Households ‘on the hook’ for data centre expansion, report warns

Households are paying for data centre expansion through their energy bills, a Sinn Féin-commissioned report has found, with the exact amount being untraceable through publicly available data.

Around 30% of a household electricity bill pays towards network charges including the price of wires, substations and transformers that carry power to the door – all necessary for expanding the grid due to increased demand.

A report published on Tuesday, commissioned by Sinn Féin MEP Lynn Boylan, states that households are paying the cost of developing grid infrastructure for “some of the world’s largest and richest” tech companies who are “free to build anywhere” and “take consumer-funded capacity built ahead of demand”, while carrying little of the risk if demand turns out to be unrealised.

Ms Boylan argues current regulatory processes are prioritising industry over households, and that it is “not accidental” the framework to recover costs of network expansion cannot be traced back to the demand that drives it.

She said that in order to ensure a fair outcome for the public, the process for setting network charges has to be brought “into the light of day” – instead of leaving households “on the hook” for costly data-centre related infrastructure build-out.

The report says a system than can approve and recover billions of euro for network expansion should be able to explain in public and in numerical terms how much of a burden is placed on household bills.

However, that is currently not possible using publicly accessible data.

Ms Boylan said the framework to recover costs of network expansion cannot be traced, adding: “Crucially, despite data centres being named plainly as the drivers of the grid expansion, the record goes quiet when it comes to allocating the costs.”

The report, authored by Trinity College Dublin postgraduate researcher Eve Ryan, states the public is underwriting the risk of building ahead of need while the benefit of on-demand guaranteed capacity is captured by the large energy users when they want to connect – described as turning the grid into a “publicly funded platform for private growth”.

It recommends an approach of “trace before you recover”, whereby the Commission for the Regulation of Utilities (CRU) should be forced to show cost drivers and who will end up paying so these are “shared by reasoned choice in the open, rather than by default and out of sight”.

Ms Ryan said legislation should be amended to “make consumer protection a primary duty, not a discretionary option”.

She added: “The interests of existing and future consumers must be prioritised, and this requires putting a stop to the consistent socialisation of costs and risks on to those least able to see or contest it.”

The report presents an analysis where while no single decision by the CRU explicitly states that households should subsidise data centres, the “build up of many small, reasonable-looking choices leaves them doing exactly that”.

The regulator is responsible for deciding how much of the networks’ proposed spending users must fund, whether that should be shared across everyone, how bills are designed, and over what period costs are allocated.

The report states that when the CRU categorises these multibillion euro costs, it “overwhelmingly sends them down the shared route rather than charging the users who triggered them”.

It also presents a scenario whereby an artificial intelligence slowdown could become a household affordability problem without any formal bailout for tech companies as the cost would already be built into their energy bills.

The CRU, which is conducting a review of electricity network tariff structure, has been contacted for comment.