Higher bills for 50 years if electricity cables are buried
Electricity costs would rise 3pc per year – study
Published 18/02/2014 | 02:30
HOUSEHOLDERS and businesses will be hit with higher electricity bills for the next 50 years if EirGrid bows to pressure to put high-voltage power lines underground.
The independent Commission for Energy Regulation (CER) said "end users" would be hit with a hike of at least 3pc in their annual bills, but it could be higher.
This is because only the capital cost of erecting almost 500km of high-voltage lines on pylons has been calculated.
The cost of operating and maintaining underground lines, considered more expensive than an overground option, has not been factored into the impact the more expensive option would have on customer bills.
Using a study commissioned to investigate undergrounding the North South Interconnector, it calculated that an additional €100m-a-year would be added to electricity bills over the next five decades – or an additional €36 each year per household annually on top of the current average bill of €1,211.
"That would apply year in year out, a 3pc higher bill than it otherwise would be if the lines were overhead," a CER spokesman said.
The CER said its estimate was "at the conservative end".
"We are being cautious. We outlined in the letter to the Oireachtas committee that it may well be more than 3pc," the spokesman said.
"On the flipside, if the Government or the [planning] authorities were to decide to put around half of the lines concerned underground, then you would have half of the impact."
However, the Irish Independent has seen cost projections made by the UK's National Grid for similar projects in Britain which, if placed in a Irish context, would amount to increases of around 6-10pc. This would mean annual bills increasing by between €73 and €121.
The figures came as an expert group appointed by the Government begins to investigate if it is possible to underground three proposed grid upgrades – Grid West, Grid Link and the North South Interconnector.
However, not until after the local elections will communities learn if undergrounding is feasible on cost and technical grounds.
If undergrounding is considered for all or even parts of the routes, the costs will be higher for domestic and commercial customers.
This is because the cost of upgrading infrastructure and providing power lines is borne by customers who repay the cost over time on their bills.
According to the CER, the additional cost of undergrounding high voltage cables, as opposed to running them overhead on pylons, would triple to over €3.1bn.
This is the combined expense of building the North-South Interconnector, Grid Link and Grid West.
A document submitted to the Oireachtas Committee on Transport and Communications, seen by the Irish Independent, says these additional costs would inevitably have to be borne by consumers.
"It is important to state that in our view, 3pc is a conservative estimate and is purely based on the additional capital costs associated with undergrounding, ie it doesn't take account of likely additional operational and maintenance costs," the document says.
"The capital cost of each solution is heavily influenced by a range of factors, including the topography of the land, the route length, the requirement for convertor stations and other technical issues."
Employers expressed dismay at the likely increase in electricity costs businesses would have to bear if the lines were put underground.