Darragh O'Brien (Dublin Fingal East, Fianna Fail)

Go raibh maith agat, a Leas-Chathaoirligh. I thank you and your colleagues for the opportunity to come before the Seanad.

I am pleased to address the House on the Second Stage of the Electricity (Supply) (Amendment) Bill 2025. The Bill before the House today will provide the legal mechanism for the payment of €1.5 billion of equity investment in the ESB as committed to by the Government under the national development plan. I will open the debate by setting out the broader context for why Government equity investment is required, before outlining the detail within the Bill itself.

As Senators will be aware, lreland's electricity demand will grow significantly over the upcoming decade. It is estimated that electricity demand will double by 2035, and this is in addition to the 25% growth that we have already seen over the past ten years. The International Energy Agency, IEA, has advised that expanding and modernising electricity grids is essential for a secure, affordable and sustainable electricity system.However, it has expressed concern that investment in grids globally is falling and is failing to keep pace with spending on generation and electrification. In Ireland, every five years, our network companies, ESB Networks and EirGrid, present their five-year forecast investment plans to the Commission for Regulation of Utilities, CRU, which then approves the revenues allowable for their operating and investment programmes. CRU published its draft determination for the next price review, PR6, in July of this year. An overall network expenditure programme of anywhere between €14.1 billion and €18.1 billion is being considered for the remainder of this decade. That shows the significance of the investment the Government is committing to and how essential it is that this is done.

The level of investment being considered marks a real step change in delivery. We expect a final decision on it next month. We will more than double the investment made under the previous investment programme, PR5. This unprecedented package of investment will enable the network companies to support Ireland through this period of change in terms of our use and demand for electricity. It will support key priorities in infrastructure and housing. It will help with competitiveness and help to drive investment and growth. Really importantly, it will help us to continue to decarbonise and to meet our climate targets and objectives.

The benefits of extending and reinforcing the grid are many. They include improving the resilience of our grid system, which is absolutely critical, and future-proofing it for generations to come. It will ensure that every home and every business has a reliable and secure source of electricity, including the 300,000 new homes we have committed to build by the end of this decade. It will safeguard against damage from future weather events and storms. We saw the impact of that with Storm Éowyn. While not quite unprecedented, it was the most severe storm event we have seen. Some 768,000 households and premises were left without power due to that storm. The resilience of our grid is absolutely critical. That is why this investment is critical. Really importantly, extending and reinforcing the grid will also accelerate the connection of new sources of renewable electricity, which will contribute to Ireland's transition to greater levels of renewable energy and the achievement of our climate goals. Last year, in 2024, 41% of our electricity was generated by renewables. If you go back 20 years, it was only 7%. Ireland is a European leader on the integration of renewables into our grid. This grid investment will allow us to expand and accelerate that further. We have a target of 80% renewable energy by the end of the decade. This investment will help to underpin that.

The investment also has huge importance for our economy and will be key to ensuring that the State can increase the critical infrastructure that is needed for continued economic growth and employment in our economy, underpinning the national development plan, the review of which we have just concluded. It will underpin projects like MetroLink, which Senator Clifford-Lee and I both know to be critically important, and others right across the country.

However, the scale of the increase means that both companies will need financial support to deliver the ambitious investment programmes. In July of this year, as part of the NDP, the Government agreed an investment of up to €3.5 billion in additional equity to support the PR6 grid investment programme. This represents the largest single investment ever made in Ireland's electricity network. Some €2 billion will be invested in EirGrid to support the financing of its offshore grid investment plans. I refer not just to the offshore renewable electricity support scheme, ORESS, 1 projects that are in planning right now, but also to getting EirGrid into a situation where it can leverage that to invest in the offshore grid. A further €1.5 billion will be invested in ESB to support the financing of its onshore grid investment plans.

EirGrid's equity investment mechanism will be agreed and legislated for separately next year whereas the investment in the ESB is required by the end of this year. That is why I am here today for Second Stage. This work needs to be concluded by the end of this calendar year to ensure payment from the Government's Central Fund, as approved under the NDP, and to ensure the ESB is sufficiently financed prior to 2026 to begin delivery of the ambitious programme I have just touched on. Given the urgency of the investment, I wrote to the Oireachtas Joint Committee on Climate, Environment and Energy to seek a waiver from pre-legislative scrutiny. I thank the committee for granting that waiver following a technical briefing provided by officials from the Department, who are here with me today. I am also seeking a motion for early signature in respect of the President's signature of the Bill.

The €1.5 billion equity investment in the ESB will support its ability to finance the overall investment programme I have already referred to. This programme plan will be financed by debt issuance on the bond market, supported by the Government's equity investment, which I am bringing forward today, and ESB Network's regulated income, as approved by the CRU. It will see the delivery of over 500 capital projects across transmission and distribution networks. This includes 181 km of new overhead lines, 319 km of new underground cables, nearly 70 new and upgraded substations right across the country and 50,000 pole replacements.

ESB Networks will expand, modernise and reinforce our onshore electricity network infrastructure. Without Government equity investment, the ESB would be unable to deliver such an extensive and rapid programme of work in the five-year period to 2030. The investment will also support the strength of the ESB's balance sheet and ultimately assist it in maintaining its excellent credit ratings. While the investment does not directly lower current customer electricity bills, it will maintain that strong credit rating, which ensures the ESB can borrow at the most competitive interest rates, which ultimately lowers the impact of network charges on customer bills. It is also important to note that the State will continue to receive dividends in proportion to its shareholding. On a separate but important issue, legal consideration has determined that this equity investment does not give rise to any issues with regard to state aid.

I will briefly outline the subject matter of the Bill. Section 2 amends section 4 of the Electricity (Supply) (Amendment) Act 1954 to provide for the increase of the statutory borrowing limit of the ESB from €12 billion to €17 billion. This increase is necessary to support the potential €15.2 billion expenditure by ESB Networks from 2026 to 2030.

Section 3 amends section 2 of the Electricity (Supply) (Amendment) Act 2001 through the insertion of new subsections. The new section 2(5) provides for the issuance of capital stock by the ESB in return for payment up to the value of €1.5 billion. Some 90% of such stock shall be issued to the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation and 10% shall be issued to the Minister for Climate, Energy and the Environment.

The new section 2(6) provides for the procedure for the Minister for Finance to make payment to the ESB up to the value of €1.5 billion for capital stock from the Central Fund and the new section 2(7) enables the ESB to issue stock to the employee share ownership plan, ESOP, in return for payment should the trustees choose to invest in the ESB to maintain their current shareholding percentage. The ESOP will have a period of up to 12 months following Government investment to make its investment. At present the State's shareholding in the ESB stands at 97.4%. The ESOP holds 2.6%. Should the ESOP choose not to participate in the equity investment, the State shareholding will obviously increase. ESB management has advised my Department that ESB employees are supportive of both the equity investment by the Government and the ambitious investment plan we are about to embark under PR6.

I commend the Bill to the House. I look forward to the debate. I am interested in the input of my colleagues here in Seanad Éireann.