Aug 22, 2022

Let it flow: electricity networks are key to supply

Let it flow: electricity networks are key to supply

Lightbulb over a field
Lightbulb over a field
Lightbulb over a field

Inadequate infrastructure is cited amongst the key issues affecting security of supply.

For decades, critical reinforcement projects have been obstructed by public and private interests.

19th Century philosopher, Joseph de Maistre, said every nation gets the government it deserves. It seems that in our age of democracy, public participation and access to information, the Irish citizen has never been more responsible for our political leaders and the outcomes overseen by them.

Media reports over the weekend tell us we have reached the inevitable finger pointing stage in the so-called energy crisis. The Government has engaged a former senior civil servant to conduct a review into the current shortfall in power supplies as well as an alleged failure to predict, respond and effectively manage the situation. Seemingly, senior members of government are quite annoyed. Now they are coming for system operator, EirGrid, and the energy regulator, CRU.

As stable doors and bolting horses come to mind, there is little doubt that the crisis is a long time in the making. The latest ministerial hand-wringing and musings over who knew - and when - are somewhat predictable. Perhaps too the extent to which the public will accept the neat narrative of a regulator asleep at the wheel while a state agency fails to perform. As we eagerly await the findings of the review, we might ask ourselves whether we are looking for answers in the right places.

Electricity consumption in 2010 was measured as roughly 27.5 terrawatt hours (TWh). By 2020 it had increased 16.4% to 32 TWh. Forecasts say it will rise between 28% and 43%, up to 46 TWh by 2030. Projected higher demand is driven somewhat by electrification of transport and heating. The major driver, however, is activity associated with large demand users, primarily data centres.

Overseen by CRU, EirGrid is responsible for future planning and real-time balancing of supply and demand. Leaving aside the critical role to be played by demand response programmes [see www.thedrai.ie], electricity demand is for the most part uncontrollable. EirGrid focuses on managing the resources that affect supplies to meet consumer needs. By analysing and predicting the socio-economic factors that drive electricity demand, plans are developed.

One of the most important tools for balancing supply and demand is the transmission network.

Since the earliest days of electricity transmission, the primary purpose of the grid was to deliver power from a handful of generators to the regions and towns in which it was consumed. Slowly, as the economy and use of electricity grew, the network evolved to what it is today. The current network, comprised of overhead lines, underground cables and substations now connects many more types of generation and demand customers.

At the turn of the century, independent power producers were permitted to connect to the grid for the first time. Emerging renewable energy targets and improved technology led to a rise in wind farm construction. So too solar generation and grid-scale energy storage are now on the rise. Investment in fossil-fuel based power generation, despite its unquestionable value and importance, has been notably low, an issue we will discuss separately.

Semi-conductor manufacturing and data centres, calling cards of the digital age in which we live, now comprise Ireland’s largest single demand connections. Individual demand loads are equivalent to that of small cities.

Renewable electricity production continues to grow as does demand; and at a pace much higher than in recent decades. Much generation is now located on the western seaboard where transmission network has been weak or non-existent, whereas large demand customers are densely clustered on the east coast.

The scale and complexity of infrastructure required to meet modern requirements is difficult to deliver. ESB and EirGrid have struggled to gain acceptance and permission to build new network. Many projects have been dogged by protest and resistance. Some new lines and stations have been delivered, of course, but invariably later and more costly than planned.

In the 1990s a 220 kV line around Cork Harbour was held up by public protest for years, unresolved until the late 2000s. By that time, a 220 kV line in Roscommon-Sligo and 110 kV line in Donegal were undergoing similar difficulties.

Probably most costly is the 400 kV North-South Interconnector between Meath and Tyrone which has been mired in controversy, often used as a political football, since the project began in 2005. Planning permission is in place but endless legal challenges mean that, 17 years later, construction still has not started.

More recent projects such as the Grid Link (Cork-Dublin) and Grid West (Mayo-Roscommon) 400 kV lines were cancelled following public backlash.

In 2016, CRU approved just over €1 billion in capital expenditure to be invested between 2016 and 2020. Only €795m approved expenditure was reported. More than €200 million of underspend was due to “delay or re-scoping of large 400 kV developments”.

In 2020, CRU approved over €1.1 billion in transmission capital expenditure for the period 2021-25, reflecting a 43% uplift in ESB’s capital (network) expenditure. It also approved a 28% increase in EirGrid operational costs, which include the cost of planning and developing the network. The regulator justified its approval of the increased expenditure on the grounds of ensuring that EirGrid and ESB “have the resources and capability to deliver for consumers”.

The record shows that the regulator and state agencies have tried to stay in front of supply issues, at least from the point of view of network investment. EirGrid has been petitioning industry stakeholders for years, saying it cannot do its job alone. Whereas support from the business community seems necessary, it appears that other forces, within the public realm, stand in the way of progress.

As easy as some may find pointing the finger at EirGrid and CRU, an uncomfortable truth may be that the Irish citizen must accept its share of responsibility for this crisis.

High levels of growth in consumption are nothing new. In the ten years to 2000, electricity usage grew by 67%. Granted, in the intervening years growth has been more modest. However, given the dearth of network development during this period, it may become apparent that slower growth has only served to cover up and delay the issues as we see them today.