Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. I am sure he knows the way this works. Gas Networks Ireland is a commercial State-sponsored body and is regulated by the Commission for Regulation of Utilities, CRU. The CRU has developed a network connections policy, under which industrial users, towns or groups of towns within a region can make an application to be considered for a connection. The criterion the regulator sets is that the net present value of the revenues over a 25-year period must exceed the net present value of the costs of the connection. I gather, from what I am told within the Department, that the last time the Tipperary region referred to by the Deputy applied was more than ten years ago and, at that stage, Thurles did not qualify for a connection. Since then, the system has evolved in that groups of towns can apply, so if there are connections with Lisheen that might add additional payload, those can be included.

Gas Networks Ireland would need a proposal to come forward with various payloads and the need for energy and gas usage from industrial users and from towns. Clearly, it cannot assume that just by providing gas, everyone will connect, given there is a connection charge and also the cost of adjusting one's own heating system to a gas system. It has to conduct this study. As I said, the area in question has not made an application in ten years. If the businesses that are developing in Lisheen have a gas requirement, that can be added as part of a submission, which would be evaluated under the connections policy the CRU has enunciated. Gas Networks Ireland would then apply that.

Based on what the Deputy outlined, I do not know which industrial users are in the area. Gas Networks Ireland does not provide speculative extension of the line without having an indication that the demand is there, which is natural, given it is a commercial user. There has to be the establishment of demand and there would have to be projects coming on stream and approved, whether by Enterprise Ireland, the IDA or Teagasc. That is the system.

My Department is examining whether there are other dimensions, such as environmental dimensions, that could be a top-up to simply looking at the pure net present value. I understand a report will come to me shortly with an evaluation of that. That report will consider issues such as the carbon savings that might accrue and whether the net present value criteria are taking those into account. However, the overall approach is as I have outlined. Whatever the local promoters of the various initiatives are suggesting, whether it be biogas or otherwise, those will have to be developed to a point where they are close to approval as viable projects before Gas Networks Ireland could be in a position to supply its system. I am trying to be as helpful as possible. Of course, applications to the climate action fund or the disruptive technologies innovation fund can be of a more innovative type. Where there are innovative initiatives coming forward, those could apply to the climate action fund, where they would be looked on based on their value in respect of carbon impact.

See this speech in context