Mr. David Kelly:

I thank the Cathaoirleach and committee members for inviting us here today to outline Gas Network Ireland's position on the development of biomethane in Ireland. I am director of customer and business development. I am joined today by my colleagues, Mr. Brian Mullins, director of strategy and regulation, and Ms Karen Doyle, head of business development.

Gas Networks Ireland owns and operates Ireland’s national gas network. The network is a €2.7 billion, State-owned, vital source of energy for Ireland, transporting energy solutions to 725,000 customers across 22 counties, providing for 34% of Ireland’s overall energy needs and generating 50% of Ireland's electricity. Our licence to operate does not allow us to produce gas, so we are here as the State's network operator to share our views on how the renewable gas industry can develop.

Ireland currently imports almost 75% of its gas from the UK, via our interconnectors with Scotland, with the remaining 25% being accounted for by indigenous supplies from the Corrib gasfield in County Mayo. This dependency on imported natural gas is expected to rise to 90% by 2030 as the Corrib gasfield depletes. It is vital that Ireland diversifies its energy supplies, and developing a biomethane industry can introduce an indigenous, sustainable and renewable source of energy. Biomethane is a renewable gas derived from organic sources such as landfill, food waste and agricultural waste. In less than seven years, with the right structures and policies having been put in place, Ireland can achieve the Government target of producing 5.7 TWh, as set out in the climate action plan. This is approximately 10% of the country’s current gas demand. Gas Networks Ireland is confident that this is not only an achievable ambition, but potentially even a conservative one.

Today, the national gas network transports 99% natural gas and just under 1% biomethane via our injection facility in County Kildare. There is no impact for customers when natural gas is replaced with biomethane in our network. It is completely interchangeable, requiring no investment from the end user. We are also progressing a central gas injection facility in Mitchelstown, County Cork. When operating at full capacity, it will have the potential to inject up to 700 GWh of renewable gas into the gas network. This represents 1.2% of total gas demand and will reduce emissions by approximately 130,000 tonnes of CO2 per annum. We are also progressing several direct connection inquiries from biomethane producers, which will further increase the volume of biomethane in our national network.

We believe Ireland’s gas network can be a key enabler of, and help to accelerate, the development of this new national biomethane economy, and, importantly for Irish farmers, it can also help to reduce agricultural emissions. This is not something we are doing in isolation, as across Europe, in countries such as Denmark, this approach has been a remarkable success story over recent years. We believe there is a significant opportunity for the agricultural and energy sectors to join forces and create a thriving biomethane economy in Ireland by 2030.

There are several direct benefits for the agricultural sector in Ireland. For rural Ireland, this industry could provide a new revenue stream as farm waste can become a source of income. Achieving the climate action plan ambition of providing 5.7 TWh and replacing natural gas with biomethane in the national gas network would result in a carbon abatement of 1.1 million tonnes of CO2. These emissions savings could support the achievement of sectoral emissions targets. An important byproduct of biomethane production is digestate, which can replace imported fertiliser, protect our watercourses by reducing nitrates and diminish Ireland’s exposure to international fluctuations in price and supply.

There are also broader benefits in respect of climate action and security of supply for Ireland. Biomethane provides Ireland with an opportunity to improve energy independence and security of supply. A biomethane production industry could replace the declining Corrib gasfield, so that Ireland would not be completely reliant on a single source of gas from the UK in the future. Biomethane is a proven source of energy to rapidly decarbonise hard-to-abate sectors. We are already seeing demand from industrial, high-heat sectors connected to the network that are seeking a consistent source of green energy to fuel their operations. An indigenous biomethane industry will replace the purchase of natural gas on international markets and allow the money spent to remain in Ireland. Equally, 5.7 TWh of biomethane could displace approximately €750 million worth of natural gas, and this money would be injected into local economies right across the country.

As gas experts in Ireland, we are actively engaging with large energy users, suppliers and our counterparts in Europe to assess the market potential here. The industry feedback we have received directly from biomethane producers shows that approximately 20% of natural gas could be replaced on the national network, which is double the current target. To deliver these benefits, we need a comprehensive biomethane strategy that provides clarity on appropriately balanced feedstocks, maximises waste to energy options, ensures community engagement and introduces appropriate market structures to ensure the industry grows in a sustainable manner. Ireland has already been successful in supporting the development of renewable energy and we need to leverage these lessons to support the development of a biomethane industry.

Ireland has a real opportunity to develop a biomethane industry at scale which will benefit our agricultural economy in numerous ways, aid the decarbonisation of our economy and allow for the development of a key indigenous energy resource in the coming years. We look forward to questions from the members, and we can provide follow-on material, if required.