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News
18.07.2016

What impact will Brexit have on Ireland’s data centres?

Still in the fallout of Brexit, it’s unclear how the UK’s relationship with the EU will change over the coming months and years. While Ireland is a member of the EU in its own right, that doesn’t mean it remains unaffected by the UK’s decision to leave.

According to data compiled by the EU’s statistics body, Eurostat, Ireland is more reliant on imported energy than almost every other country in the EU. At the moment, Ireland receives most of its energy supply through Scotland and the Corrib gas field. Following Brexit, it’s unclear how this service will be maintained, which could leave the Ireland with a 20% deficit for electricity generation. Furthermore, following the 2009 gas crisis, EU regulations now provide for disaster relief across Europe through the sharing of resources between Member States in an energy crisis. With the UK’s departure and no gas pipe linking Ireland to Mainland Europe this safety net is potentially removed.

Following Brexit, in the short-term Ireland’s energy supply could be put at greater risk during an emergency situation, and new UK/EU import tariffs seem inevitable, potentially increasing pricing.

Linking Ireland’s energy directly to mainland Europe through an interconnector to France is already part of a long-term EU strategy. As well as securing Ireland’s electricity supply, it will make it possible for the country to deploy more wind-powered energy generation technologies with the aim to export the power generated back to mainland Europe.

Following the result of the referendum, Denis Naughten, Ireland’s Minister for Communications, Energy and Natural Resources, issued a statement saying that a full assessment would be undertaken to review the issues associated with the country’s energy supply. The assessment will, “…include security of supply issues, taking account of current interconnection arrangements, and cooperation with the UK generally with regard to stocks of fuel. It will also include cost implications and preferences for any new, post-Brexit arrangements between Ireland and the UK, recognising that this will form part of any market access discussions in the EU context.”

Data centres are big business for Ireland

According to a report published on CBR Online, data centre capital investment into Ireland since 2008 is over $4bn. Many IT giants have seen the country’s potential and decided to make Ireland their home:

  • Apple: invested $1bn on data centres with plans to expand by another 263,000 sq ft.
  • Amazon: invested €3.7bn in overall direct data centre investments in Ireland.
  • Google: currently investing €150m in a new facility, bringing its total investments to €515m.

Data centres are the cornerstone of wealth-creating activities, encompassing the equipment that goes into them, to the engineering, software and high-value IT jobs that they create to boost the local economy. However, the uncertainty surrounding Ireland’s energy supply could signal problems for any future investment.

Power and cooling costs account for the biggest expenditure in a data centre. According to a report in ZDNet, an average in-house server costs around £550 a year in power and cooling. Unsure of how these costs will be affected in a volatile energy market, data centre providers may look further afield to more stable power economies to protect their investments.

Before Brexit was even announced, a report published by 451 Research showed that the low and stable electricity prices of the US were making it a target for data centre investment. It states, “…the energy bill for a medium-sized 2MW data centre in the US with a 50% baseload energy consumption could be as much as £335,000 a year less than a comparable facility in the UK or Ireland.”

To ensure data centre investment continues at its current rate, Ireland needs to act fast to put investors’ minds at ease.

Of course there are other factors that influence a business’s decision on where to locate its data centre services. Connectivity, latency, tax, data policy and easy of doing business are some of the factors that will play a part in the selection process. Thankfully for Ireland, and its data centre industry, these are areas where the country is leading the region and providing a competitive advantage for many organisations.

Getting ahead

While Ireland’s interconnector with France is on the horizon, building it will take time and require great capital investment from the Government. Therefore, if data centre providers wish to secure their future in Ireland, they need a more immediate solution.

One way to do this is to consider how you can incorporate greener energy into your operations. According to Host in Ireland, 23.7% of the nation’s energy is produced using green sources. Wind harvesting is proving fruitful with 19% of the electricity in Ireland, 2,111MW energy, produced from wind turbines.

Besides wind and solar, there are more “reliable”, space-efficient and less-known opportunities for power generation. Depolymerisation, gasification, bio gas and other similar technologies, combined with long-term power purchase agreements, provide solutions that are both financially feasible and environmentally sustainable alternatives for data centre operators. These solutions are also reasonably fast to deploy, delivering sustainable power in the short-term while larger infrastructure projects are undertaken.

Coupling efficient data centre design with renewable on-site energy generation makes a lot of sense and has the potential to be the most sustainable solution for your data centre.

Future-tech: where experience meets innovation

Future-tech is an industry leading specialist in data centre design, construction management, operation and optimisation. Our vendor and solution neutral approach allows us to put our clients’ project outcomes and business goals at the heart of our designs. By incorporating the latest design principles and technologies we will ensure your data centre provides an energy efficient, future proof infrastructure platform that will adapt and change as your business requires. As an ISO14001 accredited organisation, and winner of several ‘green’ awards, including the Certified Energy Efficient Data Centre Award and Uptime Institute Green IT Award, we know how to make cleantech work for your organisation.

Discover how we can enable alternative power generation for your data centre.

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