Monday Interview: 'Green electricity could have impact on poorer families'

EirGrid CEO Fintan Slye tells Paul Melia how those who can't afford to install solar panels could end up facing higher energy bills

Fintan Slye, chief executive of EirGrid. Photo: Arthur Carron

Paul Melia

The future of electricity may be green - but poorer families could be penalised if households are allowed to produce their own power.

Currently, around one-third of bills are made up of network charges which cover the cost of installing power lines and transmitting electricity across the country - the more power you use, the higher the network charge you pay.

Microgeneration allows households to generate their own power from wind turbines, solar panels or combined heat and power plants. But increased use may result in added financial pressure on the poorest.

The reason is relatively simple. If you have a low electricity bill because you produce your own power, your network charge is lower. But if you can't afford €5,000 to install a solar panel, your electricity bills remain the same and you pay a higher charge for being connected to the grid. That could impact on the poorest, EirGrid chief executive Fintan Slye has said.

"If I as an individual consumer put solar panels on my roof, but remain connected to the grid because if the sun doesn't shine and my battery runs out I still want to watch 'Coronation Street', I get all the benefit of being connected to the grid but my usage charge is tiny," Mr Slye said.

"So I'm actually paying small amounts to the grid facility, but all those costs still need to be recovered.

"The societal question is: is this (microgeneration) likely to exacerbate fuel poverty because those who put the solar panels up have the money to do it? If I'm in fuel poverty, I'm unlikely to have the money. The fixed charges go up to pay for the lines, so if we don't approach this in a structured way, there's a risk of unintended consequences."

There's another complication about microgeneration too.

"Part of it is if you have lots of small generation, massively dispersed around the country, how do you control that? Supply and demand needs to balance each other second by second," he said. "Traditional energy systems do that by having a relatively small number of generators, be that large wind farms or power stations, and a control centre which sees where demand is going and saying (it wants) each generator to do the following.

"If you have two million little generators, that model breaks down somewhat so you need a different way of thinking about it."

Appointed in October 2012, having previously held the position of director of operations with responsibility for operating the grid across the island, the impact of microgeneration and renewables on the system is among a number of issues Mr Slye is currently grappling with.

In the background is the North-South Interconnector and other so-called 'pylon projects' which have caused ructions in rural communities. Acknowledging that mistakes were made in how the affected communities were consulted, EirGrid is now planning an extensive public consultation process.

The 'Planning Our Energy Future' process, which begins later this month, is aimed at starting a conversation about what choices will be available.

The company's 'Grid Development Strategy' sets out spending of between €2.6bn and €2.9bn over the coming years, which is paid through a levy on customer bills - the network charges.

"The key is to get feedback on the four scenarios (see panel above)," he says. "It helps to shape a structured conversation around policy and choices that are there and what might be the impacts of them."

Utilising renewables on the system will be a challenge. Currently, up to 60pc of all power used at a given time can be drawn from wind and other technologies. By 2020, that will increase to 75pc.

"How do you use the renewables? There are three levers. Increasing the amount the system can absorb in real time. The second is storage, be it in electric vehicles or large industrial utility-scale storage batteries. The other is interconnectors, to sell that excess energy to the UK or France or wherever.

"The other dynamic which helps is flattening the demand profile where it (demand) isn't much higher at 5pm compared with 4am. Two things can impact that. Data centres help because they're flat. The other is you get more responsiveness from consumers around real-time pricing, which involves smart meters. If you had something that said it would optimise the heating in your home using electric storage heaters, and the system would automatically put the energy in when it's cheapest. No one is going to record 'Coronation Street' and watch it at 4am."

'Tomorrow's Energy Scenarios' - four possible futures

The first is 'slow change', where economic growth is sluggish, investment in renewables is in low-risk, established technologies and there is little change in how electricity is generated.

The second is 'steady evolution', where the growth of renewables is maintained, energy efficiency is improved and there is more use of electricity for transport and heating.

'Consumer action' follows, with strong economic growth, an appetite from the public to reduce emissions, efficiency is deployed and there is community energy projects and microgeneration, where households produce their own electricity.

Finally, 'low-carbon living' sets out the roll-out of new renewable technologies, the public demands a reduction in emissions and there is no coal or peat generation.