Ms Aoife MacEvilly:

I am grateful for the opportunity to discuss these important topics. I am the chairperson of the CRU and I am joined by my fellow commissioners: Dr. Paul McGowan and Mr. Jim Gannon. The CRU is Ireland’s independent water and energy regulator. Our mission is to protect the public interest in water, energy and energy safety. A core element of our vision is ensuring a secure, low-carbon future.

We have circulated to the committee the recently published CRU information paper, which outlines security-of-supply challenges identified in the latest generation capacity statement 2021, along with the programme of work that the commission is undertaking to address these challenges.

The core element of the programme is the procurement of 2,000 MW of new enduring, flexible gas-fired generation that will facilitate the integration of further renewables and support the transition. We are also taking temporary and contingency measures in the interim. These include delivering 300 MW of temporary emergency generation, enhanced demand-side response and the retention for a short period of existing generators which were otherwise expected to retire.

These measures have been developed with EirGrid, our transmission system operator, and will be delivered with EirGrid, the Department of Environment, Climate and Communications and other key stakeholders. The measures outlined will be delivered through either competitive markets or through competitive procurement to achieve cost-effective delivery.

The CRU is fully committed to Ireland’s low-carbon transition, represented by our 2030 targets and our recently adopted Climate Action and Low Carbon Development (Amendment) Act. While we would clearly prefer not to retain some of the higher-emitting generators, we consider this necessary to ensure security of supply. Priority dispatch for renewable generation and higher carbon prices should ensure that these generators will only run when absolutely needed. Their use will also be reduced by increasing renewable capacity on the system and the delivery of the DS3 project which will increase the level of renewables that can be accommodated instantaneously from 70% to 75% and more.

Further CRU work that is under way to support the secure transition and deliver our 2030 targets includes delivering the regulatory frameworks to support the new interconnectors, Greenlink and Celtic; supporting the renewable electricity support scheme, RESS, auctions, including offshore RESS and developing a new framework for offshore grid development; developing the new competitive framework for system services to support best-in-class delivery of 95% instantaneous penetration of renewables; building on the suite of smart services, enabled by smart meters, which allow customers to participate in energy markets, while saving on their bills, including the framework for the clean export guarantee for renewable self-generators; and ensuring our electricity and gas network companies support security of supply and decarbonisation.

Regarding gas security, as Ireland progresses with an electricity system of high renewables, backed up by flexible gas-fired generation, along with the electrification of heating and transport, the security of natural gas supply is of increasing strategic national importance. Gas, and in the future decarbonised gases, will form part of the decarbonisation agenda in decades to come.

The recent closure of the Kinsale gas storage facility and the ongoing decline of Corrib gas production will leave Ireland dependent on a single supply source, via our interconnectors with the UK, for 90% of our gas supplies by 2030. This means that we will not meet the N-1 security standard. Ireland would not have the capacity to satisfy our total gas demand in the event of disruption to the single largest gas infrastructure during a day of high demand. The diversification of gas supply sources, through new types of gas as well as new supply routes, would, therefore, significantly enhance the security of supply of Ireland’s energy sector as a whole, as well as delivering cross-sectoral benefits.

On the basis that there is a ban on new indigenous exploration authorisations and in the absence of viable options for further gas interconnection, we consider it prudent that the Department of Environment, Climate and Communications review of energy security should include an examination of the future role of LNG. We look forward to the outcome of this review.

Electricity demand growth from this data centres is unlike anything Ireland has seen in the past 100 years. At present, this demand is connecting to the grid more quickly and easily than it has proven possible to deliver the supporting transmission and generation infrastructure. As independent regulator, the CRU has, therefore, consulted on a draft direction on new data centre connection policy, which seeks to mitigate some of the security-of-supply risk associated with the growth of data centre demand. We are still deliberating and we will make our decision in October. Our aim is to ensure that data centres are part of the solution to the challenge they present.