Wednesday, 12 October 2005
Question 89: To ask the Minister for Communications, Marine and Natural Resources the future plans in respect of the provision and location of electricity or gas interconnectors; and if he will make a statement on the matter. [28032/05]
At a meeting in November 2004, Mr. Barry Gardiner MP, the then Northern Ireland Minister for Enterprise, Trade and Investment and I endorsed plans put forward by the Commission for Energy Regulation, CER, and the Northern Ireland Authority for Energy Regulation for the construction of a second north-south electricity interconnector.
Planning for the construction of the interconnector is continuing. The transmission system operators are currently working on phase one of the project, including technical issues and route selection. This phase is likely to be completed by early 2007. Phase two, the construction phase, will then commence and it is estimated that the interconnector will be operational by 2012.
The proposed interconnector will provide increased system security and reliability. It will be a positive step toward further developing competition and will facilitate the development of a fully functioning single electricity market.
The CER has appointed consultants to advise on the financial, technical, commercial and procurement aspects of the development of the east-west electricity interconnector. Phase one of the project, which is nearing completion, is examining procurement options, routing, capacity, ownership and operational parameters.
A consultation process involving all parties that have expressed an interest was undertaken. A decision on how best to take the project forward, whether on a regulated or a hybrid regulated, merchant basis, is the next step and determination will be informed by the advice of the CER.
The two natural gas interconnectors with the UK, IC1 and IC2, have been operational since 1995 and 2003 respectively. As part of the development of the gas network on an all-island basis, the South-North pipeline, due for completion in 2006, will carry gas to Belfast from the IC2 landfall at Gormanstown.
Will the Minister indicate the extent to which he can speed up the development of the proposed east-west interconnector? Such an interconnector will enable us to sell surplus electricity generated here on the European market as well as to obtain surplus electricity that may be generated in Britain. This is important with reference to the continuity of energy supply and the balance within the grid between electricity generated by air and by other means. The east-west interconnector will ensure that we maintain supply and can avail of best practice in both directions to support our economy.
I will do everything I possibly can to speed up the process but it is not entirely within our control. I am awaiting the report from CER which is investigating the matters I outlined earlier. Once that report is published, a decision has to be made on the ownership of the interconnector. More importantly, however, we must get agreement on both sides of the Irish Sea on the putting in place of the necessary infrastructure to enable the electricity to be transmitted. It would be desirable, as Deputy Durkan has argued, to have this project completed sooner rather than later and certainly I will do anything I can to speed up the process.
The planning process comes into play on this project, on both sides of the Irish Sea and there is a uncertainty regarding the length of time the planning aspects will take. As soon as I have the report and have made a decision on it, I will make it public and we will try to expedite the interconnector as quickly as possible after that.
Does the Department have a plan B if, in the event of an emergency, supplies from Scotland were unavailable? Is there a plan to keep the radiators heated and the lights on?
What is the long-term plan for the interconnectors? Does the Minister foresee the development of the market between these islands as a fundamental step forward with regard to energy supply and pricing on the island of Ireland?
For those who have been deeply involved with the Corrib gas field issue for the last three or four months, the critical necessity, in terms of security of supply, is to bring forward that gas in an agreed and consultative way. It should be done in a manner on which the local community in north Mayo, the companies and the Government are agreed. The issue was discussed in terms of what could go wrong but there is an onus on us to ensure security of supply through Connacht and into Ireland as soon as possible.
CER is the body with responsibility for security of supply and capacity issues. It works very closely with the transmission operators and the generators of electricity. There are back-up plans in place. There are extra generators available that are not currently in use and a system is in place that allows for a shut-down in particular areas. There is a contingency plan in the event of some systems failure.
There was a problem with the system at the end of August, which was sorted out relatively quickly. It caused some difficulty and the problem was with the interconnector and of a technical nature. The problem was overcome without major loss of supply for any length of time. That problem was technical but in general terms, there is a plan for back-up in the event of short-term breakdowns.
With regard to the Deputy's question about future markets and interconnectors, we hope to have a single electricity market in place on this island by mid-2007. This will be a stepping stone to a larger market on the islands of Britain and Ireland. The EU is very supportive of the development of electricity regions and we form one particular region. The more interconnections we have, the better, particularly in terms of security of supply and extra competition.
Despite what some people have argued, the Corrib gas field is extremely important to this country from a security of supply point of view. Deputy Broughan referred earlier to the UK market, the gas constraints there and statements that have been made in that regard. The problem of future constraints is simply a fact. I do not know if the gas from Corrib will be flowing ashore in time to meet some of the capacity constraints that the UK market will experience but the Corrib field is absolutely essential to this country.
It is not the case, as some people assert, that the Corrib gas will be of no benefit to this country at all. The gas is extremely important. It is an indigenous source of gas for ourselves and will ensure security of supply. It has been estimated that Corrib will reduce our gas imports by 50% or 60% in the first four or five years of transmission. Corrib is extremely important and I share Deputy Broughan's desire that the project goes ahead. I acknowledge the role he and other Members of the House have played in trying to advance it and hopefully the progress made in the last number of weeks will continue.
Given that in the future we will be dependent on gas for electricity generation and that gas will shortly come from Siberia which is at risk of interruption for a number of reasons, is the Minister considering long-term storage systems such as the pumping back of gas into the Seven Heads of Kinsale field as a storage location or the installation or development of an LNG facility to provide some sort of long distance security in view of the eventuality to which Deputy Broughan referred?
In regard to long-term grid structures in which we might invest, rather than the nuclear option, which is ruled out, should we consider a European grid of off-shore wind farms, connected up together, so that we would get over the variability factor in terms of the extent of such a grid from the North Sea to the Portuguese coast which would mean wind would always be blowing at a certain time? This project would be of great significance to Ireland given that we have a huge amount of wind resources which could tap in to such a futuristic grid.
I would be very supportive of the concept put forward by the Deputy for an alternative European energy grid. Very often when we have discussions in this country about energy and make comparisons with countries in Europe, we forget that most of the grid system in Europe is connected. Denmark has a fantastic record in regard to wind energy. It is connected into a European grid system whereby it can buy and sell. It probably imports as much electricity as it exports at various times. I would support such a connection. Any kind of connection from here into the European grid system should and would be of enormous benefit to the country. Anything that lessens our dependence on our own suppliers at present would be of huge benefit to us.
On the first part of the question, we are examining and trying to encourage alternatives so that we will not be dependent on gas from Siberia and other very unstable parts of the world. The indications are that a number of private sector companies may be interested in providing an LNG terminal in Ireland. It would cost approximately €500 million to put in place. Whether the State should go down that route or encourage the private sector to do so is something we could debate, but it is being considered. The other suggestion the Deputy made in regard to pumping back the gas into Kinsale or other areas around the coast is also being considered. Research in this regard is being carried out by the GSI and some private companies.
The problem is that if we need it in the short term, no one will be available to pump out the gas on a whim. It is not how decisions are made. I do not agree that we should not exploit that gas source. There may be a time in the future, long after all of us here are gone, when we will have sufficient supplies to be able to decide to let them remain under the earth, but we are not yet at that stage.