Mr. Fintan Slye:

Deputy Eamon Ryan asked about offshore wind energy projects. We are seeing, as he rightly said, some quite remarkable results from auctions in various European countries in the provision of power from such projects. In the past six to nine months numbers have come in much more slowly than would have been expected only 12 to 18 months ago. There are two things happening in this area. Part of it is due to the fact that people are betting on a technology evolution with bigger and bigger turbine sizes. The most recent in Germany involves turbine sizes of 13 to 15 MW, which are huge. Some have other parts included such that the actual transmission connection is provided and the developer does not have to do so. In some the bank has fully consented and will not have to take the development risk. Notwithstanding this, offshore wind power generation is happening more and more in these countries and the auction system seems to have worked for them.

How do we see the sector developing in Ireland? To the extent that offshore wind energy project develop, there is much interest in developing them on the shallow bank that runs right along the eastern coast of Ireland. Various developers have looked at different sections of it over time. Depending on where they would connect to the system, it could be quite beneficial as most of the demand on the electricity system is on the east coast, as distinct from the west coast.

As for our interest in developing interconnectors, or even going a step further with grids on the Irish Sea, we started off in 2009 when the east-west interconnector was well under way. We saw an opportunity to go again to the United Kingdom, but that would have been a third interconnector to the United Kingdom, or to France. The French case at the time presented more economic benefits for consumers. Momentum has built behind it, as we are more firm about the benefits it could deliver and have progressed in our relationship with Réseau de Transport d'Électricité, RTE. At the same time, several developers came on the scene looking to develop interconnectors between Ireland and the United Kingdom. To some extent, the development space was being dealt with by these developers. At one time, there were three separate proposals to build additional connectors on top of the existing two between Ireland and the United Kingdom. Only one of them remains a viable project. We are also talking to our European colleagues about how we can connect up disparate sets of offshore wind farms to a grid. TenneT is developing the concept of an island, about which we are talking to it. We are fortunate that many of the sites on the east coast are close enough to have an AC connection to the grid without the need to have large converter stations. We have ended up where we are with a French interconnector as distinct from one to the United Kingdom because, at the time, it presented more benefits for consumers and the other space was occupied by other developers, one of which is still there. Who should own them is a policy question, more than being one for us.

The Deputy’s second question was on Brexit and specifically the east-west electricity trade between the single electricity market, SEM, and the GB market. I would like to differentiate between the negotiations as that word has a political context in the Article 50 space. EirGrid and National Grid in the United Kingdom are very close. We have two interconnectors which join our systems and regularly interact. As we are changing the market here, we have extensive discussions with the National Grid on how the two markets will couple under the new arrangement. With the integrated-single electricity market, I-SEM, and the market changes we are making here, we are in the process of engaging in detailed discussions with National Grid on how they will link up and how that trade will happen. Obviously, there are conversations happening to ensure, to the maximum extent possible, that it will be robust to deal with whatever the outcome may be of the Brexit negotiations in a member state or EU-sense. We continue to work as closely as we can with National Grid, as two transmission system operators, TSOs, in two jurisdictions to ensure the trade in electricity between them will be as seamless as possible to benefit consumers as much as possible and robust to meet whatever the outcome is of the Brexit negotiations. There are, however, no negotiations per sein the context of Article 50.

The Deputy’s third question was about the changing nature of demand forecasts. We will get back with specific answers on terawatt hours in 2016. Annually, we update our demand forecasts for the next ten years. Only last week we published our new generation capacity statement with our forecast for demand to 2026. We review, update and publish it on an annual basis. The projections remain within the bounds of what we foresaw with this version of the grid development strategy.

Within tomorrow's energy scenarios which look further to 2040, obviously growth in demand is one of the key variables. It ranges from growth in demand of 26% up to 60% across the different scenarios. There is a significant range in the assumed growth in demand figures. The other part is that there are assumptions where the growth in demand happens. It could manifest itself at transmission level or in a proliferation of generation at residential and domestic level. In our consumer action scenario we actually see the level of demand drop on the transmission system, while the gross level of demand in the economy increases because it is served by small micro residential generation systems at a domestic level.

The Deputy's point on the importance of demand forecast within the range is well made. We have covered it in the scenarios.

The Deputy referred to data centres. Data centres are very significant in terms of demand growth and in our energy scenarios about 75% of the demand growth we see is driven by the assumption of the build-out of data centres. It is the key driver. We see increasing levels of energy efficiency mitigate some of the growth that happens as economic growth happens. Data centres are the outlier in that and we see them contributing 75% of the demand growth across the different scenarios. We have looked at that. I apologise for not having to hand the number the Deputy wanted. We will get it for him.

Deputy Stanley's first question was on renewables. I spoke a little bit about offshore wind. We are seeing a set of auction results around Europe which would lead us to believe it is becoming a very competitive technology. There is a need, when we look at the auction results, to make sure we are comparing apples with apples. Some of them contain provisions that the developer is provided with the transmission connection, which can be quite expensive, or with a fully consented site. Notwithstanding that, there is a resurgent interest in it in Europe and it is winning in some of those competitive auctions. It will always be more expensive than on-shore wind for obvious reasons but the changing technology of much bigger turbines is coming. The Deputy asked how the grid is prepared to accept some of it from off-shore technologies. Off-shore wind is only one off-shore technology but it is probably the only one that is commercial. The other, such as tidal and wave energy are much further away in terms of being commercially viable. The answer to the question about how prepared the grid is depends on where the connection to the grid is. If it was to develop down the east coast where there are some good sea areas for developing off-shore, we are potentially connecting into relatively strong points on the grid and also closer to where the demand is. Depending on where it is, it might be quite beneficial for the network.

The Deputy's second point on renewables was on micro-generation. The Deputy makes the point that in some other European countries there is significantly more of it than here and that is true. In places such as Germany there has been an explosion in roof-top solar energy. In the south east of England there has also been a huge amount of distributed solar energy installed. It has also come on in Spain. In those countries such micro-generation has primarily come from roof-top solar on commercial buildings or houses driven largely by very generous subsidy regimes which in some cases the policy makers have had to pull back from. There is significantly more of it in some European countries than there is here. As we look out to 2030 and 2040 through our energy scenarios, we see the potential for it to become more a part of the mix. The core part of our consumer action scenario is concerned with consumers becoming more engaged with their energy future or energy system and deploying those technologies at a local, community or household level. We will examine that scenario to see what it means for the transmission system, security of supply and distribution network. The scenarios enable us to work through the implications for a range of things, not least policy targets, if that is what the future looks like.

The Deputy had a specific question about the replacement of coal. Moneypoint is the only coal burning station. The decision about what to do with Moneypoint rests with the ESB. In three of our four scenarios we have assumed that by 2030 coal will be replaced. In one of them, we have not. By virtue of the fact there is one in which coal remains, we will be able to see the with-coal and without-coal effect when we look at the implications of those scenarios going forward. In so far as it affects the rest of the energy system and the rest of the network, we have sought to take it into account. The specifics of any investment decision to change the use of Moneypoint would be for the ESB.

The Deputy's second question was on the North-South interconnector. We would love to be able to talk about the North-South interconnector. We have been at this committee and discussed the North-South interconnector and other projects before but it is before the High Court. There are three judicial reviews under way and there is a hearing tomorrow in the High Court on it. I am constrained in what I can say. On the ALEGrO project in Germany, which the Deputy mentioned, my understanding is the applicability of it or not would come within the scope of the independent review the Minister launched today or yesterday to update the previous review on technologies and the international experience. I expect the international review to look at the ALEGrO project and others around Europe to ascertain if there are any lessons that can be learned or applicability to the situation in Ireland.

I am happy to come back and discuss the North-South interconnector at length with the committee once the judicial review proceedings are dispensed with.