Oireachtas Joint and Select Committees

Tuesday, 21 April 2015

Joint Oireachtas Committee on Transport and Communications

North-South Interconnector: EirGrid

11:30 am

Mr. Fintan Slye:

The Deputy's first question was on technological advances and the financial implications.

The Deputy said that he would have expected to see a drop in the €3.2 billion number, which was the estimate of the cost of the Grid25 review in 2011. As he will have seen from the recently published draft strategy, there is a range from €2.7 billion to €3.9 billion in terms of the cost.

On a like-for-like comparison basis - in the original 2008 strategy we had assumed an overhead line solution to a project and we assume that is how we would now deliver all the projects - there is a significant drop in the overall costs, which is the €2.7 billion number. Therefore, the figure of €3.2 billion on a like-for-like comparison basis comes down to €2.7 billion. However, in addition to that, we have become more open to other technologies and that includes advanced technologies such as series compensation, which I will talk about later, and also underground technologies. Hence, we have published a range for the total cost because, for many projects, the decision about whether it will be overhead or underground has not been taken and that decision, on a project by project basis, would impact on the cost. If we took the decision to underground a project, it would increase the cost.

The Deputy is correct in that some of the new technologies we are deploying are more cost-effective. Some of them are more expensive but have other advantages such as undergrounding and, hence, the range in the figures. We moved from a point estimate, which we would have used in the original strategy, to a range in this respect. We have not picked a solution for many of the linear projects and therefore there is a range in the cost depending on the technology choice. However, there is a significant scaling back. The original number was €4 billion in 2008, the number was €3.2 billion in 2011, which is the number that the Deputy selected, and now the number is down to €2.7 billion if one were to a like-for-like comparison. That reflects the stark change in economic projections and also projections around use of electricity. That was the Deputy's first question.

The Deputy's second question, if I picked him up right, was around the multiple of costs for undergrounding the North-South project. He referenced the three times cost. That is not a number we produced but one that was produced by the international expert commission, which was appointed by the Government and reported in 2012. It was its conclusion that deploying a HVDC underground solution in respect of the North-South project would be three times the cost. Our detailed engineering analysis comes up with a higher number than that and that was the subject of the discussion that I had with Deputy Moynihan. I am aware that the three times number has been questioned but it is important to make sure when making comparisons to ensure they are like for like comparison of projects. The three times number is not ours it is that of the international expert commission.

The Deputy picked up on the project of common interest, PCI, point that I made during my opening remarks and the issue of it being a fast-track process. The PCI process is a European one that was introduced for what are labelled projects of common interest and they extend across different infrastructural types. Typically they are cross-border projects. The North-South interconnector has been designated a project of common interest. The enabling framework within the Irish planning system to give effect to that was put in place late last year and An Bord Pleanála was appointed as the competent authority for managing projects of common interest. There is a slightly different process for projects of common interest to the process that would apply for a project such as a substation in Mayo. One of the key ways it is different is with respect to the process before application.

It sets out what is required of the developer in terms of their engagement with localities and communities. As a result of the designation of North-South, and these regulations came into force in the middle of the North-South project although it had a life before the end of last year, An Bord Pleanála, as the competent authority, had to examine the project and the consultation and engagement that had been done and determine whether it met the requirements for consultation and engagement as set out in the projects of common interest, PCI, regulations. That is called the concept of public participation, which we had to produce around that. An Bord Pleanála reviewed that and agreed that we could move forward based on the consultation that had been done.

The other difference is that under the normal planning rules, the developer submits a planning application, and there is fairly limited engagement with An Bord Pleanála before that. Under the PCI process a draft application is provided to An Bord Pleanála which it reviews, and it must certify that it is fit for purpose before it is submitted as a formal application. We have been engaged with An Bord Pleanála on that since November or December last year when we submitted the draft application. That is quite a different process. Once it has determined that the material is fit for purpose it then sets out the schedule of the process involved in lodging the application. That is everything from site notices to notification of statutory bodies to notices in newspapers, etc. It sets out that process, and we understand it will take about four weeks.

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