Eamon Ryan (Dublin South, Green Party)

I hope my reply will answer some of the questions raised by Deputy Enright. This is an issue of importance, not just locally but nationally also. We are close all the time to not having enough power, so as well as the jobs issue, there is the question of security of supply from electricity generation. It is a crucial matter.

The operation and maintenance of the ESB's power stations is a matter for the company and not one in which I have a direct function. However, following notification from the ESB earlier this month that its West Offaly and Lough Ree peat power plants at Shannonbridge and Lanesboro were experiencing outages on safety grounds, my predecessor, Deputy Noel Dempsey, requested that the Department's chief energy technical adviser undertake an assessment of the situation. I have received this report which was carried out with the full co-operation of the ESB.

Given the legal contractual position between the ESB and the main contractor, the report is purely factual and does not make any determination as to the reasons for the plant problems. I have asked the chief energy technical adviser to continue to liaise with the ESB on developments.

I am advised by the ESB that unexpectedly high levels of corrosion have been found in the 150 MW peat-burning West Offaly Power station at Shannonbridge, County Offaly, and its 100 MW sister plant, Lough Ree Power at Lanesboro.

The ESB went to open competitive tender to build these plants to a high specification that met the most up-to-date environmental requirements. The international engineering company, Foster Wheeler, won the competitive bidding process. Similar technology was offered by other tenders and the ESB's assessments included visits to peat-burning reference plants in Finland, which were operating satisfactorily.

Foster Wheeler built and commissioned Lough Ree Power and West Offaly Power, and the plants were operational from December 2004 and June 2005, respectively. The burning of peat allowed greater diversity of fuels to be used in electricity generation as oil and gas prices reached record levels. It also ensured greater security of supply. In order to achieve lower emissions, an internationally proven technology, a circulating fluidised bed boiler, was employed in the two peat stations. Simply put, this process facilitated burning the peat fuel at lower temperatures.

With both plants still under warranty, in late 2005 the ESB discovered the development of corrosion in the high temperature section of the boiler in West Offaly Power. This was confirmed in early 2006. A similar corrosion was discovered in Lough Ree Power in spring 2006. These developments required outages to allow remedial repair work to take place and both plants returned to service.

The ESB also commenced a programme of work with Foster Wheeler to determine the root cause of the corrosion and to identify a long-term technical solution. This work is ongoing.

During a scheduled outage at Lough Ree Power in May 2007, extensive corrosion was found in the flue gas cleaning equipment of the plant. Arising from this discovery, an assessment was carried out in West Offaly Power and similar levels of corrosion were discovered in that plant.

On the basis of these findings, on 1 June 2007, the ESB was advised by Foster Wheeler to take West Offaly Power out of service at once for safety reasons. I understand the ESB and Foster Wheeler are working together to resolve the technical problem. Experts have been engaged to study the processes at both plants with a view to finding a long-term solution. The ESB is also working with my Department in investigating these issues.

The company assures me it wishes to ensure these temporary outages last no longer than absolutely necessary but the safety imperative makes it impossible to avoid loss of production while it seeks to solve the problem. I am also kept informed of any resultant implications for security of supply in regard to electricity. In accordance with their statutory responsibilities, the power generation situation is continually monitored by the Commission for Energy Regulation, CER, and the independent transmission system operator, EirGrid, and is carefully managed from EirGrid's national control centre.

I am advised by CER and EirGrid that in addition to the outages at Lough Ree Power and West Offaly Power, and as a normal part of the management regime, the summer maintenance season is currently under way with a number of generators taking outages for maintenance work. While I understand these outages can lead to concern at times for the adequacy of the generation margin, I am assured the situation is under control and being carefully managed by EirGrid to ensure that capacity meets demand at all times.

The most recent advice available to me from the CER and EirGrid is that there is sufficient generating capacity, both installed and planned, on the system to meet the predicted demand for the period ahead. Notwithstanding this assessment, the expected balance between demand and supply is being kept under consistent collective review by my Department in consultation with the CER and EirGrid.

Should there be any indication that the situation regarding generation adequacy may change, the CER is charged with the responsibility of taking action to ensure supplies of electricity are protected. I am also aware the outages at West Offaly and Lough Ree have implications for Bord na Móna, which has a commercial agreement with ESB to supply fuel to the West Offaly Power plant. Under the agreement, the company normally supplies 25,000 tonnes of milled peat per week to West Offaly Power. The closure of the power station has meant a loss of revenue to Bord na Móna of approximately €700,000 per week.

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