THE INADEQUACY OF OUR LOCAL GRID IS DAMAGING OUR ECONOMIC FUTURE IN SOUTH DOWN AND SOUTH ARMAGH
I have been campaigning for local businesses to get the same access to the all-Island grid network as they have in the Republic so as they can transition to green energy, save money and produce renewables for the grid. The Council has recently adopted many of my suggestions on how our grid must change to serve our Districts future
Northern Ireland Executive’s new Energy Strategy – “Path to Net Zero and the Climate Change Act (NI)” is now prompting a review of our local grid to see if the legislative and regulatory framework for connecting to the grid – and the grid itself – will meet the needs of our local population. This review has been conducted by several bodies and I attach some of my submissions below.
- The Utility Regulator (UREG) (in main content below)
- the Department for the Economy (DfE) SEE BELOW
- NIE local energy networks(I will find this an attach it)
- SONI which controls the market and big transmission lines 2. My Submission to SONI
I was pleased that our Council recently adopted one of my submissions to the regulator and Department of Economy as their own. see The economic importance of having a right to cheap quick connections to the grid as they do in the South on our all-Island grid
HERE IS A SUMMARY ON CAMPAINGING POINTS – Council has picked up most of these points in submissions to the Regulator and DfE
This response from Newry, Mourne and Down District Council (NMDDC) reflects the need to take a balanced approach to electricity connection costs. It would be beneficial to remove some of the financial barriers for those homes and businesses who want to connect a renewable technology, whilst also ensuring that any socialisation of costs to consumers is reasonable, especially in the context of fuel poverty, recent energy price rises and cost of living concerns. Information or evidence relating to the potential impact on consumers’ electricity bills, as a result of any proposed changes, has not been provided, and therefore our response highlights that this information is needed in order to have an informed position. That being said, the 2023 report from the UK Department of Energy and Climate has clearly indicated that renewable energy is now subtantially cheaper than all fossil fuels – even Gas-fired power generation – see their graph..
We have also highlighted that the specific impact on rural consumers should be given special consideration.
We want to bring particular attention to the impact of existing and proposed connectivity regulations and charges to medium to large employers in our District like BE Aerospace in Kilkeel or Warrenpoint Harbour Authority, most of whom have to use multiple diesel generators because of lack of capacity on the grid in our District. This has a particular effect on the Fish Processing Industry. See point 1 below.
We have similar concerns with the effect of the current and proposed ‘deep charging’ regime on commercial farming in our District – see points 4 and 7 below.
Whilst the Call for Evidence notes the importance of getting connected quickly, easily and at a fair price, this Call for Evidence focuses on connection costs and so our response highlights the need to also address issues around the speed and simplicity of electricity connections, which will also be a significant barrier to delivery of future renewable energy targets. Allied to this is the need to modernise the grid in our District to make it fit for purpose in the energy transition – see point 9 below. Currently this debate is an academic one in our District given the lack of capacity for both consumption and production throughout our entire area,
1. THE FISHING INDUSTRY AND MICRO-GRIDS
Lack of capacity and thus grid access for both consumption and production in our District has created a situation where some of our most significant employers must have very large diesel electrical generators on-site in dedicated generator rooms. Some of these have contracts to support the grid by generating or shedding power. See point 9 below on lack of grid capacity in our District.
This has particularly affected the Fishing Industry. 2 of NI’s 3 main fishing ports are based in our District at Ardglass and Kilkeel. When fish arrive for processing in harbour the need to flash-freeze the processed food and the lack of capacity on the grid forces these companies to generate their own power.
The lack of grid capacity has been complicated by the obstacles in creating micro-grids in our District’s fish processing factories. Fish processing plants and Fishing Harbours are particularly well-suited to micro grids as the normally have giant industrial cold-stores or ice-making plants ideal for storing PV power generated during the day for long periods of time.
Our fish processors have sought to create micro-grids for almost 15 years, but regulations insisted that there had to be capacity to export their entire renewable output to the local grid before it could be used on-site in internally in giant cold stores.
In one case a large fish processor sought to have an acre of PV panels on their South-facing steel roofs that cover their giant industrial fridge to generate 500kw capacity for use within a micro-grid internally. But was refused connection for over 10 years based on lack of capacity on the grid in our District. The annual bill for purchasing diesel at this facility was £130,000 last year.
Regulations have changed over the last 18 months and this factory has secured permission to install 300 KW capacity of energy based on not exporting any power to the grid. This company would want to install at least another 280kw of power but cannot do so as it would require the occasional ‘spill’ of power onto the local grid that does not have the capacity to take it. This company has offered to do a tour of its premises and host a workshop on connectivity and micro-grids if needed to support this consultation.
Northern Ireland Fishery Harbour Authority manages Ardglass and Kilkeel Harbours and is in a similar position with its ice-making plant in Ardglass. Now regulation has changed it can install PV at its ice-making plant in the harbour as a micro-grid but cannot export due to the long-standing capacity issues in the area.
In this point and in other points below, there is a clear need in our District to upgrade sub-stations, modernise the 11kv network and have a network of 33kv lines across our District.
2. DO WE AGREE WITH CURRENT POLICY?
Partly, However, we would propose that the first guiding principle should be amended to state that the Connections Policy Framework review will facilitate the delivery of the Executive’s Energy Strategy targets, and also the requirements of the Climate Change Act (NI) 2022.
We would also stress that there should be recognition that in future there will be an increasing number of consumers of electricity who are ‘prosumers’, generating their own electricity, and investing in renewable energy technologies.
Your proposal to have a ‘partly deep’ charging structure is at odds with your ‘guiding principles’. Your document highlights that 72% of customers in NI struggle with affordability of energy costs – the worst figure in these islands. The UK Governments “Electricity Generation Costs Report 2023” published in August 2023 shows that renewables provide power at 1/3 or less the cost of conventional power sources.
Thus, your suggestion of not following the GB and RoI example of shallow charging regimes will create a barrier for the less-well-off in transitioning to cheaper or no-cost fuel energy options. This will exacerbate the current disparity between NI and GB/RoI in the speed of the energy transition. Better off consumers will be able to afford the ‘deep’ charging costs and thus leaving the consumers who struggle the most with affordability carrying the higher costs of legacy systems of heat, power and transport.
3. Do we agree with the scope of the review of electric connectivity?
Yes. But see our comments in other points, and especially point 9 below about connectivity being an academic debate in our District when the capacity of the grid for both consumption and production is the main issue.
The Call for Evidence (CfE) notes the importance of getting connected quickly, easily and at a fair price. The focus of the CfE is on connection costs, which we would agree is an important matter to support future decarbonisation. As part of the scope of this CfE and further planned engagement, it would be beneficial to also consider the important issues of speed and simplicity of electricity connections in more detail, as these may also be a significant barrier to delivery of future renewable energy targets.
4. How we feel that high connection charges in NI discriminate against our farms and businesses when compared to the South – on the same grid
Section 5.18 of the Call for Evidence (CfE) highlights that, in order to make any potential changes to the current connection framework, it is essential to know the potential costs to NI customers. For this reason, it is difficult to provide an answer to this question at this time. As part of any future consultation on this area we would suggest that information on typical/estimated connection costs should be provided, alongside the potential cost implications for consumers, in order to support a more informed position. This should also highlight if there are particular regions or council areas where the current connection methodology presents more of a challenge i.e. where there are greater constraints on the grid and the cost of investing in renewable energy is disproportionally higher.
We would note a number of relevant points which relate to the current charging methodology and alternatives.
A ‘partially deep’ charging methodology may act as a financial barrier to those wishing to invest in decarbonisation and as such it could be argued that alternative methodologies may be more appropriate (subject to consideration of consumer protection).
The CfE notes the position in other parts of the UK and Ireland, where a shallower connection boundary is in place. It would be beneficial to model the financial impact of this position, if similar were to be adopted in Northern Ireland.
DAMAGE TO LOCAL FARMING
The ‘deep connection charges’ currently in place have severely impacted commercial farming business in our District. Farm businesses currently pay between £12,000 and £35,000 to achieve planning permission before they can apply for connection. Rossglass Haylage Ltd has given us permission to use their example. Here a co-op of several large commercial farms was producing Haylage for Middle Eastern Countries and especially the Saudi market. A key part of the process is the compression process of the horse-feed to create highly compressed bales. This requires a large amount of energy. After struggling for some years to get planning permission for a 250kw on-farm turbine, they were refused connection at any cost by NIE. A nearby farm was also presented with a connectivity charge of £180,000 for a 250kw turbine which made the project financially impractical. This is essentially the fee for upgrading the grid between Killough and Tyrella. This farm business would supply details of it case on request. These situations are typical in our District with most rural or farming SME’s not taking the risk of planning costs in the face of impossible ‘deep’ connection charges from NIE. All of these businesses compete in the same market with SME’s and farming enterprises in the Republic, on the same National Grid, who actually receive support from the Irish Government for electrifying and transitioning to renewables.
IN THE SOUTH
Across the boarder, Southern Irish farm businesses receive grant aid to produce renewable energy. They also qualify for the Clean Export Guarantee (CEG) tariff, for any exported electricity, at a competitive market rate from their electricity supplier. Farm projects between 6kW and 50kW receive a Clean Export Premium (CEP) tariff per kWh exported, for a period of 15 years, from their electricity supplier of €0.135/kWh in 2022, which is higher than the current average wholesale electricity price. Any difference between the CEP tariff and wholesale electricity prices will be supported by the Public Service Obligation (PSO) levy. Exported volumes of electricity eligible for the Clean Export Premium (CEP) tariff will be capped at 80% of generation capacity – to incentivise self-consumption
Renewable Energy Developers based in our District are also affected by both the current ‘deep’ charging regime and lack of connectivity in our District. Flynn Energy based in Castlewellan is one of the best-known medium-sized locally-based renewable energy developers in Northern Ireland and who have also agreed for their example to be used in this response. Flynn Energy has supplied details of its 1.85MW project with farming partners on the 60-acre brownfield site in Bishopscourt airdrome on the old abandoned RAF runways. Having faced substantial planning costs and difficulties, this project was then faced with the lack of capacity in our District and the ‘deep’ connectivity charges regime. NIE initially offered a connection charge of £1.3 million to create a new 33kv line from the Ballinaskeagh substation near Bishopscourt via Downpatrick to the transmission grid terminus near Ballynahinch. As this site was suitable from a planning point of view for up to 10MW of PV panels, Flynn Energy agreed to this steep cost. However, NIE baulked at the amount of work required in contacting 33 landowners and retuned the booking fee for both this development and 9 other local developments saying it was no longer going to be dealing with developments less than 5MW. This decision would affect dozens of other SME’s in our District seeking to migrate to the new electrified economy. Again, this situation would not occur in the Republic with whom our local rurals and farming businesses must compete.
Had these projects gone ahead, Newry Mourne and Down District Council would have received a significant boost to its rates base.
The current methodology is likely to directly impact many homes and businesses, and may also impact on future decarbonisation and financial decisions by councils e.g. to decarbonise buildings using heat pumps, to provide electric vehicle charging infrastructure, or to invest in renewable electricity generation (such as a solar farm).
We appreciate the significant complexity of balancing the need to remove barriers to decarbonisation, whilst also ensuring consumers are protected. We would note that consumers are not only impacted by costs passed through their electricity bills, but also via other means, such as rates. For example, removing high connection costs (and addressing simplicity and speed of connection) may make a particular renewable energy project by a council more financially viable, which in turn may mean that energy costs can be reduced, which can benefit rate payers.
We would stress the need to consider consumers in more rural locations, as those households and businesses are likely to have a greater need to travel by car (and so may be more likely to purchase an electric vehicle in the future) and they may also have fewer options to decarbonise heat, such as reduced access to the gas network (and so may be more likely to install technologies such as heat pumps). This may suggest that rural customers may be more likely to require additional grid capacity and so may be impacted more significantly by the choice of charging methodology. Whilst the CfE notes that there has been investment through RP6 and further planned investment through RP7, which is intended to reduce connection charges, the impact on rural homes and businesses should be carefully considered. For example, it would be beneficial to review historical connection costs for heat pumps and EVs for individual rural consumers (e.g. the need to upgrade small transformers), in comparison to those in a more urban environment, and consider the impact of each of the proposed connection methodologies.
We would also note that there may be other future policy developments to support decarbonisation in Northern Ireland and would question which connection policy is appropriate. For example, the Department of Finance is currently consulting on potential changes to building regulations. Areas being considered for new buildings include the potential increased use of heat pumps, and also the provision of infrastructure for EV charging. This includes potentially providing EV charge-points at all new dwellings where there is associated parking, similar to the position in England (where there is a cost cap of £3,600 in place for the average connection cost i.e. the additional cost due to including EV charger provision). The current ‘partially deep’ methodology may have a significant impact for new developments, where a combination of EVs, PV Panels and heat pumps may be required in order to comply with future regulations.
5. Do we agree with a different charging regime in NI vis a vis GB and RoI?
Please see relevant information in our response to Question 1, 2, 4, and question 9. As NI continues to be part of the Single European Market and part of the All-Island energy market, having a regime that makes our rural businesses less competitive with their peers in the Republic does not deliver a competitive cost base for both consumption and production of renewable energy. The continuation of the deep charging regime would put NI businesses, farms and consumers on a more unfavourable basis than the Republic. The Republic also provides grant-aid for the transition which adds to the already unfavourable comparison based purely on connection charges
6. Do we think that grid connection lower charges like RoI and GB more appropriate?
Please see relevant information in our response to Question 1, 2, 4, and question 9. As NI continues to be part of the Single European Market and part of the All-Island energy market, having a regime that makes our rural businesses less competitive with their peers in the Republic does not deliver a competitive cost base for both consumption and production of renewable energy. The continuation of the deep charging regime would put NI businesses, farms and consumers on a more unfavourable basis than the Republic. The Republic also provides grant-aid for the transition which adds to the already unfavourable comparison based purely on connection charges
7. Do we feel that lower grid connection charges will help meet Climate Change targets?
Please see relevant information in our response to Question 4.
As noted in this response, a ‘partially deep’ charging methodology currently acts as a financial barrier to those wishing to invest in decarbonisation .
It would be beneficial for the Utility Regulator to provide any available information and modelling in order to support a more informed position.
The regional impact of alternative charging methodologies, including the impact on rural consumers, should be considered (e.g. are certain areas in Northern Ireland, or rural customers in general, more likely to be unable to invest in renewable or sustainable technologies if the current charging methodology is retained).
A shallow connection charging policy would result in significantly more renewable energy being produced by rural SME’s and farms, less diesel generators being deployed, more jobs being created and a more sustainable growth pattern in rural areas. It would also make our SME’s and farm enterprises more competitive with their peers across the boarder.
In question 4 above we gave examples of rural businesses being affected by the current deep charing and lack of connectivity regimes. Should you wish to explore this and similar experiences we can put you in contact with 40 similar rural businesses in the Lecale area of County Down who have founded a DEARA-registered community association for small rural SME’s who have been affected in this way called “DDFFRE”. Rossglass Haylage is a member of this association of businesses.
It is important to couch this debate within the economic reality that Northern Ireland is part of the single market for trading purposes and operating in an All-Island National Grid.
8. If this meant increasing NIE’s charges for running the network?
NIE’s 2023 statement on network charges notes that NIE’s share of the final consumer bill is 25% https://www.nienetworks.co.uk/about-us/regulation/network-charges .
Thus, increasing this already high figure marginally to allow a more rapid transition to lower-cost renewable energy option will ultimately be to the benefit of consumers and the competitiveness of the NI economy.
The UK Department for Energy Security and Net Zero in their August 2023 report highlighted that renewable energy generation costs are significantly lower than fossil-fuel generated power. See point 15 below. They also noted that renewable energy costs are continuing to fall faster than expected and fossil fuel continues to rise faster than expected.
A useful tool to consider may be the Northern Ireland fuel price ready reckoner for fuel poverty (available from NIHE website). This tool was produced around 2018 and considers 35 fuel price scenarios which were applied to the 2016 modelled position of fuel poverty for Northern Ireland, including changes to the price of electricity.
9. Are we happy with current plans to upgrade the grid? (called RP6+7)
We note RP6 is coming to a close and that RP7 “A future network for all” is due to start from 1st April 2025 and continue to the 31st March 2031. https://www.nienetworks.co.uk/documents/future_plans/rp7-business-plan-summary-april-2023.aspx
Our main concern with RP7 is that it has no proposals to remediate the National Grid in the Southern Region of Northern Ireland. The transmission grid as currently configured ends at Ballynahinch and 5 kilometres North of Newry. There are very few 33kv lines in our District. Most of our 11kv network is operating with 25mil conductors rather than the modern 100mil norm.
This leaves our District as the biggest geographical area in N.Ireland without the infrastructure needed to fully support the energy transition and without the connectivity to the renewable energy ‘clusters’ mentioned in your consultation document needed to support large renewable energy projects.
As a minimum it would be reasonable to expect;
- Upgrading of the 11kw network from 25 mil
- A network of 33kv transmission lines
- Upgrading of all substations and ensuring they are also configured of export. For instance Seaford is a modern substation but is not configured for export.
10. Do we think that the costs of developing the grid should be placed on those wanting to connect?
A developer led approach is appropriate for very large renewable or energy storage projects where the cost of upgrading the grid can reasonably be seen to be part of the project.
However rural SME’s, farms or the majority of domestic consumers do not have the capacity to support the expansion of the grid in their areas. See examples given above in the first 4 sections.
Having a deep charging regime would drive smaller developers to RoI, GB or simply not to transition to the new electrified economy. Especially those who could not afford the ‘deep’ charges to migrate to the cheaper renewable energy regime.
More than 90% of all businesses providing the bulk of employment in Newry Mourne and Down are micro-SME’s that are the least likely to be able to afford a ‘deep charge’ in transitioning to an electrified economy.
46% of consumers in Newry Mourne and Down District Council were subject to fuel poverty prior to the most recent rise in prices. The transition to cheaper or no-cost renewables needs to have the lowest possible cost barrier.
- See https://www.newrymournedown.org/media/uploads/community_plan_living_well_together_apr_17.pdf
- And https://www.newrymournedown.org/council-opens-up-public-buildings-as-fuel-costs-rise .
11. Do we think the current 3-month target for a connection is reasonable?
(note this target is often not met) The current timeframe of 3 months should be shortened.
This timeframe has specific challenges for projects where grant funding is made available, but the funding is time bounded e.g. for installing renewable technologies or EV charging infrastructure. SONI and NIEN may need specific details on the proposals which cannot be provided until the works have been procured (in order to determine specific products or solutions) and so the uncertainty around grid connection can lead to further difficulties when undertaking innovative projects.
It would be beneficial to clarify the timeframe for connection offers in other parts of the UK and Ireland, and consider any options to reduce the current 3 month timeframe.
12. Do we think that planning permission should be required before a grid connection offer is made?
Planning regulations across GB, RoI and NI have all been modified in recent years to deem many or most smaller renewable developments as ‘permitted development’. In NI, PPS18 serves this function and in the 2030 development plan is likely to be liberalised further to expand areas not requiring planning.
Thus planning permission may not be a reasonable basis for most renewable grid connections.
Planning permission can cost an SME or farm enterprise between £12,000 and £35,0000. This is a daunting cost for most small businesses.
It is likely that far more planning applications would be made and the transition to the electrified economy more rapid if developers, SME’s or farms were aware that they would get a connection and know the approximate cost before engaging in the expensive and time-consuming planning process.
However, the Council does consider that if “Shovel Ready” schemes were afforded priority over those which had not received planning permission then this could allow these to be prioritised and enable a faster rate of connection of renewable energy schemes.
13. Do we have any issues with the current queueing system for connection?
Increases in demand for connection is unlikely to be linear in nature. Given that 94% of NI properties are likely to have some form of retrofitting on heat, light and transport from electrified or renewable resources over the next 2 decades, an increase in the capacity, efficiency and speed to handle connections would could reasonably be expected to be a geometric growth in demand would have to be part of any future business model of the queueing process.
14. Do you have any other significant issues that should be considered?
- In 2014 renewable energy provided £20 million in rates income to local authorities in NI. This is likely to rise to between £140 and £200 million per annum. Thus, the capacity of the grid in our District and the lack of plans to make it more robust in the 2025/2031 RP7 plan “future network for all” could have a substantial impact on our Council’s finances over the next 10 years.2.
- Your consultation mentions the 80% target for electricity from renewables. However, your consultation does not seem to factor in the likely doubling of electrical demand from the transition of transport over the next 10 years, nor the likely doubling of demand again from the electrification of heating. These is a concern that the grid as it is being configured in RP7 has undersized the upgrade needed both in our District and across NI as a whole.
15. What are your grid connection issues in order of importance
- Deep charging regimes are not appropriate for rural SMEs and business involved in competing in agriculture and fishing with the Irish Republic.
- Capacity issues in the South of Northern Ireland, and especially in Newry Mourne and Down District Council need to be resolved and a plan put in place between NIE and Newry Mourne and Down District Council to ensure future connectivity in our district can successfully complete the energy transition.
- The transition to an electrified renewable energy economy is likely to reduce heat, power and transport costs for rural areas like ours where affordability of all forms of energy is an issue. Hence shallow charging regimes are likely to have the biggest impact on reducing the 72% or consumers in NI NIE suggest are struggling with affordability at the moment.
- According to the UK Department for Energy Security and Net Zero in their August 2023 report, renewable energy costs are continuing to fall faster than expected and fossil fuel continues to rise faster than expected. It is therefore likely that the energy transition will be driven by market forces and not regulation and result in a faster take-up and transition than is assumed in the consultation. Here is a summary from the Departments August report.
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Fossil fuels are rising in cost but renewables are falling
