It’s not so much of a tax issue as it is an inability to physically ramp up infrastructure fast enough to meet demand.
There are huge wind power projects in the pipeline but, it’s still an isolated grid in a small country with a population of 4.9 million (or 6.8 million if you include the all island aspect of the grid).
The distribution networks and grid are public utilities, but the generation capacity is provided purely commercially. So any extra power supply has to come from commercial providers in an open market, not the state or public money. The publicly owned ESB still owns a lot of generation capacity, but it operates as a commercial entity, just with public shareholding and there are other purely commercial generators.
The scale of the data centres has a limit and interconnection possibilities are limited by distance. There’s a UK - Irish connector, but the UK system is similarly quite tight for capacity and there’s a french interconnection due on stream in a couple of years.
There’ll have to be a limit on what can be added to the demand side or it will utterly sink the Irish grid and also fail to achieve green energy targets.
We’ve also seen the most inefficient (from a CO2 output and economic point of view) power plants removed from the grid here. So that’s also bringing supply tighter.
Ireland also operates a carbon tax regime, so carbon intensive power is significantly more expensive.
Some of the data centre operators are also directly financing windfarm development, on and off shore, which has a big positive impact, so does the increased demand for green energy as it’s driving up commercial investment in off shore wind which has the upside of driving down overall Irish CO2 emissions.
You also can’t just site data centres anywhere, as the population isn’t uniformly spread, so the grid infrastructure reflects that and there is MASSIVE opposition to new overhead lines in Ireland, so that will probably limit data centres to Dublin, Cork, Shannon Estuary etc.
We saw that happened when Apple tried to develop a large data centre in rural county Galway, it was mired in years of planning objections and they eventually gave up entirely.
So it’s not really just a case of tax / finances or lack of resources. There’s a cost/benefit analysis. A carbon footprint analysis and it’s constrained by Ireland’s isolated grid.
There are limits to what you can do in any grid, but an isolated one like here has a lot of constraints.
The regulator can also simply lodge planning objections to new projects or just refuse connection. If the supply isn’t there, it isn’t there. They’re not going to connect loads that can’t be reasonably supplied.