Vol. 1090 No. 6
2. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Tourism and Employment if, in the interest of transparency, he will instruct his Department to publish the original unedited report (details supplied) on the value of data centres to Ireland. [67206/26]
3. Deputy Roderic O'Gorman asked the Minister for Enterprise, Tourism and Employment the reason a recent report (details supplied) published by his Department on the economic impact of data centres in Ireland did not address the net impact on the economy of increased costs of energy caused by data centres, the opportunity cost of supporting data centres instead of other infrastructure or sustainability targets on water and energy use for data centres. [67205/26]
Over the summer the Department published a report prepared by KPMG that set out the economic case for data centres in Ireland. Freedom of information requests made by Lynn Boylan of Sinn Féin, and I acknowledge all her work in this area, revealed that officials from the Department sought to make amendments to the draft prepared by KPMG in order to cut concerns about the impact of data centre expansion on housing, utilities and farmland. In the interests of transparency will the Minister release the full draft report prepared by KPMG where these concerns have not been removed?
I propose to take Questions Nos. 2 and 3 together.
I thank the Deputies for their questions. I propose to take these two priority questions together as they concern the recently published report, The Value of Data Centres to Ireland, which was prepared independently by KPMG for my Department.
The first issue raised is regarding the publication of draft versions of the report. Officials from my Department and members of the steering group provided comments and feedback on draft versions in line with standard practice for commissioned research. Draft reports are subject to review and refinement to test assumptions, challenge analysis, seek clarification where required and ensure that findings are robustly supported by evidence and clearly presented. In line with standard practice, this is the approach that my Department takes in delivering independent research studies, including, for example, The Sectoral Analysis of Future Hydrogen Demand and End Use in Ireland, An Evaluation of Deadweight in the DETE Economic Appraisal Model (EAM) and An Economic Assessment of Green Energy Park Concepts.
Assertions that the KPMG study on data centres was designed to reach a predetermined conclusion are incorrect. Responsibility for the methodology, analysis and findings contained in the final report rests with KPMG, following its evidence gathering, stakeholder engagement, expert challenge and quality assurance processes. I do not intend to instruct my Department to publish draft versions of the report. Drafts are working documents that form part of an iterative research process and do not represent the considered final views of the authors. Publication of drafts without the context of the review and quality assurance process could create confusion regarding the final conclusions of the study.
I will now turn to the issue raised regarding the economic impact of data centres, the associated energy costs and the scope of the study. The report was commissioned to address a knowledge gap regarding the economic contribution of data centres to Ireland, including their impact on employment, gross value added, tax revenues and wider economic activity. It found that data centres supported an additional 7,636 operational jobs between 2010 and 2024 and are enabling infrastructure supporting significant economic activity in Ireland.
The terms of reference for the study were to determine the economic impact and wider societal benefits arising from existing and planned data centres in Ireland up to 2030 and explore options for the evolution of the data centre landscape beyond 2030 with a view to optimising future economic and societal benefits. While the report was required to consider trade-offs and opportunity costs associated with future data-centre development, it was not commissioned as a comprehensive cost-benefit analysis comparing the economic benefits of data centres with electricity costs, nor was it designed to assess the net economic benefits of data centres against alternative uses of electricity, land, water or infrastructure capacity.
This is a 12-and-a-half minute slot for two questions and each Deputy will have two minutes to speak.
People need transparency because they are researching how many data centres are enough and how do we get a sustainable balance. In 2025 data centres consumed 23% of all metered electricity, which was up from a figure of just 5% ten years ago in 2015. This is more than the total metered electricity used by all urban dwellings in 2025, which accounted for just over 18%. All rural dwellings accounted for 9%. At this rate, the electricity usage of data centres will surpass the total used by all homes within a few years. I do not think this is sustainable.
The pressures these data centres are placing on grid capacity cannot be understated. I am sure the Minister for Enterprise, Tourism and Employment can recognise that where grid capacity is unavailable it jeopardises potential investment and job creation in smaller businesses. Delays in securing electricity or water connections mean investment will go elsewhere to competing economies. Businesses need places for their workers to live. If we cannot match this housing demand due to grid constraints we will lose out.
It is vital that decisions on new data centre connections take account of the electricity requirements of housing, businesses, public services and future industrial development in that area. This is why last week my colleague, Deputy Pa Daly, brought forward a Bill that does just this. It prioritises homes and businesses over these energy and water consuming data centres. More data centres mean higher energy bills for households. Earlier this afternoon Lynn Boylan, MEP, and Eve Ryan from Trinity College presented the findings of their research on how data centres impact on the cost of electricity.
When the KPMG report on data centres was initially published it raised serious questions around whether a meaningful cost-benefit analysis was being undertaken in relation to the economic impact of data centres, particularly when it coincided so closely with the publication of academic analysis that showed households have seen their energy bills increase by hundreds of euro due to data centre demand driving up wholesale prices. Now it appears, through freedom of information requests, that the conclusions of the report were determined from the beginning and that the rougher edges were shaved off to present a more palatable picture.
The tender document that set out the specifications of the report asked KPMG to assess the challenges and potential disadvantages of further data centre development. The same terms of reference specifically provided the example of rising electricity prices as one such potential challenge, stating there is a potential for increase in electricity prices related to any grid infrastructure developments required to support further data centre development. Why, then, was this analysis absent from the final report? Were the consultants not asked to conduct a full net economic analysis, including the costs as well as the benefits of data centre expansion? Did the Department specifically instruct the consultants not to assess impacts on electricity prices for households and businesses?
Was any assessment carried out by the Department of the opportunity costs of dedicating grid capacity and public infrastructure to data centres rather than housing, transport or industrial development? Why were sustainability targets, which include measurements relating to energy use, water consumption and emissions, not included as core metrics within this report?
I thank both Deputies for their responses. Critically, as I pointed out in my earlier contribution, our report was not a cost-benefit analysis. It was principally about the added economic value that data centres would bring to the economy, or not. We had a gap in evidence in relation to their economic value. We have a body of evidence from the Department of Climate, Energy and the Environment, the CRU, EirGrid and the Environmental Protection Authority, EPA, in relation to grid capacity, electricity demand, emissions and all those areas, and it is intended to offer a view on the economic analysis. There is a gap in this regard, and it is an area where the Government should have impartial evidence to make a determination. It was not, therefore, a cost-benefit analysis.
As I outlined in my opening contribution, in the context of reports that come from the Department, there are steering committees, terms of reference and a responsibility to ensure that reports meet the terms of reference as required by the Department. All the methodology, assumptions and quality assurance have to be stood over by KPMG. That is key.
In relation to demand and competing interests, I am very much aware that there are huge challenges with data centres, particularly in the context of grid capacity. That is why I changed the rules. In the context of our large energy user plan, I said very clearly that any new data centres will need to use 80% renewable energy. That is going to drive forward our renewable energy transition. If we are going to breathe life into the five projects on the east coast, which will produce a total of 5 GW, we are going to need large energy users. Critically, to finance the projects, we are going to need the money and the opportunities that present in this regard, both of which are key. We are also very clear that for the security of the grid, data centres must have 100% of their demand in dispatchable energy generation on site. Again, this builds up resilience in the system. As I have pointed out previously, we have an opportunity to book value for our citizens in energy that is utilised through data centres and to build resilience in the digital economy. I know that there are challenges. We are mitigating those challenges by having a strong policy response.
Has a cost-benefit analysis been done in respect of data centres? Perhaps the Minister can answer this question. We need a thorough cost-benefit analysis. It may be that the information is there and I have not seen it. I ask this question because households are footing the bill for network upgrades to increase capacity for the expansion in the number of data centres, effectively subsidising the power supply for some of the most profitable companies in the world. Network charges currently represent 30% of household bills and are set to rise by an average of €41.25 annually from October. That is not fair. The Government's laissez faire approach cannot continue. Housing, energy security and infrastructure serving the public must be prioritised over the endless number of data centres. How many data centres do we need? How many are we going to have and where are they going to be located? The current arrangement of socialised costs for privatised profits cannot continue. I really think that we need to look at this whole area of data centres, where they are, how many are needed and what the cost-benefit analysis is.
Good policy requires that we assess benefits and costs. If the Government is confident in its approach towards data centre expansion, then it should have no need to place its thumb on the scales, as was done in the case of this report. The Minister may disagree with some criticisms of the approach, but many people will think it is reasonable to ask whether a report that was intended to inform public policy should have examined the benefits and the trade-offs associated with further data centre growth.
It is very clear from the terms of reference released that the report had been intended to address these issues. Why, then, were they removed? Given that data centres account for such a huge share of national electricity demand and are already increasing electricity bills, this is not an abstract question. We have had one useful admission from the Minister, who stated that the KPMG report was not commissioned as a comprehensive cost-benefit analysis. Is it not time that the Government commission a comprehensive report on the benefits and costs of data centres?
That is not an admission; it is a statement of fact, and I am on record as saying that. It is in the programme for Government. There is a comprehensive piece on the economic value of data centres. That is what the research and the report were about.
On increased energy prices, various Deputies quoted reports which state that data centres are responsible for increased energy prices. We saw the report from Friends of the Earth. Notwithstanding that, from 2015 to 2023, we had a war in Ukraine and a huge energy shock, but the report in question blames data centres. We have to ask ourselves whether that is credible. This is the key thing on which people are being misled. Let us look at the contribution to the grid that data centres bring in the context of capital infrastructure and at grid capacity, the temporary emergency generation scheme and the amount that data centres have to pay. If a family is building a new house, there is a charge to be paid to put in an electricity connection. The charges for data centres are multiples of that amount. So they should be, because their infrastructural and capital costs are huge.
Obviously, data centres are buying energy on the wholesale market, which is like comparing apples and oranges. An amount is certainly asked for from them, and that money can drive forward our offshore renewables. This is a question that a lot of people advocating for our offshore renewables are not answering. How are we going to finance them? Are we going to say, for the five projects I mentioned, that we are not going to use that demand here? What about the 9 GW of onshore energy we are looking to bring in and the 8 GW of solar energy? Where are we going to have that energy demand? Are we going to rely on exporting energy to other countries that are increasing their renewables and their own energy independence or are we going to look at the potential of booking that value for Irish citizens?
There will be challenges along the road, and we have to be very careful that we do not get into a situation where there is a trade-off with housing or industry. The Government's new policy manages that quite well because we are driving renewables. We know it is set out in the report that there is a challenge with emissions, about 4%, from data centres right now, but the opportunity costs in bringing fully renewable energy onto the grid are very significant and no one wants to mention that.
4. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Tourism and Employment the engagement he has had with the management of a company (details supplied) regarding reports of increased cabin crew redundancies in Dublin and Cork; and the steps he is taking to protect jobs; and ensure meaningful consultation with workers and their representatives. [67207/26]
The Minister of State will recall that Aer Lingus announced substantial job cuts in July affecting hundreds of workers across the country. My office has been contacted by some of those affected workers facing redundancy. They are extremely concerned regarding the transparency of the restructuring at the airline, while others face significant changes to their current working arrangements. Can the Minister of State provide an update on his engagements with Aer Lingus since July concerning these job cuts? Will he outline what steps he is taking to protect jobs and ensure meaningful consultation with workers and their representatives?
I thank the Deputy for her question. My thoughts are with all workers facing potential redundancy. I understand this is a very difficult time for those involved.
Ireland has a robust suite of employment rights legislation in place to protect workers impacted by redundancy. The Redundancy Payments Act 1967, as amended, requires employers to pay a statutory redundancy payment to eligible employees who are being made redundant and have more than two years’ service. The rules governing collective redundancies are set out in the Protection of Employment Act 1977, as amended. The 1977 Act imposes a number of obligations on an employer that proposes a collective redundancy, which arise when certain thresholds are met. These include undertaking a 30-day information and consultation process with the employees’ representatives and notifying the Minister for Enterprise, Tourism and Employment of the proposed redundancies at least 30 days before they take effect. My Department received a notification of proposed collective redundancies from the company concerned on 16 July 2026.
The Workplace Relations Commission, WRC, is the organisation which is mandated to secure compliance with employment rights legislation. Employees have the right to refer complaints to the WRC on a wide range of employment law breaches for adjudication and compensation where appropriate. This includes the right to make a complaint where they believe their employer has failed to fulfil its obligations under the Protection of Employment Act 1977.
I do not think that a hands-off approach is going to work in this case. Aer Lingus announced in July, as the Minister of State rightly said, that 500 jobs would be lost at the airline. That would impact pilots, cabin crew and ground staff. The company said this was due to the €34 million loss reported for the first six months of 2026. Aer Lingus, though, is a very successful company, having recorded operating profits of €282 million last year.
The company is also expected to make an overall profit in 2026. Its parent company, IAG, enjoyed operating profits of over €5 billion in 2025. The workers in Dublin, Cork, Shannon and around the country who have contributed to that success deserve every effort to be made to secure their jobs or to protect their livelihoods. I understand that Aer Lingus is a commercial company, but that cannot be the end of the Government's responsibility. The Tánaiste told me on 16 July that he would ask the Minister of State, Deputy Dillon, to come back to me on the Government's engagement with Aer Lingus.
As already stated, Ireland has a robust suite of employment law to protect workers who are impacted by this redundancy programme. That includes the right to statutory redundancy payments for eligible employees with more than two years' service. It also includes the right to a 30-day information and consultation process during the collective redundancy process and, indeed, a certain level of minimum notice prior to dismissal. These protections are in place. They are really important. Given the independence of those who manage these through the WRC, they are exercising their statutory function. If there are any issues, they have the right to refer complaints to the WRC on a wide range of employment law breaches. That is the first port of call. We have robust industrial relations mechanisms and it would not be appropriate for me, as Minister of State, to intervene in that process in light of the independence of the entities involved.
The Taoiseach told me that the Minister of State would follow up on this. Will the Minister of State confirm that he did so? What engagement has he had since the announcements were made and what concrete commitments have been secured from management? The Minister of State also needs to confirm that he will meet directly with the affected workers and representatives and ensure that Aer Lingus management engages in genuine consultation.
The proposed redundancies at Aer Lingus are causing enormous uncertainty for workers and their families. These are skilled individuals who have contributed enormously to the airline over the years. They deserve transparency, fair treatment and a genuine opportunity to influence decisions affecting their livelihoods. Workers need more than assurances that this is a commercial matter. They need to know what concrete action the Government is taking to protect their jobs and rights. Will the Minister of State meet with the workers, see what the situation is and find out what can be done to protect them and their livelihoods? The Government has a responsibility here, notwithstanding what the Minister of State said about the mechanisms that are in place.
I answered that question previously. The legislation sets out clearly the requirements of what the consultation involves. The consultation process includes discussions around avoiding redundancies where possible, reducing the number of redundancies and mitigating the consequences for those affected. Employers are also required to provide employees' representatives with specific information relating to the process of redundancies and to facilitate meaningful engagement and transparency.
Nothing has been communicated to me in regard to intervening. Ultimately, the obligation is that they fulfil their requirements in respect of certain matters. It should not be up to the political system to intervene. Indeed, it is a matter for the independent WRC to conduct its work professionally. That is appropriate in the here and now.
I am very disappointed with that answer.
5. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Tourism and Employment the way in which his Department will address the challenges outlined in a recent report (details supplied). [67208/26]
The recent IBEC-CBI report identifies serious barriers to all-island labour mobility, including complex tax arrangements, restrictions, hybrid working, incompatible work permit systems and a lack of clear guidance for employers. I thank my colleague the Minister, Dr. Caoimhe Archibald, in Stormont, who has already written to the British Treasury about this and who has discovered that significant progress has been made on the new double taxation convention between the UK and Ireland. I am interested to hear an update from the Minister on these talks.
IBEC and CBI Northern Ireland's Joint Business Council published the All Island Labour Mobility - Obstacles and Opportunities report in July. The report calls for the establishment of a joint forum to develop a bilateral approach to all-island labour mobility and discusses a range of issues such as taxation arrangements, social security, and mobility for non-Irish or British workers. The Government's Labour Employer Economic Forum, LEEF, which is chaired by the Department of the Taoiseach, is considering this report. This forum, which is attended by all relevant Departments, including the Departments of foreign affairs, Social Protection and Finance, has a shared island working group dedicated to examining issues relevant to economic and labour market policy across the island of Ireland. The LEEF shared island working group commissioned an all-island labour market study in 2024 to examine the condition of the labour market across the island of Ireland. Officials in my Department have been engaging with the State enterprise agencies, the shared island unit in the Department of the Taoiseach and the Department of Finance on the issues highlighted.
My Department has responsibility for economic migration policy and the employment permits legislation, protection of workers' rights in the State, and achieving fair labour standards and freedom of movement across borders for workers are key priorities. Ireland engages with the European Commission, the European Labour Authority and member states with regard to ensuring fair, simple, and effective enforcement of EU rules on labour mobility and social security co-ordination. The Government also engages regularly with its relevant counterparts in Northern Ireland and the UK in order to foster a unified and cohesive response to labour mobility and cross-Border issues. My Department and other Departments will continue to engage on this matter.
I am asking the Minister for a timeline for when the recommendations in the report will be implemented. The report rightly addresses the barriers preventing workers and employers from taking full advantage of the all-island labour market. Both organisations involved called for urgent action on hybrid working and taxation and immigration arrangements, including the establishment of the forum, as the Minister said, to develop solutions.
Brexit has led to significant issues for workers in the Six Counties and the wider Border region. The North voted to remain in the EU in 2016, yet, ten years on, we are still dealing with the consequences of that disastrous vote. Eighteen thousand workers face significant obstacles navigating the Border on a daily basis. Cross-Border trade amounts to €17 billion annually, but the potential for growth is restricted by the availability of labour. Forty-two per cent of IBEC-CBI members sampled said that mobility barriers are making it harder to fill those skill gaps. We need urgency on this.
I do not have a timeline because LEEF has not yet considered fully the contents of the report and formulated a response. However, I concur with what the Deputy said regarding the all-island economy and the growth in the value of cross-Border trade to €17 billion. I sense that an opportunity in this regard is being left behind. As a member of LEEF, I know it has been stated previously that taxation issues are causing difficulty in the context of cross-Border work. However, I would point out that LEEF has all the relevant people present to consider this. Obviously, the taxation issue has been highlighted as a fairly significant concern.
As soon as LEEF comes forward with a resolution or a response to the report and a set of actions, which we need, it will help us in developing a bilateral approach to all-island labour mobility. This will be key, particularly in resolving the taxation arrangements as well as those relating to social security, which will be key to help the Department of Social Protection as well.
I thank the Minister for that and for the work that is being done. I just think there needs to be an urgency in respect of this matter. I accept that the double taxation convention is primarily a matter for the Department of Finance and the British Treasury. However, the consequences of the barriers extend directly into enterprise and employment policy, recruitment skills shortages and the ability of businesses to operate across the island.
The IBEC-CBI report is not simply a taxation report. It identifies wider barriers affecting the operation of the all-island labour market. I ask that the Minister urgently address the recommendations made within this report. I acknowledge the work that has been done to date, but there is an opportunity cost around all of the delays with regard to sorting this out ten years after Brexit.
LEEF has a shared island working group dedicated to resolving some of these significant challenges and putting significant capital funding in. However, I concur with the Deputy that we need to make it easier for enterprises to flourish on both sides of the Border and workers will be key. This has been discussed at the LEEF and we are working collectively to formulate a response to the IBEC and Confederation of British Industry, CBI report at the joint business council. I am doing absolutely everything I can to further North-South relations, particularly with the Deputy's colleague, Caoimhe Archibald. The cross-Border work we have been doing in tourism and other areas is quite striking, particularly investing in significant projects that will bring mutual benefit, such as bringing the lakelands of Fermanagh into Ireland's Ancient East, the work on extending the causeway coastal path and the Wild Atlantic Way. There is a huge amount of opportunity in that area. Equally, we have challenges in business which we have to make progress on. I am up for doing so and will raise the Deputy's concerns at the LEEF.
6. Deputy Albert Dolan asked the Minister for Enterprise, Tourism and Employment when the successor to the current regional enterprise plan for the west will be launched; and whether additional measures are being considered to support enterprise development in regional and rural areas. [67196/26]
The western regional enterprise plan has been a successful endeavour. Regional enterprise in the west has continued to go from strength to strength. However, the plan ended in 2024. I accept that it was extended to 2025 for an independent review. However, we are now in September 2026. When will we see a revised, updated and ambitious western regional enterprise plan?
I thank the Deputy for his question. Balanced regional development is a Government priority. The Department and its agencies contribute to this agenda in several ways, including through the regional enterprise plans, REPs. The REPs are bottom-up plans, developed and led by regional stakeholders, which focus on collaborative initiatives to strengthen the enterprise environment. Each of the nine REPs was tailored to reflect regional strengths and opportunities and aligned to national enterprise policy priorities such as decarbonisation and digitalisation. The most recent REPs ran from 2022 to the end of 2025, following agreement to extend them by one year to support implementation and to enable consideration of the future of the REPs. The western REP covers the counties of Galway, Mayo and Roscommon and was overseen by a steering committee that included the enterprise agencies, local enterprise offices, LEOs, local authorities, education and training institutions and private industry.
The Department commissioned an independent review of the REP initiative last year. The review included significant engagement with regional stakeholders, analysis of the plans and implementation reports, and consideration of international approaches. It also provided recommendations and options for the future of the REPs. The final progress reports for the latest REPs will be published in the coming weeks and my consideration of these, along with the review’s findings, have informed my decision on the future approach to regional enterprise development.
The approach will align regional enterprise priorities more closely with the regional spatial and economic strategies, RSESs, of the regional assemblies. This will strengthen the links between enterprise development, skills, infrastructure and wider regional planning, supporting a more integrated approach to regional enterprise development. A memorandum on the overall approach was submitted for the information of the Government in June of last year.
My officials are currently working with Departments, agencies and authorities to develop a framework statement to give effect to this approach, whereby any future regional enterprise actions will operate as focused implementation programmes aligned with the RSESs.
I welcome the report and that the plan will be published in the coming weeks. That is a huge step forward and will allow us to take things to the next level in east Galway, the rest of Galway, Mayo and Roscommon. Let us consider the reality of what has been achieved in just the past two years with the Dexcom facility in Athenry. There are more IDA Ireland lands in east Galway from Athenry to Tuam and Loughrea. We want them to be unlocked and brought into use. The one request I have for the Minister of State is that, in advance of publishing the plan, when he reviews the western REP, he pleases ensure he does not hold back on ambition for what could be achieved in the west over the lifetime of the next plan.
With that plan, what will be proposed in terms of new ideas, AI and climate and environment?
I thank the Deputy for his support and his ambition for the delivery of enterprise and business solutions to the west, especially Galway. Galway has been one of the major drivers of the success of the regional enterprise plans and the county has benefited significantly from closer collaboration across enterprise, education and innovation sectors. One only needs to look at the likes of the PorterShed, the Atlantic Technological University, ATU, and Platform 94 to see that. The ambition is to continue to support the life sciences sector, medical technology and engineering and for closer alignment between agencies and third level institutions.
We are not standing still. We are currently working on getting the framework right, not simply on replacing the old enterprise plan. Project managers are located in each of the regions. They are now in situ in each of the local authorities are working with the private sector and State agencies to drive the regional enterprise framework statement and continue to deliver across the nine regions.
I welcome that commitment. It is important to say that we in Galway have an ability to deliver life sciences like no other area of the country. It has become what we are known for. Galway is seen as a medical devices and medical technology hub and we should pursue that by continuing to attract more talent from across the globe to that region.
I do not need to explain this to the Minister of State, but none of that can be achieved without the adequate infrastructure. It would be remiss of me not to raise with the Minister of State that he should reach out to Galway County Council and Galway City Council to ensure they try to improve the traffic situation in Galway so all the employers there see the benefit of Government investment in common sense infrastructure that leads to a better quality of life for the people working in those factories.
That is a fair point. The new Planning and Development (Amendment) Act, along with the Critical Infrastructure Act will certainly unlock key large-scale infrastructure. There is no better example than the Galway ring road and other key infrastructure that will support the expansion of, not just County Galway, but the west as a whole. That includes the western rail corridor and many other significant strategic projects. Galway has a strong ecosystem, like Mayo, in medical technology and pharmaceuticals and in working with the likes of the enterprise agencies, including IDA Ireland, Enterprise Ireland and the LEOs, we can continue to harness new start-ups. There has been a huge uptake in participants in the new frontiers programme and that has been of huge benefit in collaboration with the University of Galway and ATU. We need to continue to support that pipeline in the various accelerated programmes, which are delivering real jobs in Galway.
