DECC Publishes Guiding Principles For The Development Of A 'Private Wires' Policy

The Irish Government has approved a set of guiding principles for the development of its "Private Wires" policy (the Private Wires Policy). This follows the public consultation on Private Wires which closed late last year.

A New Approach

The development of the Private Wires Policy has been a goal of each of the Climate Action Plan 2021, the Climate Action Plan 2023 and the Climate Action Plan 2024. The publication of the Private Wires Policy is expected to represent a major shift in Ireland's approach to the buildout of its electricity infrastructure as it strives to decarbonise.

What are Private Wires?

The term "Private Wire" is used in this context to refer to private entities running their own electricity cables to transfer electricity. Private Wire arrangements contemplate demand users of electricity creating a physical connection (via a direct, private wire or private network) with an electricity generator on a different property, for their own internal dedicated supply of electricity. This contrasts with the current system whereby the transfer of electricity from external generation to demand sites only occurs on the State-owned national electricity grid (the National Electricity Grid).

How will it impact Ireland's electricity system?

The goal of the Government through its Private Wires Policy is to unlock private sector resources to build new electrical infrastructure, thus promoting ultimate investment in renewable generation and storage. This would benefit the whole electricity system. Advocates argue that they can provide and/or purchase cheaper electricity by building their own infrastructure between generation and demand sites and circumventing the National Electricity Grid. By doing so, issues surrounding grid constraint, i.e. certain grid areas lacking the capacity to transfer the generated electricity, are avoided. This would open such areas to new electricity generation projects and usher in local investment.

Data Centres & Private Wires

It is anticipated that undertakings such as large data centres, which have experienced significant difficulty in obtaining new connections to the National Electricity Grid, will seek to source electricity directly from dedicated wind, solar, or other renewable energy sources. Although most of Ireland's energy needs will continue to be met through electricity supply on the National Electricity Grid, Private Wires are seen as a potential route to permit the buildout of important tech infrastructure without jeopardising Ireland's security of electricity supply.

Public Consultation and Guiding Principles

The public consultation for the Private Wires network opened in August 2023. The Department of Environment, Climate and Communications received 128 submissions which they have analysed and reviewed, releasing a collated review of the information received in the report that can be found in this link. The responses will be used to guide the development Ireland's Private Wires framework.

The Government has also published 8 principles to guide the formation of this Private Wires Policy. Although these principles do not have a direct effect nor make any immediate changes, they will aid the understanding of the system and will be used as a point of reference going forward. The principles are:

1. The objective of any change is to accelerate decarbonisation, and promote the deployment of electricity infrastructure, renewable generation and storage;
2. The National Electricity Grid is a crucial piece of national infrastructure and will remain in public ownership;
3. Any change must complement other policy objectives including security of supply, the offshore wind strategy, the hydrogen strategy, industrial policy and the national climate objective;
4. The National Electricity Grid will remain the primary way to connect generators and consumers of electricity. Where grid-based solutions are available these will be preferred to Private Wires;
5. Private Wires cannot undermine the financing of the National Electricity Grid. Those with a Private Wire must pay the full cost of the service they have sought from, or is provided to them, by the National Electricity Grid;
6. Private Wires will be built to the same technical and safety standards as the National Electricity Grid and will be capable of being taken in charge by the System Operators;
7. Private Wires will not be permitted to undermine the efficient development of the National Electricity Grid; and
8. Private Wires will have to be developed within appropriate planning and environmental assessment requirements, and the consent of landowners. Private Wire developers will not have wayleave or other powers to use land.

What next?

With the publication of the guiding principles for the Private Wires Policy, the Government has taken an important step towards formulating a comprehensive policy framework around Private Wires. The final Private Wires policy is due to be published, in accordance with the 2024 Climate Action Plan, by the end of 2024.

Our Energy, Renewables & Utilities team will continue to monitor developments in this area.

Contributed by Alex Needham, David O'Shea and James Curtis

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