Journey Outside Dublin Prompts New Growth Phase For Ireland’s Data Centres

Ireland’s data centre market is entering a new growth phase, with more than half of the country’s pipeline located outside Dublin in a development likely to reshape the geography of the sector, according to new research from adviser Knight Frank.

Its report, Ireland’s Data Centre Market: Growth Beyond the Grid, estimated that Ireland has more than 1.2 gigawatts of live IT capacity and a development pipeline exceeding 2.1 GW, making it the fourth-largest data centre market in Europe.

And Knight Frank has forecast that live IT capacity will exceed 2 GW by 2030, adding almost 1 GW over the next five years, with regional markets by then accounting for more than 1.1 GW of planned capacity.

While the defining issue for data centre development is the availability and management of energy infrastructure, Knight Frank said Dublin also remains one of Europe’s most cost-effective locations for data centre development. Average construction costs total €9.36M per megawatt, the lowest across the FLAP-D markets and below Amsterdam (€11.17M), Paris (€11.17M), Frankfurt (€10.9M) and London (€10.35M).

“The next chapter of growth is likely to be fundamentally different,” Knight Frank Ireland Divisional Director, Development Land Finín O’Driscoll said of the findings in a statement.

“The central challenge facing the market is no longer occupier demand. Demand remains exceptionally strong, driven by cloud computing, artificial intelligence and ongoing digitalisation. Instead, the defining issue is the availability and management of energy infrastructure in line with government policy.”

This shift is changing how data centre land is assessed, acquired and developed, he said. Counties that historically sat outside the core data centre geography are increasingly attracting attention due to their renewable energy potential, available land supply and ability to accommodate large-scale projects.

“This presents a significant opportunity for regional landowners, local authorities and institutional owners to participate in the next stage of Ireland’s digital economy, pointing to Waterford’s pipeline which is equivalent to almost six times its existing operational capacity, while Kilkenny is expected to expand more than fourfold,” he said.

To date, data centre operators have contracted more than 1.5 GW of renewable energy capacity in Ireland through power purchase agreements, with Microsoft making the largest commitment, signing agreements covering more than 900 megawatts of wind and solar capacity.

In addition, while Ireland has just 25 MW of operational offshore renewable generation, more than 5.6 GW is planned.