Irish Government commences long-awaited “Private Wires” ConsultationFriday, 25 August 2023
The Department of the Environment, Climate and Communications (DECC) on 18 August 2023 launched a public consultation to gather views and consolidate understanding of the role which Private Wires may play in the future Irish electricity ecosystem, as well as identifying the challenges and opportunities such a policy may present.
Private Wire refers to private individuals or undertakings running their own electricity cables in order to transfer electricity. This can be in the form of a Private Line or a Private Network. Private Line means a private electricity line used to supply electricity and links a single generation site with a single demand user. Private Network means a privately owned electricity system of associated cables and infrastructure linked to a single site with multiple users or linked to multiple sites. Currently the transfer of electricity from external generation takes place on the state owned national electricity grid, with Eirgrid operating the transmission system and ESB Networks operating the distribution system.
The consultation and proposed policy have emerged in the context of the Climate Action Plan 23 and the governments push to achieve Ireland’s renewable energy targets. These targets includes offshore renewable energy targets of 8GW by 2030 (including 2GW of green hydrogen production) and 30GW by 2050. The consultation paper published by the DECC acknowledges capacity issues on the national electricity grid associated with the addition of further offshore wind energy. Private wire has been suggested as a potential solution to this issue and the paper notes that stakeholders have indicated that without private wires, several new renewable generation projects will not come to fruition.
The consultation paper identifies several opportunities for private wire, including connecting large energy users involved in the manufacturing or data centre sectors to renewable energy, development of renewable energy business parks and community solar schemes. Importantly, the paper refers to the Government Statement on the Role of Data Centres in Ireland’s Enterprise Strategy. This statement sets out that Government policy is to seek to enable the twin transitions of decarbonisation and digitalisation of Ireland’s society and economy.
However, the paper also identifies a number of challenges, which need to be considered as part of the development of such a policy. This includes the need for backup electricity supply for large energy users at times of low renewable energy output and security of supply associated with the reliance on the national grid as a backup energy supply at such times. One suggestion put forward is that such private wire projects would be required to remain entirely private to negate such impact. While large energy users may have backup electricity generation onsite, the paper also raises a concern about compliance with the Energy Efficiency Directive, which requires Ireland to reduce its final energy demand by 2030 (noting that renewable energy is included towards assessing performance of this target).
There are also safety and regulatory concerns raised in the paper around private entities building such infrastructure. Wider usage of private wires could also increase costs and charges for customers of the national electricity grid caused by a dilution of the national grid customer base. The location of private wires will be a significant challenge, as in most instances private wires will cross land and/ or property that the cable owner and/ or operator does not own, whether this is privately or publicly owned land. The paper has highlighted the challenges this creates in terms of increased costs to circumvent private wire infrastructure, mapping issues and identifies a number of potential considerations including the use of the national road and rail infrastructure for carrying private wires and whether compulsory purchase powers similar to those currently held by the ESB should be granted to private entities.
Responses to the consultation will be considered in the development of a Private Wires policy. The closing date for submissions is Friday 13 October 2023 and submissions will be published on the DECC website.
The consultation is available here.
For further information on the Private Wire Consultation, or general legal advice on energy regulation and projects, please contact Fergal Ruane or Christopher Woods or any other member of the ByrneWallace LLP Infrastructure, Construction and Energy Department.