Oireachtas Joint and Select Committees
Tuesday, 21 April 2015
Joint Oireachtas Committee on Transport and Communications
North-South Interconnector: EirGrid
I welcome the delegates. I ask everybody to ensure mobile phones are switched off as they interfere with the transmission of the proceedings. The meeting has to conclude by 2 p.m. at the latest. Apologies have been received from Deputies Patrick O'Donovan and Helen McEntee.
This meeting is being broadcast live on UPC channel 207, eVision channel 504 and Sky channel 574.
The purpose of this meeting is to engage EirGrid in a discussion on the North-South interconnector and certain reports that have recently been published. On behalf of the committee, I welcome the following representatives from EirGrid: Mr. Fintan Slye, chief executive; Ms Rosemary Steen, director of public affairs; Mr. John Fitzgerald, director of grid development; and Mr. Aidan Geoghegan, project manager for the North-South interconnector.
I draw the witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are requested to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of today's proceedings is to be given and they are asked to respect the parliamentary practice to the effect that they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statement they have submitted to the committee will be published on the committee website subsequent to the meeting. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
I invite Mr. Slye to make his opening statement.
Mr. Fintan Slye:
I am grateful for the opportunity to address the Joint Committee on Transport and Communications. I am accompanied by Ms Rosemary Steen, director of public affairs; Mr. John Fitzgerald, director of grid development; and Mr. Aidan Geoghegan, project manager on the North-South interconnector project.
Last month we published a draft strategy for the development of Ireland’s transmission grid. The draft strategy, on which EirGrid is now seeking public feedback, is shaped by three key pillars, namely, open engagement with communities, making the most of new technologies and a commitment to make the existing grid work harder before building new transmission infrastructure. The strategy takes account of the changing technical and economic context for Ireland’s electricity transmission system, examines the energy challenges facing Ireland and identifies the steps we need to take to develop a strong and secure transmission system for homes, farms and businesses throughout Ireland in order that the electricity grid is capable of providing for the energy needs of our country now and into the future.
The strategic review includes an independent report from Indecon which shows that investment in the electricity grid will directly benefit Ireland’s economy and can help reduce energy costs. As well as supporting indigenous businesses and consumers, a modern transmission grid will put Ireland in a strong position to continue to attract foreign investment and support new and emerging opportunities in the energy sector. This approach will also support Ireland’s current policy objectives, including the Government’s Action Plan for Jobs and the IDA’s regional development strategy. The draft strategy reflects the change in economic circumstances and our current circumstances as a country, an economy and a society. In recent years we have seen technological advances, some of which we have deployed already to great effect and others which are now emerging. Based on all these advances, our new strategy is firmly focused on maximising existing assets and deploying appropriate advanced technology solutions.
In respect of the North-South interconnector, the review determined that there remains a clear need for the project and that a 400 kV overhead line remains the most appropriate solution. The interconnector is a 400 kV overhead line linking a substation in Woodland, County Meath, with a new substation in Turleenan, County Tyrone. It will provide a second high capacity transmission line between Ireland and Northern Ireland. The project will more than double the power transfer capacity between North and South, thereby improving the efficiency of the all-island electricity market.
It will enhance the security of the electricity supply throughout the island of Ireland, which is essential for economic growth, the creation of jobs and improving the standard of living and quality of life for all. In addition, it will enable more renewable energy supplies to be connected to the network, thereby reducing our production of greenhouse gases and our reliance on imported fossil fuels. The interconnector is needed now, as a cross-Border bottleneck has developed on the all-island electricity system, which is having serious financial consequences. Last year the Economic and Social Research Institute, ESRI, reported that the North-South interconnector would remove the bottleneck and reduce electricity costs by €30 million per year.
The proposed scheme has been the subject of public scrutiny and debate for some time, with the focus on whether it can be put underground. Several independent reports on the issue have been published. In 2008 the Government commissioned the Dutch energy consultancy company Ecofys to produce a Study on the Comparative Merits of Overhead Electricity Transmission Lines Versus Underground Cables. In 2009 EirGrid published a report produced by industry experts, PB Power, which examined overhead and underground options for the project. A key component of the study was a comprehensive and site-specific underground cable evaluation that identified and evaluated a specific route corridor. The report was reviewed and updated in 2013. Another report commissioned by EirGrid was a technical study by TransGrid Solutions of Canada that investigated the impact of high voltage, direct current, HVDC, schemes in the Irish transmission network. We also commissioned an assessment by Tokyo Electric Power Company of the technical issues related to significant amounts of underground cable in the all-island transmission system. In 2012 the Department of Communications, Energy and Natural Resources published a study by an international expert commission which had reported on the case for, and cost of, undergrounding the North-South interconnector. The Government-appointed independent panel, headed by Mrs. Justice Catherine McGuinness, acknowledged that the evaluation of undergrounding of the North-South interconnector was compatible with the methodologies being employed on the Grid West and Grid Link projects.
We do not have time to examine in detail the findings of all these reports, but there are two themes that emerge from them, the most prominent of which is the finding that undergrounding the project would be more expensive. The international expert commission's report concluded that an underground solution would be three times more expensive than an overhead option. Our own estimate is that an underground system would cost in excess of €500 million more than the overhead option. As a State-owned company the mission of which is to develop, maintain and operate a secure, economical and efficient transmission system, this is an additional cost EirGrid cannot pass on to consumers. It is an additional cost that would not be acceptable to the regulator, the Commission for Energy Regulation, CER. This is made clear in a joint letter to EirGrid in 2013 from the CER and the utility regulator in Northern Ireland which stated:
[T]he project must not only be progressed quickly but also cost effectively. The Committee understands from the Irish Government review that the cost for the undergrounding of the project would be significantly higher than the AC overhead line construction employed elsewhere in Europe. The regulatory authorities would therefore be of the view that customers should not be expected to pay for any unnecessary costs associated with undergrounding of the cables given there would be no enhancement in service.
I will deal briefly with some of the technical aspects of the project. In its 2012 report the international expert commission made only one recommendation, namely, that the North-South interconnector not be undergrounded using AC technology. We agree with that recommendation. The commission, while not recommending that the interconnector be undergrounded, stated that if it were to be undergrounded for all or a significant portion of its length, the best solution would be to use HVDC technology. EirGrid is very familiar with HVDC and keeps abreast of the development and application of the technology which we successfully deployed in our east-west interconnector project. However, while it was, in fact, the only technically feasible option available for the east-west interconnector, the same cannot be said for the North-South interconnector project. There are technical options to be considered and they have been.
The international expert commission found that AC overhead line technology was the standard in Europe for implementing projects similar in application to the North-South interconnector. That remains the position. There are significant technical issues with putting projects such as the North-South interconnector underground using HVDC technology.
One of the key benefits of the North-South interconnector is the ability to operate the networks North and South as if they were one system. This will bring cost savings for electricity consumers as a larger electricity system can be operated more efficiently than smaller ones. However, if the project was to be put underground, it would be an HVDC system linking two alternating current or AC networks. As HVDC is not compatible with AC, there would be additional complexities as it would require equipment to convert the power from AC to HVDC and back again. In order to function properly, an HVDC interconnector would also require a computerised control system. Such a system would be bespoke and very complex and introduce a risk of mal-operation. Taking such a risk when there is a technically superior and less risky option readily available is unnecessary. In addition, "tapping" into an HVDC interconnector at an intermediate point to provide a new grid connection or for network reinforcement in the future would add to the already complex control system. It would also be significantly more costly, potentially in excess of €100 million more, than tapping into the proposed AC overhead line. This would disadvantage future development in the region.
Where are we with the project? EirGrid has recently republished its proposed line route that will form the basis of an application for planning approval to An Bord Pleanála. The review resulted in the proposed tower locations being repositioned along the alignment. The alignment has not changed and the owners of the land holdings affected were notified prior to publication. We are looking to submit a planning application to An Bord Pleanála in the coming weeks. In fact, we have been liaising with the board on the planning application for some months. We have been doing this because 18 months ago the European Commission designated the interconnector a project of common interest, PCI. This is a significant development and means that the project is subject to a new EU regulation for trans-European energy infrastructure that is designed to facilitate a more efficient permit granting process. An Bord Pleanála was designated as the competent authority for managing the PCI process in Ireland and, as per the EU regulation, we submitted a draft application file to it for review. Last month we submitted additional information to the board which it is reviewing. Once it is satisfied with the draft application, it will draw up a schedule for formally submitting the planning application. We expect this to happen very soon.
As I mentioned, open engagement with communities is a key pillar of the draft strategy. During the course of the project we have endeavoured to meet every landowner affected by the development and have had productive discussions with many. Others have chosen not to deal with us directly, appointing intermediaries to represent them. This is their undoubted right and prerogative. However, it is also a barrier to effective engagement and we encourage all landowners to talk to us.
Recently we have opened offices in counties Meath and Monaghan and will shortly open a new office in Cavan. We are encouraging anyone interested in the project to call in and discuss it with our project team. These offices will remain open right through to the submission of the planning application and afterwards. Our staff will be on hand in the local offices to provide assistance for landowners and members of the public who wish to make a submission to An Bord Pleanála once the statutory consultation process starts following the submission of the planning application.
The interconnector is critical to ensuring a safe, secure supply of electricity throughout the island of Ireland. It will bring major cost savings and address significant issues around security of electricity supply, particularly in Northern Ireland. On behalf of the EirGrid representatives present, I thank the committee for giving us the opportunity to brief it on this critical development. We are happy to take questions members may have
Looking at the overall report, there appear to be different solutions for different areas of the country. On the North-South interconnector, the perception is that there has not been much consultation and that there has been no change in what has been proposed.
That compares to Grid Link in respect of which there is a proposal to use existing infrastructure and Grid West in respect of which there is an option to have 200 kW or 220 kW lines upgraded and it is suggested 30 km of the line should be underground. Overall, will Mr. Slye explain further why different solutions are proposed in different areas?
Mr. Fintan Slye:
I welcome the opportunity to address the broader strategy and any of the other projects proposed, aside from the North-South interconnector. The Chairman has mentioned that different solutions are appropriate for different projects. There is no one bespoke solution that works for all projects. I will talk about them in turn, indicating the differences between them. I will deal, first, with the North-South project which is at a significantly more advanced stage than both the Grid West and Grid Link projects. It has been the subject of extensive analysis and consultation for a number of years. A number of reports have examined the undergrounding of the interconnector. In 2009 EirGrid commissioned PB Power to produce a detailed report which was published. It included a route specific evaluation of the underground option. The analysis was updated in 2013 and made available. In addition, in 2011 the Government appointed a commission of three international experts to look specifically at the project. Its terms of reference included an examination of the cost of, and the case for, undergrounding the interconnector. The commission reported in 2012. At the time its members appeared before the committee to brief members on their findings. The underground option has, therefore, been analysed extensively.
The independent expert panel was established at the start of 2014 by the then Minister, Deputy Pat Rabbitte. It is chaired by Mrs. Justice Catherine McGuinness and includes Professor Colm McCarthy, Professor John Fitzgerald, Professor Keith Bell and Dr. Karen Foley. It was asked to examine the analysis and assessment of the different technical options, specifically the undergrounding of the North-South interconnector, and come to a view on whether the analysis was the same as that being proposed for the Grid West and Grid Link projects. It concluded that it was. Therefore, the same rigour and analysis has been applied to the alternatives, in particular, the undergrounding option for the North-South project.
I will address the question of the new advanced technology that has been potentially deployed for the Grid Link project and the extent to which it may or may not be applicable to other projects. It is a technology that relies on upgrading the existing grid; therefore, the Grid Link project is about transmitting large power supplies effectively from the Munster region to Leinster and, in particular, the east coast centred around Dublin where there has been and continues to be significant growth in demand. However, there is a multiplicity of transmission lines between Munster and Leinster. The new technology which has not been deployed anywhere else for this purpose in Europe before relies on maximising the utilisation of these lines.
In the case of the North-South project, it is about joining two transmission grids - the grid in the Republic and the grid in Northern Ireland. There is a single link between the two. While we have two transmission grids, there is a single all-island energy market. To have the infrastructure underneath to support that single energy market, it is necessary to reinforce it. Unfortunately, there is only one link and we do not have a multiplicity of lines, the use of which we could maximise. Therefore, new infrastructure is needed.
That technology is not appropriate, which means the main technical option for the North-South interconnector is an underground solution using HVDC technology. As I pointed out, this technology has been the subject of extensive reviews.
The Chairman asked about the other two major projects. As part of the Grid West project, EirGrid examined overhead and underground options. We established that by reducing the voltage from 400 kV to 220 kV, we could potentially underground up to 30 km of the circuit. We identified and analysed this option. The analysis of the three options was conducted in line with the terms of reference established and set out by the independent expert panel. The analysis has been submitted to the panel which is in the process of reviewing it. Once the review has been concluded, the panel will provide an opinion to the Minister as to whether the analysis meets the terms of reference and the options are set out in an objective and comparable manner. EirGrid will then publish the detailed analysis that has been submitted to the independent expert panel and engage with local communities in the area in an extended project specific consultation on the three options.
Grid Link has always been approximately six months behind Grid West in terms of project development. In addition to an overhead option, which is the one on which we have been engaging with communities and for which we have identified multiple line routes, we are in the process of developing an underground cable route. This would be a direct point-to-point route from Cork to Kildare rather than a three-point solution, as is the case with the overhead line. As part of the Grid25 review, which we have been carrying out for the past year, we identified this new technology which is deployed in other parts of the world. For example, it is deployed in the United States on very long transmission lines that are hundreds of kilometres in length to enable them to be used effectively. EirGrid has established that in the context of a relatively small system such as the system in Ireland, the technology can be used for a different purpose on existing lines to maximise the power throughput on them. This is another option in respect of these lines.
EirGrid will develop these options in further detail. They are clearly very different across a range of criteria in terms of their impact on the environment, both visual and natural, cost implications and technical characteristics. They all meet the needs of the regional economy for the next decade or until 2030. We have stress-tested them specifically against the IDA's regional development strategy and the plans for the region in terms of existing industries and their anticipated development over the relevant period.
How influential will the public consultation be, for instance, if, in the case of Grid West, the overwhelming traction, if one likes, is in favour of upgrading the 220 kV lines and undergrounding 30 km of the route to avoid schools and other pressure points? My perception of consultation, and I am sure members from the north east and elsewhere will have views on the matter, is that people believe decisions were taken before the consultation took place. Why was consultation not allowed in advance of decisions being taken?
Mr. Fintan Slye:
I will make two quick points before asking Ms Steen to comment. We listened to the feedback we received last year from communities and local people throughout the country. I also received some strong feedback from the joint committee during my previous appearance before it. During last year, we reviewed and examined our consultation process and how we engage with communities.
In December we published and made available a report and a review that included two independent external reviews on that subject. Central to this was a set of 12 commitments as to how we would improve our consultation and engagement in the future. We recognise that delivering large-scale linear infrastructure projects, no matter what their technological implementation, is incredibly difficult. It is a fact that they have an impact on communities and we need to learn continually and improve on how we engage with communities.
A key point is that we published our strategy in draft form to allow for comment over an eight-week period. It was not a case of us saying that this is the new strategy and this is the way it must be. It was us reflecting on what we had heard as we developed the individual projects and reflecting the changed circumstances in the economy. We put together a draft strategy for comment.
I refer to the Chairman's point about the role of consultation in the decision-making. We are quite clear that we are going into the Grid West project with three options. We have not decided which one and we do not have a predisposition towards one or the other. We have the independent expert panel to ensure that as we analyse the options and present the analysis of the options to the public, this is done in a fair, transparent and comparable way in order that people can see the trade-offs that are being made or that need to be made when a selection is being made from options. Ms Steen may wish to comment on public consultation.
Ms Rosemary Steen:
As an organisation we are changing the way we interact with members of the public. We have advertised to recruit more people to assist us on the ground because we are conscious of reaching out for feedback. We take very seriously the need to make greater efforts in engaging communities. In publishing the strategy as a draft, we have demonstrated that we are listening, that we are taking on board feedback and we are trying to change the approach. However, we have projects at different stages. As Mr. Slye has explained, some of these projects are quite advanced. However, we are very committed to making sure that where we can engage with members of the public, we do so. I am very much aware of the concerns that have been raised here to date and we will be reflecting further on them.
I refer to the question to which the Chairman alluded. It seems that the company has done a U-turn with regard to the Grid West and the Grid Link south. When it is good enough for Grid West and Grid Link south, why is it not good enough for the people in the path of the North-South interconnector? There is significant disquiet in this regard. There is also significant scepticism with regard to the consultation process. As I stated, I think it was a decision made by the company to take the energy from one point to the other without any consultation with the people on its path and this has led to the almost stand-off situation at this stage. Is it fair and equitable for the company to drive on with the proposal on the North-South interconnector? The company has explained all the technical issues but the fundamental point is that this project will have a detrimental effect on the area in its path.
Over the past two and a half years there has been discussion in this committee and in the Dáil about the cost. The undergrounding of the project was going to be three times more expensive. In December 2013 the figure was bandied about that it would be six times the cost of the overgrounding. This report gives the figure as being 1.57 times the cost. Why is there such a variation in the figures? How come the figure of six times the cost has been reduced to 1.57 times the cost?
Where was the figure of six times the cost found? What is the cost of undergrounding the North-South interconnector? There is a fear among people on the path of the interconnector that, regardless of consultation with the communities, the offices opened or the engagement, the decisions have been made, the routes are planned and the plan will go ahead. Why will EirGrid not consider undergrounding the interconnector? What is the real rationale behind that decision? The information, technology, knowledge and issues around putting the entire North-South interconnector could be as wrong now as the figures were a year and a half ago.
The communities are very aggrieved and feel strongly that the consultation is a whitewash, is only ticking a box and will not make any real difference to the overall strategy that EirGrid will announce.
Mr. Fintan Slye:
There have been several detailed analyses of undergrounding the North-South interconnector. In 2009, we published a detailed, route-specific analysis of undergrounding by the international company, PB Power. That was updated in 2013. The Government appointed an international expert commission of three who examined the case for and cost of undergrounding it. The independent expert panel appointed by the Minister concluded that in all material respects undergrounding had been examined to the same extent and level of detail as was being proposed for the Grid Link and Grid West projects. All of that analysis has been done for the North-South project. It has been publicly available and has been debated publicly, including with this committee.
The Deputy mentioned the multiples of the cost as being 1.57 versus six times. I take it the 1.57 is from the comparison of options for Grid Link in the recent strategy. For different projects different technology solutions are appropriate and they require different capacities of interconnector. For Grid Link the proposed underground scheme is 700 MW, but for North-South a 1,500 MW scheme is needed. Therefore, the comparison is not like for like. The 1.57 is based on a 700 MW scheme for the Grid Link project. There is still a band around that €800 million to €850 million as we are still involved in the engineering and detailed design of that. With the delivery of the east-west interconnector, we have a lot of experience of the costing, engineering and delivery of these high-voltage direct current, HVDC, projects.
The higher cost multiple comes from our detailed engineering analysis of delivering an underground solution for a North-South connector and from the PB Power report where the multiple was approximately five. That is based on a detailed engineering analysis, component by component and route specific, which is all documented and set out in the PB Power report, which was updated in 2013.
The other number often cited is a multiple of three. This comes from the international expert commission appointed by the Government. That multiple was not derived through an on-site engineering study, but through comparison with a range of projects around Europe. The commission carried out an international benchmarking exercise - some of the commission worked closely on those projects and I expect it was good information - and its conclusion was a factor of three.
The figure of six times the cost was bandied about prior to a Dáil debate we had in 2013 regarding the North-South interconnector. Was that ever a reality? I made the point earlier that the communities in the path of the North-South connector will ask why putting the cables underground is not being considered for this project when it is being considered for the other two projects. Whatever the accurate cost, be it a multiple of 1.75 or 1.57, and considering the damage that will be done to these communities for generations by keeping the cables overhead, is it worth saving on those costs? Fundamentally, considering the damage that will be done by what is proposed, is putting the cables underground not the best option to protect these communities? If the cost is only a multiple of 1.57, as stated in the report, putting them underground should be considered.
Mr. Fintan Slye:
First, the cost is not a multiple of 1.57. That cost relates to a comparison of two different things. In the case of the Grid Link project, to build a 700 MW interconnector between Cork and Kildare, the multiple comparing that to a 400 kV overhead solution that goes from Cork to Waterford to Kildare is 1.57. However, what is proposed and needed in the case of the North-South connector is technically very different. It is more than twice the capacity required.
Mr. Fintan Slye:
At heart, the basic difference is a doubling of the capacity, so it involves twice the power transfer capability. What is in the draft strategy report the Deputy referred to for the Grid Link project is an estimate of the cost of a 700 MW HVDC solution between Munster and Leinster. In the case of the North-South connector, what is required and needed is power transfer capacity of 1,500 MW. Therefore, a like-for-like comparison cannot be made.
Excuse my ignorance, but Mr. Slye is talking about a larger capacity. The same mechanical and engineering works would have to be carried out, whether it involves 700 MW or 1,500 MW, and it is only the capacity that would have to be enlarged.
Mr. Fintan Slye:
In order to enlarge the capacity, we are talking about doubling it. At that capacity, there are no installations worldwide of that size and we would need twice the infrastructure. Instead of one cable set in the road, we would need two cable sets in the road. We would only need one road opening or one trench through agricultural land, but the cost savings from a single mobilisation are far outweighed by the fact we need additional converter stations at each end. A converter station costs somewhere between €75 million and €100 million and additional cable sets. Cables cost in excess of €1 million per kilometre. The costs are not marginal, but potentially double.
Mr. Fintan Slye:
That relates to another reason that might be relevant. The committee might stop me if it is not relevant. This is one of the reasons why the route for the North-South interconnector has a preference for agricultural land over local roads. When we were doing the routing for an underground option for the interconnector, we considered all the options, including disused rail lines, existing roads and agricultural land. We have touched on one of the key issues why, in the case of the North-South interconnector, agricultural land is the optimal route corridor. That is distinct from the Grid West project, which only needs a third of the capacity, as a 500 MW interconnector, and there is much less sterilisation-----
I thank the delegation for coming before us. This is a very contentious issue and there are different aspects which cause concern for people. Everybody agrees that in this country we need secure, affordable and sustainable energy supplies. Everybody is conscious of that but how can we get there in an economic way and in a manner that respects people's lives and ways of living? How we can we do it in a way to deliver the benefits we are seeking? There are a few components to consider.
The witness mentioned the technological advances that have been made since the last proposals were put forward, particularly in terms of Grid West and Grid Link. I am unclear about the financial impact of those as there seems to be some contradictory information in the material that we have. If I read this correctly, the projected cost of €3.2 billion in 2011 will now range from €2.7 billion to €3.9 billion in 2015. Another document indicates that there is the option to use existing infrastructure, at least in part, for Grid West and Grid Link, so I would have expected a big reduction in the cost. Undergrounding is argued to be three times more expensive for the North-South interconnector but people still have serious doubts about that figure. It is moving around the place.
People will not be reassured by the witness stating that the project is of common interest. Basically, the indication is this can be fast-tracked through the planning system. There was mention of consultation with the community.
Design documents are being drawn up to support planning applications. As that costs money, it means effectively that decisions have been made. It is difficult to know what difference public consultations can make as the design decisions have been made. Otherwise, EirGrid would not be in a position to produce design documents for planning applications. Am I wrong in saying this?
EirGrid referred to series compensation technology, which will allow existing infrastructure to be used, but dismisses it for the North-South interconnector project. As I am not technically knowledgeable enough and do not have technical staff who could advise me on why this must be the case, will the delegation explain to me in simple English why it is that series compensation technology can be used elsewhere but not for the North-South interconnector project?
Several times during the presentation it was mentioned that too much of a burden must not be placed on communities. I agree completely, but the burden seems to be in terms of energy bills only. While this is important, there are other impacts such as on house and home values, agriculture and those involved in the tourism industry. Has any analysis been carried out of these aspects? I would have expected one to have been carried out.
There has been a difference in approach between the North-South interconnector project and projects in the rest of the country. Will this have an impact on future discussions or proposals for an interconnector project with Britain or France? If there is to be wider interconnectivity between continental Europe, Britain and Ireland which is not beyond the bounds of possibility, will the same restrictions apply to such a proposal?
Nowhere in the documentation is the impact of further delays in the North-South interconnector project addressed. There have been many delays in the project up to now. I do not see any evidence that progress has been made in getting those who will be immediately impacted on, namely, the host communities whose lands and lives will be impacted on by the interconnector, to understand or to at least accept that this is the way this needs to be done. The fact that they do not understand or accept this means that some people will resist the project in every legal way they can, despite the object of common interest designation, allowing it to be fast-tracked through the planning system. What will be the impact if there are further delays?
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.
If I may intervene, was that process ongoing during the preparation of this study? Was there any interruption in the process in terms of waiting to see the outcome of this study? Were people working on the design assumptions that existed two years ago?
Mr. Fintan Slye:
A point the Deputy picked up on was in terms of when design decisions were taken on the North-South project. Our view is that the most appropriate solution for North-South is a 400 kV overhead line and the planning application, a draft of which is with An Bord Pleanála as we speak, is based upon a 400 kV overhead line solution. The Deputy is right, it is stating that as our preferred option.
Mr. Fintan Slye:
To return to the PCI process, once the application is with An Bord Pleanála my understanding of the process is that it generally looks like the standard process that exists today in that it appoints an inspector who examines the project. It has a series of consultations on it in which everyone has an opportunity to have their say. An oral hearing is conducted. My understanding of it is that it is not significantly different in terms of what the process looks like from the point of application forward. That is it in terms of the PCI process.
The next point I picked up was on the new advanced technology we are deploying on the Grid Link as an option, alongside the overhead solution and the underground solution in terms of series compensation technology and why that is not applicable to the North-South project. I would say it is also not applicable to the Grid West project. I will attempt to explain and if I do not do so adequately, members can feel free to interrupt me. It is technology that is deployed on existing transmission lines in existing transmission stations.
It is large transmission kit such as one would see in a transmission station. It is put on the ends of a transmission line and it changes the electrical characteristics of that transmission line and allows more power to be pushed over the line than would happen in the absence of this technology. When this technology is put in, it allows the maximisation of the power transfer over the existing transmission line. Advanced control systems now allow the possibility to change how that happens from the control centre as well.
In the case of Grid Link, that works because we have a need to move large amounts of power from the south and south west, where generation is growing in the Cork-Kerry area, up towards the east, centred around Dublin where there is demand growth. That is one of the key parts of the Grid Link project. There is a multiplicity of existing transmission lines which run from the general south and south-east area to the Dublin area. The existing transmission network covering that is a mesh network. Therefore, existing transmission lines are in place upon which we can place this technology to maximise use. If that multiplicity of lines can currently carry 100 units of power, by deploying this technology we can raise that to, say, 110 or 120 units of power.
We need to do two other things as well to solve the Grid Link issue. One is to up-rate seven or eight existing lines in the Golden Vale south-east region, which we can do. That involves upgrading and changing conductors on the lines in existing infrastructure to allow them to carry more power. The second thing we need to do is to install another cable underneath the River Shannon. We are trying to get power which is being generated in the Cork-Kerry area out so we need to get it underneath the Shannon and onto the 400 kV lines, where we are going to deploy this technology, and maximise the use of those 400 kV lines, which start at Moneypoint station and travel up towards Dublin.
That is why it works in the case of Grid Link. It does not work in the case of North-South or Grid West because the problem is a different one In the case of North-South, the problem is that there are two different transmission grids. We have a single, all-island energy market but two transmission grids with, currently, one link between them. We need to enable the two grids to be operated more seamlessly together to maximise the benefits of the all-island market. To do that, we need to put in place another piece of infrastructure alongside the existing one. We do not have the underlying network to utilise; it needs new infrastructure. Hence, the technical options boil down to an overhead option or an underground option to do that.
Mr. Fintan Slye:
Not without the circuit in between. In order to transmit electricity, we need a circuit in between. The technologies to do that are either underground or overhead technologies. If we go underground, we need the large converter stations at either end, because the underground technology uses a different power transmission technology. It uses high-voltage, direct current, HVDC, technology. All of the grid, all of the material in this room, everything we have, uses AC technology. We therefore need these converter stations to convert the power from AC to DC and back again. When we talk about converter stations, that is what that is. The HVDC cable is completely underground, but we have these converter stations at either end to convert them in and out. Hence, there is no existing network on which to deploy the technology to which I referred for Grid Link series compensation to maximise the usage of it. It is a case of needing additional infrastructure and examining what are the options for it. I hope I have managed to explain that.
Has there been any financial analysis of the impact? What is the estimated cost to the tourism industry if this were to proceed? What would be the financial impact on property values - homes and land - in the area if this proceeds? I know the need to take it into account was identified, but was any scientific analysis done on the financial impact?
Mr. Fintan Slye:
We have worked with Fáilte Ireland and Tourism Ireland in terms of the draft strategy that was published and we are also in the process of finalising a specific report relating to the impact of electricity infrastructure on the tourism industry. We have worked with Fáilte Ireland and Tourism Ireland on that. It is one of the key criteria that forms part of the planning application on specific projects. Obviously there is a general impact but also on specific projects. Mr. Fitzgerald might like to say more about that in terms of the North-South interconnector.
Mr. John Fitzgerald:
As part of our environmental impact assessment for the North-South planning application we will be addressing those. In terms of hard numbers it can be quite subjective in terms of impact. We are working with the tourism bodies on all our projects. It will form part of the environmental impact assessment for the North-South planning application.
Will it quantify the financial impact of adjustments to property value, land value, agriculture value and tourism value or will it just be taken into account in a general environmental impact statement without quantifying it?
Mr. John Fitzgerald:
A number of studies have been carried out and we keep abreast of developments. This is a subjective matter and it differs from one area to another and from one person to another. What we have put in place as part of our commitments, which we announced in January 2014, is to address some of the visual amenity issues, a community gain fund for the regions that are hosting the infrastructure but also a proximity ex gratiapayment for the residents in the areas. Studies show that the impacts on tourism are not very significant. We are working with our tourism bodies here to look at that across the whole Grid25 and we will see what comes out of that. We are watching, but it is a very subjective area. We will be addressing it.
I am conscious that we need to vacate the room by 2 o'clock and a number of members have yet to contribute.
With everyone's permission, I will call Senator Sean D. Barrett and Deputy Michael Fitzmaurice first and then call non-members. I ask that the answers be relatively brief as I want to get everything on the table and see where we go from there.
Mr. Fintan Slye:
I do not think it would materially change, unless we deployed different technology such as HVDC. Inserting HVDC does have associated transmission losses as in the case of the east-west interconnector. I think the figure for losses is about 5% or 6%. The conversion from HV to DC about which I was talking earlier in response to another question is not without losses.
On transmission costs, would one of the logical consequences be, if such costs are large in economic and social terms, we should locate industries near generating stations? I do not recall any case where that has happened going right back to the plant at Ardnacrusha. One of the ways to cut transmission costs would be to have the generation and the end user located side by side or within a couple of miles of each other.
Mr. Fintan Slye:
The Senator is absolutely right. We are seeing more of a need to do this as growth in demand is predominantly on the east coast and centred in Dublin. There is increased generation capacity, largely from wind power, which tends to be generated on the west, north-west and south-west coasts. This did happen in the past, with generation stations being sited in Dublin and recently in Cork. The most recent generator was built in Waterford city, at the site of the original Great Island station. The ESB built the Moneypoint power plant in the early 1980s and, although it sited the station on the Shannon Estuary to facilitate the importation of coal, it built two 400 kV lines to Dublin which was the demand centre at the time. The plant at Moneypoint feeds demand almost directly in north and south Dublin for the very reasons the Senator has articulated.
Mr. Fintan Slye:
That is a conversation we are having with IDA Ireland. In recent years and months we have seen a significant increase in the number of and level of interest in data centres around the country, the most high profile of which was the subject of the recent announcement by Apple of an €850 million investment in a data centre in Athenry. Such facilities require huge amounts of power, significantly more than we would have typically seen in the case of industries connected to the transmission system. We are working very closely with IDA Ireland to make sure, as it engages with companies to try to encourage them to come to Ireland, it is doing so with the knowledge of where the infrastructure would best suit them is located.
In respect of the all-island electricity market, why are we annoying so many people in County Meath in order to bring electricity to Northern Ireland instead of developing power stations in that jurisdiction? In the context of all of the dislocation discussed in this committee, are power stations such as Coolkeeragh or Ballylumford ruled out for future development or is Northern Ireland incapable of generating the electricity it requires?
Mr. Fintan Slye:
The North-South interconnector project will deliver a number of benefits. The Senator referred to one benefit in his point about the security of supply issues arising for Northern Ireland after 2020. However, we also set up an all-island electricity market in 2007 but we do not yet have the transmission grid to allow it to operate seamlessly. Therefore, while one of the benefits of the project is that we will address the security of supply issue for Northern Ireland, another benefit is that will allow us to deal with a bottleneck which is costing customers across the island approximately €30 million per annum in additional constraint costs. Over the long term the security of supply benefits will accrue to everyone on the island. While Northern Ireland faces an issue in the short term, an all-island energy market will allow consumers on every part of the island to access the most efficient source of generation irrespective of where on the island it is located. While the immediate issue for Northern Ireland arises in 2020, beyond that point generation capacity will be developed in various locations in Northern Ireland. This potentially includes redevelopment of Coolkeeragh, Ballylumford or Kilroot. It is important that consumers across the island are able to access the benefits accruing from these developments.
Mr. Fintan Slye:
The interconnector will facilitate the free flow of power in both directions. That will depend on the relative efficiency of all of the plants in the market but it will also allow consumers in Northern Ireland to rely on generation capacity in Southern Ireland at times of shortage in Northern Ireland. Without the North-South interconnector they will not be able to rely on the capacity already available in the Republic.
Mr. Fintan Slye:
If Northern Ireland built its own generating station it still would not address the bottlenecks and constraint costs between the two jurisdictions. Such an approach would perpetuate the constraint costs of €30 million per annum, increasing to €40 million a decade later. We would still have a single market with two transmission grids. If the position is adopted that each jurisdiction should build an efficient level of generation on its own, the net cost to consumers will increase because the two systems would build up capacity reserves without the ability to share them. That cost would ultimately be borne by consumers.
When this was first presented as an element of a single electricity market, I do not think the people of County Meath were aware of the contribution they were going to make. That is why the controversy arose.
People perceive underground transmission as working very well in historic and residential areas. Has EirGrid whetted the appetite for underground transmission by allowing people to see that it is much nicer than using poles? As Deputy Colreavy noted, it affects the value of properties nearby. People see that as a positive benefit, and they contrast the legislative requirement for a pole with these miniature factories scattered across the country.
As a former director of Bord Fáilte, I am aware of our efforts to promote Ireland as a green destination. This is particularly important because we are never going to attract visitors on the basis of our climate alone. Pylons and other electricity infrastructure constitute a major detracting factor and we, as a committee, will have to decide whether it is worth paying X% more for electricity to retain Ireland's green environment.
Mr. Fintan Slye:
The question of the impact of infrastructure on tourism is one of which we are acutely aware. We are working with Fáilte Ireland and Tourism Ireland to ensure we take these issues into account and mitigate them to the fullest extent possible, be it through undergrounding small or large sections of the line, better design of the pylons and so on. All of these are part of the tool box of options we look at to ensure, in coming up with a solution, that it balances all of the relevant factors and represents the right answer for Ireland Inc. The Senator rightly points out that the impact on tourism is one of those issues that absolutely must be taken into account.
I thank the delegates for their presentation. Mr. Slye indicated that expenditure on the project had reduced from an estimated €4.2 billion to €3.2 billion and, ultimately, to €2.7 billion. He talked about how the international panel had found in 2012 that undergrounding would cost three times as much as proceeding with the overground option. He suggested that he disagreed with that estimate, but one would assume an international panel would have some expertise in the matter. Will he clarify that point?
As I understand it, there is an intention to provide an interconnector between France and Ireland in due course. Looking to the long term, does it make sense to go around the country installing pylons and wind turbines when the probability is that in ten to 15 years time we will not be able to produce electricity more cheaply than the price at which it can be imported? In England, for example, they have kicked the wind turbines to touch and given a contract to the French to build five plants. In Mr. Slye's opinion, is the most likely scenario one in which it will be cheaper to import electricity than to produce it here?
Mr. Slye referred to working with IDA Ireland in the regions. That must be a recent development because everything that organisation has been doing has been focused on Dublin. It is not in the past three, four or ten years that consideration has been given to the regions.
Investment in motorway infrastructure in recent years has left us with a good network. By and large, that development managed to avoid, as much as possible, impacting on home owners. In deciding the location of pylons and other infrastructure why does EirGrid not seem to give the same consideration to avoiding building near people's houses? Why has it not worked in conjunction with the National Roads Authority in devising these projects rather than imposing a blight on the landscape in all parts of Ireland?
Deputy Michael Colreavy and Senator Sean D. Barrett spoke about the impact of this infrastructure on property prices. Has EirGrid undertaken any analysis of the extent to which the homes of people living 50 m or 100 m from these unsightly pylons will be devalued? The delegates have indicated that they took account of the impact on tourism and referred to community grants, which seems to be the buzz phrase. Community grants are being talked about like the pill the doctor will give to the patient to make him or her better. However, ordinary people, many of whom are in negative equity, are understandably concerned about the impact of pylons and turbines on the valuation of their property. We have seen how much the technology has advanced in the past six months throughout Europe and the world in dealing with cryptosporidium and other types of water pollution. I am sure that if similar progress is made in the case of electricity infrastructure, networking could become a very efficient and cost-effective way to go.
Has Mr. Slye looked at the cost base analysis given that more people are working, be it digging or whatever, and more tax is returned to the Exchequer and it may be a better option for everyone's sake? I ask Mr. Slye to address particularly the issue of England and France. Are we going down a road where there will be wires and pylons all over the country?
Mr. Fintan Slye:
I might start with the questions on the interconnector. As the committee will be aware, in 2012 we completed the east-west interconnector, a 500 MW link to Wales from Ireland, which has been in commercial operation since then. We are investigating further interconnection. That is part of our overall remit and mandate. The one that is most advanced that we are looking at is an interconnector to France. We are working with our colleagues the French transmission system operator, RTE, on evaluating that. We have done an initial analysis of it to see whether it stacks up from an economic perspective and it does. It appears to work and we have commissioned a seabed survey which will take place over two years. The first half took place last summer, the second half will be completed this summer. That largely informs the cost of building it. Once one knows what is on the seabed one can better estimate the cost. This will lead us to a detailed rigorous cost benefit analysis of that project in the first half of next year with a decision as to whether, at that point, to bring it to the next stage of development in association with the French.
In terms of interconnectors and their effect on electricity prices and electricity flows I will look first at the east-west interconnector. About nine months after it was in operation at the end of the first calendar year, we conducted a retrospective analysis as to effect on electricity prices. We found that the existence of the interconnector and the ability to move power over it had reduced wholesale electricity prices by 9% from what they would have been had the interconnector not been in place. That was due largely to power moving from the UK into Ireland. The typical profile of the interconnector for a large part of the time since it has come into operation is that cheaper power comes from the UK into Ireland; its cheaper base load power being nuclear gas traded over the interconnector and into Ireland brings down wholesale prices. When it is very windy in Ireland the flow tends to go the other way as we have a surplus and sell that excess energy to the UK.
In looking at an interconnector with France, obviously for it to go ahead it would have to be a 50:50 joint venture with the French. It needs to work both overall but also for each country individually. It needs to make sense for Irish consumers to make an investment of that level in an interconnector. In looking at the cost benefit analysis of the interconnector we have to ensure it stacks up overall. The French will look at it from a French perspective and we will look at it from an Irish perspective. In broad terms the way it pans out, similar to the UK interconnector to an extent, is that at times of relatively low renewable generation across Ireland and the UK, French based nuclear power which is largely nuclear would flow into Ireland and have the effect of depressing electricity prices at a wholesale level. At times when it was relatively windy, the flow of large amounts of renewable resources on these islands reverses and is sold into the UK. Obviously, that is a very broad generalisation of what would happen on those interconnectors over time. The French electricity system is quite different from that of the UK electricity system hence the diversity in the two sources works quite well.
The French electricity system is dominated by nuclear power, which has a relatively low incremental cost of production. It is also relatively inflexible, so that works in terms of interconnecting and getting cheap electricity.
In business one has to project for the future. In ten to 15 years' time, does Mr. Slye think that when England builds five new plants they will be bothered about taking electricity from us? They have kicked wind energy to touch. If we have an interconnector with France, does Mr. Slye think that we can compete? We have had meetings here to talk about energy security throughout Europe. In a business frame of mind, does Mr. Slye think it would be produced in England and France a lot cheaper than here, given the investment we have to put in?
Mr. Fintan Slye:
It is an excellent question. If one looks ten, 20 or 25 years down the road, for example, if there was an interconnector with France in addition to one to the UK, one would see benefits accruing to both. We would produce it more cheaply and efficiently than in either of those two other jurisdictions, with large amount of wind and renewable resources here.
Mr. Fintan Slye:
All year round, for approximately 30% of the time, one would see power moving from Ireland to those other jurisdictions. We would have very low incremental cross-generation, potentially at zero, if it is coming from renewable resources. At that level we can compete against nuclear power stations. As the Deputy rightly points out, in the UK they have moved away from onshore to offshore wind energy. Offshore wind energy is significantly more expensive, so onshore wind can compete with that quite effectively. Therefore, some 30% of the time, I think one would see-----
What I am trying to nail down is that, in Mr. Slye's projection for ten or 15 years' time, 70% of the time we will buy in electricity cheaper than producing it. Is there a cost-effectiveness in what we spend now for that 30%? Is it going to pay us?
Mr. Fintan Slye:
Could I just aggregate the question slightly? The case for interconnection will have to stand on its own. It is a single investment in a single piece of infrastructure and it is a big pricetag.
The other part of the Deputy's question concerns energy policy. With the 40% target, for example, and that level of renewable generation, what will be the impact upon electricity prices in, say, ten years' time? A detailed analysis of that has been done. It is currently being finalised by the Department of Communications, Energy and Natural Resources. We provided some modelling expertise for it. The SEAI, ourselves and one other party were involved. They are finalising that study and, as I understand it, they hope to publish it soon. That specifically examines the question the Deputy is getting at in terms of going to the 2020 target of 40% renewables in electricity and the net costs and benefits, versus a system that, for example, keeps today's levels, which are about 20%. That study gets to the heart of the Deputy's question.
It has not yet been published, although I understand it is being finalised.
Interconnectors tend to increase the value of the renewable resource because at times of high wind and low demand when it cannot be used, they provide a market into which one can sell and obtain some value. As I indicated, an interconnector represents a very large investment in a single piece of infrastructure and the business case for it would have to stack up and be rigorously analysed on both sides. This means that the French and Irish sides would have to come together to undertake the analysis. That may be an issue that is slightly separate from the question the Deputy asked.
Mr. Fintan Slye:
The Deputy asked a question about the total cost of the Grid25 programme, which fell from €4 billion in 2008 to €3.2 billion in 2011 and is now in a range of between €2.7 billion and €3.9 billion. This reduction reflects the decrease in the underlying projections for electricity demand until 2025 and beyond and the potential to use advanced technology to maximise the use of additional infrastructure. The range in cost figures is due to the fact that for many of the projects we have not determined what will be the choice of technology. Therefore, if the more expensive technology is chosen, the figure will move towards the upper end of the range.
The Deputy also asked a question about the international expert panel and how the multiple of three in terms of costs related to EirGrid's higher projected costs for the North-South interconnector. The reason the panel and EirGrid arrived at different costs was that two methodologies were used to produce the figures. I do not disagree with the findings of the international panel of experts which benchmarked broadly similar projects and arrived at an estimate of three times the cost of overgrounding. It used, if one likes, a top-down approach, whereas EirGrid took a bottom-up approach involving an engineering analysis and the identification of a route. We costed the route and all of the individual components and produced a higher figure for overall costs. The difference in the two figures can be attributed to the methodology and approaches employed. I hope that explains the difference.
The Deputy also asked about working with the National Roads Authority. When EirGrid is examining the options for routing overhead transmission lines or underground cables, we consider how best to route them. For example, the underground cable for the east-west interconnector, a 500 MW interconnector, uses existing roads from Rush beach to Woodlands station. Typically, it is better to use second class roads than motorways because they do not need to be closed and the works can be accommodated.
For the North-South interconnector, the best option we identified was to use agricultural land owing to a much larger land use requirement for the project. We work with the National Roads Authority and examine options alongside motorways. However, the routing principles for transport infrastructure along motorways tend to be different from those for transmission lines. We consider all of these issues. The key factor is that when one is examining routes for an overhead transmission line, one is trying to mitigate the visual impact and the proximity to houses and community facilities. In Ireland there is a large number of one-off houses and we try to keep as far away from them as possible when routing a transmission line. While EirGrid works with local authorities and the NRA on routing, placement alongside roads is not always a viable option.
I apologise for not being in attendance for the presentation. Mr. Slye has confirmed that the interconnector to Wales is a 500 MW cable and obviously there are no pylons on that route. What is its length in kilometres or miles? What is the length of the interconnector to France? Is it a 500 MW cable? Is it correct that the interconnector to Northern Ireland is a 400 MW line? It is not. I am trying to compare the North-South interconnector with the east-west interconnector and with the interconnector to France. It all depends on the distance and the length of the cable to Wales. I suggest that the North-South interconnector should be a maximum length of 400 kV underground cable and overhead where it is less conspicuous and then back underground. I presume that the interconnector between Ireland and Wales would be 60 or 70 miles, from Rush beach to Wales. Could the North-South interconnector combine both overhead and underground lines for a similar distance?
EirGrid is a semi-State company. Along with other Deputies here I represent the Cavan-Monaghan constituency. The communities in Cavan-Monaghan are very concerned that they have not been treated in the same fair and equitable manner as people in Grid Link and Grid West. There is a fundamental difference in the way they have been treated in terms of consultation compared with the people in the west and south. We are coming to the commemoration of the 1916 centenary. There is a concept of cherishing all the children of the nation equally but we do not feel that we have been treated equally with people in other parts of the country. I asked the landowners of County Monaghan to sign a petition to the Minister, Deputy Alex White before the committee meeting of 31 March. Some 95% of the landowners affected are opposed to overgrounding. They want a specific underground route option and they want to be consulted on it. Some 350 people attended a meeting last night in Aughnamullen community centre and they are all totally opposed to the overgrounding of this project. There is huge community disquiet about the approach taken by EirGrid.
On the point made by Mr. Slye about regional gain, there is absolutely no regional gain in Cavan or Monaghan from this project because the company has not included any converter stations. The previous application included converter stations at Kingscourt but there are no converter stations planned as part of this application so therefore there can be no community gain nor regional gain in the area affected by the project.
The company has pointed out here for the first time that it is technically feasible to put this project underground for the length of the line and that is welcome. The company has said that it will take €500 million more to put it underground than the cost for overground. A number of questions were asked at last night's meeting about the fact that the valuation of property has not been included in the cost of the overground option when compared with the underground option. There is also the question of the effect on tourism in the region if the lines are overground. A number of technical questions were asked and I have some technical questions which I wish the company to address. Mr. Slye said that the project was needed in its current form because of bottlenecks between transfer of energy between the North and South. It is my understanding that the daily flow of electricity between the North and South is between 150 MW and 170 MW and that based on the company's own figures and safety requirements, the current interconnector can take a capacity of 400 MW per day but only 150 MW to 170 MW is being used at a maximum at tea time while the average is around 100 MW per day. There are three power stations in Northern Ireland producing up to 2,300 MW of energy per day.
The average daily consumption of energy in Northern Ireland is 1,200 MW to 1,300 MW. They can produce 2,300 MW per day. The maximum daily use ever of energy in Northern Ireland was 1,700 MW in December 2010 during the very bad weather.
They say the maximum flow they can take in is 400 MW per day but the daily average, according to the website, is between 150 MW and 170 MW. I question the need for this project at a 400 kV line. In EirGrid’s technical guide to the project there is no technical analysis whatsoever of a 220 kV underground option which would cost much less than a 400 kV underground option. It could produce an additional 500 MW per day with a 220 kV line underground. That would be technically possible and that option should be before the people. It has not been put before them and that needs to be done before the project goes ahead. I have communicated this message to the Taoiseach, the Minister for Communications, Energy and Natural Resources and the Minister for Arts, Heritage and the Gaeltacht, Deputy Heather Humphreys and the Minister for Agriculture, Food and the Marine. Delegates from the Irish Farmers Association attended the meeting last night and they were unequivocal in saying they believe a 220 kV line is sufficient, given that the three power stations in Northern Ireland have not been closed down and there is new private gas generation contracted to produce an extra 250 MW through traditional sources.
Mr. Slye mentioned the Tobin report. The independent expert panel chaired by Mrs. Justice McGuinness did not have access to the Tobin report before it made its analysis. There is a complete variance between what the Tobin report and PB Power say about the best options. The Tobin report said the preferred route options were underground along roads. PB Power said that was the least best option.
An Bord Pleanála was appointed the competent authority for the project of common interest, PCI, element. Under European law there should have been a Chinese wall placed between the people evaluating pre-project the draft proposal and An Bord Pleanála, which would consider the proposal at an oral hearing. An Bord Pleanála put the draft application on its website. So much for Chinese walls and complying with European legislation.
We were told at the meeting last night that since EirGrid consulted with An Bord Pleanála it has changed the pylon locations again.
The people of Meath are not happy, as EirGrid has heard. I went to Gibbstown yesterday. There is deep anger there about putting pylons on historic ground such as the site of the Tailteann Games.
What is the distance pylons have to be from the habitat of the whooper swan, which is of international importance, and of the golden plover, which is very important in the Blackwater Valley? How far does a pylon have to be from a proposed wind turbine? I have been told that there is an agreement between EirGrid and Element Power that there must be a specific distance between the two. What does the distance have to be between a person’s home and a pylon? I understand it has to be 400 m between a whooper swan’s habitat and a pylon and that between a pylon and an Element wind turbine it has to be 800 m, and 50 m from a person’s home. I regard the whooper swan habitat as extremely important and I do not want EirGrid to destroy it but can the witnesses explain the logic of setting a 400 m distance from a whooper swan’s home but only 50 m from a person’s home in the same area of County Meath?
It does not make sense to people. I will come back with more questions.
I thank the Chairman for this opportunity. The draft review indicated that an underground line would be feasible and Mr. Slye confirmed that here today when he stated it would be technically possible engineering wise. He also indicated there are other advantages that have to be taken into account, not just the issue of cost. This is something we have argued with EirGrid over many years. There are other advantages, some of which can be quantified in euro and cent. It is about the people who are so dramatically impacted by what is proposed.
Mr. Slye stated that consumers should not be burdened, given there would be no enhancement of service by taking the underground approach. He cited the cost of converter stations, AC to DC, at either end and also stated that they cannot "pass on" to consumers. What cannot be passed on, and over what period of time? We are looking at a project with a suggested life expectancy of 40 years. Therefore, what are we talking about in terms of the per annum additionality or the two-monthly billing period most of us are subjected to from Electric Ireland? What additionality are we talking about and over what period of time? What is the maximum period this could apply to?
As somebody who is not impacted immediately, in terms of living in close proximity to the line, I believe the additional cost per consumer would be marginal over a period. I am quite willing to pay, because I know what my constituents and those in neighbouring counties, not only in this jurisdiction but North of the Border, would have to face. We must face up to this. Does Mr. Slye have the figures on that rather than just saying "we cannot pass it on to consumers", as if he was particularly concerned about consumers. I mean no disrespect, but we are all consumers, including the families and individuals who will be dramatically impacted if this presents in close proximity to their homes.
Mr. Slye's opening remark was that the interconnector is needed now and he stressed the word "now". I do not believe there is any likelihood this will happen any time soon. We must also recognise there are significantly reduced demand forecasts, right up to 2025 and beyond. What does he mean by "needed now" when those forecasts apply not only in regard to the economy in this State but across the island? The forecasts in terms of demand are significantly reduced from what would have been believed back before the current more difficult economic climate.
EirGrid has engaged with people on a range of issues, such as land valuation, which is a huge concern for land and homeowners. This is understandable. The issue of the environmental impact has also been raised and reference has been made to tourism. However, this is also about the people who live in the area concerned. Perhaps some of the subtext to the decision not to take another look at the North-South connector is because it does not belong to the traditional tourist destinations, such as the west or the south east. However, those of us who live in or visit the area are very concerned in terms of the visual impact for the potential market for the development of the north east.
I have a range of other concerns, including one everyone dismisses, namely, health. This is not just about being unwell. Health is about being well and having a sense of wellness.
I have heard of one instance of a young man, whose mother spoke to me last evening. They live in immediate proximity to a 36 kV line and they know the facts. This young man has special needs and is unable to leave the family home and use anything around the periphery of their smallholding because of the continuous crackling from the line. Even in damp weather conditions, there is also occasional flickering. There is a noise factor, even with a 38 kV line. This will be replaced and there is no consideration given to the fact that this young man has a very severe level of autism and all the complicating factors it entails in terms of the health and quality of life of that family. There has been no care whatever shown in any of the so-called consultations that have taken place.
Time is against me and there is a range of issues I would have liked to raise with the delegation. The Tobin Consulting Engineers report was mentioned earlier. Why was the information in that report not presented to the independent expert panel in the consideration of its extended brief? It was a minuscule responsibility in terms of taking on the North-South interconnector. It was a number of days after the publication of that report that the content was shown with respect to the width and depth of the channels to accommodate roadside undergrounding. The PB Power report indicated 20 m to 22 m working swathes but the reality from the Tobin report was that the width is 1.1 m and the depth is 1.35 m. That is absolutely achievable along the greatest lengths of the regional road infrastructure that serves the counties of Meath, Cavan, Monaghan, Armagh and Tyrone. It is absolutely achievable and there has never been any serious consideration, despite all that EirGrid and its voices have claimed, of the undergrounding approach with respect to the North-South interconnector. It has not happened and the PB Power report does not tick the box under any circumstances. There has been no consultation with the people on the ground on this real alternative. The figures on potential cost have decreased and this will continue. Some day, EirGrid will wake up and wonder what all the fuss was about and how it should have considered this approach all along.
I will be brief as I must attend another committee meeting. I welcome the chief executive's clear statement in response to my party colleague, Deputy Michael Moynihan, that it is feasible to underground the North-South interconnector project. I suggest that in advancing the project, EirGrid should consult the local community about undergrounding options.
Another issue that has not entered the debate much is that the project is for a relatively short distance interconnector, making it completely different from the western project and the example in the South and midlands. The technical analysis document states that Grid25 was predicated on forecasted electricity demand at a peak of 8,000 MW daily by 2025. The forecast is now over 5,000 MW daily, which is the same as the 2011 peak. Will the witnesses confirm which figures are correct in that respect?
I attended the public meeting referred to by Deputies Conlan and Ó Caoláin last night in Aghnamullen, County Monaghan. More than 400 decent, honourable local people attended that meeting to voice their concerns, anger and their absolute frustration with the inability of EirGrid to have a meaningful consultation to date. They gave a clear message that they will not be treated as second-class citizens.
Whereas there was a meaningful external panel assessment of the grid projects for the west, the south east and the midlands, the North-South interconnector was an add-on without a meaningful review being undertaken. It is welcome that two of the other projects were substantially changed in terms of how they would be completed. Why can it not be the same for the people of counties Monaghan, Cavan and Meath?
Deputy Michael Colreavy asked about the adverse impact of the interconnector on land values and the devaluation of property. It certainly beats Banagher to hear Mr. Fitzgerald refer to an international qualitative assessment. What about the man or woman who milks 40 or 50 cows a day and whose holding, if traversed by these pylons, would be decimated and no longer be in a position to carry on his or her existing farming practices? One does not need to have any international assessment to know that the real adverse impact of these pylons would be on these individuals, families and communities. We need to get real in the consultations with people and communities. When the project was first initiated in 2009, the cost of putting the lines underground was put at 20 times more than that of overgrounding. Today EirGrid has stated it will be a small multiple of the cost, if at all. The clear message has to go to EirGrid that the people of Cavan, Monaghan and Meath want the North-South interconnector project, if it is to proceed, to be put underground.
It has been a contentious, topical but necessary discussion for all Deputies and Senators from counties Cavan and Monaghan. While I may be from Dublin asking about an interconnector that does not affect my area, I am a Senator for all of Ireland. I have had questions on this matter e-mailed to me by constituents from right around the country.
Two years ago EirGrid stated it would be six times more expensive to put the North-South interconnector underground. However, in a review published several weeks ago it stated it would be only 1.57 times more expensive. That is a significant variation in the costs involved. A child could have the done mathematics better. Why is there such a significant variation in costs?
In the original plans all three lines were supposed to be 400 kV overhead lines on pylons. Now EirGrid claims 200 kV lines are needed for the Grid West project, with partial undergrounding. Why was this change introduced? Why can this not be done in the case of the North-South interconnector?
I apologise, but I was at another meeting. Perhaps the answers might be emailed to me.
Was the consultation process the same for the North-South interconnector project as for the other grid projects? I would have believed all consultations were the same. If they were different, why was that the case? The Tobin report indicated a trench 1.1 m wide and 1.35 m in depth was required, whereas the McGuinness panel recommended a 20 m to 22 m working swathe. Again, why is there another significant variation? Why was this information not made available at the time? One would have believed this was common European information.
Will EirGrid consider reviewing the distance between pylons and people’s homes? Does it agree or disagree that homes and farms could be devalued? Some people may be put out of business, but others could gain because of the better interconnection we all hope to have.
Mr. Slye has a hard job of work to do. It is hard to satisfy everybody. People will examine the question of community gain in this project. I have received e-mails from people in Cavan and Monaghan stating that there is no community gain deriving from this project. The question of community gain also arises with the erection of wind turbines. One of the Deputies said there would be no converter stations and raised the issue of employment creation.
With regard to planning applications, the reference to this project devaluing homes is a huge issue, not only in terms of a property but in terms of people's health. I do not know if Mr. Slye can answer that wide-ranging question. I have asked six or seven questions and if he cannot answer them now or if he answered them previously, I would appreciate if he would reply to them by e-mail. I can put them in writing to him, if he would like and I would appreciate a brief answer to them followed up by a longer response in an e-mail.
There is a long list of questions for Mr. Slye and I am mindful we have to vacate this room at 2 p.m. He might briefly respond to them and if there is additional information on them, he might supply it to the clerk to the committee and we will pass around.
Mr. Fintan Slye:
Obviously, if we do not get to respond to any question or miss out on responding to some, we would be happy to follow up on them. I will deal with the questions in the order in which they were asked. The first question related to the east-west interconnector and the Ireland-France interconnector and the specific characteristics of those and how they compare with the North-South interconnector. The east-west interconnector is approximately 260 km end to end and it is a 500 MW link. Its power transfer capacity is 500 MW. Does Mr. John Fitzgerald know the length of the Ireland-France interconnector?
Mr. Fintan Slye:
The east-west interconnector is approximately 260 km and it has a 500 MW power capacity link. The North-South interconnector is approximately 140 km end to end and the requirement is a 1,500 MW power transfer capacity. That power capacity is more than twice that of the Ireland-France interconnector and three times that of the east-west interconnector.
Mr. Fintan Slye:
It is because they are very different projects with very different requirements. Between Ireland and Northern Ireland we have a single energy market. The single electricity market was established in 2007 and that is a single energy market for the island of Ireland. Underpinning that, however, are two distinct and different transmission grids. They have developed separately and differently and they have a single link today between them. We need to put a second link beside them so that those two grids can operate seamlessly together as part of the single electricity market we have on this island.
Interconnection to either France or the United Kingdom is a different proposition. It is not about having a single market that operates seamlessly between the two jurisdictions. It is about the trade of power between the two jurisdictions. It is a different proposition.
I was asked about the ability to mix overhead and underground for the North-South project.
Mr. Fintan Slye:
To clarify, and this point arose in several other questions in terms of the multiple, the figure of 1.57 is not the multiple for the North-South project.
That 1.57 figure originates from a comparison within the draft strategy we did for the Grid Link project comparing a 400 kV overhead line that runs from Cork to Waterford to Kildare at 1,500 MVA with a 700 MW high-voltage direct current, HVDC, connection between Cork and Kildare.
The international commission appointed by the Government, which reported in 2012 and discussed its findings in this committee, indicated a multiple of three for the cost of undergrounding the North-South interconnector. That was its estimate based on a top-down review of similar projects around the world. We did a bottom-up analysis in the Parsons Brinckerhoff, PB, report which indicated that it would cost an additional €500 million to put it underground. That answers the multiples question.
We have looked at mixing overhead and underground lines for the North-South project, and some of the additional information we supplied to An Bord Pleanála was on whether short stretches up to 10 km of the North-South overhead line could be put underground to mitigate specific local concerns. That information has been submitted to An Bord Pleanála as part of our discussions with it on the draft application in terms of additional information it sought on that project. We are acutely conscious that that is an option we examined.
I apologise to Deputy Conlan if I do not get to answer all his questions. If there are any questions to which we do not have the answers, we will send him those, but in the interests of saving time I will try to get through as many of them as quickly as possible. The first question was on the treatment of the analysis done on North-South versus the analysis done on Grid West and Grid Link and the perception of communities in Meath, Cavan and Monaghan that they were not afforded the same level of analysis as was done on those other projects. I believe that undergrounding has been examined in great detail to a similar level as now proposed for Grid West and Grid Link. To that end-----
Mr. Fintan Slye:
The underground routes were published and made available but there was not a specific consultation on an underground route. The Deputy is right. However, a specific underground route was examined and published. Members who have looked at the back of the PB Power report will see an Ordnance Survey map that sets out the route corridor.
The next question was on regional gain on which I will make two points. First, the existence of a high-voltage AC transmission line such as this one affords opportunities to interconnect into it, even without the station being there initially, and a great example of that is Apple in Athenry. It is not connecting in to an existing station. We are building a new transmission station for it, tapping in to an existing high-voltage transmission line. The existence of that corridor, therefore, provides access to high quality, high-voltage electricity that will allow for developments into the future. We see that with Apple, and we are seeing it more frequently with other companies that are looking to develop and tap in to an existing line.
I would point out also that we have in place a proposal on community gain that includes both a community fund for the wider community and also a proximity allowance payable to householders in recognition of the fact that transmission infrastructure has a greater impact on those immediately adjacent to it in terms of their visual amenity.
The Deputy raised the issue of bottlenecks in the current flow of the existing line, power capacity in Northern Ireland and projections for security supply in Northern Ireland. If I might, I will group those three issues in my answer. Every year we review the security of supply on the entire island.
We look at it in Northern Ireland, the Republic of Ireland and on the island as a whole. It is updated every year based on best projections for economic growth and electricity demand growth resulting from that. The document, called the Generation Capacity Statement, is published every year, and it is approved by the regulators North and South before it is published. That document clearly articulates the security supply issue that is emerging in Northern Ireland in 2020 as security of supply margins dip below what is acceptable. That is due in part to the impending closure of some of the power stations in Northern Ireland.
For those who are not aware, two of the power stations in Northern Ireland use coal and there are European directives around the continued use of those power stations. A number of power stations closures are imminent in Northern Ireland and they are set out in our report. However, the security supply margin dips below what is acceptable from the end of this decade onwards.
Mr. Fintan Slye:
The issue is that because it is a single circuit that can be lost with a single event, it is not possible to put that much capacity on it. A single event would be able to take down the systems in Northern Ireland and the Republic if we did that. The Deputy correctly articulated broadly the size of the system in Northern Ireland. It has an average load of 1,400 MW or 1,500 MW. If all of that was flowing, in the Deputy's example, on that single set of towers between North and South and someone drove a truck into one of the towers, the power system in Northern Ireland would be immediately collapsed.
Mr. Fintan Slye:
In order to use the capacity that is there to transfer power, either South to North or North to South, we need to have two circuits so that the loss of one will not damage the integrity and reliability of the system. It is called the N minus 1, N-1, principle. The transmission system and the power grids around the world are operated so that no one thing, no matter what it is, should take down or damage supply to the grid. It is a fairly basic principle. The situations outlined by the Deputy in terms of Coolkeeragh, Moyle and all of those issues have been analysed in the generation adequacy report. Under all of the reasonable scenarios around those issues, the security supply margin in Northern Ireland becomes inadequate at the end of the decade and needs to be addressed. Security supply is incredibly important to business, industry and the economy. Hence, reliance on the single line between North and South is limited by the fact that it is a single line and any one thing could potentially take it out of commission.
Mr. Fintan Slye:
An underground line has to be a high-voltage, direct current, HVDC, line to go the length of North-South which is 140 km. With a 220 kV line, we would still be achieving only a very small proportion of the length that could go underground. Bringing it back from 400 kV to 220 kV would maybe get-----
I apologise for interrupting Mr. Slye but I ask him to address Senator Byrne, Deputy Ó Caoláin and Senator Keane for the minute or so we have remaining. He can follow up with a detailed response, which the clerk can circulate.
Mr. John Fitzgerald:
That might have been driven. I cannot comment on that specific matter. We will come back to the Senator if there is more detail on that.
Regarding wind turbines, the interaction is more aeronautical in terms of the impact it has on transmission lines. We have been engaging with that industry to discuss having 2.5 to 3.5 times the radius or wing length. So we are taking about not siting them closer than that.
Mr. John Fitzgerald:
No, I did not say that. I was just getting along to the most important part which is that we endeavour to stay as far away as possible from houses. As was said earlier, owing to the ribbon development if a line is drawn through the country, 100 km in any particular direction one will get closer than that. We endeavour to stay as far away as we can. If we are-----
Mr. Fintan Slye:
Deputy Ó Caoláin asked whether the cost would be passed on to consumers. He asked why those costs would be passed on to consumers and the impact over the lifetime of the project. In the context of transmission development, at the end of the day consumers end up paying for the cost of the transmission network. It is broken down and differentiated depending on the consumer group, with industrial consumers tending to have a greater percentage of their bill relating to transmission charges than domestic customers.
In terms of the impact on people's bills, I am aware of one piece of analysis that was done. The energy regulator reported to this committee that if the transmission infrastructure development bill was to increase by €2 billion through the undergrounding of a series of the major projects, it would raise prices by 3% to 5% at domestic level. This is on the record of this committee and I may not have it 100% right. The one point I want to stress is that industrial customers pay significantly more as a percentage of their bills in transmission charges. For some of those industrial customers, who are among the largest employers in the country, the additional energy bill in a year could exceed €1 million. Therefore, 3% to 5% in some contexts might not seem like a large amount of money, but we need to consider the effect on all users of the system and how that affects Ireland's competitiveness.
Obviously I am not going to get an answer to any of the other questions I also asked. I would like to have the detailed replies, including the detailed reply to that particular matter, furnished to me as quickly as possible.
On behalf of the committee, I thank all the witnesses and visitors for attending today. Obviously, the story is going to run a lot further than this. I thank the witnesses for their answers and the members for their engagement. The committee is to meet the County Monaghan Anti-Pylon Committee next Tuesday. As there is no other business, the joint committee is adjourned until 9.30 a.m. tomorrow, Wednesday 22 April.