Mr. Garrett Blaney:

A number of issues were raised. Deputy John O'Mahony mentioned generation in the west and demand coming from the east. This is an important dynamic. One of the factors in the electricity sector is that the sector has been affected by the downturn in the economy. We have seen the level of demand reduce year on year since 2008. There has been an approximate 2% reduction year on year. As there are a lot of fixed costs in the system, this puts upward pressure on prices. From our point of view, while the efficient use of energy is very important, there is an opportunity for Ireland to have new sources of demand.

One of the areas we find particularly interesting is data centres which have a high demand for energy. There is worldwide interest in such centres and we have sufficient capacity in the system to absorb them. We have talked to IDA Ireland and others about what can be done in this regard. As regulator, we have a limited role to play, but we watch out for opportunities to make better use of our energy supplies. There is an opportunity to export energy supplies and there might be another to attract industry and increase demand in Ireland. That would be a very attractive proposition. In the case of data centres, we probably need to look at the data corridors and where the backbone of communications is. Currently, it is on the east coast, but if more demand was developed on the west coast, that would be advantageous. However, we need to look at all of the options. If there was an opportunity to create more demand, that would be great, but we have limited capacity in that regard, although we have worked with other State agencies to try to encourage it.

On the issue of exports generally, we have no statutory role to promote exports. That is not required of us by way of legislation. However, from our point of view, we see anything which would benefit consumers as something we should do our best to facilitate. Therefore, if there is an opportunity to ensure some positive benefits, by allowing further interconnections without the cost of interconnectors falling on the Irish consumer or making better use of the networks and thereby reducing the cost to consumers, this will be encouraged.

The issue of royalties is very much one for taxpayers and Government policy. As regulator, it is important that we do what the body was set up to do under statute and leave broader issues of policy to the Government which must make the decisions on them. However, we have been involved with the Department in advising it and helping to ensure we find robust export solutions.

We are happy to facilitate exports. The issue of royalty levels is one for the Minister and his Department.

I was asked about the challenges for renewable energy projects. The number of such projects is not matched by the level of network availability to facilitate them. In effect, we have had to ration capacity on the network to ensure projects are developed in a timely manner. That rationing process has been challenging. We are in the third of three gates in the gate process and keen to try to reach a conclusion. A number of important issues have arisen during the process. As we hit the 50% limit about which we spoke, there is a point at which we will have to start turning down wind farms, even though they have the capacity to generate. Obviously, that is inefficient. Nobody wants to turn down those who can generate electricity at a low cost, but we will have to do so in order to facilitate the stable and secure operation of the system. We are keen to try to increase the 50% limit to 75%. If that is to prove possible, the issue of who bears the cost will have to be dealt with. Should it be borne by those renewable energy generators who would like to generate but cannot do so? How do we allocate the cost? Should the consumer end up with all of it? We have been working through this issue at the all-island body with our Northern colleagues. I cannot say too much about it because it is still out for consultation. I can say, however, that there has been active engagement with the industry on the matter. We are trying to reach a balance that will work for the industry without imposing extra costs on consumers. We will have to go through due process and engage in consultation to that end.

It has been somewhat frustrating for the industry that this has not happened as quickly as we would have liked. Some of the biggest challenges in the system are posed by planning and the need for public acceptance of the grid as being necessary to meet renewable energy targets. If members of the committee have influence in ensuring the planning process is efficient and streamlined, it would help consumers and everyone else. It is difficult to meet the challenge of striking the balance needed. The regulator will try to do its bit to ensure consumer interests are protected, national targets are met and the 40% renewables target is achieved.