In a recent post on the social media platform LinkedIn, Philip Connolly of ESB Generation supports the Government’s ambitions to further expand the data centre industry.

There are sceptics about data centres who point to the scarcity of electricity infrastructure. Further expansion would inhibit connections for other projects, pushing up already high prices, they fear.

The appetite for electrical energy is rising anyway and is partly being met from imports. Connolly disagrees: “Unlike countries such as Germany, the UK and Netherlands, Ireland does not have a large, energy-intensive industrial sector.

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“When you compare total non-domestic electricity consumption including industry and data centres, Ireland is on par with our European peers.”

He notes that industries (think of Germany) like steel, chemicals and vehicle production are big consumers of electricity, but there are none here.

Ireland used to have a steel industry and fertiliser plants too, not to mention a car ‘industry’ confined to domestic assembly, behind tariff barriers, of imported components, but abandoned these sectors because cost to consumers and to the Exchequer were excessive. Ireland, from the 1960s onwards, has turned away from industrial activities in which there is no cost advantage. Why change?

Connolly does not urge the re-invention of these industrial sectors but supports instead the further expansion of a new one, data centres, bringing our requirement for electricity to levels comparable to what he deems to be European peers. But are they peers in any meaningful economic sense and is it ever sensible to make policy by international analogy?

It would be easy to list sectors where activity in Ireland is notably lower than EU averages – not just vehicle manufacturing but olive oil and wine – and others where Ireland has facilitated expansion.

Producing grapes in Donegal, perhaps in greenhouses using subsidised energy, may well be technically feasible but producing cheese in Munster through grazing cows outdoors looks a better bet.

Whether Ireland enjoys a natural advantage in expanding the data centre industry is an important policy question. The economy is, in any event, close to full employment – any rapid expansion in one sector means resource pressures on everyone else.

With data centres already consuming around 25% of available electricity, is it wise to impose extra demand on whatever new supply becomes available?

The European average data centre demand, as a percentage of power supply, is in the 3% to 5% range and restraints on data centre connections are becoming common around Europe.

Direct connection of new Irish data centres to proposed or existing sources of generation does not improve overall availability if planning consents for transmission or for new generation sites are constrained.

With data centres already consuming around 25% of available electricity, is it wise to impose extra demand on whatever new supply becomes available?

If the data centres get more power, someone else will have to wait, unless you believe that Ireland has natural access to unlimited and cheap sources of renewables as well as easy access to planning approvals.

Connolly writes: “While I’m conscious of current grid and renewable electricity constraints, once these are addressed, what else are we realistically going to do with all our excess renewables?”

This asserts that Ireland has excess renewables, despite admitting that there are grid and renewable constraints.

As for the excess renewables, there are regular reports of generation companies having second thoughts about the economics of offshore wind, even in the shallower waters of the North Sea where construction costs of turbines, platforms and grid connections will be lower than, for example, off the west coast of Ireland.

The Sceirde Rocks project just off the Connemara coast, thought to be an attractive site because cheaper fixed-bottom platforms would be feasible in the shallower waters, was abandoned by the promoters despite a price guaranteed by the State against adverse movements.

The promoters had adequate access to finance but backed off for commercial reasons.

Onshore wind looks a better bet as does solar but local and national politicians seem fixated with the notion that the Atlantic is to be the Saudi Arabia of wind, a soundbite where there should be a calm evaluation of the economics.

Reports from the Irish Academy of Engineering have argued for a realistic approach to the economics of Atlantic wind, including offshore construction but also the onshore costs of bringing remote generation to centres of demand in Ireland, never mind the even greater cost of reaching the export markets implied by the more ambitious targets.

State subsidy to the capital costs of transmission through equity injection into Eirgrid, or free capital for seaports to service offshore developers as envisaged in recent budgetary demands, work their way through to subsidisation for producers of renewable electricity.

The source of these subsidies is the general public, as consumers or as taxpayers. If renewables are to be cost-reducing as their lobbyists claim, the subsidies should not be hidden, nor indeed be needed at all.