Is Ireland really geared up to meet demands of multinationals?
The question will be whether Apple decides to cut its losses and build elsewhere and what message that sends to others
I N FEBRUARY 2015, tech giant Apple announced plans to build and operate two data centres in Europe – one in Denmark, and a second in Athenry, Co Galway.
Planning permission was granted for the Irish plant in September 2015, but the decision was appealed to An Bord Pleanála. It approved the €850m project in August 2016, but not a brick has been laid. Why? The decision was appealed to the High Court, which will rule next month on whether it was correct. In Denmark, the data centre is built, and will be operational by the end of the year. Apple now plans another.
Now another tech giant – Microsoft – appears to be running into trouble. It was granted permission to build four data centres in west Dublin last year, but now says it needs a gas-fired plant to provide electricity for the next three years, pending an upgrade of the grid to meet the massive demand for power.
At the time permission was sought, no issues were raised about the grid’s capacity to deliver. That appears to have changed, and EirGrid now says the system needs to be bolstered to meet increased demand, which will take a number of years. It raises questions about whether Ireland is geared up to meet the demands of multinational firms seeking to locate here.
On the face of it, no. We have a housing crisis, our public transport system is overloaded and congestion is a huge issue. Our water network needs billions of euro to bring it up to modern standards, our health system struggles, the grid needs some work – and Ireland’s an expensive place to live.
While the Government has an additional €4.1bn to spend on capital projects out to 2021, it has to juggle demands from health, housing, education, social protection and countless other sectors for money. There will be no quick fixes to our infrastructure deficits.
Data centres use enormous amounts of power – Microsoft’s will use the equivalent of that consumed by tens of thousands of homes – and they’re a relatively new phenomenon. But lurking in the background is a suspicion that the firm’s plans will now be subject to delay, and its planning application could become more than just an administrative box-ticking exercise. There’s an argument to be made that the 18MW power plant should have been included in the original planning application. Should the entire scheme be revisited, setting it back months if not years?
The planning system is often criticised as a source of delays for big projects, and the Government says it is in need of reform. But during the summer, An Bord Pleanála was reduced to just four members. It’s supposed to have nine. Whatever about reforms, resourcing what’s already there avoids backlogs. The situation has since been addressed.
Apart from our educated workforce and corporate tax rates, part of the reason why companies come here is because the IDA provides plants kitted out for particular industries, and then seeks firms to occupy them. It’s an extra string in the bow in a global fight for investment. But the IDA can’t build data centres, and Apple’s problems may not go away any time soon.
If Apple ‘wins’ the High Court case, the losing party could appeal. The question at that stage will be whether Apple decides to cut its losses and build its data centre elsewhere, and what message that sends to others. While our infrastructure deficits don’t appear to be losing us business, that could change.
Certainty around planning timeframes should, at least, be a given.