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Last week’s report from the Irish Academy of Engineering (IAE) should serve as another wake-up call for those working on the transition to greener energy.
There are serious holes in the strategy outlined in the 2019 Climate Action Plan and one of them concerns the high-voltage electricity grid.
A national electricity system has three physical components, generation stations, the national grid of heavy-duty power lines and the low-voltage distribution network connecting to homes and businesses. All three require constant investment and are ultimately paid for by the end-users.
The investment bill is about to expand dramatically. The climate policy envisions a major expansion of the electricity industry to power the car fleet and to displace coal, turf, gas and oil in heating homes and other buildings.
Demand
Meanwhile, the demand for electricity in Ireland is being boosted by an extraordinary concentration of data-centre development in this country.
The intention is to build over 9,000 MW of new renewable generation, mainly wind, at a cost of €1m per MW or possibly a little more. This will be dispersed around hundreds of onshore and offshore wind farms and some onshore solar facilities, all of which will need grid improvements.
Parts of the low-voltage distribution system will not be able to cope with the increased demand from households and there will be another large bill for upgrades.
All three components of the system, generation, transmission and distribution will require major investment, to be recouped in the electricity tariff charged to customers. It would be nice to know the likely total cost and the implications for electricity tariffs.
Remarkably these calculations have yet to be undertaken and you will find no guidance in the document published by Richard Bruton last year.
Unpublished analysis
The IAE report notes that the plan relies on an unpublished analysis by the consultants McKinsey which “does not address the cost of enabling infrastructure (eg, the electric vehicle – EV) charging network and the electricity infrastructure such as off-shore wind connections, transmission and distribution and system services), or other barriers to change”.
This means that the analysis seeking to identify the least-cost measures to cut emissions has left out these investment items entirely, which may explain why the McKinsey study has not been released.
It is not really feasible, aside entirely from cost issues, to place the new cross-country transmission system that is needed out of sight in underground cables
Since there has been no official cost estimate, there is no way of knowing whether the schemes identified in the Government’s plan are indeed the lowest-cost options for cutting emissions.
The scale of the required electricity investment is comparable to building a new power sector from scratch of roughly the same size as the one currently in existence, which means that it will be easily the biggest capital project undertaken in the history of the State.
The commitments in the 2019 document have since been expanded and accelerated in the recent programme for government, again without costings.
The IAE report makes two important further points. Those most eager to see a shift to renewable energy do not always support the measures necessary to bring it about.
More high-voltage lines will mean more pylons and EirGrid has had no success in building new lines in recent years.
It is not really feasible, aside entirely from cost issues, to place the new cross-country transmission system that is needed out of sight in underground cables.
The wind industry has set its sights on offshore developments and there has been some visionary phrasemaking from the publicity people, noting that there are strong winds in the Atlantic and asserting that Ireland can become “the Saudi Arabia of Europe”. This would deserve, they argue, State support including the provision of grid connections and export interconnectors for which the wind industry does not propose to pay.
The IAE report observes that the export price of electricity from Ireland last year was about half the amount guaranteed to the wind industry by the Government. This is not how Saudi Arabia got rich. If private companies wish to build wind farms in the Atlantic and export power to the UK and Europe for prevailing prices at their own expense, good luck to them.
If they prefer to farm the Exchequer, the public’s representatives might pay more attention to protecting the interests of the taxpayers.
Tariff regime
The Commission for the Regulation of Utilities (CRU) is the body which oversees EirGrid and the ESB. There has never been a clear tariff regime in Ireland attributing the cost of grid connection to generators, but it is now timely for the CRU to address this issue.
The popularity of Ireland as a location for data centres, whose main input is electricity, is a puzzle until one perceives the availability of cheap, or even free, grid connections for these high-volume users.
We need a thorough review of charging on the national grid before the bills start piling up.
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