John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I thank the Minister for attending the House to discuss this important issue and the Ceann Comhairle for selecting it for discussion. In the short time available to me, I propose to make a couple of points.

There has been much media coverage in the past two weeks of a report that was commissioned by the ESB and submitted as part of the consultation process on the Government's Green Paper on Energy. Submissions on the Green Paper were taken over a number of weeks in the summer. The report deals in detail with the proposed upgrade of the national grid and various measures announced in 2008 which came to be collectively known as Grid 25.

The report goes into detail, outlining the fact that the expected increase in demand for electricity that was included in the Grid 25 project in 2008 will not materialise as was projected, for obvious reasons. Furthermore, the ESB stated that the Grid West and Grid Link projects should be reviewed so that the research reflects the latest evidence. There is a process in place in regard to the Grid Link project which stretches from Kildare to Great Island and east Cork.

In light of the fact that the increased demand which was projected in 2008 for electricity use in the country will not now materialise, and the comments of the ESB, which is the largest electricity supplier in the country, that this is the case, is it not now time that the Grid Link project and perhaps Grid West would be parked?

Martin Heydon (Kildare South, Fine Gael)
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In 2006, as the Minister is well aware, EirGrid was formed. It forecast at that time that there would be an increase in energy demand in Ireland up to 2024 of 60%. When the former Minister, Eamonn Ryan, launched EirGrid's Grid 25 project in 2008 the forecast was reduced to 45%, but still suggested a 45% rise in demand for energy prices up to 2024.

This year in its submission to the Green Paper and review on energy policy, the ESB, using Eirgrid's latest demand projections, suggested only a 5% increase between now and 2024. In its submission ESB confirmed that the capital cost of the infrastructure build in any year will be recovered from the electricity bills for up to 50 years. Infrastructure must be planned well in advance so that it will be in place when it is needed. However, the ESB stated it must be delivered no sooner than needed or it will act as a drag on electricity prices.

There are two key stakeholders. The first comprises communities throughout the country. The Minister is aware of their concern. They are in the root corridor of the proposed Grid Link and Grid West project and have grave concerns about pylons and high voltage tension lines being in their areas. The other is those who will pay electricity bills, business and residential customers alike, for the next 50 years. We have to be absolutely sure that any suggestion that the proposed level of demand is not needed is thoroughly investigated.

Our economic landscape has changed utterly since 2008. Having bourne that in mind, what assurances have the Minister's Department received from EirGrid as to the necessity of this project? What communication has the Department had with the ESB regarding Grid 25 plans? Prior to 2006 and the formation of EirGrid, it was the job of the ESB to decide whether to build more pylons. It now says we probably do not need Grid Link or more lines.

The ESB submission highlights that as Grid Link and Grid West was planned nearly seven years ago there is a need to review them in order that research reflects the latest evidence. That request from the national energy company cannot be ignored.

Alex White (Dublin South, Labour)
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I thank the Deputies for raising this issue. The report referred to in the question from the Deputies is the ESB submission on the energy Green Paper. It is one of over 1,240 submissions received earlier this year during the period of public consultation on the Green Paper. That submission, like all those received is a useful contribution to the process of developing a definitive energy policy. That process is continuing, with further stakeholder engagement planned over the coming months, including a number of events at various regional locations before the end of the year.

We had a very useful seminar this week in the Chester Beatty Library. I encourage Deputies, as I have said before, to participate in the process regarding the preparation of the White Paper which will be the definitive energy policy statement for this country for the next generation. We will develop this in the next six months. The process is not being rushed. Deputies will have an opportunity to contribute and I encourage those on both sides of the House to do so.

Deputy Heydon is correct. My Department is focused on ensuring that the assumptions on which the final policy paper will be written are tested and accurate, so as to produce a dynamic and responsive evidence-based framework. This work will facilitate us in steering an appropriate course as we seek to address sustainability, security and competitiveness challenges and opportunities. The text of the policy paper will be progressed during the first half of 2015, with a view to publication of the final policy paper by September 2015.

The ESB and EirGrid are fully in agreement on the need for critical energy transmission and distribution infrastructure. Both companies also acknowledge the need for Irish electricity networks to address citizen and community concerns, to take account of changes in the level of electricity demand due to changing economic circumstances and to accommodate evolving European energy policy. The ESB and EirGrid work closely together on development and reinforcement of the transmission and distribution systems in order to ensure security of supply and to meet customer and stakeholder needs.

As a matter of course, EirGrid regularly reviews its strategies and projects. Grid 25 was originally developed in 2008 when the macro-economic climate was very different. In line with Eirgrid's review policy, Grid 25 was updated in 2011, when the scale and scope was reduced to reflect the change in circumstances. As a result, the cost was revised downwards from €4 billion to €3.2 billion.

Grid 25 was developed to improve security of supply and to provide a high quality of electricity supply to all areas, including the west, and to enable the delivery of electricity generated from wind farms to the major urban areas. In May this year, EirGrid initiated a further update of Grid 25 to take into account the most up-to-date information available, including technical innovation and future economic and demand projections. Following discussions with my Department, this update also includes an independent review to verify the strategies of Grid 25 on the basis of changing circumstances since 2008. EirGrid expects this review to be completed and published early in 2015.

John Paul Phelan (Carlow-Kilkenny, Fine Gael)
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I welcome the Minister's answer, in particular the fact that the review is to be published in early 2015. A lot has happened since 2008. There is an interesting paragraph in the Minister's response where he speaks of the ESB and Eirgrid working closely together, as one would assume they would. The point of raising this issue is that the ESB, in its submission, clearly pointed out that the demand increases projected in 2008 will not materialise.

I hope and fully expect that Eirgrid's review, to be published early next year, would take into account that demand will not be what was expected in 2008. Therefore, in particular for Grid Link and Grid West, demand does not exist at present. People in those communities who are directly affected have a legitimate expectation that their views will be heard. Those views are being echoed by the ESB in its submission and we hope that will be reflected in the final report next year.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Minister for his comprehensive reply. If we have a White Paper in early 2015 that says demand is not what was estimated and we cannot have a lag on electricity costs by building infrastructure which is not needed, the mechanisms have to be in place for EirGrid to halt its plans for Grid Link and Grid West. That seems to be the ESB's current position.

In regard to wind energy, 182 wind farms have been constructed around the country and 188 are at the planning and development stage. In its report the ESB estimated that we need another 1,000 MW and at present we have 2,200 MW. The CEO of the Irish Wind Energy Association disagrees and said we need to almost double our output. One could say, "They would say that, wouldn't they?" Many commentators say the wind lobby has been very effective in selling wind to us at a policy level. I hope the wind energy element, as well as the power requirement element, will be taken on board by the Department in the White Paper and when it is published it will have an impact on our wind policy energy on proposed wind farms around the country, Grid 25 and, in particular, Grid Link.

Alex White (Dublin South, Labour)
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I reiterate that the ESB submission to which the Deputies referred will be considered, together with all of the other submissions received as part of the consultation process, and will contribute to the develop of a new energy policy for Ireland.

It is important to understand ESB and EirGrid are fully in agreement on the need for critical energy infrastructure, including both transmission and distribution infrastructure.

It is important to recall also the projections for demand changed and the extent to which they did change between 2008 and 2011 and this work has been taken into account. One of the Deputies used the phrase "demand at present." Demand is a dynamic. We can look at the years 2008, 2011 and 2014. The challenge is to project forward three, seven and ten years to try to predict as best we can what the demand will be in these years. We cannot do this on the basis of what we had in 2008, nor can we be definitive today about what our requirements will be in five years time. The dynamic in the projection agenda must be borne in mind. We must ensure the infrastructure is provided, but we must also ensure we engage in a better way than heretofore with communities and citizens. Our energy policy is not just the energy policy for industry or the political system; it is also the energy policy for the entire community and the people. For that reason, I encourage people to participate in the debate. I thank the Deputies for raising the issue.