Mr. Mark Foley:

It is great to have the opportunity to be here before the committee again. We were here last October so I will not repeat the message from then. I will try to focus on what has changed and what is very much current. I will also add to the list of the attendees. Our chief operations officer, Mr. Rodney Doyle, is also with us today.

I will start with security of supply because it is one of the big topical issues. I will first acknowledge the Government's policy statement on the security of electricity supply, published last November. If we are to deliver the energy transition it is very important that we do not jeopardise the security of the system in the process. We welcome the Government's position paper. We are very supportive of it.

I wish to clarify our role versus that of the regulator. EirGrid's job as the transmission system operator is to advise on what we think needs to be done in protecting the integrity of the system guaranteeing security of supply. The CRU is responsible for making the necessary decisions to ensure security of supply is maintained. That is very important, because sometimes there can be some confusion around the two roles. We advise and they decide.

The last time we were in front of the committee there was a lot of concern about the winter and the possibility of blackouts. I am very pleased to say that we navigated it really well. I compliment my team and all of the other actors involved. Gas plants came back and we had a lot of wind. We successfully and thankfully got through the winter. We are currently in the process of procuring some temporary emergency generation to see us through the next number of winters, under the direction of the CRU. This is important. It is our insurance policy to ensure that we are not at risk over the next number of years. We are busy about getting that commissioned, contracted and installed.

I remind the committee of EirGrid's position on gas and dispatchable gas generation. Gas is essential to see us through this transition. I cannot overemphasise this. We are all committed to achieving the Government's climate action target of 80% renewables but gas is our backstop. This is what ensures that we can deliver this transition and get out the other end, and hopefully with hydrogen replacing gas in due course in the next decade.

Based on EirGrid's analysis, we need some 2,000 MW of dispatchable gas generation. We need it preferably by the end of 2026. This will do two things. It will backstop the system and ensure that we have security of supply, and it will help us to see off the old fossil-intensive plants, be they at Moneypoint, Tarbert or elsewhere, in the system. We should not apologise for it. It is necessary and it will get us to our goal. We are very focused on that and we have made very strong representations to the regulator in that regard.

Recent auctions for new capacity have not been as successful as we would have liked. Let us be honest about that. We have made recommendations to the regulators about how we believe we can improve the probability of better outcomes from those auctions in the months and years ahead.

I will conclude on the issue of security of supply by saying that none of us predicted four weeks ago that we would be in the horrible geopolitical crisis we are in and what has happened in Ukraine. This is making the picture more complex. It is leading to very significant risk and challenges ahead around the security of our electricity system. I can assure the committee that working with the Department, the regulator and all other State actors, we are very much on the case in trying to look at what our contingencies are if, for example, there are interruptions to gas supply.

We launched the Shaping Our Electricity Future programme at COP26 in Glasgow in November last. Shaping Our Electricity Future is the seminal piece of work that gives us the pathway to 2030. It sets out the end game and sets out the pathway for how we are going to get there. While it is predicated on 70% renewables, because that was our original plan, we are actively working on the Government's recent ask of a target of 80%. We will publish the incremental pathway for that later in the year.

We welcome the new CRU direction on data centres that came out just before Christmas. It has given us a framework within which we can work with the digital economy to ensure that there can be further investment in that sector and that we can deliver solutions to allow the centres to connect.

We really welcome the enactment of the Maritime Area Planning Act 2021 in December. It provides a very firm legislative context for the delivery and development of offshore wind energy in the Irish Sea, which is a key component of delivering the 80% target by 2030.

Our own transmission network development programme. which is ultimately what joins up all of the dots, incorporates more than 140 projects and includes new transmission lines, upgrades to existing lines, new substations and new technologies. I stress to the committee that we are listening to what communities are saying. Three recent decisions we made about the north Connacht line, the Kildare-Meath line and the convertor station for the Celtic interconnector all involve solutions that we believe are acceptable from a community perspective. We are walking the talk in that regard.

The 700 MW Celtic interconnector project between Ireland and France is on target and we are hopeful of a positive planning consent in the very near future. That is critical to security of supply and is also critical to ensuring we can achieve the 80% renewable target.

Moving on to supporting technologies and system services, we are in the final stages of trials on the power system and hope to be able to sign off on 75% renewables on an instantaneous basis very soon. We have been operating close to that level for the past couple of months and we will sign off and announce same within a matter of weeks. That is a critical milestone on the journey to 80% renewables. It is important to note a couple of other critical recommendations we are making in respect of technologies. A balanced portfolio of different types of technology is essential and we have recommended 1,000 MW of long-duration storage, which is very similar to what our colleagues have said here today. Storage is critical to making the system work by 2030. We have put forward proposals around market changes to support the investibility of new technologies. It is really important that the regulator comes up with proposals that incentivise the deployment of technology on the system to allow it to achieve our goals. We have made recommendations on new system services products and have made very strong recommendations around the redesign of system services and the capacity markets to ensure we get the right technology at the right time in order to deliver the 2030 objective.

The committee asked us for our view on demand response. At the end of 2021, there was 563 MW of demand-side unit capacity installed on the system, which equates to 364 MW on a de-rated basis. The availability of these units was, on average, only 160 MW and we are not happy with that. The market signals, therefore, need to be adjusted to incentivise the performance and ensure we get the service that we need on the system. By 2026, there will need to be at least 1,000 MW of industrial and commercial demand-side reduction capability in place. Unlocking that necessary demand-side potential requires the evolution of the electricity market by the single electricity market, SEM, committee, as outlined in EirGrid's Shaping our Electricity Future roadmap. I remind the committee of the key role the committee plays in ensuring the regulatory environment and the incentives deliver the right solutions for the power system to enable us to deliver on our objectives for 2030. As Ms Marie Donnelly, chair of the Climate Change Advisory Council said, the greenest MW is the one we do not consume. In that context, we must maintain a national focus on energy conservation right across the whole ecosystem.

We must all remain focused on the objective of decarbonising the power system as a key pillar of the Government’s climate action plan. Nothing has changed around the imperatives of that mission. The situation in Ukraine further illustrates the need to double down and deliver. Shaping Our Electricity Future provides a clear pathway for Ireland’s decarbonisation ambition in the electricity sector and EirGrid has the capacity and capability and is determined to deliver that plan. We have identified short-term measures to protect security of supply and these are being expedited following regulatory direction and with Government support. The delivery of the appropriate dispatchable gas generation plant, battery technologies and the full range of necessary system services is required to be delivered by the regulatory authorities through a market design proposition that creates investor confidence in the near to medium term. EirGrid will provide what advice and support that it can but the decisions rest with the regulatory authorities.

Finally, additional short- or medium-term measures may very well be required in the context of the tragic and criminal events in Ukraine. We are working with all relevant State agencies to ensure, as best we can, that we put in place contingencies to deal with the possible outcomes of that geopolitical crisis.

I thank the Chairman and members for their attention. I was rather fast in my delivery of our opening statement but I wanted to leave plenty of time for questions.