Incoming EU rules risk delaying housing, ESB warns

The semi-State company which builds Ireland’s electricity grid has warned new rules drafted in Brussels could compound existing delays in connecting new homes.

ESB Networks is responsible for connecting newly built homes to the energy grid. Pressure on its services has delayed new housing projects, because developers are often waiting for ESB crews to connect properties to the electricity network.

The new “Made in Europe” legislation, intended to give a leg up to Europe’s struggling manufacturing industry, could also inadvertently slow down Irish housing supply, its managing director warned Irish officials.

Internal correspondence, seen by The Irish Times, shows ESB Networks expressed concerns about EU plans to require public money and State-funded projects to source materials from European suppliers.

Nicholas Tarrant, managing director of ESB Networks, told the Department of Public Expenditure restrictions on its business and contracts “would represent a risk to our ability to build at the pace required to support housing, the economy and climate action”.

The semi-State company, which supplies electricity and gas to homes and businesses, said the new European rules would put “restrictions on our ability to procure equipment on a global basis”.

Tarrant added that he supported the broad ambition to help European manufacturing. The July 1st email to civil servants was released in response to a Freedom of Information request.

ESB Networks flagged fears that proposed “buy European” clauses in draft EU legislation would apply to materials it sources to build out the physical electricity grid, such as cables and electrical transformers.

The EU’s 27 national governments have spent months arguing over the scope of a new law, the Industrial Accelerator Act. It would attach strings to future public funding for projects in certain “strategic” sectors, requiring a percentage of money to flow to European suppliers and manufacturers.

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The legislation is being pushed by France as a way to protect Europe’s automobile and steel industries and make up more ground developing renewable energy and green technology.

Governments have clashed over whether to restrict preference requirements to EU-based suppliers, or adopt a broader interpretation that would include the UK and other European partners outside of the union.

The Irish Government has been attempting to steer the difficult negotiations towards a deal, in its role chairing debates in Brussels while holding the EU presidency for the second half of this year.

Diplomats are hoping to settle on a common position agreed by the 27 governments next month, after which point negotiations will begin with MEPs in the European Parliament.

Emails show ESB Networks sent department officials a paper written by DSO Entity, a European umbrella organisation representing companies and bodies responsible for building electricity grids.

The paper warned that requiring cables and other components in power grids to be sourced from EU manufacturers could lead to “high prices and limited supply” of key materials, given the industry was already facing difficulties purchasing grid materials.

A spokesman for ESB Networks said it was still unclear if the scope of the Industrial Accelerator Act (IAA), and its “buy European” requirements, would extend to contracts to source grid equipment the semi-State company needed.

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“While ESB Networks supports the objective of increasing manufacturing capacity in Europe, and the associated decarbonisation goals, we believe the IAA should not restrict the ability of utility companies to source essential grid equipment through global supply chains until sufficient European grid equipment manufacturing capacity exists”, the spokesman said.

A “strict interpretation” of the proposed legislation would increase costs and lead to longer timelines to deliver new infrastructure, he said.