Irish government mulls electricity grid regulation overhaul to legalise private wires

Private wires are dedicated electrical connections between different locations that do not use public or national grid infrastructure. As the Irish electricity system evolves to accommodate greater levels of renewable generation and increased levels of demand, the need for new electricity infrastructure, including private wires, will increase too.

Currently, the Electricity Supply Board (ESB), a state-owned electricity company, exclusively owns the national grid infrastructure in Ireland, meaning that private wire supply arrangements that bypass the national grid are not permissible under existing Irish legislation. However, in several EU jurisdictions and in the UK, private wires are permitted.

Although the reluctance to allow private wires in Ireland has been the subject of long-standing criticism from the developer community, the impact of the European Commission’s REPowerEU package across the EU has created a different, much sharper dynamic requiring member states to accelerate the energy transition.

As the ESB is also the sole distribution system operator in Ireland, it is therefore responsible for metering such that it is relatively easy for customers to change electricity supplier. In that context, the Irish government is keen to understand if or how customers would purchase electricity from a supplier of their choice via a private wire – and how they would exit from a private wire contract.

According to DECC’s consultation (84 pages / 669KB PDF), private wires:

• must exclusively relate to electricity infrastructure;
• must be privately owned, operated, and maintained;
• can involve electricity generation for self-supply, sale, or onward distribution;
• must not rely on the national electricity grid for electricity transfer; but
• can exist at either the transmission or distribution level.

DECC’s consultation recognizes that expediting and facilitating developments in the electricity sector is essential to achieving the goals in Ireland's Climate Action Plan 2023 (CAP23), which aims for net-zero emissions by 2050. CAP23’s targets include electrifying transport, reducing emissions by 75% by 2030, and expanding offshore wind and green hydrogen generation.

Private wire projects must align with the prevailing plan-led approaches for the national electricity grid and the deployment of renewable generation assets, reflecting the shift towards co-ordinated planning among public actors in Ireland.

The consultation also introduces potential scenarios for private wire projects to emerge in Ireland, including a private line for offshore wind to green hydrogen production and another for green hydrogen production from onshore renewable electricity. Ireland's National Hydrogen Strategy, published in July 2023, outlines the efficiency of establishing a direct line between hydrogen production and electrolysis when produced near renewable energy sources.

Furthermore, electrifying transport is crucial to meet Ireland's target of having 900,000 electric vehicles on the road by 2030 and reducing transport sector emissions by 50% by the same year, as outlined in CAP23. The consultation seeks feedback on whether current restrictions on private wires hinder the development of Ireland's EV charging infrastructure.

ESB’s Networks for Net Zero Strategy sets an ambitious goal of achieving an electricity distribution network that is net zero-compliant by 2040, closely tied to the introduction of private wires. However, the consultation acknowledges the need to address security of supply concerns, especially regarding new private wires projects with significant demand connected to the national electricity grid.

Transformational grid policies are imperative to achieving Ireland’s ambitious climate goals and as the landscape of electricity generation and consumption transforms, the rule book must adapt to accommodate emerging business models such as energy parks, off-grid solutions, and green hydrogen. Above all, clarity is paramount. As DECC develops this policy based on stakeholder feedback, it must provide absolute clarity on legal and regulatory aspects, including licensing requirements, regulatory oversight levels, and minimum safety standards.

Co-written by Sarah Greene of Pinsent Masons.