Pádraig O'Sullivan (Cork North Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Gabhaim buíochas leis an Aire as teacht isteach chomh déanach seo. This is a question I have been looking to put for quite a while. It is something the Government needs to take seriously. This is a space in which we need to be proactive and engage with all stakeholders, including developers, the ESB and other electrical and energy providers.

The long and short definition, as I understand it from a layman's point of view, is that private wire is essentially where private industry, particularly large energy users like pharmaceutical companies, data centres and so on are essentially taken off-grid and they try to provide as much of their own energy through wind or solar power as possible, perhaps with the help of a nearby farmer or whatever the case may be. This allows these companies to provide for the vast majority of their energy needs. The difficulty is that the ESB has full power over consent in this area.

As I understand it, private wire is covered under section 37 of the Electricity Regulation Act 1999. Essentially in many cases it allows for the ESB to be very slow at engaging with these big developments. The ESB does not want to see these large energy users becoming self-sustainable because it is not in the long-term interests of the ESB. It does not want to see large profitable consumers of energy and customers going off grid. In the long term it is taking a view that it will damage its profit margins. I am extremely worried about this area. I submitted a parliamentary question to the Department which is dated 21 September. In the reply the Minister said this is a commitment under the Climate Action Plan 2021. The plan includes a commitment to review this policy. The aim was that the review would be undertaken by the first quarter of this year. Unfortunately we are now in the fourth quarter. It is six to nine months down the line and we are still waiting for the review.

This is an urgent matter. People are facing ever-growing bills. We look across the water at what is going on in the UK and the extortionate amounts people are paying for energy. Thankfully the Government has stepped in in the short term here and provide €200 energy credits over a period of time. This is very welcome. In the long run we know from the forecast of the energy regulator, and from anybody in the field, that we are facing a decade when we will struggle to keep up with demand. This is something on which we need to act now. By the Department's own admission it is something we should have acted on in the first quarter of this year. I am very concerned because this is not the only issue on which we are behind schedule. There are also the wind and solar energy guidelines that seem to have been going on forever. It is almost depressing when we get responses that state we are behind schedule and we will catch up. I hope the Minister will have a positive response that will outline exactly what he and the Department will do on this urgent issue.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for raising this important topic. I will set out the policy position and outline the views of stakeholders on the issue. I will then discuss the proposed consultation. The current legislative framework does not for the most part allow for privately-owned power lines. The ESB is the sole distribution asset owner and ESB Networks is the sole distribution system operator in the State. On a practical level this means the ESB owns the electricity distribution while ESB Networks, a subsidiary of the ESB, builds and maintains all distribution level network infrastructure.

The Deputy may be interested to know this position has its roots in the early years of the State when the ESB was established by the Electricity (Supply) Act 1927. On its establishment it was placed in charge of operating, managing and maintaining what we now know as the Ardnacrusha power plant along with distributing electricity nationwide. The ESB chose, as allowed for under the Act, to take on the direct responsibility of distributing electricity to consumers and set about creating our electricity network. The results of this decision, once fully enacted and after the ESB had acquired all existing electricity undertakings operating in the State, was the creation of a standardised national network in the control of the ESB.

The current electricity market environment is very different, with a liberalised and interconnected market in operation. However, as the Irish energy sector evolves further and moves towards renewables and a zero-carbon economy we must review the environment in which electricity suppliers operate. The Electricity Regulation Act 1999 provides in limited circumstances for the construction by private entities of electricity lines and infrastructure. However the Act also provides that the ESB can gain ownership of such constructions, either through agreement or at the direction of the Commission for Regulation of Utilities. Notwithstanding the current position in respect of direct lines and private wires, it is important to emphasise the scale and ambition of what we are looking to do in delivering to reduce our dependency on fossil fuels and make Ireland a world leader in delivering renewable energy as part of our drive towards a low-carbon system.

The Government is very aware of calls from stakeholders for amendments to be made to the legislation and regulations on direct lines and private wire networks. Officials from the Department have met and continue to engage with interested parties and stakeholders in the area. These stakeholders have indicated that amendments to the status quocould allow for the deployment of more renewables across the electricity sector while reducing overall grid demand. They outlined three key areas where they wish to see direct lines and-or private networks providing electricity. These include business enterprise parks, large energy users and renewable energy communities. It has been outlined to officials that allowing for private networks for business parks and large energy users would have sectoral benefits for Ireland. These include increasing the attractiveness of our country as a base for foreign direct investment. It would also provide an environment for renewable generation. It is noteworthy that stakeholders have highlighted that there is a desire among many large corporations, in particular technology companies, to have renewable sources of generation directly linked or owned by the company.

Ireland has ambitious climate targets as I set out earlier. I believe the development of private wires can and will have a significant role in helping to meet them. Action No. 115 of the climate action plan commits the Department to reviewing the policy options on allowing private networks and direct lines. Government policy is that the ESB is the sole distribution asset owner and ESB Networks is the sole distribution system operator. In the interests of clarity it is warranted to point out there is a clear distinction between a private network and a direct line. The consultation will seek views and report on both matters. A direct line is regarded by the Department as a privately owned power line that connects one generator with one energy user. A private network on the other hand is a privately owned and operated electricity distribution network connecting end users with generators.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Minister. To be fair that is a very substantive response and I appreciate it. I do have several issues. I have listened to many people from Government parties and the Opposition speaking about offshore wind energy. The harsh reality is we are being told it will take an average of seven years to do it here but when we look at our European counterparts, such as Slovakia, it can take as little as 18 months. It is laughable. It is actually quite worrying to read in the Minister's response that the ESB is the sole provider and sole distributor. Let us call it for what it is: it is a monopoly.

I am glad the Minister is having a public consultation. How long will it last for? When is it due to conclude? When does the Minister hope to implement any recommendation there may be? The targets we have and the implementation of the climate action plan are also quite welcome and we are all supportive of them. This area will be very important and central to the plan.

It is also worth noting that in the Minister's opening remarks he said this is governed by the Electricity (Supply) Act 1927. That is nearly a century ago. Given the energy crisis we are in it is a perfect example of why we need to get on with the consultation and get on with implementing any amendment the Minister may have. Already over in the UK, Centrica, which is the parent company of Bord Gais, has made a strategic decision to no longer supply large energy users such as those we are speaking about. We are speaking about potential blackouts in future years. We are speaking about demand exceeding supply in the coming decade. We need to get on with this and we need to stop delaying.

Eamon Ryan (Dublin Bay South, Green Party)
Link to this: Individually | In context | Oireachtas source

The consultation is due to conclude at the very latest early next year but the officials hope it can be concluded before the end of this year. I will be very keen to see a rapid conclusion. It will not come to a decision but it will elucidate the various views. This is a complex issue. It has been looked at for many years. It has been stalled by concerns about possible unintended consequences. My view is that we are in changing market circumstances. Power is very tight and we are now at the very edge of any country's development of renewables. If we are to have a balancing capability, where it is not just for power generation but also for potential storage solutions, then private wires could provide us with support integrated into the grid.

11 o’clock

The environment is changing and it may allow us the opportunity to start developing self-generation in this way, be it through private direct wires or networks where we move away from the historic position and start looking at the sort of potential that is available. We have to be careful and make sure it does not undermine other investments or the ESB network, which is a vital piece of infrastructure for us. There is real potential to bring new power generation into a country where that will be critical in the next ten years as well as new balancing capabilities.

EirGrid is saying that it wants to work with large energy users in terms of flexible demand response and their generation helping the system when times are difficult. In that sort of changing and evolving market, it seems to be that the balance will move towards allowing private wires and self-generation, which large industrial users have been seeking for some time but we have not been able to deliver.

I will wait the conclusion of the consultation before finalising the arrangements, but that has to happen within months, not any longer than that.