Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I thank the committee for facilitating this meeting and giving me the opportunity to present details of the Supplementary Estimate. The purpose of this meeting is to seek the approval of the select committee to reallocate €30 million in savings from subhead D3, which relates to the national broadband plan, to subhead B13, which relates to emergency generation capacity.

On 7 June 2022, the Commission for Regulation of Utilities, CRU, directed EirGrid, the transmission system operator, to procure around 450 MW of additional generation capacity for winter 2023-24 through to winter 2025-26 to offset a potential capacity shortfall of electricity supply. In order for EirGrid to be able comply with this direction in the next few weeks, financial support needs to be provided by my Department to the company. Legislation to ensure that EirGrid can carry out this direction, including the legal basis for my Department providing the necessary financial support, passed all Stages in the Oireachtas yesterday and is expected to be signed into law by the President in the coming days.

The level of financial support required in 2022 to allow EirGrid place orders on the electricity generation units and ensure that they are delivered and installed in time for winter 2023-24 is estimated to be in the region of €350 million. As the final level of financial support required this year will not be fully known until later in the summer when all the contractual arrangements in place, it has been agreed that approval of the allocation of funding for the emergency generation capacity will be requested in two tranches, namely, the current allocation request of €200 million and a subsequent request later in the year for approval of the balance of the funding to be allocated. The second Supplementary Estimate to be provided later this year will take account of the final agreed figures for the purchase and installation of the equipment and any further savings arising in my Department based on projected year-end expenditure.

As I mentioned, the overall purpose of this Supplementary Estimate is to allocate €200 million to a new subhead B13, in the energy transformation programme, to fund the purchase by EirGrid of additional emergency generation capacity. The €200 million being allocated is comprised of €110 million in additional funding from the Exchequer and €90 million from a reallocation of savings within my Department. Some €30 million is being reallocated from savings on subhead D3, which is the national broadband plan, and €60 million is from forecasted capital underspend in the energy transformation programme.

My Department has agreed an updated interim remedial plan with National Broadband Ireland to take account of the knock-on effects of the Covid-19 pandemic and other delays to the programme. Under this plan, the revised target has reduced from 130,000 to 102,000 premises to be passed by the end of January 2023. This has resulted in reduced 2022 projected expenditure with a mid-term forecast of €30 million in underspending at the end of the year. It remains the ambition of the Government to roll out the national broadband plan State-led intervention as quickly as possible in all areas. To achieve this, National Broadband Ireland will continue its focus on addressing the delays which have arisen and ensuring that the build programme gets back on track.

Following the announcement by Government earlier this year of an enhanced package of measures to support the uptake of home energy upgrades, demand for the SEAI residential energy efficiency schemes has been strong, with double the number of applications seen in 2021. It is expected that the pipeline of applications will result in high levels of delivery for the remainder of the year. However, indicative mid-year results from the SEAI show a forecasted underspend at the end of the year on the one-stop shop and community energy schemes. While the targeted number of houses will be started in 2022, it is anticipated that not all of these will be completed and certified for payment this year due to supply chain constraints. It is expected that the pipeline of applications in 2022 will result in strong levels of delivery next year.

The €400 million allocated to the electricity credit included a contingency to cover the possible cost arising from growth in the number of domestic household accounts in excess of the original 2.15 million forecast. The final cost of the electricity credit was just under €380 million, leaving a saving of €20 million to be reallocated to the emergency generation capacity subhead. I am happy to take questions from the committee on this Supplementary Estimate.