EirGrid signals reduction in tariffs after pretax profits almost triple

EirGrid, the operator of the electricity grids in Ireland, saw its pretax profits almost triple to €40.7 million in the year to the end of September 2021, up from €14 million in the previous 12 months, as its revenues rose 7 per cent to €737.4 million.

The grid operator said the surge in profit was mainly due to exceptionally low wind conditions, which meant that associated costs were significantly below the regulatory revenue allowance. Excluding the impact of over-recoveries, management’s estimate of the underlying operating profit for 2021 was €22.1 million. The related over-recovery will be returned to customers through a reduction in tariffs in future years, it said.

The company, which derives most of its revenues from regulated tariffs paid by all users of transmission systems in the Republic and Northern Ireland, is proposing to pay a dividend of €4 million to the Government, unchanged from last year.

“This was a very important year for the group in the execution of our strategy, including defining the roadmap to 2030 through Shaping Our Electricity Future and the progression of critical infrastructure projects, such as the Celtic Interconnector,” said EirGrid group chairman Brendan Tuohy.

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Mr Tuohy said that as of the end of the financial year, the group had approached the midpoint of its latest strategy, which is shaped by climate change and the required transformation of the electricity sector, and he was pleased to have made progress on it despite external challenges. Progress on key infrastructure projects including the Kildare Meath Grid Upgrade, the North Connacht Project and the Celtic Interconnector has been “significant”, he added.

EirGrid chief executive Mark Foley noted that the group supported the Government’s revised target of 80 per cent of electricity from renewable sources by 2030 and had already begun to plan for this new target.

“We believe that the new target is deliverable and are committed to developing the optimum pathway to achieving this new ambition by 2030,” Mr Foley said.

“Ireland is on the cusp of the emergence of a new sector in offshore wind. A sector that will be a real powerhouse in helping deliver our 2030 targets, but also in the longer term has the potential to transform the island economy if the vast resources off the west coast can be harnessed in an efficient manner in the decades to come.”