The European Commission’s proposal to remove EU limits on the transmission charges paid by electricity generators risks undermining investment, weakening competition, and increasing costs for consumers. This proposal is expected to be discussed at a meeting between the Commission and EU Member State representatives on 19 October. EAI, alongside Eurelectric, is calling for the existing limits to remain until a suitable replacement has been assessed and agreed.
Proposed changes to generator grid charges
Electricity generators pay charges to use the high-voltage transmission network that transports electricity around the country. These charges help fund the network’s operation and development.
EU rules currently limit the average transmission charges paid by generators. For Ireland, the upper limit is €2.50 per megawatt-hour of electricity supplied to the grid. This is an average across producers, rather than a cap on each generator’s bill, and certain costs are excluded.
The Commission is proposing to delete the provisions containing these limits (Annex B of Regulation (EU) No 838/2010). EAI’s concern is that removing this safeguard without an agreed replacement would leave investors facing greater uncertainty over future charges.
Implications for investment, competition and affordability
Ireland needs investment in electricity generation to maintain a reliable supply and meet its decarbonisation targets. Building new generation requires substantial funding, with investors making decisions based on expected costs and revenues over many years.
If future grid charges become less predictable, projects can become more expensive to finance or face delays. Developers may also require higher revenues to cover the additional risk. These costs can ultimately feed through to consumers.
Removing the EU limits could also widen differences in charges between countries. Generators competing to supply electricity in interconnected markets could face increasingly different costs because of national charging rules, potentially weakening competition and making some locations less attractive for investment.
The proposal would not automatically increase electricity bills. Network costs must be paid regardless of how they are shared between generators and consumers. The concern is that greater uncertainty and weaker competition could make delivering the electricity system more expensive over time.
What is EAI asking for?
Ireland needs to oppose the deletion at the comitology meeting on 19 October and retain the existing safeguards until a credible replacement is ready.
Any replacement should be supported by a clear assessment of its effects on investment, competition and consumers. Any new framework should provide predictable limits on generator charges and a managed transition that allows projects to plan with confidence.
EAI raised these concerns with the Commission in July and has now written to Minister O’Brien, supporting Eurelectric’s position that a replacement framework should be agreed before the existing protection is removed.