Paul Murphy challenges data centre support under UECS

In relation to the Ukraine Enterprise Crisis Scheme Stream 2, could you just clarify whether Irish-owned data centres would qualify for support there? Yes, I can. Data centres would fall into the category of internationally traded services, so would potentially qualify. They would be subject, though, to all of the checks and balances that my colleague Donal has outlined earlier, Deputy. And could you say how much could a given Irish-owned data centre get? First of all, there's a very small number of Irish-owned data centres, if you look at some, probably, and they're small regional enterprises. I would know them from previous, so I think very small numbers. But it would depend on the application. It would be impossible to say what the amount might be until we see, first of all, what their energy cost is, how much it has increased. And what we've found, Deputy, as we look across all sectors, is that the cost of energy varies, you know, the situation that people are in on energy varies very widely, actually. And some of the more energy-intensive businesses have actually hedged, and some people have hedged out as far as 2024, as far as I can see. So it would depend on the individual situation of the company, and that would be true for any company. But if they've seen a big increase in their energy costs, they can get up to a 30% contribution of their energy costs, is that right? 30% over a doubling. So firstly, if you're, and the way I remember this for myself, Deputy, is if your energy cost was a million euros in 2021, if it is now 3 million, you can get 30% of the last million. So $300,000 over a 3 million energy bill is the quantum. And also, it's important to remember that our support is capped at 2 million euros for string two of the UECS. Per company? Per company. Per company, per group of companies, actually. Yeah, okay. And that is entirely separate too, and on top of any support that they would get from T-Best, for example, where a data centre can get 30,000 euros a month. It is. T-Best will be netted off from our support. So if someone gets the full 60,000 under T-Best, and if they access 120,000 under ours, they will get 60,000 from Enterprise Ireland. Okay. So I do note, I mean, there are various sectors that are excluded from Scheme 2. For example, there's a reference somewhere here, I can't find it, but to, like, adult entertainment is excluded. Gambling sector is excluded. So you haven't chosen to exclude data centres while speaking about the need for decarbonisation, while yesterday the Taoiseach was, you know, giving great words and saying, our citizens will become increasingly cynical, weary and hopeless if words are not urgently matched by deeds, if commitments do not generate new realities. So why haven't you excluded data centres, given their contributions in terms of 70% of our total energy use at this stage? Is it not entirely contradictory to the idea of decarbonisation to be having more public money being funneled to data centres? First of all, Deputy, I would say it's not clear that public money will be funneled at all to data centres because we're not certain whether and if data centres will actually be eligible under the specific criteria of the fund. The sectors that we've excluded are sectors that we exclude from our typical grant offers, and I might ask my colleague Donal maybe to comment on this a little bit further in a second, but these are, what we have done is made this support, as we always do, available to those companies that are available, that are eligible for our current and standard supports, and we've excluded those that are not eligible for our current and standard supports. Maybe Donal, you might want to expand a little bit on that. Thanks, Leo, and thanks, Deputy. Yeah, just to expand on the sectors that are excluded, there's almost nothing new in that in the sense that there are about four sectors, which would include gambling and also tobacco and adult entertainment, and they are traditionally excluded because sometimes for legal reasons, tobacco, there's international agreements not to support tobacco companies from the state, for instance, and also experience in dealing with certain industries, that it was taught with experience, with advice that it would be unhelpful for the state to be involved in them. But when we go out for schemes, generally, we don't look at sectors anew and decide what is and isn't appropriate outside those four categories. But that's purely a policy choice on behalf of Enterprise Ireland. I mean, there's nothing legally stopping you from saying we're not going to include data centres. No, there's nothing legally to stop us doing that. So if you were serious about the commitment to decarbonisation, you would have excluded data centres. What I would say, though, Deputy, is that our scheme, like most of our schemes, is within EU rules, and we're following the EU rules, and when we went for notification to Europe and doing it, and what generally is easier to get through Europe, and mindful that we had to do this fairly quickly, the more you exclude and the more you leave out sectors, the more competition distortion is involved, so that the longer the process it would take to go through Europe. OK, so the reason data centres aren't excluded is because of EU rules, is that what you're saying? No, no, we're not. We're not, Deputy. What we are saying, though, is I think, and it is probably important to draw the distinction between energy cost and decarbonisation, but at that level, I think going back to the foundation of your question, there are very few Irish-owned data centres. There are a very small number of... But they exist. They do. And they can apply to the scheme. And they serve local needs for digital customers, hyper-local needs in certain cases, and I can think of two off the top of my head, but probably only two at this point, Deputy, that are local data centres, and I know the communities they serve. They're in rural, and one's in the centre of a rural region. The other is in a regional urban location, and they serve local clients. But without further information to hand, I don't want to comment on those particular businesses, but... So you're saying that these cloud data centres, they only serve local people? I might misunderstand the whole nature of the cloud. You said Irish-owned, so... Yeah, I've got one here, for example, in Blanchestown. Certainly, their office for getting in touch is in Blanchestown, and they advertise internationally and offer data centres. The idea that they're just serving local people is kind of contradictory to the nature of what a cloud... The two, and I do know the one you're talking about now also, but actually, there are companies that offer international services, but they are very important to export businesses in themselves, and we don't want to exclude businesses. However, I would say that this support is not targeted at data centres, and the fact that these companies are not excluded, it does not mean either that we deliberately left them in. The key point I made earlier is that the exclusions on this scheme are exclusions that we would have in respect of our standard supports, and that's the approach that we took on this, and as Donal said, that simplifies the process of creating a scheme which was created in response to an urgent emergency requirement. But does it not demonstrate a very gross policy incoherence that, on the one hand, we have the kind of speeches we heard yesterday from Eyal Martin, we have your statement talking about the commitment to decarbonisation, but yet the public, through Enterprise Ireland, certainly through T-Best separately from Enterprise Ireland into a big way, but quite possibly through Enterprise Ireland, may be funding the energy use of these big data centres. Is that not in some way contradictory? I think it's a longer conversation, Deputy, in terms of the difference between decarbonisation and digital infrastructure or data centres, and I think they are energy use and decarbonisation are probably different discussions, subtly different. More energy use makes it harder to decarbonise, except that this is basic mathematical fact. It depends on what that energy use offsets in other locations, and it depends on the benefits that accrue to the businesses that decarbonise themselves. It also depends on the carbon content of the energy that's used by the consumer of that energy. You know, so I think there's lots of factors, Deputy, and I wouldn't say it's as simple as you put it, but I'd be more than happy to follow up with you on this matter, actually, and to have an offline discussion. So if that's helpful, I'd be more than happy to do so. Thanks. Thanks. Thanks. Thanks.