Consultation on Irish Private Wires Policy

Introduction

The extreme weather events of this summer have once again put climate change, and the progress towards meeting climate targets, in the spotlight.

In Ireland, new renewable generators frequently face long delays in connecting to the grid and, once connected, they often face significant levels of constraint.

For a combination of reasons including constraint arising from the need for greater grid investment, the Commission for Regulation of Utilities has directed EirGrid and ESB (the system operators) to implement restrictive policies in relation to connection of certain asset classes such as data centres.

While we wait for the grid to be reinforced there is a need for flexibility in policy to allow continued investment, including by large energy users such as data centres, and for renewable generators to connect with reduced constraints. One way to do this is private wires. These are arrangements whereby an electricity generator and a demand user have a connection for their own supply of electricity, by-passing the national electricity grid.

The Department of the Environment, Climate and Communications (Department) published a public Consultation on developing a policy on private wires (Consultation) and the deadline for responses was recently extended to 27 October 2023. The purpose of the Consultation is to seek views on the possibility of parties other than ESB owning electricity transmission/distribution infrastructure, as is the case in other countries.

The development of a policy on Private Wires is a goal of Ireland’s Climate Action Plan 2023. Publication of the Consultation represents the first step towards a policy and completes action EL/23/15 of the Climate Action Plan 2023.

 

What are Private Wires?

“Private Wires”, although not defined, essentially entail private undertakings installing, operating, and owning private electricity infrastructure. This will involve crossing land and/ or property (whether privately or publicly owned) that the cable owner and/ or operator does not own.

The Consultation notes that the term Private Wires is an open ended, catch all term which means different things to different people. Therefore, the Department has attempted to classify types of Private Wire as being either a “Private Line” or a “Private Network” and states that:

• a “Private Line” is a privately owned electricity line, and associated infrastructure, used to supply electricity and which links a single generation site with a single demand user; and
• a “Private Network” is a privately owned electricity system consisting of associated cables and infrastructure, used to transport and supply electricity from a single generation site to multiple demand users and/or from multiple generation sites to single/multiple demand users.

 

Why are Private Wires needed?

The Consultation states that some believe that they can provide and/ or purchase cheaper electricity by building their own infrastructure between generation and demand sites. This would mean avoiding the national electricity grid, which some argue would lead to issues around grid constraint (i.e. certain areas of the grid not having the capacity to transfer the generated electricity) being avoided. This could open up currently grid constrained areas to new electricity generation projects and/or investment by large energy users.

The Consultation notes that others propose that Private Wires could facilitate ‘off-grid’ electricity generation, storage and usage models which are not currently facilitated. This would include concepts such as energy parks.

Unlike Ireland, internationally, corporate energy users use private wire power purchase agreements to purchase electricity directly from renewable generators. The use of Private Wires is widespread in the United Kingdom and many EU countries.

The Consultation states that the resulting policy must be complementary to and assist with meeting Ireland’s electricity sector targets as set out in the Climate Action Plan 23, to include renewable generation targets, and sectoral emissions ceilings.

 

What is the current legislation?

Section 37 of the Electricity Regulation Act 1999 (as amended) (the Act) transposes relevant provisions of the EU Internal Market in Electricity Directive. A Direct Line is defined by the Act as, in relation to electricity, an electric line which is used or is to be used to carry electricity for the purpose of supply and the construction of which line is permitted under section 37 of the Act.

As such, Irish legislation already contemplates the use of private wires (called direct lines). In order to obtain a permission to construct a private wire under Section 37 a person must have applied for a grid connection and either:

1. been refused a connection due to a lack of capacity, or
2. following a dispute under Section 34, the Commission for the Regulation of Utilities (CRU) in making its determination forms the view that it is in the public interest to issue a permission.

Connection applications have generally been held in a queue rather than refused and, as such, conditions allowing a permission to be granted have not arisen. Consequently, we are not aware of direct lines having been constructed in Ireland to date.

The Act also provides for the construction of contestably built connections in accordance with section 34(1A) or (1B) of the Act. These provisions provide that where a connection is required to the national grid an applicant for a connection may elect to construct the necessary connection. Such construction must be in accordance with the standards as set by either EirGrid or ESB and in accordance with section 37 can be subsumed into the national grid and ownership of ESB, as Transmission Asset Owner (TAO) and Distribution Asset Owner (DAO), upon their application to the CRU. However, contestable construction is quite different to, and not a substitute for, allowing private wires since contestable connections do nothing to assist with grid capacity issues.

The Consultation gives an overview of the history of the grid including the manner in which it has developed and then explores certain opportunities for use of private wires and, in this context, raises a series of questions.

 

Who should respond to the Consultation?

The Consultation invites views of those who currently use the national electricity grid on the development of a private wires policy, whether it is to generate, supply, and/ or consume electricity. It also seeks the views of (amongst others):

• landowners;
• farmers;
• those involved in forestry;
• those who may see Private Wire infrastructure installations in their local communities;
• those who may wish to own and/ or use a Private Wire to generate, supply and/ or consume electricity; and
• those within the wider electricity sector.

The Consultation states that all responses and submissions from interested parties are welcome and will be considered in the development of a Private Wires policy. It is recognised that public acceptance is key to delivering and implementing electricity sector policies and without community support the ability to deliver upon actions and targets will not be realised.

 

What does the Consultation seek views on?

The Consultation seeks views of respondents on the potential role, challenges, and opportunities for Private Wires in Ireland. The Consultation is divided into chapters and sub chapters and, following each, respondents are asked to answer a variety of questions.

Respondents are asked to consider issues such as (amongst others):

• whether further DSOs, DAOs, TSOs or TAOs are required in Ireland;
• the use of Private Lines for onshore and offshore hydrogen production;
• land sterilisation;
• the use of Private Lines for demand and generation located side by side or some distance away;
• the use of Private Networks for renewable business parks or demand side generation some distance away;
• the use of Private Wires for EV charging infrastructure, and supporting hybrid connections;
• citizen engagement in relation to Private Wires;
• the use of Private Wires for onsite generation and consumption;
• regulation of Private Wire operators/owners, system operators/generators and suppliers;
• minimum standards for Private Wires;
• public safety and electrical safety regulation;
• cyber security;
• security of supply;
• increase in national electricity grid network charges (e.g. as a result of system operators being required to circumvent Private Wire installations i.e. choose alternative routes for national grid wires to avoid Private Wire);
• efficient development of the national electricity grid;
• carbon budgets, the Energy Efficiency Directive and 2030 targets;
• public acceptance of national electricity grid infrastructure and grid connected renewable projects; and
• access to private property/land, public roadways and lands.

 

How and when should submissions be made?

The Consultation states that submissions should be sent by email with the subject “Private Wires Consultation”. The closing date for submissions has been extended to 17:30 on Friday, 27 October 2023.