Mr. Fintan Slye:

I thank the committee for the opportunity to give an overview of our recently published grid development strategy, as well as provide the committee with more details of the proposed subsea electricity cable linking the Irish grid to the French system, that is, the Celtic interconnector. It was brought to my attention in advance of the meeting that today, 9 May, is Europe Day, and discussing a project potentially linking the Irish grid to mainland Europe is quite apt. I am joined today by Rosemary Steen, EirGrid's director of external affairs, and John Fitzgerald, EirGrid's director of grid development.

The grid strategy which we published recently, and which I hope members received a copy of in recent days, was first published in draft in 2015. That reviewed our grid strategy and responded to feedback from the public and public representatives over recent years. The strategy crystallises a number of core strategic pillars that our work is now based on. These were that there will be open engagement and inclusive consultation with local communities and stakeholders in our approach to network development; that all practical technology options will be considered for network development; and that the existing network will be optimised to minimise requirements for new infrastructure.

Following the publication in draft, there followed an extensive period of public consultation and regional forums to garner the opinions of communities and organisations from each corner of the country. The new strategy is very much part of our ongoing efforts to encourage more participation in our decision-making process. It also reflects an updated economic context, and our growing experience with new technologies. In addition to these external factors, we have also carefully considered the Government's energy White Paper, and the various economic strategy initiatives undertaken by the Government including the Action Plan for Jobs and the IDA's 2015-2019 strategy.

We are always cognisant that we must ensure that the electricity grid is available to fulfil the policy goals set by Government. To date we have been very successful in integrating renewables into the system. The Minister, on the radio on Friday, referenced the need to go further in terms of integrating renewables and we are working hard to deliver that policy objective. The strategy that we have set out is based on all available information to us at this moment, and is an informed view of Ireland's needs as an economy and a society in the coming years. However, we will continue to review it on a regular basis.

A central tenet of our new approach is continuous and ongoing assessment, discussion and debate on the needs for grid development. For this reason, we have been progressing a new initiative called "future energy scenarios". This brings together the best available data and expertise to ensure that this country's grid is best prepared for all our future electricity requirements. We have looked carefully at similar organisations abroad which have pioneered a scenario development and planning approach. On the back of that we have developed four possible scenarios which show how the energy system may evolve years from now and what this means for our economy and society. This piece of work has been out for consultation for a number of months and we look forward to finalising the scenarios in the next number of weeks. When finalised, we would welcome an opportunity to present these to the committee if that would be helpful and we would be happy to meet members individually if they wish.

Clearly one of the key challenges for EirGrid and the energy sector, along with most other sectors, is the vote of people of the UK in June last year to leave the European Union. This has introduced new considerations, new challenges and new opportunities for us all. At EirGrid, our case is unique as we operate the electricity grid in Ireland and Northern Ireland and also operate the all-island wholesale electricity market. We believe that this remains one of the key tangible benefits of peace and co-operation between North and South and our view is that this should be safeguarded. Despite the obvious uncertainty that Brexit presents to us all, there has been widespread recognition at official and political level in Brussels, London and here in Dublin that the energy sector on this island should not be negatively impacted by Brexit. We welcome that and I emphasise my belief that retaining the single electricity market will allow this island to drive innovation in the electricity sector, particularly in terms of delivering value for customers and moving to a more sustainable energy system in the years ahead. Retaining the single electricity market will ensure the costs of electricity are kept to a minimum for homes and businesses. Any move from the current system would likely only serve to drive up electricity prices both here and in Northern Ireland and negatively impact competitiveness and security of supply on the whole island. I think we can all concur that this would be a regressive step.

I will move on to the proposed Celtic interconnector, and we have a number of slides which will provide some details on the project. At the committee meeting in February, along with others from the energy sector, committee members were particularly interested in this project and we are delighted to be invited back to give more details. We have been looking at developing a link to France since 2009, notwithstanding that the recent decision on Brexit by the UK has increased the potential strategic benefits associated with the project. The Celtic interconnector is a proposed electrical link enabling two-way supply of electricity between Ireland and France. We have been working with Réseau de Transport d'Électricité, RTE, the national transmission system operator in France, since 2012 to jointly investigate the feasibility of the interconnector. It would be approximately 600 km in length and would use established technology for subsea long-distance transfer of power. It would be able to import and export 700 MW of electricity, enough power for 450,000 homes. The project would undergo full public consultation should it proceed.

Our studies to date have shown that it would considerably enhance our security of supply by providing an additional source of power and by diversifying our power sources. The interconnector would provide Ireland's only energy connection to an EU member state once the UK leaves the EU. In addition to the key security of supply issue, we believe this project, if completed, would put downward pressure on the cost of electricity.

This would occur due to us securing direct access to the larger continental electricity market. This will positively impact on the cost of electricity to Irish homes and improve competitiveness across the wider Irish economy. In addition to these benefits, the studies we have all undertaken to date have shown that the product would bring positive benefits to Ireland in our shared efforts to meet carbon reduction targets. While these have been shown in preliminary studies to date, we hope to be in a better position to quantify those throughout next year as the studies develop.

At EU level, there has been consistently strong support for the project. In addition, last July President Hollande and An Taoiseach witnessed the signing of a memorandum of understanding between ourselves and RTE to progress the project to the next stage of assessment. The European Union's policy is to establish an integrated European electricity system, and it has designated the Celtic interconnector what is known as a project of common interest. As a project of common interest, the interconnector will also qualify for financial support from the Connecting Europe Facility.

To date, the Celtic interconnector has received €3.9 million in EU funding for the project's feasibility phase and, more recently, another €4 million has been approved for ongoing work. Our studies, in conjunction with our French counterparts, have concluded that the interconnector is feasible and beneficial to Ireland and France. Our shared estimate for the cost of the project is that it will be of the order of €1 billion, depending on the cable demand and prices at the time. I would emphasise that this cost would be shared between ourselves and the French and, as previously acknowledged, we will also look to Europe for support as this is a key project in delivering on its goal of an energy union.

We are currently working hard on the details of this with RTE and our respective regulators. If we pass various milestones, we anticipate a decision to proceed with the procurement of the project towards the end of 2018. If this were achieved, we believe the project could be commissioned in or around 2025. This means that within nine years Ireland could have a direct connection with mainland European grid and start accruing the considerable benefits this would bring.

I thank the committee for the opportunity to present and give a very brief overview of the topics. I am happy to take any questions the Chairman or committee members may have.