Ireland—particularly Dublin—has emerged as a pivotal hub in the global data centre landscape. This prominence is driven by a confluence of factors: strategic transatlantic positioning, a favourable tax regime, a temperate climate conducive to efficient cooling and a highly skilled workforce. As the digital economy accelerates, understanding Dublin’s data centre market offers valuable insights into broader construction and economic trends.
What Are Data Centres?
Data centres are highly specialised facilities that house servers, storage systems and network infrastructure, enabling the storage, processing and distribution of vast volumes of digital information. Often described as the physical backbone of the internet, they support a wide array of critical digital services—including cloud computing, streaming, artificial intelligence, financial transactions and e-commerce.
At their core, data centres are engineered to ensure uninterrupted power, robust cooling and high-speed connectivity. This stable and secure environment is essential to protect sensitive equipment, maximise server performance and maintain 24/7 availability. Their rising prominence reflects the accelerating global shift toward digitisation, automation and real-time data usage across nearly every industry.
The continued demand for data centres is broadly underpinned by three interconnected forces:
- Cloud Adoption and AI Proliferation: The rapid expansion of cloud computing, artificial intelligence and machine learning is the most significant driver of data centre demand. From generative AI models to enterprise SaaS platforms, these technologies require immense processing power, data storage and real-time responsiveness—placing enormous demand on data centre infrastructure.
- Sector-Wide Digital Transformation: Organisations across every sector—from healthcare to logistics—are embracing digital solutions that generate, analyse and rely on ever-larger volumes of data. This structural shift has entrenched demand for resilient, secure and scalable digital infrastructure. Meanwhile, the rise of remote work, online retail and content streaming—amplified by the pandemic—continues to sustain pressure on capacity.
- Regulatory and Latency Pressures: Increasingly stringent data protection regulations, such as GDPR in Europe and similar frameworks emerging globally, are compelling organisations to maintain precise control over where their data resides and how it's processed. This drives demand for regionally distributed data centres that ensure compliance with local sovereignty laws while supporting global operations, stimulating investment in strategically positioned facilities (such as Dublin) across different jurisdictions.
Why Dublin?
Once dominated by the so-called FLAP markets—Frankfurt, London, Amsterdam and Paris—Europe’s data centre landscape has evolved. Dublin’s meteoric rise in the past two decades has redefined the acronym as FLAP-D, firmly embedding the Irish capital among Europe’s elite digital infrastructure hubs.
Ranked 16th globally for IT operational power load, Dublin now commands the third-largest data centre market in Europe at 738MW—positioning it ahead of Paris and Frankfurt, and trailing only London and Amsterdam in terms of active power load. [1]
As of April 2024, Ireland hosts 82 operational data centres, with 14 more under construction and a further 40 granted planning approval.[2] The overwhelming majority of these facilities are clustered in the Greater Dublin Area, underscoring the city’s central role in the sector’s expansion. Dublin’s prominence as a global data centre hub is underpinned by a unique combination of strategic, regulatory, environmental and human capital advantages:
- Transatlantic Connectivity: Dublin sits at a key digital crossroads between North America and Europe. Its proximity to major transatlantic fibre-optic cable landing points ensures low-latency data transfer, making it an ideal location for tech giants and global cloud providers.
- Favourable Corporate Tax Regime: Ireland’s 12.5% corporate tax rate—among the lowest in the OECD—continues to attract multinational technology giants such as Amazon, Google, Microsoft and Meta, all of which anchor extensive cloud infrastructure within the Dublin region.
- Climate Advantages: Ireland’s naturally temperate climate significantly reduces the energy burden of cooling, one of the most power-intensive aspects of data centre operations. This climatic edge boosts energy efficiency and supports sustainability targets for environmentally conscious operators.
- Deep Talent Pool: Dublin benefits from a highly educated, English-speaking workforce, with strong competencies in ICT, engineering and construction. This talent base supports both the delivery and operation of complex digital infrastructure.
- Regulatory Environment: Ireland’s robust data protection laws, aligned with the EU’s GDPR framework, have bolstered its reputation as a secure location for data storage.
These combined strengths have generated a powerful cumulative growth effect, catalysing the emergence of a specialised ecosystem of firms dedicated to building, powering, maintaining and servicing data centres.
Ireland’s Indigenous Data Centre Expertise: A Powerhouse in Global Delivery
Ireland has quietly become one of the world’s leading hubs for data centre construction expertise. A rich ecosystem of homegrown contractors—such as Dornan, Collen Construction, Mercury, Kirby Group, Winthrop Technologies and LotusWorks—has emerged over the past two decades, shaped by early exposure to hyperscale clients (ie major cloud and tech firms such as AWS, Microsoft and Google that operate vast data centres requiring high-capacity infrastructure, custom specifications, and global delivery consistency) and mission-critical delivery requirements. These firms now offer end-to-end capabilities—from MEP design and modular off-site fabrication to commissioning and facilities maintenance—often within fully integrated delivery models tailored to global tech standards.
Much of this capability was forged through long-standing partnerships with multinationals who chose Ireland as a strategic European base. This early wave of foreign direct investment laid the foundation for a highly skilled, mobile and quality-driven workforce with deep sectoral knowledge—one that now exports expertise across the continent’s key digital infrastructure markets. Irish contractors are active not only in Dublin but across the FLAP-D network, supporting Europe’s densest corridors of data demand.
Paradoxically, while demand for these skills remains high, domestic constraints—including a de facto moratorium on new data centre grid connections in the Greater Dublin Area [3] — have slowed local activity, freeing up delivery capacity for projects elsewhere in Europe. Today, many Irish firms deliver more data floor area abroad than at home, cementing Ireland’s role as a global centre of excellence in data centre delivery—one of its most technically advanced and perhaps under-recognised exports.
“The fundamentals that established Dublin as a data centre powerhouse still hold—but the next chapter will be defined by how effectively we navigate grid constraints, planning complexity and sustainability expectations. For developers, the challenge is no longer just securing land and capital—it’s aligning with evolving regulatory, energy, and societal pressures.”
Challenges and Constraints
Over the past 15 years, Ireland’s data centre market—anchored by Dublin—has undergone exceptional expansion. Now a major pillar of Ireland’s economy, it contributes significantly to GDP, tax revenue and employment. Yet, this success has brought mounting pressures. As demand continues to surge, a growing number of challenges threaten to constrain future growth and competitiveness.
Pipeline Bottlenecks
Dublin accounts for over 90% of Ireland’s total data centre rack capacity [4], making it one of the most data-centre-dense regions in Europe. However, this geographic concentration has placed extraordinary strain on the national grid—prompting the Commission for Regulation of Utilities (CRU) in 2021 to pause new grid connection approvals for data centres in the Greater Dublin Area.
In parallel, other major energy users—most notably Dublin Airport, which is pursuing its own sustainable-energy programme to support a significant facility expansion—are drawing on the same grid infrastructure. Transport hubs, residential developments, and public-sector projects are all vying for limited capacity. This shared demand highlights how Ireland’s broader infrastructure network is struggling to keep pace, exacerbating power-resilience concerns highlighted by recent outages at Heathrow [5] and elsewhere in Europe.
The CRU’s updated connection criteria now prioritises projects that can demonstrate:
- Access to sufficient local grid capacity
- Integration of on-site or renewable energy generation and/or storage equivalent to projected demand
- The ability to provide demand flexibility, such as load shifting or participation in grid-balancing schemes
While not a blanket ban, it has created a de facto moratorium in the Greater Dubin area. Developers seeking new grid connections must align with these conditions to secure approval, limiting their ability to expand. One of the clearest illustrations of this impasse is the fully built Digital Realty campus at Grange Castle, which remains inactive as it awaits grid access.
Meanwhile, data centre electricity use continues to grow. In 2023, Ireland’s 82 operational data centres consumed 21% of total metered electricity consumption – up from 18% in 2022. [6] Forecasts suggest this could rise to 31% by 2027 [7], intensifying scrutiny over the sector’s energy footprint and its alignment with Ireland’s legally binding climate targets.
Note: EirGrid’s analysis shows that demand from data centres could account for 31% of all demand by 2027 (in a median demand scenario).
Addressing this challenge will require substantial investment in transmission infrastructure—particularly by EirGrid, which is tasked with modernising the national grid to move clean energy from the west (where wind power is concentrated) to high-demand centres in the east. Without timely upgrades, electricity constraints may continue to limit data centre development in the country’s most connected region.
Environmental and Public Backlash
Data centres’ high energy and water demands have drawn increasing criticism from environmental groups and the wider public. Concerns include carbon emissions, water use and the perception that data centres offer limited societal benefit relative to their resource intensity. These issues are particularly sensitive in the context of Ireland’s climate ambitions, which legally commit it to net zero by 2050.
Operators are under growing pressure to demonstrate sustainability credentials—through private power purchase agreements (PPAs)[8] with renewable energy providers, on-site renewable energy sources, energy-efficient design, waste heat recovery systems, and water conservation measures. Nonetheless, reputational risks remain high, and public opposition could intensify if infrastructure strain continues.
Planning System Complexity
Although legislation to reform the system is awaiting final parliamentary approval, Ireland’s planning system is widely seen as opaque and slow-moving. Legal appeals can be triggered by third parties not directly affected by projects, leading to delays that span several years. While long-awaited planning reform legislation is pending final parliamentary approval[9], the current framework remains a deterrent to large-scale investment.
Skills Shortages and Delivery Risk
The rapid pace of development risks outstripping the availability of specialised construction labour. Shortages in specialist skills—such as mechanical, electrical and high-voltage installation—risk increasing build costs, timelines and delivery risk, particularly on large-scale, fast-track programmes. These challenges are compounded by competition from other sectors and regions, further intensifying the demand for qualified professionals.
Land Availability and Price Inflation
Industrial land in and around Dublin is increasingly scarce, with competition from logistics and life sciences pushing prices upward. As a result, developers are expanding into outer suburban and exurban areas—but this in turn raises challenges around infrastructure access, planning complexity and latency optimisation for edge services.
Strategic Implications
While Ireland remains an attractive destination for digital infrastructure investment—thanks to its stable economy, skilled workforce and strong connectivity—these challenges raise critical questions about its long-term competitiveness.
Developers hope to expand their footprints in Ireland, but their ambitions hinge on favourable conditions being met. Countries such as Sweden, the Netherlands and Denmark are aggressively courting data centre investment with a mix of:
- Grid-ready industrial zones
- Streamlined planning regimes
- State-backed renewable power access
- Emerging support for nuclear options (now being considered by major tech firms for long-term AI energy needs)
Nuclear is increasingly being explored as a solution for delivering stable, carbon free[10], round-the-clock energy to support the next generation of data centres. Amazon, Google and Microsoft have all struck deals recently with nuclear power plant operators to fulfil rising energy demands from data centres as they race to train and maintain power-hungry AI models. Google has also ordered six to seven small modular reactors (SMRs), becoming the first tech company to commission new nuclear power plants, while OpenAI is in talks with nuclear start-up Oklo about a potential energy supply agreement using SMRs. However, Ireland’s 1999 moratorium on nuclear energy removes it from this conversation—potentially limiting appeal to tech giants considering nuclear-powered infrastructure.
Without urgent investment in grid modernisation, transmission upgrades, and regional energy distribution (ie building the infrastructure needed to get new clean energy where it needs to go), Ireland risks losing its edge as the next generation of AI and cloud infrastructure is deployed.
To remain competitive, alignment is needed across government, regulators, utilities and industry to create a roadmap that balances infrastructure growth with environmental and societal responsibility. This includes accelerating offshore wind integration, investing in grid flexibility and reforming planning to improve investor confidence.
Failure to act risks diverting high-value investment to more accommodating jurisdictions—at the cost of jobs, innovation and Ireland’s strategic digital economy ambitions.
Potential Solutions and Future Competitiveness
To address the challenges and ensure Ireland remains a competitive hub for data centre development, several solutions have been proposed:
- Investment in Green Energy: Accelerating the rollout of renewable energy projects—such as wind, solar and grid-scale battery storage—could alleviate grid pressures while supporting Ireland’s carbon reduction targets. Data centre operators are increasingly expected to secure low-carbon energy through direct investment or long-term partnerships with renewable energy developers, typically via private power purchase agreements (PPAs). These agreements not only support decarbonisation goals but also provide price stability and supply certainty in a volatile energy market. Notably, Statkraft has signed a PPA to supply Microsoft with 366 MW of clean energy sourced from six Irish projects—three wind farms and three solar farms—distributed across the country.[11]
- On-site Generation and Microgrids: Some operators are exploring on-site energy generation—including gas turbines, bioenergy systems, and integrated battery storage—to reduce reliance on the national grid. While not yet widespread, interest is growing in grid-independent, self-powered campuses. These microgrids often combine renewables with storage and, in some cases, gas peaking plants or CHP systems as backup. This model may be particularly useful in constrained regions like the Greater Dublin Area.
- Hydrogen and Future Fuels: While still in its infancy, hydrogen is emerging as a compelling long-term solution for backup power in high-demand sectors. Across Ireland and Europe, demonstrator projects are testing the viability of green hydrogen as a clean alternative to diesel in standby generation, with parallel trials underway in transport and heavy industry. For the data centre sector—where continuity of supply is critical—hydrogen offers the prospect of low-carbon resilience. Ireland’s National Hydrogen Strategy (2023)[12] has laid the groundwork for scaling up this potential, outlining a supportive policy environment for research, pilot deployment and eventual integration into critical infrastructure.
- Grid Infrastructure & Flexibility Upgrades: Expanding and modernising Ireland’s electricity grid is essential to accommodate rising demand from energy-intensive users like data centres. Government-backed initiatives such as EirGrid’s “Shaping Our Electricity Future” strategy[13] are focused on accelerating renewables integration, upgrading transmission infrastructure, and improving connection timelines. Increasingly, data centres themselves are being seen as grid assets. By adopting demand-side response, battery storage, and smart controls, they can absorb surplus energy during off-peak periods and reduce load or release stored energy during times of constraint. This two-way interaction could be critical to easing localised congestion and improving system resilience.
- Incentivising Demand Flexibility: Further incentives could encourage data centres to implement demand-response measures—such as load shifting, on-site energy storage, or participation in grid-balancing services. This would help flatten peak demand curves and reduce strain on existing infrastructure.
- Reforming the Planning Process: Streamlining Ireland’s planning system is key to reducing delays and boosting investor confidence. Proposals include limiting legal appeals to directly affected stakeholders, clarifying policy around grid-constrained zones and creating clearer pathways for strategic energy users like data centres.
- Competitive Energy Costs: To compete with regions like the Nordics, which offer abundant and low-cost renewable energy, Ireland must explore targeted incentives or tax relief to offset its relatively high energy costs. When combined with its strategic location and robust data protection framework, these measures could enhance the country’s value proposition.
- Enhancing Investor Confidence: Clear and consistent long-term policy—particularly around grid access, renewable energy procurement, and planning—can reassure investors of Ireland’s long-term viability as a data centre hub. Joint initiatives between the public and private sector to close infrastructure gaps and support new energy models will be key to maintaining Ireland’s position in the European data centre market.
In addition to these core strategies, policymakers and industry leaders are exploring complementary measures such as shifting development to less grid-constrained regions—particularly along the west and south coasts—where co-location with wind and solar farms can reduce transmission losses and improve energy efficiency.[14]
Waste heat recovery systems are also gaining traction, enabling excess thermal energy from data centres to be redirected to nearby residential or commercial buildings. Meanwhile, private wire agreements are being expanded, allowing data centres to procure renewable energy directly from adjacent generation sites—bypassing grid bottlenecks, lowering transmission losses, and enhancing supply security. Together with planning reform, regulatory clarity and a more geographically distributed energy strategy, these approaches could help future-proof Ireland’s data centre industry while aligning its growth with national decarbonisation goals.
What Comes Next for Dublin’s Data Centre Sector
While Dublin’s data centre market remains a critical hub for the global digital economy, its future growth will likely be more measured than in previous years. The pace of development now hinges on addressing key challenges, including energy constraints, planning inefficiencies and environmental sustainability.
Technological advancements, notably in modular construction and energy storage, offer potential solutions to some of these barriers. Furthermore, government initiatives to expand renewable energy infrastructure and improve grid resilience will be essential in sustaining long-term growth. However, the efficacy and timeliness of implementing these measures remain areas of uncertainty.
The Irish Government has articulated a commitment to aligning data centre development with national decarbonisation objectives. Key strategies include promoting the integration of renewable energy sources, encouraging the adoption of waste heat recovery systems and streamlining grid connections through the proposed Private Wires Policy Framework[15]. This framework aims to facilitate direct connections between data centres and renewable energy generators, thereby alleviating pressure on the public grid.
Despite these initiatives, the sector faces ongoing scrutiny regarding its environmental impact. Proposals have emerged advocating for data centres to publicly disclose their carbon emissions and to invest in dedicated energy generation and storage solutions to match their consumption. Such measures underscore the broader challenge of balancing digital infrastructure expansion with Ireland's climate commitments.
While Dublin’s role as a linchpin in the data centre market remains significant, its ability to maintain its competitive edge will depend on a concerted effort to balance growth with sustainability and infrastructure improvements. The path forward will require collaborative engagement among policymakers, industry stakeholders, and utility providers to ensure that the expansion of digital infrastructure aligns with Ireland's environmental and energy objectives.
How G&T Can Support Clients
For clients exploring opportunities in this fast-evolving sector, G&T recently published an in-depth guide on entering the UK data centre market, highlighting strategic considerations, procurement models, and delivery best practices. You can read the full article here: Entering the UK Data Centre Market: Opportunities and Strategic Considerations.
G&T offers comprehensive support to clients entering the data centre sector, leveraging extensive experience delivering complex/ mission critical projects. Services include Project Management, Cost Management, Life Cycle Costing and Construction & Property Tax Consultancy amongst others, ensuring projects are delivered efficiently and sustainably.
Cost Management: G&T provides detailed cost planning and control throughout the project lifecycle, helping clients optimize budgets and achieve value for money. For instance, in the Data Centre 30MW project, G&T managed costs effectively during the construction of a 30MW data centre and upgraded existing facilities to improve power usage effectiveness (PUE) and increase power capacity. Data Centre 30MW | Gardiner & Theobald.
Project Management: G&T oversees the planning, coordination, and execution of data centre projects, ensuring they meet clients' objectives and adhere to timelines. In a recent confidential Data Centre Fit-Out project, G&T managed the refurbishment of a data centre facility to accommodate high-density customers, tying these new areas back to enhanced power infrastructure with centralised cooling and standby power. This resulted in a significantly improved PUE compared to the existing facility. Data Centre Fit-Out | Gardiner & Theobald.
Life Cycle Costing: G&T assesses the total cost of ownership over a facility's lifespan, enabling clients to make informed decisions about investments in infrastructure and technology. This approach ensures that data centres are cost-effective to build and economical to operate and maintain.
Construction & Property Tax Advice: G&T offers specialised Construction & Property Tax Advice services tailored for clients entering the data centre sector who can benefit from various tax efficiencies and incentives designed to encourage investment in infrastructure and technology. Their expertise encompasses navigating complex tax regulations, optimising capital allowances and Land Remediation Relief and enhancing the financial efficiency of data centre projects.
By integrating these services, G&T assists clients in navigating the complexities of data centre development, from initial feasibility studies and property searches to design, specification and implementation. This holistic approach ensures that data centres are delivered on time, within budget and aligned with client's strategic goals. These services ensure that data centre developments are operationally efficient and financially optimised, delivering maximum value throughout the project's lifecycle.
Talk to our experts:
Adam Thurley - Project Management
Kevin Newton – Cost Management
Jonathan Wilson – Engineering Services, Cost Management
Gavin Ogg - Life Cycle Costing
Neil Swarbrigg - Tax Advice
[3] In 2021, the state-owned electric power provider, EirGrid, implemented a de facto moratorium on new data centre grid connections in the Dublin area, citing grid capacity concerns. This restriction is anticipated to continue until 2028, significantly influencing the development trajectory of new facilities in the region.
[4] Rack capacity refers to the total amount of physical space available within data centres for the installation of server racks (units that house servers and other hardware).
[5] https://committees.parliament....
[6] Data Centres Metered Electricity Consumption 2023 - Central Statistics Office
[8] Long-term contracts with renewable energy providers to secure sustainable energy sources.
[9] Including a streamlined objections process and swifter decisions.
[10] Nuclear energy is considered a low-carbon and carbon-free energy source. While there are some emissions associated with fuel production and the construction of the plant, nuclear power plants themselves do not produce greenhouse gas emissions during operation.
[11] https://www.statkraft.ie/news/2022/microsoft-and-statkraft-sign-366mw-renewable-energy-deal/#:~:text=The%20deal%20is%20Statkraft's%20first,Agreement%20(PPA)%20in%20Ireland.&text=The%20PPA%20will%20work%20towards,solar%20%E2%80%93%20located%20across%20the%20country.
[12] https://assets.gov.ie/263248/f982c10f-eca6-4092-a305-90000e5213ed.pdf
[13] https://www.eirgrid.ie/shaping-our-electricity-future
[14] EirGrid’s Shaping Our Electricity Future consultation proposed relocating future data centres to the west, closer to coastal renewable energy projects and away from Dublin’s grid constraints. However, global operators have shown limited interest, as latency increases with distance from key European markets—making western locations less viable for real-time applications. Some local developers are pursuing sites near subsea cable landings, but demand remains low. Apple is the only hyperscaler known to have explored the west, with a long-delayed project in Athenry potentially reserved for non-latency-sensitive workloads.
[15] Although not published yet, In July 2024, the Department of the Environment, Climate and Communications (DECC) released a set of guiding principles for the forthcoming Private Wires Policy. This initiative aims to enable private entities, such as data centre operators, to establish direct electrical connections to renewable energy sources, bypassing the national grid. The policy is designed to alleviate pressure on the public grid and support Ireland's decarbonisation objectives. The development of this policy has been highlighted in Ireland's Climate Action Plans from 2021 through 2024, underscoring its importance in the nation's strategy to decarbonise the energy sector.
