The Government's policy statement of the 15th July to allow privately owned electricity networks on public property risks a dangerous diversion of Ireland's limited infrastructure resources, could result in major EU fines and increase electricity charges for electricity customers and more generally open the door for the privatisation of electricity networks nationally.
The Government's policy statement outlines that the Government proposes to legislate to allow private investors to be able to build and own (& operate) electricity networks that will cross public or third parry owned lands in the following circumstances:
- A direct connection between a generator, for example a wind farm or solar farm, and an electricity customer, perhaps a factory that wants to decarbonise. There are situations where this is quicker and more efficient than having both parties connect to the grid;
- A wind farm or solar farm owned by one company will be able to share a grid connection (Hybrid Connection) with another generator or a battery installation owned by another firm. Previously this could have breached the rules prohibiting private lines;
- Private lines will be allowed where they are the solution to allow on street charging of electric vehicles;
And lastly to allow a firm that self-supplies electricity to provide electricity to neighbouring customer where the line does not have to cross land owned by a third party
The Government statement also says this decision can be revisited in future and the situations where private wires are permitted can be expanded for further liberalisation and specifically mentions the emerging concept of green energy parks.
These proposals represent a fundamental change from the current practice where access to public land for construction and operation of electricity networks is generally seen as for the common good of all electricity customers rather than an attempt to provide a potentially faster and lower cost supply to a particular large energy user who will make no contribution towards the upkeep of the national electricity networks and possibly pay no VAT on their electricity supply.
The policy statement acknowledges there is already provision to allow a customer or a generator to build their own connection to the public electricity networks / Grid and then if they wish transfer ownership and responsibility for this new network to ESB. This provision, with some minor changes to existing policy, would address the need for Hybrid connections proposed in the policy.
The proposed use of Private Wires to provide on street EV charging facilities may have merit but it is not clear why this would not be a duplication of work required to extend the public electricity network to provide the network for this service and thus avoid potential safety and reliability issues arising from having a new and potentially temporary private operator being responsible for this service. In addition will this private entity charge VAT on this electricity supply and apply any of the other charges borne by all other electricity customers to support the national electricity system?
The proposal to allow a customer who already has a generator or could install a generator to supply neighbouring premises rather than simply export surplus electricity to the public network, could present major safety issues purely for the purposes of someone making a profit and avoiding contributing to the upkeep of the public electricity network and possibly paying VAT on their electricity supply.
Given all of this, why is there a need for these new Private Wires proposals?
The stated need for this fundamental change is that it could accelerate the rollout of renewable energy projects to help Ireland achieve its renewable electricity targets by being a solution to the reported slow grid connection process, benefiting customers, and allowing developers to take the scope for electrical infrastructure design and install into their own remit (ownership & operation), and giving them project programme certainty.
However Irish Congress of Trade Unions (ICTU) believes there is a real risk that this policy will lead to many new renewable energy projects being diverted to service large energy users and particularly Data Centres, rather than being used to help Ireland achieve its renewable electricity targets.
This approach fundamentally misallocates Ireland's access to scarce infrastructure resources at a critical time for our climate commitments. We're essentially allowing data centres to try to jump the queue while ordinary customers and decarbonisation efforts are left waiting."
Ireland faces severe limitations in materials and labour resources for infrastructure construction due to supply chain and workforce shortages and international competition for these limited resources. Diverting these constrained resources to private data centre developments will further delay the delivery of the additional network and generation capacity needed to meet EU decarbonisation targets.
Failure to meet these targets could result in EU penalties ranging from €6 billion to €21 billion – costs that will ultimately be borne by taxpayers and all electricity customers connected to the public electricity network.
In addition, land owners are expecting to be able to extract large sums of compensation for these wealthy Data Centre companies in order to allow these Private Wires to cross their lands. This would set a new benchmark for compensation payments for public electricity networks that also have to cross landowners’ lands and result in higher Networks charges that would have to be borne by all other electricity customers to enrich this group of land owners.
Lastly these policies could be seen as the Government bending to pressure from private interests who want to avoid contributing to the cost of providing and decarbonising a national public electricity system in order to purely maximise their profits. This could lead to a breakdown in the fragile social cohesion that exists to support and bear the cost of decarbonising electricity usage and more generally reducing our carbon emissions.
Accordingly, ICTU is calling for everybody else both individually and as part of any organisation you are affiliated with, to lobby against this policy and request that the Government instead focuses its efforts on ensuring the necessary additional generation and network capacity needed for new housing and decarbonisation of electricity usage by other customers is prioritised.
To address the needs of Data Centres, these super wealthy Companies should be asked to work with all the relevant State and other agencies to accelerate the production of green hydrogen and its use as a fuel for generating electricity for their needs. Many of these super wealthy Companies have already committed to making large investments to develop Small Modular Nuclear Reactors (SMRs) in the US and elsewhere to meet their huge electricity requirements. So, in Ireland they should be asked to make similar commitments to develop electricity generation from green hydrogen.
Jim Dullaghan is Chair of ICTU Energy & Natural Resources Committee
