The growing demand for electricity, in every year but one from 1927 to 2008, was the most powerful driver of investment in the national electricity grid and distribution system. Electricity demand dropped with the onset of the recession of 2009 and while now well below its peak, it is recovering. According to the latest forecasts it is expected to reach its 2008 peak in 2019 (Fig 1).
The Commission for Energy Regulation (CER) regulates investment in the electricity transmission and distribution network. Its approval of expenditure is around five-year development plans submitted by EirGrid and ESB Networks. These plans rely on forecasts of electricity supply and demand that are in turn affected by Government policy, economic development, innovation and technology. Thus investments are approved by the CER against the background of what is likely to happen rather than what is certain. There is always some risk that unforeseen factors or events will frustrate part of the purpose of the investment. It is important on the part of CER to ensure the right level of investment because the social and economic cost of under-investment and the resulting loss of or inability to supply new demand is high . Thus the CER decision paper on the five-year review of expenditure is the result of closely reasoned, widely consulted and publicly available documents.
While on the face of it we have enough power lines to meet current and projected demand to 2020 or thereabouts, there are other factors driving the need for new power lines.
If we are to have significant job creation in regions and rural areas then a 21st Century grid and power lines are needed to power the factories and offices that will create local employment .
The National Risk Assessment 2014 points out that “Balanced economic growth is partly dependent on the timely provision of infrastructure in the right locations. If this does not occur, then there will be negative consequences for indigenous job growth and Foreign Direct Investment (FDI) opportunities and may lead to consequent regional imbalances.”
With a view to maintaining Ireland’s attractiveness to investors, the Enterprise Agencies (Enterprise Ireland and the IDA) place a strong emphasis on the cost-effective provision of electricity infrastructure in their policy submissions to Government . Attracting industry requires a high quality, competitive and reliable power supply so new grid infrastructure plays a key role in spreading new jobs, industries and economic opportunity across the country ,. Other dedicated new power lines like interconnectors are needed to make our electricity system more cost-effective and secure. For example, the East-West Interconnector links Ireland to the larger system in Britain, so far helping to push down wholesale electricity prices . It is projected that a second North-South connection will result in savings of some €20m a year to customers on the island of Ireland by 2020, increasing further into the next decade (Fig 2). Continued investment in links to neighbouring jurisdictions is also important for security reasons and to deliver the benefits to Ireland of the European aspiration for a Single Electricity Market . The transmission system has to expand to facilitate increased supply and to ensure that the cheapest power plants can be tasked to produce power no matter where they are on the island.