New Data Centre Rules Can Open Green Energy Doors, AWS Says

The inexorable rise of AI and the data centres has become something of a cause célèbre around the world.

While, in the past few years, AI has become one of the central pillars of the global economy, it is also under huge pressure to address its energy and water consumption.

Though the technology is still in its growth phase, governments and organisations have already begun imposing regulations in an effort to limit the environmental impacts of data centres.

The Irish Government is one such example.

Last year, the Commission for the Regulation of Utilities (Ireland's independent regulator for the energy sector) ruled that future data centres must meet 80% of their energy needs from additional Irish renewable power plants – a decision that has divided opinion across the energy and technology sectors.

For Niamh Gallagher, who is AWS' Country Lead for Ireland as well as its Infrastructure & Public Policy Lead for EMEA, the ruling is an opportunity rather than an obstacle.

Speaking at the Wind Energy Ireland conference in Dublin on Wednesday, she argued the regulation creates "structured long-term demand" for a new generation of renewable energy in Ireland.

From ambition to reality

But how exactly is the demand for clean energy actualised in the data centre sector?

The most common framework is something called a power purchase agreement, or PPA for short.

These are contracts under which companies agree to buy large amounts of electricity from wind or solar plants, typically over a period of between 10 to 20 years.

These deals are mutually beneficial to both the buyers and the energy providers: the company secures energy for a fixed price, while the energy companies get the funding necessary to build and maintain their installations.

For Niamh, CPPAs allow developers to "convert ambition into bankable megawatts".

These deals are important for Ireland right now too, especially considering its ambitious energy targets.

The government is aiming to install 5GW of offshore wind capacity by 2030, though both the industry and the state now acknowledge is unlikely to be met.

PPAs will go some way to making up the deficit, however.

Individual projects in that pipeline cost billions of euros, and securing finance remains one of the central bottlenecks.

Amazon's position in the market

Amazon is one of the largest hyperscalers in the global market today, responsible for around 900 data centres today with many more in the pipeline.

That said, the firm is also the world's largest corporate buyer of renewable energy, with a portfolio of more than 600 wind and solar farms, capable of producing 40GW of energy.

In Ireland, the company has already struck deals with green energy generators totalling 310MW of capacity.

Ultimately, Amazon is aiming to secure agreements covering up to 800MW – roughly the equivalent of two conventional power plants.

Its partnerships include a deal with State company Bord na Móna to back the development of the Derrinlough wind farm in County Offaly, which Niamh says will be capable of generating enough electricity to supply 90,000 homes.

She also points out that corporate deals fund renewable construction "on time, on budget and with no subsidies and at no cost to the taxpayer" – a framing that will likely appeal to policymakers wary of public subsidy exposure, though critics might note it also serves Amazon's interest in presenting data centre expansion as a net public good.

The data centre debate

Despite the optimism of the country's many tech companies, data centres remain a contested issue on the Irish grid.

Their energy consumption has attracted sustained criticism from citizens and organisations alike, particularly as Ireland is struggling to meet its own climate targets and as households contend with elevated electricity costs.

However, Niamh is looking to reframe that debate, arguing that the AI technology housed in data centres can actively reduces energy demand and carbon emissions elsewhere.

She cited a recent finding by Spanish energy giant Iberdrola that Amazon's systems had helped it cut operating costs by between 10% and 30%, with the savings passed on to customers.

It is the kind of argument that Amazon will need to keep making and it is one that Niamh is determined to take responsibility for.

"Ireland has the wind, the policy direction and the demand," she says.

"Now it's about delivery."