Mr. Mike Quinn:

I am the chief executive of Ervia. I am joined by Brendan Murphy, commercial director at Ervia, and Denis O'Sullivan, head of commercial at Gas Networks Ireland. I appreciate the opportunity to brief the committee on the work under way by Gas Networks Ireland to reduce the carbon concentration of gas supply in Ireland and to help meet challenging 2020 emissions reduction targets. I would like to outline to members the role that natural gas, renewable gas and Gas Networks Ireland can play in attaining those targets and in underpinning Ireland's energy security as we transition to a low-carbon economy.

In the longer term, Gas Networks Ireland believes that Ireland's annual emissions, currently 61 million tonnes per annum, could be reduced by up to 17.5 million tonnes by further utilising the gas network. Gas Networks Ireland is currently assessing or implementing many of the technologies to make this happen.

Natural gas is of strategic importance to Ireland, representing 30% of our country's primary energy mix. Some 688,000 homes and businesses in 20 counties throughout Ireland depend on it every day. Of particular importance is the demand for natural gas from foreign direct investment companies seeking to locate or expand in Ireland.

In starting to transition from natural gas to renewable gas, in 2018 Gas Networks Ireland will introduce renewable gas onto the Irish gas network for the first time. Our first renewable gas-injection site is under construction in Cush, County Kildare. It will receive gas from the anaerobic digestion of agricultural and food wastes and will have an initial capacity of 90 GWh per annum. Over the next five years we plan to construct six additional renewable gas-injection facilities with a total combined annual capacity of 1,450 GWh. To put it into perspective, this is enough energy to heat 145,000 homes with a 100% carbon-neutral fuel. By 2030 we are targeting to have 20% of total gas demand met by renewable gas, a figure supported by the SEAI report. This 20% of gas demand equates to 11,000 GWh - or sufficient renewable gas to meet the needs of every home currently using natural gas along with 50% of fuel requirements of the entire truck and bus fleet in Ireland.

Renewable gas also has the advantage of helping Ireland to address the emissions from our expanding agriculture sector. Using agricultural waste will not only create a new energy source, but will also allow us to achieve our potential as a food producer while mitigating agricultural emissions. Where renewable gas is burned in existing gas-fired power stations it will produce renewable electricity, but with minimal additional infrastructure required. Running just two of the existing gas-fired power stations on renewable gas would increase Ireland's renewable electricity by an additional 20%.

In terms of natural gas in the power generation sector, Ireland has made considerable progress in the development of renewable energy, predominantly electricity. However, this has only been possible by relying on secure, flexible and efficient natural gas electricity generators to partner intermittent renewable technologies, such as wind. Its vital role in guaranteeing security of our electricity supply is without question, with 52% of our electricity currently produced from natural gas on an annual basis. While considerable progress has been made in decarbonising electricity, an ambitious policy is required to ensure it meets its decarbonisation targets by 2050. An energy policy based on replacing heavy carbon emitters such as coal and peat with cleaner natural gas, combined with greater renewable energy use, makes sense.

Ireland will need to reduce emissions by 80% to 95% by 2050 to align with our Paris agreement commitments and European Union commitments. Gas Networks Ireland is currently assessing carbon capture and storage, CCS, for gas-fired power generation in Ireland, which is the only technology that can reduce power generation emissions at scale, while providing Ireland with the levels of inertia and system services required. Ireland could also achieve negative emissions in this sector by utilising our renewable gas resource with CCS, which is known as bioenergy carbon capture and storage, BECCS.

I now come to natural gas in the heat sector.

Of the 1.7 million occupied houses in Ireland, approximately 700,000 are heated by oil. Unlike gas, oil-fired homes currently have no pathway to become zero-carbon homes. Out of these homes, 300,000 are located in urban areas which already have natural gas and some 100,000 of them are actually located within 20 m of the existing gas network.