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Security of Supply: A Pressing Issue for Business Leaders

30 May 2014

Windfarm

Security of supply

It has been many decades since ‘security of supply’ has been the primary concern in relation to our electricity grid.

The recent focus has been on the cost of electricity and on fuel poverty, masking the serious issues around the current stability of the Grid and the availability of adequate quantities of electricity at peak times of the day.

Even if the priority issues are appropriately addressed now, the lead-in time for the required infrastructure investment means that stability and supply issues will become even more acute in the short term.

Regrettably, timely decisions on improvements to our infrastructure have not been taken to date; as a result the impact will be untimely ‘brown-outs’ (short interruptions in supply) and potentially ‘black-outs’.

By the time the necessary decisions on infrastructure investment are eventually approved, significant costs will have accrued to these projects.

How NI plc tackles this problem is of hugely significant strategic importance yet it is not apparent that any co-ordinated approach is being taken.

The failure in decision making and prioritisation at the Northern Ireland governance level has not only led inevitably to more widespread security of supply issues, but ultimately to higher electricity prices than otherwise would have been necessary.

How is this manifesting itself?

These issues are already impacting on business expansion plans and jobs.

Brown-outs are happening now across the province - from the Ards Peninsula to North Antrim, from Castlewellan to Omagh.

Businesses are having to use generators to provide electricity where Grid supply is not available. (On-site generator supply is at least twice as expensive as Grid electricity, thereby affecting competitiveness).

Companies such as iPower are installing and operating generators on sites across the province now. On behalf of NIE, these are run at times of peak demand to mitigate tightness in Grid supply. The question of who pays for this ‘short-term, localised and expensive’ solution is that we all do, in the form of more expensive electricity.

Businesses planning expansion have to consider how to mitigate the risk that in 3-5 years’ time they may be asked to ‘switch off’ in a rolling black-out scenario.

What are the key issues?

Below is a list of policy and investment issues that require addressing from the IoD Business Environment Committee perspective:

  • · North South 400kV Interconnection development
  • · 11kV & 33kV Network reinforcement
  • · The current licence for Kilroot power station expiring in 2022
  • · Large Wind Farm development
  • · Installation of Photo Voltaic (PV) Arrays
  • · The impact of ROC’s Small Scale Generation Legislation (2010)
  • · Construction of Waste to Energy plants
  • · Energy storage under Belfast Lough
  • · iPower stand-alone small scale generation across NI
  • · Fracking
  • · The ability of electricity supply to support business growth and investment

More questions than answers

The Institute of Directors’ committee members have highlighted these concerns about security of energy supply. Our discussions have raised more questions than answers.

  • Who is responsible for co-ordination and delivery of the required infrastructure in a timely and cost-effective manner?
  • How much will it cost and where will the billions come from?
  • How quickly can the projects be delivered?
  • What are the implementation timescales? How late are they already?
  • What will be the full impact on security of supply and cost of electricity of the failure to invest?
  • Is there room - and time - for innovative solutions?

 

Many organisations make a contribution to creating the energy supply and distribution landscape in Northern Ireland. The Executive, the Department for Enterprise Trade & Investment, the Strategic Investment Board, the Utility Regulator, NIE, Invest Northern Ireland and more. But where will the buck stop before the lights go out?

 

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