Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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40. To ask the Minister for Communications, Energy and Natural Resources the amount the capital phase of the North-South interconnector project will cost the State; and if he will make a statement on the matter. [5421/17]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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558. To ask the Minister for Communications, Energy and Natural Resources the amount the capital phase of the North-South interconnector project will cost the State; and if he will make a statement on the matter. [5393/17]

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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I welcome the Minister back to the House. It is great to see him here. I wish him a speedy recovery.

Denis Naughten (Roscommon-Galway, Independent)
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I thank Deputy Niamh Smyth.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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These questions relate to An Bord Pleanála's recent decision to grant permission for EirGrid's contentious pylons on the east of the island. This decision will affect counties Cavan, Monaghan and Meath. Some of my colleagues from County Meath are present. There is huge opposition to this proposal in the area. Will the Minister make a statement on the overall cost of the project to the State?

Denis Naughten (Roscommon-Galway, Independent)
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I propose to take Questions Nos. 40 and 558 together.

EirGrid estimates that the cost of constructing the proposed North-South interconnector will be €286 million, with €180 million of this cost being incurred in Ireland and the remaining €106 million being incurred in Northern Ireland.

The proposed interconnector is a critical piece of energy infrastructure that will benefit all the people on the island of Ireland. Last November, the Northern Ireland Minister for the Economy, Simon Hamilton, and I confirmed our joint commitment to the ongoing development of the single electricity market. The new market arrangements will be in place in 2018 and will yield benefits for electricity market customers in the North and in the South.  The UK White Paper on Brexit, which was published last Thursday, noted that the UK is considering all options for its future relationship with the EU with regard to energy. The UK is particularly keen to avoid disruption to the single electricity market operating across the island of Ireland.

The North-South interconnector, which will further support the single electricity market and reduce costs for consumers, has received planning permission in Ireland and is in the planning process in Northern Ireland. This vital project, which will ensure the security of supply in Northern Ireland, is a further example of the interdependence of our energy systems. The interconnector will enhance competitiveness, bolster security of supply and remove a key barrier to the efficient operation of the electricity system across the island of Ireland.

It is envisaged that it will lead to initial savings of €20 million per annum, increasing to between €40 million and €60 million each year by 2030, shared between Ireland and Northern Ireland. Such cost savings will ensure there are benefits for every home and business in the State and will improve the competitiveness of businesses and the household disposable incomes of citizens. On this basis, I believe the proposed investment in our electricity infrastructure is a sound one.

The costs of developing the North-South interconnector are not borne by the Irish Exchequer. The project will be funded in the same way as other electricity and gas grid investments are paid for. These costs are approved by the regulator and charged by EirGrid, ESB Networks and Gas Networks Ireland to energy supply companies. The energy supply companies generally include these costs in customer bills.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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Given that the overall cost of the North-South interconnector is €286 million, I suggest that it would be prudent for the Minister and the Government to put the capital phase of this project on hold until we know what impact Brexit will have on its financing and its viability. Given that the project is being presented as a key part of the EU electricity grid, what implications will the departure of the UK from the Union have for it? We are reading various contradictory reports on the possible reintroduction of a hard Border. It is looking very much like we will have a hard Border. There are questions surrounding the transfer of goods and services to the UK and through the UK to other European countries. The potential for associated tariffs is unclear. I suggest that this, when coupled with the concerns of those who are opposed to the project, means the Minister should put the interconnector on hold at this stage. I remind the House that €286 million is a phenomenal amount of State funds. There is huge opposition to this project at present. I thank the Minister for agreeing to meet representatives of anti-pylon groups in counties Monaghan, Cavan and Meath tomorrow. The bottom line is that people really want to see this project being developed underground. Brexit is the most recent issue to affect this proposal, which has been under consideration for ten years and which needs to be put on hold now.

Denis Naughten (Roscommon-Galway, Independent)
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I have heard what the Deputy has said, but I am a bit surprised that she is questioning whether we need the interconnector. I look forward to meeting representatives of the groups tomorrow morning. Having listened to many of them already, it seems to me that there is agreement across the board that an interconnector is needed, even if the question of how it should be connected might remain an issue for debate. The Deputy has asked a valid question about the implications of Brexit. The governance framework for the all-island single electricity market is based on legislation adopted by the Oireachtas and the UK Parliament. It is not based on EU law. The existing energy-trading and interconnection arrangements between Ireland and the UK, which ensure the continuity of mutually dependent energy arrangements, are based on co-operation and agreement between Ireland and the UK and do not depend on Brexit or on whether Ireland is inside or outside the EU.

Norway is currently in the process of building an interconnector with the UK. Of course, Norway is outside the EU.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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There is no disputing the need for this. However, why do we not look at the Brexit situation as an opportunity? Two weeks ago, we attended a public meeting with over 300 people who are living in fear of what this will mean for their homes, their lives and their children, who may propose now to live in the area. We will see a mass exodus of young people from the area if this continues, however. I am asking the Minister to see this as an opportunity to either underground the project or to put it on hold.

Pat Gallagher (Donegal, Fianna Fail)
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I call Deputy Cassells and we will then hear from Deputy Thomas Byrne. I point out to Deputy Kelly that this is not favouritism. As two questions are being taken together, there is double the time available. Deputy Kelly will have some 18 minutes for his upcoming questions.

Shane Cassells (Meath West, Fianna Fail)
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The Minister is right that it is a matter of how we provide the connection which is in question. This is my third time to discuss the matter in the Chamber with him. All I want to know is whether he accepts the figures that have been put forward by NEPP in respect of how much it would cost to move the project underground, which has been a huge point of debate. Does he accept the figures that have been put forward and that suggest it is viable? Does he also accept that, in the ten years since this project was first proposed, the logistics of providing this are not a threat to security of supply but are very much in line with current practice in continental Europe?

Thomas Byrne (Meath East, Fianna Fail)
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First, to say this is not related to Brexit or the EU is totally misleading and disingenuous. As the Minister knows, this is a project of common interest, as designated by the European Commission, so it clearly has strong European ties and links, regardless of the legislation.

Second, the Minister and EirGrid, as the semi-State body, must have regard to the fact it is now clear that a majority of Dáil Éireann does not support this project in the way it is envisaged. How can the Minister decide to stand over this when he knows the Dáil does not support it? Fianna Fáil has been extremely clear in its assertion that the underground option should be taken. I understand Sinn Féin takes the same position, as does the Minister's colleague, the Minister of State, Deputy Regina Doherty. Clearly, there is no political support, so how can it proceed? At the very least, the Minister needs to obtain another proper, independent international study of this project in order to examine the merits of putting it underground.

Denis Naughten (Roscommon-Galway, Independent)
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I am told the only feasible way to underground a circuit with 1,500 MW capacity over a distance of 138 km is to use a specialised high-voltage direct current with conversation equipment at either end, not AC technology. For a DC link to act reliably with a synchronous network, it would be necessary to develop new and complex control systems that have not been tried before in order to replicate the functionality of an AC interconnector. I am told that it is not the same as undergrounding in regard to some other projects. The example that has been given in the past is the Aachen to Liege project, where there was undergrounding, but over a much shorter distance and with a lower capacity. If we take the cost of that project based on the bigger scale that is required here, the DC undergrounding cable option as applied there would cost in the region of €992 million, which is significantly higher than what is projected here. The argument is made by EirGrid, based on its research, that the underground option would be three times more expensive.

Thomas Byrne (Meath East, Fianna Fail)
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It has gone back up again.

Denis Naughten (Roscommon-Galway, Independent)
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I am meeting representatives from NEPP in the morning and I will listen to what they have to say.

Thomas Byrne (Meath East, Fianna Fail)
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We appreciate that.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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There is also the Monaghan group.

Denis Naughten (Roscommon-Galway, Independent)
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I am quite willing to hear what people have to say. However, it is important for people to understand that a legal case has already been lodged with the courts and a planning process is ongoing. I have to be conscious of both of those issues.