Thursday, 11 April 2019
Saincheisteanna Tráthúla - Topical Issue Debate
My question concerns the future of Moneypoint electricity power station on the Shannon Estuary in west Clare. It is the only coal burning station in Ireland. It opened over 40 years ago and is coming to the end of its natural lifespan. It is due to cease burning coal and producing electricity in 2025, which is just six years from now. It is an important part of the national grid and is an important installation for electricity production. It produces, at its maximum, 900 MW of electricity, which is up to 20% of the national requirement. It is also a very important employer in west Clare. What is the future of electricity production in Moneypoint and what is the long-term future for the plant?
On 5 December I wrote to the Minister asking him to clarify exactly what is planned for Moneypoint when it comes to the end of its operational life in 2025 as a coal burning station, and asking him to engage with the ESB in order to inform the public about the company's future intentions for the site. The Minister replied, saying that it is settled public policy that electricity generation from coal will cease not later than 2025. The position has been outlined in a number of public policy documents. The national mitigation plan, the National Development Plan 2018-2027 and the 2015 energy policy paper concerning Ireland's transition to a low-carbon energy future were all mentioned. A Programme for a Partnership Government includes a commitment to moving towards a sustainable and suitable low-carbon technology to replace coal burning in Moneypoint in 2025. The Minister committed to asking ESB to provide a paper on the options for the replacement of coal burning in Moneypoint. I understand that paper has not yet been provided. Does the Minister know when it will be available?
The experts in Moneypoint would be the best people to identify what is the future of Moneypoint. Will it be phased out gradually when 2025 comes along? Will it be kept in reserve for use in times of extraordinary need? Will it be converted to alternative energy sources such as gas or biomass? Will it act as a terminal for providing off-shore wind and tidal energy production if the technology is available?
There is some commentary on Moneypoint in the climate action cross-party consensus which was published in March this year. The committee recommended that the active use of Moneypoint should be kept to a minimum and looked forward to examining the future proposals for that site. The committee was also cognisant of the impact on those whose livelihoods are dependent on Moneypoint and said that engagement with those whose employment will be affected by the closure of Moneypoint should commence at least three years prior to any proposed closure. The time for that is really now, because we are in the middle of 2019: 2025 is less than six years away. Moneypoint sustains 400 jobs, both directly and indirectly in west Clare. What is the future for those jobs? What is the Minister's view on the future for Moneypoint?
The Deputy has quoted much of the substance of my reply so I will not repeat it for him. It is settled Government policy that coal firing in Moneypoint will cease by 2025 at the latest. That has been well sign-posted. My predecessor wrote to ESB in order to start engagement about the future for Moneypoint. ESB has provided some response, but more work needs to be done in this area to provide a clearer roadmap. The response of ESB deals with key issues relating to the cessation of the use of coal for electricity generation. It raises issues around the security of supply, competitiveness and the sustainability of the company, as the Deputy pointed out. It also deals with the possible technologies to replace it. At this point a range of options is being discussed which will not surprise the Deputy as he mentioned them in his comments. Those options include off-shore wind, biomass, combined cycle gas, gas peaking plants and other combinations of those. Certainty about the future use of Moneypoint cannot be given because the decisions have not yet been made in that regard.
It was pointed out that market dynamics and wholesale market mechanics will ultimately decide who gets to build and what generation technologies will replace the coal capacity. There is a market within which the ESB, as a commercial entity, must operate when considering future generation. In this regard, ESB points out that the exact details of the issues created by the closure of Moneypoint coal-fired power units are commercially sensitive, particularly in the context of the “T-4" four-year-ahead capacity auction completed recently by EirGrid and SONI, the equivalent body in Northern Ireland. The new capacity mechanism auctions are conducted by EirGrid and SONI, operating under the regulatory supervision of the single electricity market committee, in a fully independent manner.
Apart from obtaining the necessary state aid approval and ensuring ongoing compliance with EU energy and state aid policy, I have no function in these matters.
Its new capacity mechanism, which is in line with EU state aid rules, is competitive and focused on delivering the generation services customers need at least cost. The process has been structured, clear and transparent, and has been well signalled to industry players. This latest auction, known as t-4, is for the delivery of capacity in 2022 and 2023. In broad terms, the results show the Irish generation portfolio is on the path towards its ambitious decarbonisation targets. The auction has facilitated the entry of new wind, demand-side and battery technology, supported by flexible gas plants required in the energy transition, with some fossil fuel plants or units being unsuccessful. These results are consistent with our overall long-term decarbonisation policy goals.
ESB is committed to playing a leading role in the transition to a low-carbon society, powered by clean electricity. It has confirmed in its response that coal-fired generation will cease no later than 2025. The response also confirms ESB’s intention that the Moneypoint site will be used for electricity generation post 2025, using some or all of a range of low-to-zero carbon technologies. In the coming years as we move decisively to confront the challenge of global warming and decarbonise the electricity heat and transport system, Ireland and particularly the west of Ireland is blessed with an abundance of potential renewable energy sources. There will be a need to harness this energy for the benefit of the State.
I look forward to the input of all parties to meet this challenge as part of the plan we are working on.
The Minister has not addressed the issue of what will happen at Moneypoint. I know ESB and the Minister are considering a number of options, but time is running out. It is five and a half years to 2025 and decisions need to be made on the future of Moneypoint. I invite the Minister to visit Moneypoint. The previous Minister, Deputy Naughten, visited Moneypoint about two years ago and it would be very important for the Minister to come and see the site which is quite extensive. It would be important to meet the staff and see the substantial infrastructure there. We cannot allow it to wither and die; we need a plan for Moneypoint.
Moneypoint is also a deep-sea port and its future may be in maritime traffic as well as in electricity generation. It has potential in that regard. I would certainly like the Minister to visit Moneypoint and see the infrastructure there.
We all understand that we need to move to a low-carbon future and Moneypoint is what one would call a dirty station. While it produces very cheap energy and is important, it needs to be replaced. We need to know if it will be some alternative low-carbon fuel, wind or tide. The people, who work at the station and those who support it, need to know what their future will be. There is great potential for developing wind and wave energy. It has a sizeable site and could be used as a hub for developing such technology.
I will try to summarise what was a rather long-winded reply. ESB has plans to replace coal burning with alternative generation, but it is in a marketplace with many other players competing for generation capacity in what is a rapidly growing generation market.
The market framework is now becoming clearer and, as I said in the reply, includes the sorts of options ESB is considering. It includes combined cycle gas, gas peaking plants, battery technology, wind capacity and so on. The option framework covers the options ESB is considering. At this stage for commercial reasons it cannot commit to any one position; it will not outline a track that would give its competitors an advantage. I admit that is not an ideal situation.
I will further explore what certainty we can seek to give to workers. As the Deputy rightly said, a large part of the Oireachtas work is to talk about the transition and supporting people in that transition. I am conscious of the balancing required, with a company competing with others trying to develop a strategy while at the same time communicating with it in a way that people can plan ahead. I will explore this further to see if we can get greater clarity. I am very conscious of the constraints within which ESB is working as one of a number of competitors for the opportunity to provide additional generation. As the Deputy rightly said, it has, in Moneypoint, a very valuable asset and one I will seek to visit. That asset clearly has significant value not just for ESB but for the entire grid system.