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July 2021

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CRU proposes to address data centre connections to curb system stress

Charlotte Nelson
charlotte.nelson
14 July 2021

The Commission for Regulation of Utilities (CRU) is seeking to address connection data centres to curb system stress after warning of a surge in demand for electricity. In the consultation issued by the CRU on 8 June, the CRU said that it had become apparent that data centres and the demand load they require are having a significant impact on the Irish electricity system currently and into the foreseeable future.

EirGrid already wrote to the CRU explaining its concerns and stating that Ireland was now at a “significant crossroads” for the future development of the power system. Suggesting new measures were required to provide clarity to it and to data centres on the next step.

Data centre demand on the rise

EirGrid’s median demand forecast predicting data centres will account for 25% of all demand by 2030, increasing to 33% in the high demand forecast. However, this forecast does not account for the most recent applications: connection agreements are in place for over 1,800MW with up to 2,000MW of additional requests received.

Options available

The regulator considers that data centres are the single largest homogenous demand driver, “now need to be flexible and demonstrate this by providing solutions to enable further grid integration”, and it has considered three options as potential solutions.

  • Do nothing. The current Data Centre Connection Offer Policy and Process would continue – the CRU considers this unacceptable.
  • A moratorium on data centre connections. The CRU also does not consider appropriate due to the mechanisms that data centres can employ to contribute to their overall flexibility.
  • Regulator to direct EirGrid and ESB-N to implement requirements they specify for all connection applications received from data centres, whether inside or outside the greater Dublin region. This is the preferred option of the CRU as it considers that this option should allow the data centre industry to continue to connect in a manner that respects the overall system integrity. Under this arrangement, prioritisation of applications would be based on:
  • The location of each data centre applicant with respect to whether it is within a constrained or unconstrained region of the electricity system.
  • The applicant’s ability to bring on-site dispatchable generation and/or storage equal to or greater than their demand meets availability and other technical requirements specified by EirGrid.
  • The applicant’s ability to provide flexibility in their demand by reducing consumption when requested to do so by the transmission system operator in times of system constraint through the use of dispatchable on-site generation and/or storage, which meets availability and other technical requirements specified by EirGrid.

With data centre demand predicted to represent a significant percentage of Ireland’s future energy consumption, simply doing nothing will likely compromise the security of the energy supply. Protecting this is imperative. The third option presented by the regulator should allow data centres to continue to grow in the market whilst ensuring that supply to customers remains uninterrupted.

Bad news for data centres?

This may have been tough reading for some data centres. However, at face value, the proposal is very achievable for many of the new developments, Instead of being viewed as contributing factor to rolling blackouts, data centres could solve the security of supply and constraint issues.

Data centres have tremendous potential to provide flexibility to the grid. Their ability to be flexible with their demand, incentivising them to operate more flexibly could satisfy the concerns of the regulator and any volatility in the wholesale market.

Although this is a step in the right direction, it feels the consultation lacks coordination between all parties. EirGrid and ESB-N have a considerable task in dealing with the energy transition. Therefore, the commercial needs of the data centre community and Ireland will only be served properly if all parties come to the table together. That being said, this consultation is an excellent start to what should be seen as an opportunity for both sides.

Responses were requested by 7 July; the CRU will set out its decision “in due course”.

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