{"id":289948,"date":"2026-01-17T22:48:25","date_gmt":"2026-01-17T22:48:25","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/289948\/"},"modified":"2026-01-17T22:48:25","modified_gmt":"2026-01-17T22:48:25","slug":"game-of-russian-roulette-over-energy-supply-threatens-irelands-ability-to-attract-new-fdi-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/289948\/","title":{"rendered":"Game of \u2018Russian roulette\u2019 over energy supply threatens Ireland\u2019s ability to attract new FDI \u2013 The Irish Times"},"content":{"rendered":"

In a private paper for IDA Ireland<\/a> directors, senior officials laid bare the challenge faced by the State inward investment agency from big constraints in the electricity<\/a> network.<\/p>\n

The IDA has had many successes over the decades, making Ireland one of the main European hubs for foreign direct investment<\/a> (FDI) from international tech<\/a>, pharma<\/a> and financial<\/a> groups. This has yielded rich dividends in the form of about 300,000 Irish jobs with 1,800 client companies, and an annual corporation tax<\/a> take that came close to \u20ac33 billion last year.<\/p>\n

But the paper struck a distinct note of caution when highlighting electricity problems in an \u201cenergy update\u201d to the agency\u2019s board, which said competitiveness was critical.<\/p>\n

\u201cFundamental to this is a reliable supply that meets demand expectations at a competitive price,\u201d the IDA officials said.<\/p>\n

\u201cIreland\u2019s electricity prices are among the highest in Europe, while connections to the grid are constrained due the lack of generation and network infrastructure,\u201d they added.<\/p>\n

\u201cElectricity grid connections are not available for new energy intensive FDI projects.\u201d<\/p>\n

They went on to say large energy users such as data centres<\/a> were \u201cnot considering Ireland as a viable location\u201d and cited challenges with permits, planning permission and energy connections.<\/p>\n

There may be little enough new in that for business people grappling for years with the electricity shortage \u2013 or indeed for prospective housebuyers confronted with homes unfinished because of the lack of power.<\/p>\n

Still, it appears remarkable that the officials\u2019 stark view was made public at all. The document \u2013 presented to an IDA Ireland board meeting on February 5th, 2025 \u2013 was released with heavy redactions on foot of a Freedom of Information request to the agency from The Irish Times.<\/p>\n

\u201cThis issue hasn\u2019t happened in the last five years. This issue has been going on for 10, possibility 15 years,\u201d says Sean O\u2019Driscoll<\/a>, the former chairman and chief executive of Glen Dimplex<\/a> who leads the Accelerating Infrastructure Taskforce<\/a> that the Government established in May.<\/p>\n

\"IDAIDA Ireland has made public its concerns about the lack of grid connections for large projects. Photograph: Dara Mac D\u00f3naill <\/p>\n

\u201cThis isn\u2019t an issue that happened yesterday or today and it isn\u2019t a surprise to people in industry or people in the energy sector \u2013 and that includes ESB<\/a> and EirGrid<\/a>,\u201d he adds in reference to the State electricity supplier and the State national grid operator.<\/p>\n

\u201cNobody was encouraged to talk about this. In fact, people were discouraged to talk about it because you were seen to be negative about Ireland, talking down Ireland and talking down our FDI opportunities. The system was in complete denial.\u201d<\/p>\n

Despite the electricity risks set out in the board paper, the agency was quick to stress that 2025 still turned out to be a record year for FDI.<\/p>\n

Agency figures show 323 new investment projects were secured \u201cacross all regions and with associated job creation of over 15,000, underscoring Ireland\u2019s continued success in attracting global investment.\u201d<\/p>\n

Asked about its electricity concerns, IDA Ireland says it remains \u201cvigilant in identifying both risks and opportunities\u201d to sustain future growth.<\/p>\n

\u201cIn recent end-of-year statements, we have emphasised the critical need to address competitiveness challenges to maintain Ireland\u2019s FDI momentum,\u201d it says.<\/p>\n

[\u00a0Foreign direct investment into Ireland hits record level despite US tariffsOpens in new window<\/a>\u00a0]<\/p>\n

\u201cA secure, resilient, and cost-competitive energy supply and infrastructure is essential for Ireland\u2019s strategy to attract investment, particularly across the key growth drivers of digital and AI, sustainability, semiconductors, and health.\u201d<\/p>\n

By making public its concerns about the lack of grid connections for certain types of large projects \u2013 albeit in redacted documents \u2013 the agency appears to be sounding an alarm bell of sorts.<\/p>\n

\u201cThe challenges to Ireland\u2019s energy system have significant implications for Ireland\u2019s manufacturing sector, and for the attraction of new name business, particularly for energy intensive businesses,\u201d the paper for IDA directors says. <\/p>\n

The warning about the scarce grid connections was clear. Yet the paper also cites \u201cexternal\u201d messaging about progress being made and Ireland being in a better position relative to 2023 \u2013 a period of high network pressure \u2013 \u201cwith respect to electricity availability\u201d for existing and contracted demand.<\/p>\n

\u201cProgress is being made (eg new temporary generation, more successful electricity auctions, new strategic policies, progress on offshore wind development, planning legislation development etc.),\u201d the paper says.<\/p>\n

\u201cThere is a strong commitment in the Programme for Government around securing protecting and reducing the cost of Ireland\u2019s energy, and to accelerate the generation, connectivity and planning of renewable projects.\u201d<\/p>\n

\"LargeLarge energy users such as data centres were \u2018not considering Ireland as a viable location\u2019, the IDA paper said. Photograph: iStock <\/p>\n

Although the board meeting in question took place almost a year ago, it reflects concern that was building for many years about threats to the flow of FDI from the lack of electricity.<\/p>\n

Such risks were demonstrated in sharp terms in July when Amazon, the Seattle-based online retail and data giant, scrapped plans to build a \u20ac300 million industrial plant in Dublin because it could not secure a power supply.<\/p>\n

Not only was the prospect of 500 jobs lost. Of greater concern in FDI circles was the fact that the likely power demand from the proposed plant was considered relatively modest. The proposed Amazon<\/a> plant was not an energy-intensive data-centre, the type of high-energy building for storing internet and business data that is already subject to regulatory curbs here because of the electricity shortage.<\/p>\n

Amazon\u2019s move prompted anxiety in Government circles about the possibility of other investments being lost over the lack of power.<\/p>\n

FDI has been central to Ireland\u2019s economic model for more than half a century. This has placed the State in the vanguard of globalisation but made it more susceptible than other countries to the ebb and flow of international trade.<\/p>\n

[\u00a0Dublin data centre uses as much power as 200,000 homesOpens in new window<\/a>\u00a0]<\/p>\n

It follows that electricity pressures come with the stream of future investment from the US \u2013 long the biggest source of Irish FDI \u2013 coming into question as president Donald Trump attempts to impose his will on the world in his second term.<\/p>\n

True, Ireland dodged trouble last year when Trump introduced swingeing \u201cliberation day\u201d tariffs on global trade. Still, this is hardly a moment for home-grown uncertainty about power supplies. In the era of surging corporate investment in artificial intelligence (AI), it cannot be a good thing. <\/p>\n

Asked about the \u201cenergy update\u201d paper, IDA Ireland declined to say how many potential FDI projects have been lost because of electricity.<\/p>\n

But O\u2019Driscoll of the infrastructure taskforce says he has learned directly from multinationals about valuable investments lost to Ireland when the group consulted with industry. <\/p>\n

\u201cDuring the consultation process on infrastructure, several of the most significant foreign direct investors in Ireland made contact with me to share their concerns with me,\u201d he says.<\/p>\n

\u201cI can tell you what they said to me. We have [lost] \u2013 and are continuing to lose \u2013 billions of euro of investment to other sister companies of those multinationals in Europe.<\/p>\n

\u201cSo something that naturally had come Ireland\u2019s way previously, for the last \u2013 I would say \u2013 two to three years, some of that has been going to other European countries as a consequence of our infrastructure issues. That\u2019s how serious it is.\u201d<\/p>\n

The Government has implicitly acknowledged the problem, handing down approval in December for an \u20ac18.9 billion master plan for energy infrastructure. That includes a new \u20ac2 billion State equity investment in EirGrid and \u20ac1.5 billion in new State equity for ESB.<\/p>\n

This strengthens their capacity to finance projects into the medium term, a priority given the need for new generation, transmission and distribution systems in light of what EirGrid has described as \u201cunprecedented\u201d demand for power.<\/p>\n

Such initiatives, championed by Minister for Energy Darragh O\u2019Brien, were followed this week by a new large energy user action plan, known as LEAP. <\/p>\n

The LEAP aims to improve Ireland\u2019s prospects of attracting a new generation of investment in semiconductors, pharmaceuticals, precision engineering and data centres. New users will be required to locate operations near renewable energy sources, among them energy parks designed to put the most energy intensive industries adjacent to resources such as offshore wind.<\/p>\n

Other moves include publication of a new connection policy for data centres and a new private wires policy, aimed at facilitating investment in grid connections.<\/p>\n

Cable-laying for the Celtic Interconnector to France<\/a> has begun, along with preparations for an additional interconnector with Spain, for which a memorandum of understanding between authorities is scheduled in April.<\/p>\n

\"GreatGreat Island Power Station in Co Wexford, where an electricity interconnector links with Wales. Photograph: Brenda Fitzsimons <\/p>\n

IDA Ireland says the totality of such measures suggests the policy landscape has fundamentally improved \u201cas we enter 2026\u201d.<\/p>\n

But the fact remains that electricity and infrastructure is inherently time-consuming, with little shortcuts when the time frames for major projects often span several years.<\/p>\n

\u201cIt\u2019s ultimately a question of electrons. Darragh O\u2019Brien can\u2019t do anything about the physics,\u201d said a senior multinational executive who spoke on condition of anonymity.<\/p>\n

Like other business figures grappling day-by-day with the electricity crunch, the executive said recent Government actions, though welcome, were still years late.<\/p>\n

\u201cPeople have been very slow to get to grips with this. It\u2019s definitely one of the biggest crises of Irish policymaking,\u201d they added, noting deep-rooted problems with Irish competitiveness generally.<\/p>\n

\u201cWe\u2019re so far off base that there\u2019s a big question over our ability to meet existing demand. When it comes to AI, which has greater energy needs, it really seems unlikely that we\u2019ll be in a position to meet that demand. The risk is that AI Compute, as it\u2019s known, will pass Ireland by.\u201d<\/p>\n

\"\"Data centres are energy-hungry, so why does Ireland need more of them?<\/p>\n

AI Compute, which is shorthand for resources for training and deploying AI, requires large-scale computer resources with huge electricity demand.<\/p>\n

This places into perspective the degree of constraint on Ireland\u2019s creaking power network, which is supposed to sustain a population forecast to reach six million by about 2040 with associated economic expansion.<\/p>\n

In many ways, the roots of the problem lie in the long-term expansion of the State\u2019s population and economy, which gained pace again as recovery set in after the 2008 crash.<\/p>\n

Ireland\u2019s population was estimated at 5.38 million in 2024, compared with 3.79 million in 2000, a 1.59 million increase in a quarter-century. In the same period the numbers working in the State rose to 2.79 million from 1.65 million, a 1.14 million increase.<\/p>\n

That was not matched by a corresponding increase in critical infrastructure. This, in turn, placed huge strain on housing, transport, water and energy networks \u2013 leading to a situation where one problem often worsens another. <\/p>\n

For example, it was only in October that O\u2019Brien intervened to demand urgent action from EirGrid and ESB to ease an immediate threat to new housing in north Dublin from the lack of electricity.<\/p>\n

The area is the busiest part of the State for house building and critical for the achievement of new Government housing targets, which call for 300,000 new homes to be connected by 2030.<\/p>\n

[\u00a0Darragh O\u2019Brien warned ESB and EirGrid over house connectionsOpens in new window<\/a>\u00a0]<\/p>\n

\u201cI can tell you in parts of north Co Dublin today you could not connect 1,000 new homes because the infrastructure isn\u2019t there to connect the homes,\u201d O\u2019Driscoll says.<\/p>\n

The electrification of heating and motoring means more power is required for modern homes than in the past.<\/p>\n

And then there are the demands posed by AI. International Energy Agency research<\/a> suggests a typical AI-focused data centre consumes as much electricity as 100,000 households, but the largest centres could consume 20 times as much. The point here is that Ireland is still struggling to meet housing demand for power \u2013 never mind AI.<\/p>\n

Moreover, the lack of housing<\/a> supply is itself a concern for IDA Ireland.<\/p>\n

Separate board papers call for a more co-ordinated effort to attract international funding and resources to support housing: \u201cThe availability of housing is central to Ireland\u2019s value proposition for FDI and a greater supply of affordable housing of all types, across the entire country, is urgently needed.\u201d<\/p>\n

Replying to questions, the IDA says \u201cIreland must accelerate delivery of energy infrastructure and enhance strategic industrial planning to meet the demands of the next decade\u201d.<\/p>\n

These are priorities now for the group led by O\u2019Driscoll, who expresses confidence in plans to overhaul infrastructure because of \u201can absolute commitment by Government and civil servants and State agencies\u201d. <\/p>\n

\u201cWe have been playing Russian roulette with our economy when it comes to energy and infrastructure in general. At least we\u2019re talking about it now,\u201d he said.<\/p>\n

\u201cWe never planned for the success of our economy or the growth of the population.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"In a private paper for IDA Ireland directors, senior officials laid bare the challenge faced by the State…\n","protected":false},"author":2,"featured_media":289949,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[73],"tags":[289,79,2914,444,18,20869,15912,52737,8752,43293,19,17,143905],"class_list":{"0":"post-289948","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-artificial-intelligence","9":"tag-business","10":"tag-darragh-o-brien","11":"tag-data-centres","12":"tag-eire","13":"tag-eirgrid","14":"tag-energy-crisis","15":"tag-esb","16":"tag-housing-crisis","17":"tag-ida-ireland","18":"tag-ie","19":"tag-ireland","20":"tag-sean-o-driscoll"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115912881184499131","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/289948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=289948"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/289948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/289949"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=289948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=289948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=289948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}