Planning refusal for data centre: The importance of early engagement with Power Purchase Agreements

Google Ireland has been refused planning permission by South Dublin County Council for its proposed data centre expansion at Grange Castle Business Park in south Dublin, partly due to a lack of clarity provided by Google Ireland on their engagement with Power Purchase Agreements (“PPAs”) in Ireland. The proposed 72,400sq meter new data centre was set to be the third phase of the Google Ireland data centre campus at Grange Castle.

The decision, which was published on the 26 August 2024, details the reasons for which the planning permission was refused. The Council notably referred to the existing insufficient capacity in the electricity network (grid), the lack of significant on-site renewable energy to power (below 100%) the proposed development, the lack of a connection to the surrounding district heating network and the lack of clarity provided in relation to engagement with PPAs in Ireland with regard the development in question rather than the site or wider as partial justification to refuse permission on the basis that accordingly the stated objectives of the South Dublin County Development Plan 2022-2028 had not been adequately demonstrated.

In its application Google Ireland stated that the onsite solar PV would provide 20% of the total required energy for the data centre. The required development plan objective is that the site will be, as far as possible, 100% powered by renewable energy. Where this objective cannot be met, the applicant must provide evidence of engagement with PPAs in Ireland. Therefore, lack of significant on-site renewable energy isn’t a reason for refusal on its own. Google Ireland sought to rely on an existing 14-year PPA for 58 megawatts of new-to-the grid capacity from a permitted solar farm.

The decision of the local planning authority in this instance indicates that DC applicants cannot rely on engagement with PPAs in Ireland as a general concept but rather, if 100% renewable energy source cannot be achieved, must show concrete evidence of engagement with PPA’s for each development as distinct consideration. 

In 2023 another DC developer was refused permission on similar grounds however it was successfully appealed to An Bord Pleanála following provision of additional evidence provided in relation to engagement with PPAs in Ireland and one would expect Google Ireland to similarly follow suit. The planning authority’s decision brings into sharp focus the benefit of early engagement with potential PPA providers in circumstances where certain development plans require DC’s to demonstrate evidence of clear engagement with PPAs.