DATA CENTRE OPERATORS are contributing a significant amount to local authority budgets through commercial rates, a new investigation has found.

Councils receive an estimated €62.5m each year from data centre operators as part of their collection of commercial rates, based on this year’s calculations.

The Journal Investigates has previously mapped all of Ireland’s data centres believed to be in operation by examining over 25 years of planning records.

Our team used this data and cross-referenced it with property valuations provided by state agency Tailte Éireann.

Every year, each local authority sets its commercial rates, which when multiplied by the property valuation provided by Tailte Éireann, equals the amount that must be paid by the owner.

Commercial rates provide a significant amount of income for local authorities, which allows them to fund services such as housing, environment, transport and community programs.

Our investigation shows that income from data centres, whose large-scale operations typically attract huge property values, represents a substantial part of some local authorities’ commercial rates income.

This means that data centres are lucrative sources of revenue for all levels of government, providing corporation tax receipts for the national government and commercial rates for local authorities.

While these commercial rates could be seen as a way for data centre operators to pay back to the local area, experts have cautioned that deepening our dependency on this revenue source leaves Irish council’s vulnerable.

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Dublin councils dominate rates collection

Three local authorities make up the vast majority of commercial rates income from data centres: South Dublin County Council, Fingal County Council and Dublin City Council.

This is because the vast majority of Ireland’s 89 data centres are located in industrial estates on the outskirts of the capital.

South Dublin County Council earns over half of all the commercial rates paid by data centre operators, thanks in part to a large cluster of data centres situated in Clondalkin.

This includes a massive Microsoft campus, as well as data centres from Amazon and Google.

The EdgeConneX data centre campus is also located here.

The Journal Investigates reported last year that this campus had the highest emissions from backup and emergency generators of any other campus, with almost 130,000 tonnes of CO2 since coming online in 2017.

“Data centres make an important contribution towards the funding of the local authority,” a spokesperson for South Dublin County Council told The Journal Investigates.

They added that the council has “developed a reputation for being a county of excellence in attracting big tech companies” and that the commercial rates allows the council to provide “much needed essential services to the community”.

Other large clusters include industrial parks in Blanchardstown and Clonshaugh, which host a large number of data centres that contribute to their respective local authorities via millions in commercial rates.

“Income received from rates contributes to a huge range of services,” a spokesperson for Fingal County Council said.

“These are the financial contribution business owners and occupiers make to the upkeep and quality of life of the local community,” they added.

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Rates calculations by The Journal Investigates are estimates based on best available data.

Sometimes, the points listed on Tailte Éireann’s database did not exactly match the location of a data centre. The satellite imagery was often significantly out of date, with some points for data centres corresponding to a field before it was built.

In some cases, data centres are attached to larger manufacturing plants or are classified as office space and aren’t separated out when it comes to commercial rates. In these cases, our team used the figure for the entire facility in our calculations.

As a result, our figures are estimates based on the best available data. Councils may be receiving more or less commercial rates from data centres, but this information is not publicly available.

Meath County Council has the highest income outside of Dublin, receiving close to €10 million from a large Meta campus in Clonee and an Amazon data centre on the outskirts of Drogheda.

“Income from all commercial rates is a significant contributor to the Council’s revenue budget,” a spokesperson told The Journal Investigates.

They added that this income “deals with the day-to-day expenditure of maintaining and providing services throughout the county, including environmental services”.

‘Privatisation by stealth’

While the income from data centres is minuscule for some councils, for others it represents a substantial proportion.

Approximately a fifth of the commercial rates income for South Dublin County Council will come from data centres in 2025.

In Meath, that figure is close to 17%.

Patrick Bresnihan, an associate professor in the Department of Geography at Maynooth University, said the reliance on council income from data centre operators could leave them vulnerable should they decide to leave.

“We shouldn’t be deepening our dependency on these companies,” he told The Journal Investigates. “From a governance point of view and a sustainability point of view, I don’t think it’s the direction we should be going in.”

Bresnihan said that data centres are already becoming increasingly central to our national electricity grid, with their own on-site energy plants that can send power back to the grid.

As a result, the future of our energy transition is becoming more and more locked into the interests of these companies, he added.

With so much money also following into council budgets from the same data centres, Bresnihan said that another way of looking at this growing dependency is “privatisation by stealth”.

He explained that this doesn’t have to be nefarious, just that it is happening subtly. And if a council is reliant on this funding for housing or roads infrastructure, “you can really see a situation in which data centres can use that as leverage”.

The solution to this is rather simple.

While the data centre operators can continue to contribute through commercial rates, increasing funding to councils from the Exchequer would reduce their dependence on that income and, at the same time, bolster budgets to spend on local infrastructure and amenities.

“Local authorities derive their income from a range of sources including commercial rates,” a spokesperson for the Department of Housing told The Journal Investigates.

They added that in recent years, government grants and subsidies have overtaken commercial rates as the main sources of local authority funding.

The Journal Investigates

Reporter: Conor O’Carroll • Editor: Maria Delaney •  Social Media: Cliodhna Travers