Homes and business face a bill of at least €5 billion for the new network needed to run electricity from planned offshore wind farms to customers, according to a paper issued by regulators on Thursday.
The Government has earmarked areas of the Irish Sea and off the south coast for offshore wind development as the Republic bids to cut greenhouse emissions by switching to green electricity.
National electricity grid operator EirGrid will have to finance about €5 billion worth of infrastructure needed to get the electricity generated offshore to customers, a paper issued by the Commission for the Regulation of Utilities (CRU) on Thursday estimates.
The Republic’s 2.2 million homes and businesses will ultimately cover the cost of this, either through standing charges or the public service obligation on their electricity bills.
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Standing charges amount to about one third of the €1,756 a year that the average Irish household pays for electricity, and they fund the national grid and network. The public service charge covers supports for renewable electricity.
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While homes and small businesses pay their share of the network cost through standing charges, so-called “large energy users”, including manufacturers and data centres, pay according to what they consume.
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The CRU’s Price Review Six Strategy Paper, issued on Thursday, is the first step in determining how EirGrid and ESB Networks can recover the cost of redeveloping the system to take on more renewables, including offshore wind, solar power and batteries, while meeting growing electricity demand.
Any increases will apply from 2026 to 2030. According to the CRU, the price review that began on Thursday will “determine the revenues that network companies can recover from electricity customers through network tariffs” during that period.
Companies backed by European giants EDF, RWE and Statkraft, to which the State awarded contracts through the Renewable Energy Support Scheme a year ago, will build the pipelines and substations needed to bring electricity ashore from their wind farms.
They will transfer ownership of that to EirGrid over 18 months from the point at which they begin generating electricity. EirGrid will build the infrastructure off the south coast that will connect wind farms built there.
The company said on Thursday that the network needed for the Irish Sea will be “directly paid for from a new network tariff for the offshore developers who will recover their costs ultimately through the public service obligation levy which is paid from all electricity bills”.
The company added that the CRU had yet to decide whether infrastructure off the south coast would be paid for though a network charge or through the public service levy.
The CRU paper says ESB Networks, which is responsible for the power lines that connect individual customers to the system, also faces a significant bill for investment, but does not say how much.
The ESB said on Thursday it was not possible to indicate what the figure might be “at this early stage of the process”.
Jim Gannon, CRU chairman, predicted that the review would be one of the most important in terms of switching to low-carbon electricity.
“The integration of offshore wind will be an added challenge that will require significant development of our distribution and transmission systems,” he said.
He added that this had to be done as efficiently as possible to ensure value for a “far more active consumer”.
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