The ownership of the national grid could be passed from ESB Group to EirGrid and this could lower costs for consumers, a submission to the Government from the grid company suggests.
The submission from EirGrid, in response to the energy green paper, points out that while EirGrid operates the system, it does not own the assets. This structure it describes as "unusual", especially in an EU context.
With the liberalisation of the electricity market there has been increased emphasis on separating the operation of the grid system from the ESB. This is meant to lead to a transparency for all companies in the market. However, while EirGrid now operates the system on a day-to-day basis, the physical infrastructure is ultimately owned by ESB Group.
The grid, often described as the transmission system, is a network of high voltage lines and cables. Electricity generated in power plants is transformed to higher voltage levels and fed into the national power system. The power grid is made up of over 5,800 kilometres of high voltage lines and cables.
While moving the assets under the umbrella of EirGrid is possible, the ESB might not support such a move as it would radically reduce its asset base. This asset base allows it to borrow money for capital purposes.
EirGrid, which came into existence officially last July, said a better system would involve the grid company operating and owning the system.
In a key section of its green paper submission, it states: "While EirGrid is committed to making Ireland's transmission arrangements work, it believes that combining transmission operation and ownership is a more effective and efficient model, eliminates duplication of resources/skills, provides for clearer accountabilities and supports the application of incentives".
The company emphasises that it is not pushing the idea of moving the assets, but simply responding to the green paper and asserting that a different structure could be examined.
It stresses its determination to operate the current system as effectively as possible, but it points out that this structure does give rise to "transactional and other inefficiencies and therefore additional cost to consumers".
It says the model adopted in Ireland is unusual, particularly in an EU context, with Ireland and Greece being the sole adopters out of 25 countries.
"EirGrid continues to be committed to do its part to make the model adopted work. However, it remains EirGrid's belief that an "owner/operator" model is more efficient, gives more clarity of responsibility, is perceived by the market as being more truly independent, enhances ability to deliver and is more accepted in Europe as demonstrated by it being adopted in the vast majority of countries. The analysis presented in the Deloitte Report commissioned by the Government in 2005 would tend to support this position," it states.
