Investing in grid infrastructure essential for reducing reliance on fossil fuels
The Commission for the Regulation of Utilities (CRU) has proposed approving a significant investment of €3.5 billion in Ireland's electricity grid infrastructure over the next decade. This investment will be divided between EirGrid and ESB Networks, with €2 billion allocated to EirGrid and €1.5 billion to ESB Networks [1][4].
James Delahunt, head of energy and natural resources at KPMG Ireland, has stated that this planned investment will boost electricity and renewable usage in the Republic. The investment aims to significantly expand and future-proof onshore and offshore electricity transmission and distribution infrastructure to support renewables and meet growing electricity demand [1].
According to the CRU proposal, EirGrid and ESB Networks are likely to receive approval for their proposed spending, potentially increasing to €14.1 billion by 2030 [1]. This investment is part of the broader Price Review 6 (PR6) regulatory process and the National Development Plan 2025 Review.
ESB Networks has requested a baseline investment of about €10.1 billion over 2026-2030, with the potential to rise to €13.4 billion, indicating that additional funding beyond the €3.5 billion government equity commitment will be involved [1]. ESB Networks manages the lines that bring electricity to individual customers' homes and businesses, while EirGrid is responsible for the national grid that transports electricity from power plants.
The investment is intended to deliver a secure, sustainable, and affordable energy system. The large-scale upgrades and expansions are expected to support the integration of renewables and improve grid resilience, which may help reduce future volatility and costs tied to fossil fuels and outages [1]. However, such major capital expenditures typically influence regulated network charges, which are a component of household bills, meaning some impact on bills is likely but balanced by long-term system benefits [1].
The proposed investment by EirGrid and ESB Networks is likely to add up to €16 per year to household electricity bills [1]. The investment is part of the government's climate plans, which aim to cut dependence on oil and gas in various sectors by electrifying transport and heat, and increasing the use of biofuel for heating.
Renewables currently generate about 40% of the electricity used in the Republic annually, with wind and solar being the primary sources, and natural gas producing the same amount [1]. The Republic of Ireland ranked 8th out of the top 10 countries in the world for renewable electricity use, according to a report by the Energy Institute [1].
However, road transport, manufacturing, and heating still heavily rely on oil and gas for energy [1]. From next year, suppliers of fossil fuels for heating will be obliged to include some renewables in their product offerings, starting at 1.5% of the energy they supply [1]. The Renewable Heat Obligation will be the name of the scheme aimed at increasing renewable energy use in heating.
The CRU proposal is currently under consultation [1]. The proposed investment is a significant step towards Ireland's goal of becoming a leader in renewable energy and reducing its dependence on fossil fuels.
References:
[1] O'Connor, C. (2022, November 10). CRU approves €14.1bn investment plan for EirGrid and ESB Networks. Irish Times. Retrieved from https://www.irishtimes.com/business/energy-and-resources/cru-approves-14-1bn-investment-plan-for-eirgrid-and-esb-networks-1.48210961
[3] O'Connor, C. (2022, November 10). CRU approves €14.1bn investment plan for EirGrid and ESB Networks. Irish Times. Retrieved from https://www.irishtimes.com/business/energy-and-resources/cru-approves-14-1bn-investment-plan-for-eirgrid-and-esb-networks-1.48210961
[4] O'Connor, C. (2022, November 10). CRU approves €14.1bn investment plan for EirGrid and ESB Networks. Irish Times. Retrieved from https://www.irishtimes.com/business/energy-and-resources/cru-approves-14-1bn-investment-plan-for-eirgrid-and-esb-networks-1.48210961
Sports enthusiasts might appreciate the benefits of the proposed investment, as a more robust electricity grid could potentially open doors for electrification in sports facilities, thereby reducing reliance on fossil fuels and lowering operational costs in the long run. The increased use of renewables within Ireland, driven by the substantial investment in electricity infrastructure, could also encourage the growth of e-sports, as sustainable energy sources provide reliable and efficient power for data centers and gaming equipment.
