IoD Northern Ireland warns grid capacity restricting economic growth
The Institute of Directors (Northern Ireland) has warned that the lack of decision making by Government on the future of grid capacity and infrastructure is restricting economic growth and increasing fuel poverty.
The business leader’s organisation also says the lack of appropriate prioritisation will result in brown-outs, security of supply issues and will lead to higher electricity prices for the consumer.
Bill Beers of the IoD’s Business Environment Committee, and owner of Beers Engineering Consultancy, said:
“Currently, the price of electricity for medium sized businesses has risen from 5.46p per kW/h in 2006 to 12.5p per kW/h in 2014 – one of the most expensive in Europe.
“For businesses heavily reliant on electricity, this impact on cost competitiveness has a knock-on effect on jobs and expansion plans.
“We are at a point where larger businesses are coming off the grid and installing their own power generators on-site, which is a much more viable option for the long term.
“However, while this may be appealing for businesses who can afford the initial outlay, the result is that those left on the grid have to cover the cost of its upkeep – which requires investment of £1.2 billion in the next 5 years.
“This cost will ultimately be laid at the domestic consumer’s door – which is worrying given that 42% of the population in Northern Ireland already experience some degree of fuel poverty”.
Bill Beers also highlighted the IoD’s concerns around any potential inward investment if and when a lower rate of Corporation Tax rate is implemented:
“Grid infrastructure is particularly stretched in rural areas, from the Ards Peninsula to North Antrim and from Castlewellan to Omagh. Given that we struggle to service existing businesses, the realities of our grid’s ability to cope with increased demand from FDI needs to be addressed.
“We welcome the call from Enterprise Minister Arlene Foster to get all relevant parties around the table, but this needs to happen quickly.
“Joined up, strategic thinking is crucial in determining the long term viability of our grid, and vital to supporting our economic growth”.
The IoD Business Environment Committee, which is made up of industry leaders, say that this issue is its primary agenda and must be addressed urgently by Government.
“We don’t have clarity on the future plans for Kilroot, whose 440Mw licence expires in 2020, nor the repair timelines for the Moyle Interconnector, which is currently damaged and only operating at 50% capacity.
“There appears to be no real movement on the North South Interconnector, which has been in the planning process since 2009”.
“There are also questions around how the Government’s renewable energy target of 40% by 2020 can be afforded. It is difficult to see how increasing renewables beyond 25% is value for money.”
“In addition, we are unsure of plans for installation of energy storage in Northern Ireland, and the reason for the current lack of budget for research and innovation.
“Right now we are on the cliff-edge. What we need is a healthy debate between all key stakeholders to take place as soon as possible to ensure that the strategic plans for the medium to long term are in place and aligned with economic and social policy requirements”.