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FINANCE MINISTER PASCHAL Donohoe has said that data centres are “hugely important to really large employers in Ireland,” dismissing suggestions that they do not create many jobs.
Speaking on RTÉ Radio’s Morning Ireland, Donohoe said that the value of having data centres in Ireland isn’t in the jobs they create, but in the “indirect huge importance of them to really large employers within our country, whose taxes and jobs are playing an invaluable part in our economic performance at the moment.”
What’s more important is the number of really, really large employers in our country that are located here that are part of Ireland, the world and Europe moving to a more digital future
Donohoe said that Ireland “offers the ability to have the data that these companies need located within our country, and we’re providing the skilled workforce that they need, and we’re taxing that in the right way.”
He was being questioned about two consecutive days of amber alerts for Ireland’s grid – warnings of a threat to the supply of electricity.
Earlier this week, Clare County Council granted planning permission for a €450 million data centre campus in Ennis despite opposition from local groups.
When pressed on the speed at which Ireland’s renewable sector is developing, Donohoe conceded that “we’re going to need to make progress far quicker than within a decade.”
“If we end up with less renewable energy in the future than we will need or that we have now, that is an issue that I have to consider as seriously as the demands that many are now placing upon me to find new sources of tax revenue.”
Windfall tax
Donohoe was cold on the idea of a windfall tax on energy companies, who are recording high profits as customers watch their electricity bills soar.
He said a windfall tax – a one-off government tax on an unexpectedly large profit from a company – could undermine the growth of Ireland’s renewable energy sector.
“The wind sector, the solar sector, we need those sectors to be delivering more energy to Ireland in the years ahead, so that Ireland – and indeed Europe – can become energy independent and not face to kind of security risks that we are at the moment.
“Any sudden change in how those sectors are taxed could undermine the ability to get that independence at a point in the future, particularly when other forms of energy are being compromised.”
Taoiseach Micheál Martin said last week that the government will consider introducing a windfall tax on energy companies in the upcoming Budget.
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OK so the richest tech companies in the world with extremely dubious policies towards data collection and privacy have the red carpet rolled out so they can come here, pay hardly any tax, use our infrastructure and resources? A windfall tax should be the bare minimum.
@Sylvia Power: Think the windfall tax would be on the energy suppliers, not the companies that build and own the data centres.
@Sylvia Power: hardly any tax? factual position is corporation tax take per capita here is far more than most of Europe and is twice that of UK and Germany.
@Sylvia Power: over 275,000 people are employed by FDI companies here and that sector alone created almost 30,000 jobs here last year. In 2020 these companies paid over €9.5bn in corporation tax and €10.5bn in employment taxes and PRSI. The windfall tax is proposed for energy suppliers, not these multinationals. The idea of heaping more taxes on the FDI sector is all well and good but should they decide to jump ship to cheaper economies then the above is what is at stake.
@Stephen Kearon: The effective corporate tax rate is less than 6% and for big tech is under 2%. The reason the tax take is so high proportionally is due to Ireland being a conduit tax haven where profits made in other countries can be funnelled through the Irish tax system with only a minuscule amount of tax being paid. It’s a beggar thy neighbour strategy of the Irish State and will collapse on itself when the other EU countries force tax harmonisation on the Irish State. Fine Gael and Fianna Fáil have carefully constructed this tax haven model and it benefits Irish capital by giving a cut to Irish legal and corporate tax advisory firms and developers big fees. It’s a corrupt scam that Irish workers will pay the price for.
@Sylvia Power: data collection? AWS sells cloud storage space the data collection is the responsibility of the company not Amazon. Data centres are a drain on energy but have been revolutionary to business from small to large across the world and we need them you probably wouldnt even know they existed unless they were here. They do actually follow strict codes of conduct about where they set up and they do work hard to offset their carbon footprint. You can do your part by not storing endless crap photos and not backing up needless what’s app messages. They can also harvest and recycle their energy to give back to local communities https://www.aboutamazon.eu/news/amazon-web-services/local-community-buildings-in-ireland-to-be-heated-by-amazon-data-centre
@Stephen Kearon: Wow thats some fact to suit your pro FF narrative. Comparing us to countries with 13 and 16 times our population. What is the factual percentage of tax that the likes of google, meta and the like pay? Is it 12.5%? I dont think so. Its 2.2-4.5% are you saying that these rates are fair? Could the country not benefit with more corporate tax being paid? Potentially reducing the tax burden on every irish citizen as well as getting our ever expanding national debt under control. So many households are struggling because of govt policy. We’re wasting a great opportunity because they wont be here forever.
@Joe Daly: The EU could not force tax harmonization on the Irish State. One of the changes to Lisbon MK 2 was that Ireland would have tax autonomy. It would require another referendum here to change that.
What taxes? They don’t pay em… they suck up our reserves of energy… empty very few people (comparatively speaking) use our shores as a tax haven… and then when the EU tries to FORCE us to take billions in tax, we not only politely decline, but take the issue to court!
How many affordable/social homes do you think those billions from Apple could build Pascal?
@Greachán Ó Ceallaigh: edit – employ very few people.
@Greachán Ó Ceallaigh: Compare the amount of FDI from tech companies in Ireland vs rest of Europe, and the number they employ here. These are the metrics to discuss, not how many are directly employed in data centres
Data centres all have their own backup power generation, so can disconnect from the National grid if required during times of excessive demand.
Companies storing their data in the cloud is far more energy efficient than having their own on premises servers.
Ireland’s climate is also one of the most suitable for data centres due to our low temperature range, if these data centres were located elsewhere its likely there would be a higher impact on climate
On a per capita basis corporation tax take here is twice that of UK and Germany
@Greachán Ó Ceallaigh: pity you are short on facts and long on slogans. The Apple money was in sales in Europe and every likelihood other EU countries might like their share – Apple currently pay about 8 billion a year. We went to court to defend an agreement – seems fair me even if one disagrees with the agreement. 250,000 employed directly in FDI companies and income tax paid by all their employees. The income earned abroad and paid to Irish employees cushioned us from the financial effects of covid, and indeed the previous recession. The 250,000 employees help sustain further jobs by spending their foreign earned income in Ireland. This does not address the social housing issue but we are in a better position financially with existing 12.5% and the new 15% when implemented than without.
@Stephen Kearon: There are 2 major environmental concerns here. The digital data carbon footprint (which is greater than the entire aviation sector) and the strain on the grid. When the grid is insufficient then all of these facilities turn on their train-sized diesel generators.
@Stephen Kearon: Data center back up power is just that…… Its back up. Meant to bridge power outages as opposed to medium term use or long term use. Data centers dont tolerate any downtime, bad for business. Whats the back up to their back up if they go off grid? Any risk analysis business case would find a problem with data centers going off grid during peak times. Dont….. Highly doubtful if the companies would agree…… That per capita point is a joke and irrelevant.
@Derek Cawley:
Every major factory i Ireland run those generators and a lot of them as primary.
Here are the actual facts, Cloud Computing save huge on transport costs, just compare the cost(Co2) of one seat in a plane ride to computing power for multiple years.
Therefore we should encouraging data centers as lower CO2 lifestyle. Ireland is increasing its data centers but we should make sure we increase our renewable power supply to match.
We should be encouraging the adoption of work from home and local hot seat offices.
These Data Centers have to be built some where and Ireland is one of the best environments to build them in.
@Paul Hedderman: If a region goes offline then its region pair kicks in, for example, EU-NORTH could be paired with UK-SOUTH, that will take over.
Good Lord! I think Paschal forgets who he works for – the tax payer ”whose taxes and jobs are playing an invaluable part in our economic performance at the moment.”
@Adam C: he’s just a lacky now like Noonan before him.. want us assimilated as quick as
Should not these data centres have the roof sections saturated with solar panels so as to lessen their reliance on an already over stretched national grid?
@Paul: Data centers are 24 hour per day operations. They require electricity at night when sun doesn’t shine.
@Don Hogan: Cool, so use the grid for 24 hours instead of 12! makes sense.
This government continually gaslights us into thinking our dependence on multinationals is a good thing as it’s supposedly evidence of our uniquely talented and cosmopolitan workforce, nestled halfway between Europe and America. The reality is that we’re facilitating tax evasion on an unprecedented scale, and in return we get to turn our country into one giant data/call centre, along with statistical gimmicks like GDP and corporation tax receipts that allow us to grossly distort economic performance indicators and paper over the cracks in our country. We also get to boast about the fact that we are a European tech hub, despite the fact that very little real innovation happens here. If you want to see small but innovative economies, look at Scandinavia or the Netherlands and see some of the huge international companies that those countries produced.
If ever a country embodied the notion of “all fur coat and no knickers”, it’s us. We are a client state of tax-shy multinationals and financial services rentiers based in the IFSC who profit either by storing their data here or by speculating on and extracting fees from other people’s money or assets. That’s it.
Small businesses are treated with contempt while Google, Facebook, pharma etc. are given the red carpet treatment because our own national insecurities delude us into thinking that as a nation we can’t stand on our own two feet, but if we try hard enough through tax trickery then they’ll say nice things about us and the government will get a nice headline whenever a US company sets up or expands on RTE or the Irish Times, or if they’re really lucky, an international newspaper. It’s an appallingly low bar that we set for ourselves, when the country has so much more potential.
It’s a really strange, pessimistic way to run a country, maybe a form of learned helplessness that makes up part of our national post-colonial psyche, as it seems like we don’t feel we deserve or have the ability to be in control of our own destiny. We just have to play nice with the movers and shakers of the world and not rock the boat too much, and hopefully they’ll throw us a bone now and then. I think this extends to our politicians as well. I don’t think they have any real faith in the concept of Ireland as a nation-state, or its people, and as a result, they resort to tunnel-vision, parochial politics and electoral bribery that they hope gets them reelected.
The problem with this is that it interferes with the government actually governing, and by that I mean investing in education, defense, healthcare, housing and infrastructure so that we have a robust, self-sustaining economy based on innovation and productivity.
Instead, we have a brittle, unproductive economy subject to factors outside of our control like the whims of American boardrooms, and where policy is informed by 5 year electoral cycles, rather than longer term, more joined up thinking. Just take the Dublin metro as an example of how much kicking the can down the road goes on.
This leaves us in a situation where our health service is perpetually in crisis, we are unable to house our own people, basic public amenities like safe water treatment, broadband internet and public transport are out of reach of huge swathes of the population, and we are an island unable to defend itself. Go figure.
@Eric: Excellent comment Eric, thank you.
@Eric: Franchise Ireland no doubt.
Data centres used up 14 per cent of the metered electricity (2021) and by 2030 could be using an estimated 30%.
Almost 50% of Ireland’s electricity supply is generated by the gas network.
The Republic buys 75% of it’s gas from the UK which imports it from Norway’s Ormen Lange field.
This could be a big problem this Winter if the EU pressure Norway to sell gas direct to the EU instead.
Data centres in short could be the difference between us having a continuous energy supply and having it shutting down occasionally like it does in 3rd world countries.
Data centres were built under “strategic investment” which allowed them to bypass the normal planning process. The benefit to Microsoft, Apple, Google is clear. The benefit to Ireland considerably less so.
@Sean: benefits to Ireland are billions in FDI, 100s of thousands of well paid jobs, and corporation tax take per capita twice that of UK and Germany
@Stephen Kearon: ah Stephen on every tread defending the indefensible
@Sean: first blackout il be down to one with a crowbar. . Retrieve my stolen data and then switch the thing off
@John Kavanagh: protecting billions in taxation income and 100s of thousands of well paid jobs is what normal responsible citizens do.
@Stephen Kearon: we had most of those benefits before allowing the data centres to be built. We will need billions to upgrade the national grid – eirgrid estimates that this will cost €2bn over next five years. If the arguments in favour of data centres are so good why was it necessary to subvert the normal democratic planning process? Could there have been uncomfortable questions raised about energy security and water usage that would and should have prevented these centres from being built?
@Sean: it’s terrifying that the government is putting the “needs” of multinationals ahead of those of it’s own people but it’s not unsurprising.
Pure BS .. has he heard of this thing called the internet.. the data centers can be located anywhere in the world … They pick Ireland because of the temperate climate.
@Bri Lyons: There goes the rural broadband initiative.
So the carbon credits from sequestered land in the agriculture sector get shifted out of the agri sector and into the land use and forestry sector where the government can then basically steal them, auction them to big companies that buy them on the European carbon market and offset them against their huge energy usage so their company is carbon neutrol and scores a high ESG and promote the golden GDP for Ireland.
Yet the farmers that actually own the land can’t offset them against their enterprise all sounds suspect to me.
Its not data centres that are really the issue here. People wouldn’t actually care if they were here or not except their existence is so amplified now because of the drain on the grid in the middle of an energy crisis. Years of saying yes to them without proper infrastructure planning and how the electricity is generated to support them is the issue. Poor national strategic planning. Which isn’t anything new really given nothing seems to functioning at the moment from hospitals to airports. Zero joined up thinking. Just the usual we will be grand lads!!
So cows and farmers are bad for the environment and data centres are good for it.
Some data centres use as much electricity as whole towns. Electricity generation that’s from coal and gas. This govt is trying to convince people up is down and down is up.
They’re hugely important to how these companies operate but they don’t need to be based in Ireland just because their HQs are. There are plenty of countries with climates far more suited to housing these centres so that they don’t used as much energy to keep them cool. Our government, who I have supported in many areas, are not making these decisions based on what’s best for the Irish people. More to do with how we’re viewed globally.
There is no reason Ireland has to take a disproportionate share. Weak leadership.
Why can’t a stipulation be put in that 75% of their energy and water requirements are produced on site by themselves.
He’s right, people always whinging about the low jobs they create, so they not realise data centres are like warehouses for these tech companies, there is thousands working in offices here supporting data center operations. They should be try provide as much of there own power as possible but eirgrid are to mostly blame here and governments snail pace to approve offshore wind and hydrogen production!
Maybe if people stopped generating so much data, there wouldn’t be a need for so many data centres.
I understand that the Tallaght Data Centre was supposed to provide heat to homes in Kilnamanagh, but instead it was routed to state funded institutions like the college and the hospital.
It would be useful if those who operate data centres did an energy analysis of power consumed by servers being managed on each business’s premises (as that’s the alternative) and compare with centralised datacentres supplying heat to local homes.
Just saying
@Chris Curran: energy usage in a large building such as a hospital or college is far greater and less economical than houses and the tax payer foots that bill. Harvesting and recycling that energy in public buildings is a far better idea.
@Rmaybe: suppose it indicates that there’s a general lack of understanding around data and how its managed. Your response focuses on harvesting and recycling but what about the terrabytes of data being generated by users? Just like building new roads for more cars, data is no different, it needs to be stored and processed. Hense datacentres.
Like where is this article, or our dialog being stored?
@Chris Curran: exactly. We all have a personal responsibility to reduce the amount of data we store so regular purges and turning off unnecessary backups is something everyone should do. But data centres are revolutionary in the Internet age. Small businesses can now operate on a global scale. Aws is the most efficient and cost effective way of storing data on a global scale for both small and large businesses. They need to be somewhere why not here where we get tax, employment and attract other businesses. I work in software and there is huge growth in Irish software start ups the people who run these were attracted to working in the industry. Having the big 5 Facebook Google Microsoft Amazon and Apple in this county attracts students into the sector because of the job prospects with fantastic earning potential.
Reading that you’d wonder what is wrong with people, any pressure to upgrade our renewable energy sources due to data Centres will make this clown Pascal have to look at new tax revenue streams? What’s the point of getting on in life of getting yourself educated and getting a great job, and the worker being taxed into poverty while these companies have soaring profits and the same td is against a windfall tax? “Fcuk the people, I might get a handy board job” , the fg motto.
‘Every cloud…..’
Data centres only provide large scale employment during their construction. Once it is finished and fully operational it only takes a hand full of people to “operate” it.
No one listens to him anyway theyknow he just a lacky now
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