Ireland’s private wires guiding principles indicate potential policy direction

It comes as part of Ireland’s energy sector’s process towards accelerating decarbonisation. The upcoming policy framework, set to be finalised by the end of the year, aims to facilitate the development of private electricity networks which will enable private individuals or businesses to transfer electricity from one site to another.

Garrett Monaghan, energy and infrastructure expert at Pinsent Masons, said: "Private wires are essentially all about grid and grid limitations in particular. The expansion, investment and reinforcement of the electricity grid is a pre-requisite to the energy transition and is equally a challenge to all modern economies. Private wires could be a crucial enabler in allowing Ireland to meet its very ambitious power generation and renewable heat targets. They also serve as an important intermediary for commercialising new energy models - in Ireland at least - including biomethane, fuel cells, batteries and utilising constrained power."

The concept of private wires is not new, but the publication of the guiding principles and the upcoming policy framework represents a shift within Ireland’s energy policy following the closure of the 2023 Private Wires Consultation. The policy aims to accelerate investment in new electricity infrastructure. By allowing private entities to build and operate their own networks, the policy aims to complement the national energy grid.

There are several important considerations guiding the formulation of the private wires policy. They include decarbonisation and renewable energy as the policy is set to prioritise the deployment of renewable energy sources and storage solutions in line with Ireland’s commitment to reducing carbon emissions. The guiding principles involve ensuring a reliable and secure electricity network, with private wires obliged to meet the same technical and safety standards as the national electricity grid.

There is also importance placed on economic viability. Private wire developers are required to bear the full cost of development to ensure that the financing and efficient development of the national grid remains unaffected. The guiding principles also stipulate that the policy framework, when published, must complement other national strategies, such as those related to offshore wind, hydrogen, and industrial development. Developers must also obtain all necessary consents from landowners and comply with applicable planning conditions.

There is no confirmation at this stage as to whether the revised framework will ease rules on auto-production in order to enable on-site third-party generators to export excess electricity to the network.

The principles confirm that grid-based solutions 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. "While we await the drafting in the policy framework, this would suggest that generators will need to demonstrate why a private wire should be preferred to a grid connection," said Matthew McMurray, energy projects specialist at Pinsent Masons.