The firm – 62% owned by the taxpayer – has said that the current infrastructure is sound until at least 2025 but work to expand the capacity of the network is likely to be needed towards the end of the decade.
Electricity accounted for half of the domestic energy consumption in 2018, with petroleum products such as oil at 45% and gas at 5%. Asked if increasing its stronghold over the sector could be bad for Islanders, Chris Ambler, chief executive, said the firm had continuously provided ‘affordable and reliable’ energy in Jersey and there was no reason to suggest that would change.
Figures show that electricity for most customers in Jersey is 35% lower than the UK price cap set by Ofgem and around 15-20% cheaper than in Guernsey where regulation is in place.
Demand for electrical power is expected to rise massively between now and 2030 as the Island’s population continues to grow beyond current levels of about 106,000 people and government implements proposed strategies for the Island to reach net-zero carbon emissions. Switching energy supplies for road transport and domestic heating from fossil fuels to almost all electricity is seen as the greenest option for Jersey as about 95% of the Island’s supply comes from France and is generated from nuclear (c.66%) and renewables (c.33%).
Mr Ambler said the firm estimates that if all cars in Jersey – around 100,000 – were switched to electric tomorrow, electricity demand would increase by 15% from 630 million kw/h per year.
He added that, in his opinion, regulation of the electricity market could increase costs for customers, delay investment and ‘hamper longer term planning and strategy’.
States Members are due to vote in February on the principles of the Carbon Neutral Strategy and the establishment of a citizen’s assembly – made up of members of the public – to help advise government on policies to achieve net-zero carbon emissions. More detail on policy is due to be announced later this year, if Members agree to the first stage of the policy, but experts have outlined that a focus on cutting transport and domestic heating emissions will be needed.
Suggested policies include tax hikes on road fuel and electric vehicle-switch incentives to encourage people to ditch fossil fuel vehicles as well as schemes to facilitate a change from oil and gas heating systems to electric.
Mr Ambler said: ‘In the short to medium term – 2020-2025 – there is enough spare capacity in the JE grid to enable the Island to keep to a trajectory of carbon neutral by 2030, bearing in mind that the majority of electric vehicle charging, 30% of the total energy market, will be done in the overnight period when power is cheaper to supply and there is a lot of spare capacity.
‘In 2025-2030 there is likely to be a need for further grid investment which JE has time to plan, fund and deliver as long as the company has sufficient visibility of demand and assuming no changes to the regulatory environment. The regulatory environment is important because JE would need to be confident that the assets would be sufficiently utilised and costs capable of being recovered in order to secure the funding from external lenders.’
Over the last ten years, Jersey Electricity has invested £200 million in the Island’s electric grid.
If Jersey Electricity’s share of the energy market locally increases the Island’s reliance as a whole on suppliers EDF increases too. Asked whether this was a precarious scenario to be in, Mr Ambler said there was the ability to shop around.
‘JE has a long-term contract with supplier, EDF to 2028 and we have the ability to change the mix of nuclear and renewables from 2028. JE could also contract with a new supplier from 2028, but our relationship with EDF spans 35 years and has benefited our customers greatly over that period,’ he said.
The Carbon Neutral Strategy found that the current electricity model ‘has served the Island well, and provides an affordable, low carbon, reliable and secure product with strong investment and a good return to shareholders. This model may continue to be the right one for Jersey in the future.’
Mr Ambler added: ‘JE will work closely with government, the community and stakeholders whatever the market model we have in place.’
