Mr. Jim Gannon:

I will start with some of the long-term issues the Deputy outlined and then move to the medium-term ones. Then I will cover the emergency temporary generation. If he will bear with me for a few minutes, I will get to that crux of his question.

It was known for some time that as we transition from an older, more fossil-intensive fleet, comprising units including oil, coal and peat, to a decarbonised world which will involve, in the medium term, significant proportions of wind, backed up by natural gas, we would be faced with a period of investment and a period of increased risk. This is as large parts of our existing portfolio are retired and we replace them with, as noted in our introductory statement, more flexible, predominantly gas, fossil fired plant, which will enable that transition. It is something of the scale we have now, but also which will be used significantly less and when needed. This capacity is procured on an all-island basis through the single electricity market. That is in partnership with the Utility Regulator of Northern Ireland. It relies on industry taking the appropriate market signal in an auction and also on delivering the pipeline of generators when it has won an auction and signed a contract to deliver.

In the medium term, we have outlined in our statement that we will be looking at a combination of new generation, storage and, critically, the three interconnectors to provide us with the generation we require. In the longer term, we envisage technologies such as green hydrogen, carbon capture and storage and greater and different types of storage and interconnection coming into play, alongside a decarbonisation of that gas which allows us to move beyond natural gas to different molecules and truly meet the net zero challenge. In the medium to long term, the capacity remuneration mechanism, CRM, in the single electricity market is how we will deliver that new capacity.

We are left with this short-term challenge or risk, however. Underpinning all the provision of interconnection, capacity and storage is demand side response. The critical points in time where we see scarcity are in the winter, when we can have periods of low wind, low sunshine and it peaks between 4 p.m. and 7 p.m. Where we need responses is quite specific. If we can send the signals, both positive and negative, to industry and to consumers to take advantage of these times and to turn down and be rewarded for same, we will need to do that in combination with providing the supply side. Coming into the past winter, winter 2020-21, we had our seasonal update with EirGrid. We have a winter outlook and a summer outlook. That involves EirGrid, ourselves and the Department of Environment, Climate and Communications. In this we identify short-term challenges. These included an uptick and increase in demand from a range of sectors, which would have included data centres and the economy recovering or starting to recover post Covid. Separately, we noticed a reduction in the reliability of the existing fleet. Some of those pieces of the fleet that are of medium to older age are being asked to turn up and turn down more frequently as they balance the wind. They are being asked to do things they were not designed for, so the reliability of some of the existing fleet has decreased a little.

These were on our radar and we noted that they were more short-term challenges that might last over the course of this winter, next winter and the winter afterwards as we move from the older generation fleet to the new fleet. It was in November, December, January and particularly February and March that we had two outages in Whitegate and Huntstown, which were noted in the press. They were identified initially at that critical mid-point of winter, but then extended to long-term outages covering this winter. These were of the order of 800 MW, but they were 800 MW of the more dependable generation facilities we have to date. That is more than 10% of the thermal fleet we have, so that was significant in terms of increasing risk coming into this winter. At that point, where that crystallised a significant challenge and, indeed, an emergency for this winter coming, we began engaging further with EirGrid and the Department, not just on the medium-term challenge but this winter challenge. This is where, along with a number of measures, including working with the demand side, we began trying to secure or directing EirGrid to secure the emergency generation for the coming winter.

Emergency generation is one of a number of measures that will contribute to reducing risk this winter. We are hopeful, but not certain, that the units in Whitegate and Huntstown will return in sufficient time to cover all of this winter. We are also conscious that winter changes from year to year. We could have a winter of high winds or, as we experienced in January and February of this year, we could have a period of eight to ten days of very low winds. Again, the risk can increase or decrease in an unpredictable way from winter to winter, and the emergency generation is one measure to decrease some of that risk.

On the medium-term and long-term challenge, there are efforts to secure the new type of capacity we will need during our transition in a cost-effective way.

In the short term, there are a couple of building risks that were tightening that supply-demand balance but the trigger would have been around the realisation of this risk in Huntstown and Whitegate, as the Deputy has noted himself, and trying to ensure that should there be any delay in those units coming back that we would have sufficient capacity to supply ourselves. That additional capacity is around mitigation of that risk.