Data Centres Contribute €62.5 Million to Irish Local Authorities

Data centre operators are providing approximately €62.5 million annually to local authority budgets in Ireland, according to a recent investigation by The Journal Investigates. This funding, derived from commercial rates, plays a crucial role in supporting various public services, including housing, transport, and community programs.

The investigation utilized over 25 years of planning records to map all operational data centres across Ireland. By cross-referencing this data with property valuations from the state agency Tailte Éireann, the research aimed to offer a clearer picture of how these facilities contribute to local economies. Each local authority sets its commercial rates, which, when multiplied by the property valuations, determines the financial obligations of data centre operators.

Significant Income Sources for Councils

The majority of the commercial rates income from data centres is generated by three key local authorities: South Dublin County Council, Fingal County Council, and Dublin City Council. Most of Ireland’s 89 data centres are situated in industrial estates near the capital, with South Dublin County Council receiving more than half of the total commercial rates from these operators. This includes major facilities like a Microsoft campus and data centres from both Amazon and Google, located primarily in Clondalkin.

A spokesperson for South Dublin County Council highlighted the importance of these contributions, noting that the revenue allows the council to provide essential services to its community. “Data centres make an important contribution towards the funding of the local authority,” they stated.

In Fingal County, large clusters of data centres in areas like Blanchardstown and Clonshaugh also significantly enhance local authority income. A representative from Fingal County Council emphasized that the financial contributions from businesses help improve the quality of life for residents.

Potential Risks of Reliance on Data Centre Revenue

While the income from data centres is beneficial, experts warn against excessive reliance on this revenue source. In fact, projections indicate that approximately 20% of South Dublin County Council’s commercial rates income will originate from data centres by 2025, while in Meath County, this figure is estimated at 17%.

Patrick Bresnihan, an associate professor at Maynooth University, expressed concern over this dependency. “We shouldn’t be deepening our dependency on these companies,” he remarked, suggesting that such reliance could leave local councils vulnerable should any data centre operators decide to withdraw.

Bresnihan further pointed out that data centres are becoming increasingly integral to the national electricity grid, equipped with on-site energy plants capable of sending power back to the grid. This interdependence raises governance and sustainability issues, as councils might find themselves in a position where data centre operators could leverage their financial contributions.

The investigation also revealed some limitations in the data collection process. In certain instances, property records from Tailte Éireann did not align accurately with the locations of data centres. Outdated satellite imagery and overlapping classifications with larger manufacturing plants posed challenges in establishing precise calculations.

In a notable finding, Meath County Council reported close to €10 million in income from a substantial Meta campus in Clonee and an Amazon data centre near Drogheda. A spokesperson confirmed that such income is vital for covering day-to-day expenditures necessary for maintaining local services, including environmental initiatives.

The overall message from this investigation is clear: while data centres significantly bolster local authority budgets, a balanced approach to funding is essential. Increasing contributions from government sources would alleviate councils’ dependence on commercial rates from data centres, allowing for more sustainable planning and infrastructure development.

The investigation underscores the importance of understanding the economic landscape surrounding data centres in Ireland, which, while lucrative, could pose risks if local authorities become overly reliant on this revenue stream.