Echelon receives €855m in funding to complete four Irish data centres

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Irish-owned Echelon Data Centres has announced a debt financing agreement of €855m with Starwood Capital Group for the construction of its four data centres in Ireland.

Launched in 2019, Echelon currently has six facilities under development in Ireland and the UK with a potential combined capacity of around 500MW, including four in Ireland.

Echelon said its sites in Ireland – two in Dublin and two in Wicklow – will have a combined capacity of 390MW and will create more than 2,000 jobs in construction and full-time operational roles. There will be 80 to 90 full time staff in each facility when completed, according to an Echelon spokesperson.

The data centre operator said all data centres should be powered by 100pc renewable energy but “halfway house solutions” such as on-site gas-fired plants may be necessary in the short to medium term to support the over-burdened grid infrastructure.

In November 2020, Echelon signed a deal with SSE Renewables for the development of a 220kV substation in Arklow. This will facilitate the development of Echelon’s Arklow data centre as well as a large-scale offshore windfarm with an export capacity of 520MW. Echelon also announced plans last April to co-locate a biogas plant at the facility.

CEO of Echelon Niall Molloy said the finance agreement signals the next phase of its project in Ireland to create large-scale data centre infrastructure to meet the current need for data management.

“Data centres are essential infrastructure – now, post-pandemic, more than ever. If we are to continue to benefit from low-cost, reliable and time-saving tech such as Zoom and Teams, if we’re to enjoy the speed of 5G, if we are to stream on-demand and if we are to look forward to the future of AI and the IoT, then increasing data centre capacity is a given.”

Challenges for New Data Centres

In September 2021, EirGrid said it predicts “electricity supply challenges” in the next nine years, in part due to the growth of large energy users such as data centres. It forecasts an increase of up to 43pc in demand for electricity by 2030 and says data centres could account for one-quarter of all power consumption by the end of the decade.

To ensure data centres do not put pressure on Ireland’s grid, The Commission for Regulation of Utilities (CRU) issued new directions on connection applications from data centres for electricity grid operators last November. These include assessing them based on their location – something that is already on EirGrid’s radar – as well as the ability to generate their own power and ability to power the grid in times of peak demand.

EirGrid recently confirmed that it will not provide connections for new Dublin-area data centres until at least 2028. This does not impact centres where connection agreements are in place so projects that are currently underway should be able to proceed. An Echelon spokesperson confirmed that its four data centres are still going ahead.

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