Ireland’s appetite for the development of data centres and related infrastructure shows no sign of abating. In this article, we provide an overview of the various planning, environmental and regulatory permits that are required for the execution of a successful project.
Planning permission
All new data centres require planning permission. A 2018 amendment to the Planning and Development Act 2000 provided for a fast-tracked planning process, provided that certain criteria could be met. Section 49 of the Planning and Development (Amendment) Act 2018 has, however, not yet commenced. Once Section 49 is commenced, however, it will be possible to make a planning application for a data centre directly to the Strategic Infrastructure Division of An Bord Pleanála (the Irish planning appeals board) (“the Board”). Planning permission can be submitted to the Board provided it is deemed to be:
“A facility consisting of one or more than one structure, the combined gross floor space of which exceeds 10,000 square metres, used primarily for the storage, management and dissemination of data, and the provision of associated electricity connections infrastructure.”
This procedure will allow for the local planning authority to be bypassed entirely and for the planning application to be made directly to the Board. Until such time as the provision has commenced, applications for planning must be made to the local planning authority.
Planning permissions are usually issued subject to conditions, which can include environmental safeguards such as emission and noise limits.
Environmental impact statement
The submission of an Environmental Impact Assessment (EIA) by the developer may also be required as part of the planning application process. This will help to identify and evaluate any significant impact that the facility may have on the environment.
In Sinead Fitzpatrick and Alan Daly v An Bord Pleanála and Galway County Council and Apple Distribution International[1], the requirements for an EIA in the context of the proposed development of a data centre by Apple were considered in the Irish Supreme Court. The appeal primarily concerned the proper approach in law to the conduct of an EIA by a planning authority, where the development for which permission was sought formed part of a larger plan or Masterplan. The applicants, who objected to the development, argued that planning permission for the data centre should not have been granted without due consideration of the environmental impact of both the current development plans, and future plans for the projected development of the site.
Justice Finlay Geoghegan confirmed that the Board was obliged to consider the environmental impact of the facts of the application before the Board at that time. It was not under an obligation to consider the impact of possible future planning applications, which may not come to fruition.
Having regard to the facts of this particular case, the Supreme Court held that the Board inspector had "as far as was practicably possible" taken into account the future development of the site when determining the environmental impact of the development of phase one of the Masterplan. It was therefore permissible to treat phase one as a standalone project for planning purposes and for the assessment under the EIA Directive, as it was not functionally or legally dependent on later phases of the Masterplan.
The Supreme Court also held that the EIA required an assessment of its cumulative impacts with the electricity substation and grid connection assets that formed part of the development. The Court determined this requirement had been satisfied.
Environmental permits
In addition to planning permission, there are a number of environmental permits that may be required. This will depend on whether the proposed data centre includes standby electricity generators, as is often the case, and the capacity of these assets. The most relevant environmental restrictions relate to industrial emissions and Greenhouse Gas (GHG) emissions.
If the thermal input of the standby generators is to exceed 20MW then the developer is required to obtain a GHG permit from the Irish Environmental Protection Agency (EPA). It is important to note that only units over 3MW thermal output need to be counted when assessing whether the 20MW threshold has been reached. However, if the 20MW threshold is exceeded then all generators on site must be taken into account, regardless of their size.
Compliance with a GHG permit involves the annual purchase of emission allowances through the EU emissions trading system. These need to be submitted to the EPA to cover the carbon emitted by the plant’s activities.
Meanwhile, the EU (Medium Combustion Plants) Regulations 2017 apply to industrial emissions. These regulations govern the emissions to atmosphere from boilers and other stationary combustion plants. Any relevant plant with a thermal output of up to 50MW must be registered with the Irish EPA and must comply with emission limits. The facility must be registered with the EPA unless it is on an installation controlled by an Industrial Emissions Licence (IED) or Integrated Pollution Control licence from the EPA.
A developer whose backup generators exceed 50 MW thermal output and are expected to operate for more than 18 hours per year will need an IED Licence. This would likely be required for larger data centres.
The developer may also require various other licences dealing with transfer and recovery operations, air and heat emissions, cooling water abstraction, waste storage or discharge of waste, such as condensate from cooling systems.
Electricity connection
Access to a reliable supply of electricity will be of key importance to data centre developers. Data centres are becoming, in their own right, a major demand on the Irish electricity grid. According to a recent report published by EirGrid, electricity demand from data centres could account for 27% of all demand in Ireland by 2029 under a medium demand scenario. This led EirGrid to impose, in 2019, a data-centre-specific “Connection Offer Process and Policy”, of which the key features include:
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A two-stage offer process, which requires an initial “first stage” engagement with EirGrid in order to determine the method of electrical connection. This needs to be followed by the customer obtaining planning permission, before re-engaging with EirGrid in the “second stage” engagement in order to allow the connection offer to be finalised and issued. EirGrid will provide a connection offer for up to 2MVA of electrical import capacity for every 1000m2 of data centre floor area allowed by the planning permission;
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The imposition of “flexible demand” on data centres that are seeking to connect in “constrained areas”. This is a requirement that the data centre reduce a portion of its consumption, in response to an instruction from EirGrid’s national control centre. At present, the greater Dublin region is a constrained area for these purposes, and EirGrid reserves the right to designate additional areas.
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The opportunity for a data centre developer to reduce the “flexible demand” component of its connection capacity, by undertaking to install dispatchable electricity generation capacity that reduces or counteracts the effect of the data centre’s demand on the constrained grid.
In short, the process for allocating electrical capacity to Irish data centre projects has become significantly more structured and regimented in recent years. As a result, substantive engagement is required between a developer and the operator of the electricity transmission or distribution system at an early stage in project development.
The imposition of “flexible demand”, in particular, may present significant constraints on the operation of the data centre, and may affect the extent to which standby electricity generators also need to be deployed.
Conclusion
Ireland continues to deliver a supportive taxation and regulatory environment for data centre location, along with proximity to international data connections. It seems likely that the current considerable level of local data centre development will continue. However, as with any major sphere of economic activity, data centre development attracts a mix of traditional and unique legal issues.
Specialist legal advice should be sought when seeking to finance, develop, acquire or procure services from data centres. For more information, please call a member of our Data Centres team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
[1] [2019] IESC 23
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