Belfast Telegraph

£900m electric shock: Cost of 'essential' network upgrade could hike our bills by 12%

By Claire McNeilly

Electricity distributor NIE has told the Utility Regulator that it needs £900m to upgrade, modernise and maintain the network here, the Belfast Telegraph can reveal.

The shock figure is contained in a recent submission from the company to regulator Shane Lynch, which forms the basis of an ongoing consultation.

Without this investment, NIE has said the 40-year-old grid is at risk of “supply interruptions or catastrophic failure” — in other words parts of the network will develop faults and Northern Ireland could be heading for a blackout.

The company has also indicated the capital injection is the “minimal” necessary “to ensure the safety and reliability of service to customers”.

And it said its “experience of faults” along with the “age and condition of the assets”, ie, all the supply equipment, supports the need for a “comprehensive” upgrade. Breaking down its request, NIE is seeking permission to spend £607m on “business as usual”, £215m on renewables integration and £76m on interconnection over the next five years.

Industry experts say that as a rule of thumb every £100m spent on extra capital is the equivalent of adding 1% to electricity charges.

In other words, the cost of power could be set to rise by a further 12% over the next five years.

With households facing annual bills of around £600 given the recent price hikes, this news could send shockwaves through local consumers.

Economist John Simpson said there are three main reasons why electricity is so expensive here — Northern Ireland’s ageing grid, the continuing (but diminishing) impact of the agreements made with the older generating companies when the industry was privatised, and the inadequate interconnectors.

Mr Simpson said the ageing infrastructure that is in place is negatively affecting competitiveness. He argued that there needs to be a single electricity market because currently there are two grids with inadequate connections that are costing Northern Ireland £25m a year more than it should.

Mr Simpson said the power industry as a whole needs to be more efficiently managed and regulated — and subject to a complete review.

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