Irish households may have paid hundreds of euros extra on electricity bills because of the rapid growth of datacentres, according to a report that says Ireland should be treated as a warning case for the rest of Europe.
The study, commissioned by Friends of the Earth Ireland and Beyond Fossil Fuels, argues that large, round-the-clock electricity demand from datacentres has helped push up wholesale power costs and added a hidden burden to household bills. Its authors describe that effect as a “hidden data centre tax”, because the cost is not shown as a separate charge but may still be reflected in what households pay.
The claim is strongly disputed by datacentre industry representatives, who say the sector pays commercial energy costs, contributes to the grid, supports renewable investment and has delivered major economic benefits.
What the report claims
Datacentres used 22% of Ireland’s electricity last year, according to the Central Statistics Office figure cited in the report. That is more than all urban homes combined. For comparison, the equivalent figure given for both the US and UK is 6%.
The report estimates that datacentre demand has drained €715m from the Irish economy and increased household bills by a cumulative average of €360 between 2015 and 2023. Looking ahead, it says the average Irish household could pay a further €295 to €644 cumulatively from 2025 to 2034, depending on how much datacentre demand grows.
| Measure | Reported figure |
|---|---|
| Datacentres’ share of Irish electricity use last year | 22% |
| Equivalent share cited for the US and UK | 6% |
| Estimated economic cost to Ireland | €715m |
| Estimated added household bill cost, 2015-2023 | €360 cumulative average |
| Potential added household cost, 2025-2034 | €295 to €644 cumulative average |
| Projected national household cost, 2025-2034 | €633m to €1.43bn |
The core argument is not simply that datacentres use a large amount of power. It is that their demand is high, growing and relatively inflexible, meaning they need electricity consistently rather than only when supply is cheap or abundant.
Seán Fearon, a postdoctoral researcher at the Institute of Environmental Science and Technology at the Autonomous University of Barcelona and author of the report, said the modelling showed that datacentre demand increased the number of hours in which gas set the price in Ireland’s electricity market. When gas-fired generation sets the price, household costs can rise, especially during periods of high gas prices. When wind generation is strong, prices can fall.
Why Ireland matters beyond Ireland
Campaigners say Ireland’s experience should concern other European countries as datacentre construction accelerates, partly because of artificial intelligence and cloud computing demand. Their worry is that, without tighter safeguards, large technology companies could add pressure to power systems that are already exposed to volatile fossil gas prices.
Jill McArdle of Beyond Fossil Fuels said the Irish case showed the risk of allowing big technology companies to expand datacentres without stronger conditions. She argued that datacentres should be required to run on additional renewable energy rather than increasing dependence on gas-fired power.
That point matters for households because the issue is not only climate policy. It is also about who pays for the extra generation, grid capacity and price volatility created by large energy users. For buyers comparing electricity plans or trying to understand why bills remain high, the report points to datacentre growth as one factor that may be hidden behind the final unit price.
What the industry says
Industry groups reject the report’s framing. They argue that datacentres are not being subsidised by households and that large energy users buy electricity differently from ordinary consumers.
Maurice Mortell, chair of Digital Infrastructure Ireland, said datacentre investors had injected €18bn into Ireland in recent years. Tom Parlon, chair of the Irish Data Centre Supplier Alliance, said datacentres pay grid network charges and commercial electricity costs in proportion to their usage and investment.
Parlon also said datacentres in Ireland must meet 80% of their energy needs from additional renewable capacity, describing it as the strictest regime in Europe. He argued that the sector’s tax contribution helps fund infrastructure, housing, household supports and climate programmes.
The Irish government has generally backed datacentre expansion, describing the sector as important to the country’s technology-led economy. It denies that datacentres amount to a stealth tax on consumers.
Verdict for households and policy buyers
The practical question is not whether datacentres are good or bad in isolation. It is whether their electricity use is being priced, regulated and powered in a way that protects ordinary bill payers.
The report gives consumer advocates and policymakers a clear test: if datacentres add constant demand to a power system still dependent on gas, households may face higher costs even when they never directly use the services those datacentres support. The industry response is also material: datacentres say they pay their share and bring investment, tax revenue and renewable commitments.
For household energy buyers, the finding is a reminder that electricity bills are shaped by more than supplier tariffs. Grid demand, wholesale pricing, gas exposure and large industrial users can all affect the final bill. For governments weighing new datacentre projects, the decision turns on whether growth is matched by new renewable capacity and whether the costs are carried by the companies creating the demand rather than by households through higher bills.