I move: "That the Bill be now read a Second Time." I am pleased to address the House on the Second Stage of the Electricity (Supply) (Amendment) Bill 2025. The Bill will provide the legal mechanism for the payment of €1.5 billion of equity investment in ESB, as committed to by the Government under the national development plan. I will set out the broader context for why Government equity investment is required, before outlining the subject matter of the Bill. As Deputies will be aware, Ireland’s electricity demand will grow significantly over the coming decade. It is estimated that electricity demand will double by 2035; this is in addition to the 25% growth that has taken place over the past ten years. The International Energy Agency has advised that expanding and modernising electricity grids is essential for a secure, affordable and sustainable electricity system. It has expressed concern that globally, investment in grids is failing to keep pace with spending on generation and electrification. In Ireland, every five years our electricity network companies, ESB Networks and EirGrid, present their five-year forecast investment plans to the Commission for Regulation of Utilities, CRU, which then approves the revenues allowable for their operating and investment programmes. These revenues are charges to electricity customers known as network tariffs. This process is known as a price review. The next price review, PR6, covers the period 2026-2030. The CRU published its draft determination for PR6 in July of this year. As part of the draft determination, an overall network expenditure programme of between €14.1 billion and €18.1 billion is being considered for the period 2026-2030. A final determination will be made by the CRU later this year. The level of investment being considered under PR6 marks a significant step change. The current price review, PR5, which spans the period 2021 to 2025, will see an investment of at least €7.6 billion. PR6 will more than double that. This unprecedented package of investment will enable the network companies to support Ireland through this period of change in terms of our use and demand for electricity. It will support key priorities in infrastructure, housing, competitiveness, investment, growth and climate action. It is a critical period for Ireland in terms of improving security of supply, realising targets and ambition around decarbonisation, expansion of renewables and development of the offshore grid. The benefits to extending and reinforcing the grid are many, including: improving the resilience of Ireland's electricity system and future-proofing it for generations to come; ensuring that every home and every business has a reliable and secure source of electricity, including the 300,000 new homes we have committed to build by 2030; safeguarding against damage from future weather events and storms; and accelerating the connection of new sources of renewable electricity which contributes to Ireland's transition to greater levels of renewable energy and the achievement of our climate goals. The investment also has huge importance for our economy and will be key to ensuring that the State can increase the critical infrastructure it needs to ensure continued economic growth and employment in our economy, in addition to continued foreign direct investment. The investment will ensure we can support the expected 50% growth in electricity by 2035 and deliver on Ireland's energy needs. The scale of the increase, however, means that both companies need financial support to deliver the ambitious infrastructure investment programmes. In July of this year, as part of the national development plan, Government agreed the investment of up to €3.5 billion in additional equity to support the PR6 grid investment programmes over 2026-2030 and beyond. This represents the largest single investment ever made in Ireland's electricity network. Some €2 billion will be invested in EirGrid to support the financing of its offshore grid investment plans and €1.5 billion will be invested in ESB to support the financing of its onshore grid investment plan. In respect of the equity investment mechanism for EirGrid, it is to be noted that this will be agreed and legislated for separately. Investment by EirGrid in offshore grid will begin next year. However, the majority of its investment will not occur until later this decade. The €2 billion Government investment will be allocated over the next five years to support EirGrid access the capital markets and fund its investment. In terms of the investment in ESB, this Bill has been progressed as matter of priority. The equity investment in ESB is required by the end of this year to ensure payment from the Central Fund of Government approved NDP funding in the 2025 budget and to ensure ESB is sufficiently financed to deliver the ambitious onshore grid investment programme, continuing and expanding its existing investment in our grid. As such, the Minister, Deputy O'Brien, and I sought a pre-legislative scrutiny waiver from the Joint Committee on Climate, Environment and Energy. The waiver was granted following a technical briefing on the Bill being provided to the committee by officials from my Department. The €1.5 billion equity investment in ESB is to support ESB's ability to finance the overall investment plan for 2026-2030 as part of PR6. This overall investment plan will be financed by debt issuance on the bond market, supported by Government's equity investment and ESB Network's regulated income, as approved by the CRU. It will see delivery of over 500 capital projects across transmission and distribution networks. This includes 181 km of new overhead lines, 319 km of new underground cables, nearly 70 new and upgraded substations across the country and 50,000 pole replacements. ESB Networks will expand, modernise and reinforce our onshore electricity network infrastructure. Without Government equity investment, ESB would be unable to deliver such an extensive and rapid programme of work in the five years to 2030. The Government equity injection into ESB will support the strength of its balance sheet and ultimately assist in it maintaining excellent credit ratings. While the investment does not directly lower current customer electricity bills, maintaining strong credit ratings ensures that ESB can borrow at the most competitive interest rates which ultimately lowers the impact of network charges on customer bills. The equity investment by Government sends strong market signals and demonstrates shareholder support at a time when credit rating agencies have noted general market concerns in relation to the high levels of capital expenditure required in electricity infrastructure across Europe. In fact, since announcing the Government equity investment, Standard and Poor's rating agency has announced an improvement in its credit opinion for ESB, upgrading ESB's issuer credit rating to A from A minus. It is important to note that the State will receive an increased stock holding in ESB in return for this investment. The State will continue to receive dividends in proportion to its shareholding. I will now turn to the Bill's subject matter. I will begin by providing a brief overview of the most important measures the Bill addresses before providing a section by section summary of the Bill. The legislation before the House today has two main objectives. The first is to increase the statutory borrowing limit of ESB from €12 billion to €17 billion to finance the delivery of the PR6 investment programme. This increase is necessary to support the potential €15.2 billion expenditure by ESB Networks in the 2026-2030 PR6 period. The second objective is to provide for the issuance of capital stock by ESB in return for payment up to the value of €1.5 billion. The stock shall be issued to the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation and the Minister for Climate, Energy and the Environment. Issuing capital stock which will be fully subscribed to by the State allows importantly for Government to attach the condition that the €1.5 billion investment be used specifically for grid infrastructure projects carried out by ESB Networks. It also ensures that the investment is reflected in the shareholding percentages of the company. At present, the State's shareholding in ESB stands at 97.4%, whereas the employee share ownership plan, ESOP, holds 2.6%. Employee shareholding ownership came about in 2001 when stock was granted to employees of ESB as part of an overall cost and competitiveness review agreement with the ESB group of unions. It is important to note that the Bill has been drafted to also enable ESB to issue stock to the ESOP in return for payment, should it choose to also invest in ESB to maintain its current shareholding percentage. The ESOP will have a period of up to 12 months following Government investment to make its investment. Should the ESOP choose not to participate in the equity investment, the State's shareholding will increase. An independent valuation is currently being carried out by EY for ESB and the shareholders, which will provide a valuation range for ESB. The valuation determines the price per stock and, therefore, the number of shares the Government will receive from its €1.5 billion investment and its final percentage holding in the company. ESB management has advised my Department that ESB employees are supportive of both the equity investment by Government and the ambitious PR6 investment programme. On a separate but important note, legal consideration has determined that the equity investment does not give rise to any issue of state aid. I will provide a section by section summary of the Bill, which has five sections. Section 1 provides for the relative definitions of the Bill. Section 2 amends section 4 of the Electricity (Supply) (Amendment) Act 1954 to provide for the increase of the statutory borrowing limit of the ESB from €12 billion to €17 billion. Section 3 amends section 2 of the Electricity (Supply) (Amendment) Act 2001 by inserting new subsections. The new subsection (5) provides for the issuance of capital stock by the ESB in return for payment up to the value of €1.5 billion; that 90% of such stock shall be issued to the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation; and 10% of such stock shall be issued to the Minister for Climate, Energy and the Environment. The new subsection (6) provides for the procedure for the Minister for Finance to make payment to the ESB up to the value of €1.5 billion for the capital stock from the Central Fund; and the new subsection (7) enables the ESB to make a concomitant capital stock issue to the trustees of the employee share ownership plan, should the trustees choose to participate, to maintain their current shareholding percentage. Section 4 amends section 11 of the Electricity (Supply) (Amendment) Act 2001 to insert a reference to the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation in relation to expenses incurred in the administration of the Act. Section 5 contains standard provisions outlining the Short Title of the Bill and its collective citation. I commend the Bill to the House and I look forward to the debate.

Sentiment score: 0.31

It was the worst in history.

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I also warmly congratulate our President-elect, Catherine Connolly. I wish her the very best in her appointment. Leaving Mayo-Galway rivalries aside, I know she will do a tremendous job. I wish her the very best. I thank all the Deputies for their engagement in respect of this very important Bill. I appreciate the general support right across the Chamber in that regard. The fact that many Members have contributed to the debate demonstrates the importance and relevance of energy issues. I welcome the broad range of contributions on such wide-ranging issues. I will, most importantly, keep my comments focused on the content and purpose of the Bill. It is perhaps worthwhile to begin by restating the purpose of the Bill. It is very much focused on creating capital stock in the ESB in return for payment. This will be the mechanism by which the Government will provide the €1.5 billion investment in the ESB to support critical development of our electricity and grid over the next five years, as committed to in the updated national development plan. This investment will be crucial, as many Deputies said, in modernising, building that resilience and reinforcing our electricity network infrastructure. It will also support the Government's key priorities in infrastructure, housing, competitiveness, investment growth and climate action. Within that, there will be a robust accountability and oversight mechanism for the expenditure by ESB Networks. Indeed, that will increase significantly in price review 6. The company will be obliged to report to the CRU, on a programme by programme basis, on cost, performance, delivery and the timeline for delivery. The Minister will also require ESB Networks, as part of this investment, to report quarterly on network expenditure, network financing, delivery and debt, which is very important. There will be a clear and transparent reporting mechanism for the Minister. That has been an important theme that needs to be emphasised as part of this. It is also important to recall that the State itself will receive, on a receive-return basis, a return on its €1.5 billion investment and, as the major shareholder, on ESB profits via payment of dividends. The Government's investment will be complemented by additional privately sourced debt, funded by the ESB, to finance the delivery of the overall price review 6 investment programme. The Bill will ensure that it also provides for the increase in the ESB statutory borrowing limit from €12 billion to €17 billion. This large-scale investment in the grid as part of PR 6 will deliver energy security into the future for Irish families and communities right across the country. It will significantly improve network resilience and future-proof it for generations to come. It will enable the connection of hundreds of thousands of new homes - as I said, we have an ambitious target of over 300,000 homes over the term of this Government - improve connectivity and accelerate the connection of new sources of renewable electricity. It is another important piece of legislation that demonstrates the Government's commitment in meeting our critical infrastructure needs as a State and balancing the needs around housing, economic growth and employment in our economy in delivering the key infrastructure we require. I will respond to some of the key themes and questions raised by many Deputies. One related to high energy prices. Many Deputies raised their concerns around the impact of these high prices on households and businesses. We fully understand these concerns. Many Deputies will be aware that a number of factors give rise to higher energy costs right across Ireland. One of the principal factors is our current reliance on fossil fuels, in particular, imported gas. We are very much reliant on imported gas, which is particularly vulnerable to price volatility in the international wholesale gas market. We are very much focused on building a more renewable base. Electrification provides a route not just to decarbonising our energy system but also reducing our dependency on imported gas. We, along with many of our neighbours, very much feel the impact of our vulnerability to reliance on gas as our main energy source. We are making great strides in substituting our fossil fuels with indigenously generated wind and solar energy. This journey to a clean energy source is very much part of this programme. Electrification can only be achieved through investment in our electricity grid. That is what we are focused on through this Bill. In addition, the €1.5 billion investment in ESB, which the Bill we are discussing will facilitate, will help keep consumer costs associated with the PR6 infrastructure programme to a minimum by ensuring the ESB maintains a high credit rating but also can borrow at low interest rates. In terms of supporting householders and businesses on the more immediate basis, I again highlight some of the key measures Government is progressing to help current energy costs, including the extension of the reduced VAT rate of 9% on gas and electricity. We also increased the weekly fuel allowance by €5 from January 2026. That will provide an additional €140 to over 400,000 households during the annual fuel allowance season. We are extending the €400 tax exemption from profits from micro-generation of electricity to 2028. We are also providing a range of grants to include solar PV on homes, businesses and farms to make it easier for people to improve their energy efficiencies and produce their own energy. We have also received confirmation from the main energy suppliers that the hardship funds for those struggling to meet their energy costs will also be made available to households over the winter. Deputies asked how much investment has been allocated in facilitating new data centres. I assure them that price review 6 takes many Government targets into account including the connection of up to 50,000 new homes a year, up to 1 million electric vehicles and currently contracted data centre demand. The programme for Government commits to developing a comprehensive plan to accelerate energy generation connectivity and the planning process. That plan will be guided on the approach around data centres, which provide huge importance within our enterprise system, but we need to provide certainty to the industry when making short- to medium-term investment. Regarding future grid investment and ESB profits, a number of Deputies asked about grid investment. To date Ireland has invested in the grid at a similar pace to our EU peers, maintaining and upgrading EirGrid as required. Ireland needs to go through a period of change in the use and demand of electricity. Adapting our grid for this increased demand for energy is critical in order to progress our decarbonisation. I am confident that the legislation before the House today is an important step in future-proofing our grid for generations to come. I acknowledge the significant work of the Attorney General, his officials, and officials from both the Department of Finance and the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation who have worked with my departmental officials here today in drafting this important legislation. I also thank the members of the Joint Committee on Climate, Environment and Energy for meeting officials for a technical briefing in advance of granting a waiver on the pre-legislative scrutiny. I also thank Deputies from all sides of the House here today for their interest and contributions. I look forward to the early consideration of the next Stage of the Bill taking place tomorrow.

Sentiment score: 0.36