Building the Grid of the Future
ESB Networks Presents its PR6 Business Plan to EAI
This month, EAI hosted a webinar on ESB Networks’ business plan for Price Review 6 (PR6). At a time where significant investments are needed to facilitate increasing levels of renewable electricity generation, PR6 is an opportunity to build the electricity grid for the future and place Ireland on course for net zero by 2050. In this article we explore ESBN’s business plan and how this ambition relates to the latest research.
Last Summer, Eurelectric launched its flagship “Grids for Speed” report [1] outlining assessments on the level of grid investment needed across the EU. For Ireland, Eurelectric concluded that an average investment of one billion euro was needed into the Irish distribution network. With a proposed baseline investment plan of over 10 billion euro (including transmission infrastructure) spread over five years, the proposed PR6 plan encapsulates the ambition contained within Eurelectric’s analysis. In addition, It’s clear that, at a time of increasingly intense weather events, Ireland needs to build a more resilient electricity network. ESBN’s PR6 business plan acknowledges this challenge,
With such large sums of capital needed for network investment, the question of how and who should pay for this investment arises. A recently published report [2] by Bruegel, a Brussels based think tank, outlines the various financing models and options that DSOs have available to them. While the Price Review system is well established in Ireland, this paper opens the discussion as to whether there are other avenues to raise capital for grid investment.
Most notably, Bruegel highlights that greater capital market harmony in Europe could be a vehicle for providing this capital in Europe. Could leveraging European capital markets or even leveraging European deposit savings as mooted by Draghi be a radical new way of funding our grid investments outside of electricity customer bill? At a time of international protectionism and isolationism, necessity may become the mother of invention for our investment needs.
ESBN has submitted this business plan to CRU for the next stages of the Price Review process. EAI looks forward to engaging with the CRU when it publishes a draft determination on the business plan and any further discussions on grid investment.
[1] Grids-for-Speed_Report.pdf
[2] Upgrading Europe’s electricity grid is about more than just money