Irish families are paying for some of the most expensive electricity in Europe in part due to the fact that they are subsidising the supply of electricity to data centres, a practice which must be stopped by the Government, says Denis Naughten TD.
Addressing the issue in the Dáil last Thursday he told the Minister for Finance that Irish families are paying, on average, €180 extra for electricity annually compared to their European neighbours.
“In 2018 as a member of the Government I secured a decision to stop the practice whereby those struggling to pay electricity bills were subsidising this electricity and instead make data centres pay their own costs,” stated Denis Naughten.
“As inflation rises, driven by rising energy costs, we cannot tolerate a situation where Irish families are being forced to subsidise the cost of electricity, grid connections and backup supplies for existing and planned speculative data centres across our country.”
He called on the Minister for Finance to reduce electricity costs by stopping this data centre subsidy immediately.
Responding to the request, the Minister for Finance, Paschal Donohoe TD said: “The presence of a data centre in Ireland should not be seen in isolation; it should be seen in the context of companies that are employing hundreds, if not thousands, of people all over our country. Particularly with the changing world we are in and the kinds of changes that will happen with regard to corporate tax, an environment in which data centres can be associated with the ability to employ large numbers is a real asset for Ireland.”
Commenting on the Minister’s response, Denis Naughten said: “Last October I pointed out that one in four people in Ireland at that point could not afford to heat and light their homes, and this situation has become far more serious over the last five months. Unless we take every step possible to reduce costs, then we will damage our economy to such an extent that corporate taxes will be the very least of our worries.”
ENDS.
Dáil extract:
Dáil Éireann 24th March 2022
Leaders Questions
Denis Naughten TD: Inflation makes everyone poorer, particularly those on fixed incomes. In Ireland, energy costs have a far greater impact on inflation than anywhere else in the EU. I want to put three practical suggestions to the Minister. Our electricity prices are among the most expensive in Europe, with Irish families paying, on average, €180 extra for electricity annually. This is partly as a result of Irish families being forced to subsidise the cost of green electricity, grid connections and backup supplies for existing and already-planned speculative data centres with no substantial employment dividend here in Ireland. The Government decided in 2018 to stop the practice whereby those struggling to pay electricity bills were subsidising the speculative developers and instead make data centres pay their own electricity costs. Therefore, the Government must reduce the cost by stopping the data centre subsidy.
Paschal Donohoe TD, Minister for Finance: I take issue with the Deputy’s reference to speculative data centres. As he knows, many of the data centres located in Ireland, if not all of them, are associated with companies that are very large employers. The presence of a data centre in Ireland should not be seen in isolation; it should be seen in the context of companies that are employing hundreds, if not thousands, of people all over our country. Particularly with the changing world we are in and the kinds of changes that will happen with regard to corporate tax, an environment in which data centres can be associated with the ability to employ large numbers is a real asset for Ireland.
This interaction was part of a broader set of 4 proposals to help reduce Ireland’s electricity costs. Watch the full discussion here: