CRU Publishes Long Awaited Final Policy On Data Centre Connections

Since 2015, Ireland's annual data centre electricity consumption has increased by 5,731 GWh, equivalent to 1.36 million households' annual electricity demand.

Following concerns from Ireland's Transmission System Operator (EirGrid) as to overdemand and constraints on the electricity network, in June 2021 the Commission for Regulation of Utilities (CRU), noting that it did not consider a moratorium appropriate at this time, issued a proposed decision on data centre connection measures (CRU/21/060). In order to protect security of supply, the CRU proposed new limiting measures for the assessment of data centres seeking grid connections by reference to which the System Operators were to prioritise data centre grid connection applications on the basis of:

1. The location of the data centre applicant with respect to whether they are within a constrained or unconstrained region of the electricity system.
2. The ability of the data centre applicant to bring onsite dispatchable generation (and/or storage) equivalent to or greater than their demand,
3. The ability of the data centre applicant to provide on-site generation (and/or storage) to match its power load needs.
4. The ability of the data centre applicant to provide flexibility in their demand by reducing consumption when requested to do so by the relevant System Operator.

In November 2021, the CRU made these assessment criteria even more stringent by issuing a direction to the System Operators (CRU/21/124) that a connection offer may only be made to a data centre if, by reference to the above criteria, to do so would be consistent with the needs of the electricity system. Despite the CRU's position that a moratorium is not appropriate and contrary to government policy, the onerous nature of these restrictive criteria had the net effect of a de facto data centre connection moratorium.

In February 2025, the CRU provided much needed clarity in respect of the pathway for data centre grid connections by way of publication of its Large Energy Users Connection Policy Proposed Decision CRU/202504 (the Proposed Decision).

The CRU has now published its highly anticipated final decision as to the policy for data centres looking to connect to Ireland's grid.

The Decision is the final step in the CRU's long running review and represents an essential development for an industry in vital need of steadfast assurances as to future connection pathways. The decision builds upon the Proposed Decision (which we reviewed here.), while introducing certain additional details, which are outlined below.

De Minimis Threshold

The Decision introduces a de-minimis Maximum Import Capacity (MIC) threshold of < 1 MVA, with the CRU noting that this may be reviewed and readjusted in the future as necessary.

This threshold is based on the size of the whole data centre as opposed to any specific connection. The CRU has explicitly called out 'project splitting', stating any behaviour of separating a project in to multiple applications/sub-projects in order to qualify under the de-minimis level is unacceptable.

Tiered Generation Requirements and Mandatory Demand Curtailment

The Decision introduces tiered requirements based on the MIC of the data centre in an aim to increase the feasibility of smaller sites.

Data centres with a MIC of 1-10 MVA must provide/act as an autoproducer which participates in the wholesale Single Electricity Market (SEM), sized to meet 100% of the MIC on a de‑rated basis. These data centres are exempt from Mandatory Demand Curtailment (MDC), provided performance and availability standards are met.

Data centres with a MIC >10 MVA must provide new onsite or proximate generation, dispatchable generation or storage that is separately connected and metered, and which participates in the (SEM). Compliant sites are exempt from MDC, however all demand may still be subject to emergency load shedding under system crisis conditions.

If the delivery, performance and availability of the required energy services falls below this minimum expected reliability or provision of available capacity to the system, the System Operators will have the ability to reduce the MIC of the data centres demand connection and/or move it to non-firm status.

80% Renewable Electricity

Section 15 of the Climate Action and Low Carbon Development Act 2015, as amended, requires the CRU and System Operators to act in a manner consistent with the furtherance of Ireland's national climate objectives.

The Decision adds hard numbers to the annual self-reporting and renewable energy requirements introduced by the Proposed Decision. The Decision introduces a binding renewable electricity obligation in that 80% of data centre annual electricity demand must be met by additional renewable electricity generated in the Republic of Ireland. This must be achieved within six years of energisation, by way of a "glide up" approach.

Next Steps

The Decision supersedes the Proposed Decision and now applies to all future and existing applications within the threshold for connectivity. It represents a comprehensive and sophisticated response to the unprecedented challenge of accommodating rapid data centre growth while maintaining system security and advancing climate objectives.

System Operators are due to update their own policies and publish a dedicated engagement and connection process for data centre connection applicants by 31 March 2026, to ensure transparency and compliance for new projects. The Decision has the potential to reignite the sector as the smoke is blown away and data centre investors and developers can finally proceed with clarity and clear requirements.

The CRU's approach is unique internationally, attempting to maintain competitiveness in the Irish data centre market while imposing substantive requirements to address system impacts. Success will depend on effective implementation, market development, parallel government action on spatial planning, and continued policy flexibility to adapt to evolving circumstances.

The policy's effectiveness will be demonstrated over the coming years as applications are processed, generation assets are developed, renewable electricity is contracted, and the impacts on security of supply, market functioning, and climate objectives become evident. The CRU's call for a State-led approach recognises that connection policy alone cannot fully address the scale of challenges and opportunities presented by Ireland's data centre sector.

For stakeholders in Ireland's energy and digital sectors, this policy creates a new framework within which to operate, requiring adaptation of business models, investment strategies, and development approaches.

The Decision is available to view in full here.

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