Mr. Rodney Doyle:

I thank the joint committee for giving us an opportunity to outline our views on the potential impact of Brexit. I am the director of markets for the EirGrid Group. I am joined by my colleague, Ms Rosemary Steen, director of external affairs.

I will give the committee an overview of EirGrid, the State-owned transmission system operator on the island of Ireland. It is charged with developing the high voltage electricity grid to cater for the demands of society and the economy. It is also responsible for the operation of the single electricity market. In addition to ensuring security of electricity supply, it also plays a key role in delivering decarbonisation of the system through the integration of renewables. With our colleagues in the industry, we have been successful in delivering this to date, while maintaining security of supply. As well as its role as system operator of the grid, EirGrid has developed and owns the east-west electricity interconnector which links the grid on the island with grid in the United Kingdom. We are very conscious that the mandate of the committee is to present solutions to the challenges presented by the decision of the United Kingdom to exit from the European Union. In that regard, in our presentation we will outline the challenges and hope to give some guidance to members on possible routes for Ireland in devising future energy solutions.

In many senses, EirGrid can be seen as a key success story which peace on the island of Ireland has made possible. It owns the company which runs the grid in Northern Ireland, SONI, and is a fully integrated business. Our executive team has responsibility on a 32-county basis and we endeavour to deliver to customers the synergies and savings that operating on an all-island basis allows. We are firmly of the view that the current all-island energy approach is best for the customer – both domestic and business - in the Republic of Ireland and Northern Ireland. If Brexit was to change this approach and introduce any form of tariff or change in the all-island electricity market, it would be bad for energy customers and business. Brexit also has the potential to lead to divergences in energy policy between the two jurisdictions on the island.

As members will understand, we have been keeping a careful eye on developments since the Brexit vote last year. We have spent considerable time ensuring we understand the potential impact of Brexit on us and in the wider energy arena. In this respect, we have been very active in the Taoiseach's citizens' dialogue initiative and the sectoral forum on energy organised earlier this year by the Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, in Boyle, County Roscommon. To date, we have seen strong political support to ensure the model of delivery of energy policy in Ireland, in particular electricity, is seen as an aspect which should be both retained and safeguarded. There is widespread and explicit recognition at official and political level in Brussels, London and Dublin that the energy sector on this island should not be impacted on negatively by Brexit. It includes voices such as that of the British Prime Minister, Theresa May, as well as senior voices in the European Commission. We welcome and encourage this.

An all-island energy market has operated on the island of Ireland very successfully for the past ten years, being of huge benefit to customers on both sides of the Border. EirGrid has operated the electricity market and the electricity transmission system over that period and has seen at close quarters the huge benefits the all-island approach to energy has had. The next stage for the all-island market is the integrated single electricity market, ISEM, which will see us link the all-island energy market into the wider European internal energy market. The project to deliver ISEM is currently under way. When it goes live next year, the ISEM will bring real and tangible efficiencies to how we manage the generation and supply of electricity across the whole island. This will ensure that prices of electricity will be minimised and help to ensure the Irish economy retains cost competitiveness. Every effort should be made to ensure Brexit does not impact on the efficient running of ISEM. Retaining the single electricity market will ensure the costs of electricity are kept to a minimum for homes and businesses. Any move from the current system would likely only serve to drive up electricity prices both here and in Northern Ireland and negatively impact competitiveness and security of supply on the whole island. We can all concur that this would be a regressive step. Recently a study was conducted by Grant Thornton, which I am happy to make available through the chair to the members, which outlines the benefits of the single electricity market and the ISEM approach.

In addition to safeguarding the single electricity market, we also highlight the role played by the east-west electricity interconnector which links north Dublin to north Wales. This key piece of infrastructure has been in place since 2012 and has delivered significant efficiencies and also strengthened our security of supply. The interconnector is capable of transmitting electricity in either direction, thereby allowing market participants to trade electricity in both directions between the electricity markets in Ireland and Great Britain. This works in favour of customers in both jurisdictions. In addition, it also provides ancillary support services such as frequency response, reactive power and black start capability to system operators at both sides of the interconnector, further improving our security of supply measures. In the event of Brexit triggering any tariffs on the trading of energy, this could have an obvious negative impact on the function of the east-west interconnector. This would be retrograde step and should, in our view, be avoided.

While we may all agree that a hard Brexit is least preferable, we do recognise that the mandate of this committee is to identify solutions and not just highlight problems. In that regard, we would like to give the committee some details of the work we have ongoing on assessing the feasibility of a direct electricity link to the EU post-Brexit via Brittany in France. We believe this could act as a real solution in the energy sector post-Brexit. As brief background, part of EirGrid work as the transmission system operator is to identify future interconnection potential with other countries. This is in line with Jean-Claude Juncker and the EU’s priority policy on the goals for the European Union. Following studies since 2009, the Celtic electricity interconnector between Ireland and France has proven to us to be both feasible and beneficial to ourselves and the French. Since the Brexit vote last June, the importance of a direct link to France has clearly grown and will provide a very positive solution to reducing our reliance, in terms of energy, on the United Kingdom.

Detailed studies on the Celtic interconnector have been under way with our French counterpart, Réseau de Transport d’Electricité, RTE, the national transmission system operator in France, since 2012. This work continues after a landmark signing of a memorandum of understanding signed by an Taoiseach and former President Hollande. The Celtic interconnector itself will entail 500 km cable under the sea and it would be able to import and export 700 MWs of electricity. This is the equivalent power for 450,000 homes. To date, the proposal to link the Irish grid between here and France has been favourably commented upon here at home and at EU level and has received funding for the feasibility stages of the project. Over the coming months we hope to have more detailed studies to underline the value of such a project, and we believe that it could provide the country with a real energy solution, with this further intensified if a hard Brexit should transpire.

While most voices commenting on Brexit and energy issues have to date concurred that energy issues should not become part of the negotiations, we would urge caution. In our view energy co-operation on an all-island basis, as well as between ourselves and our counterparts in the National Grid in the UK, makes sense. Growing from a peace on this island, energy co-operation makes sense for us all and we should work collectively to safeguard it in the negotiations that will be under way in the coming period. In particular, we would like to see the continued support for the North-South interconnector, the maintenance of the ISEM project and the all-island approach to energy matters and the continuance of tariff free trade for electricity.

I thank the committee for this opportunity to present and for its attention today. We would be happy to take any questions that the committee may have.