Business Irish

Thursday 18 September 2014

Underground cable costs 'a threat to FDI'

Published 17/03/2014 | 02:30

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Pylons, inset Fintan Slye
2020 RENEWABLE ENERGY TARGETS: World leading levels of wind energy on grid...28-11-2013
Pictured at the launch of the Eirgrid Group Annual Renewable Report 2013 were; (l to r) Fintan Slye (Chief Executive, Eirgrid Group) and Minister for Communication, Energy and National Resources; Pat Rabbitte TD
EirGrid Group News Release
World leading levels of wind energy on grid
Thursday 28 November, 2013 - Ireland is making good progress towards meeting its target of 40% renewable electricity generation by 2020, according to a new report published by EirGrid Group today.
The EirGrid Group Annual Renewable Report 2013 shows that 17% of the island's electricity demand was met from renewables in 2012 - this comprised 18% in Ireland and 13% in Northern Ireland.  
In addition, during 2013, 116 MW (megawatts) of renewable power sources (mostly wind) connected in Ireland and 74 MW in Northern Ireland.  At the end of September 2013, the total renewable generation installed on the island of Ireland was 2,771 MW.
These figures show Ireland is continuing its world-leading progress in facilitating renewable energy on the grid.
No other synchronous electricity system of scale manages the same levels of instantaneous wind penetration levels (50%) seen at times today in Ireland and Northern Ireland, and no other synchronous power system is aiming to safely and securely manage real-time wind generation penetration levels of 75% by 2020.
EirGrid estimates that meeting the 40% renewable electricity targets in Ireland will reduce the CO2 intensity of emissions in the power sector from 489 g/kWh in 2011 to approx. 300 g/kWh in 2020, representing a drop of by 38%.
Speaking at the publication of the EirGrid Annual Renewable Report 2013, EirGrid Group Chief Executive Fintan Slye said: "Ireland and Northern Ireland have set ambitious renewable electri
Fintan Slye

Opting to upgrade Ireland's electricity network using underground cables rather than pylons could deter multinationals from investing in Ireland, the chief executive of transmission operator EirGrid has warned.

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"We regularly meet with large users of power and some are very upfront about it... Electricity is not the sole determinant for any multinational, but for some it is hugely important.

"Electricity costs pose big barriers to entry. We need to be careful that the choices we make don't become a barrier to competitiveness," said EirGrid boss Fintan Slye.

Electricity bills will go up between 3pc and 5pc every year for the next 50 if an underground system is pursued rather than pylons, EirGrid has estimated. But Ireland's energy costs are already higher than the European average.

Mr Slye told the Irish Independent that for some companies, a 3pc to 5pc rise equates to an extra €1m a year.

"I think those directly affected by pylons view it as a small price to pay," he said. "But these investments are for Ireland Inc, they're for everyone in the country... we need to find the right answer for the country as a whole," he said.

"We can't forget that putting cost on to the electricity bill-payer also puts them on to industry."

EirGrid's plans to erect hundreds of pylons around the country to upgrade Ireland's electricity infrastructure came to an abrupt halt in recent months, amid intense public debate about the health and environmental risks posed by pylons.

Forced to return to the drawing board, the electricity manager is now embarking on an extensive investigation into underground electricity transmission.

Both options will then be weighed up, overseen by an independent panel led by former Supreme Court judge Catherine McGuinness.

What is ultimately decided upon could affect the country's economic recovery, said Mr Slye.

"We need to be sure that if we are putting costs on to electricity bills, we're doing it understanding what the implications are for competitiveness and for jobs."

But failing to act poses a threat to foreign direct investment too, he added.

A consultants' report carried out for EirGrid said that without any investment in the transmission system, 14 out of 28 locations for power-dependent multinational companies here would have less than the required capacity by 2025.

The same study found that 90pc of large foreign companies with Irish operations feel the country's electricity transmission network is important or very important in terms of further investment.

"What this will be about, at the end of the day, is trade-offs and difficult choices," Mr Slye said.

Irish Independent

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