Bernard Durkan (Kildare North, Fine Gael)
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Question 206: To ask the Minister for Communications, Marine and Natural Resources the steps taken or likely to be taken to put in place sufficient gas and electricity interconnections, North-South and east-west with a view to ensuring adequacy and security of supplies and storage and a means whereby surplus electricity could be exported having particular regard to fluctuations likely in the event of interruption of supplies of gas or electricity throughout Europe and prolonged high usage here; and if he will make a statement on the matter. [2195/06]

Noel Dempsey (Meath, Fianna Fail)
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Security of energy supply is a key policy objective. The relatively small size of our national electricity and gas markets underlines the need for greater interconnection as a means of enhancing security of supply, promoting competition and integrating the Irish electricity and gas markets into the wider European market.

The Government is fully committed to the development of east-west electricity interconnection as a matter of priority. The Commission for Energy Regulation has been engaged in a process of rigorous exploration of the options for such development and I expect to receive advice from the commission on next steps shortly.

In November 2004, both Governments endorsed plans put forward by the 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 under way with an operational date of 2012. Ireland has developed a high standard of security of gas supply, through good interconnection with the UK, encompassing two interconnections, to ensure sufficient importation capacity from external sources.

A South-North gas pipeline is also under construction, and is scheduled for commissioning in October 2006. The pipeline will extend from Gormanston County Meath to Belfast. Under section 19 of the Gas (Interim) (Regulation) Act 2002, the CER is required to prepare and publish an annual forecast of capacity, flows and customer demand on Ireland's natural gas system over a seven year period. The 2005 capacity statement includes a range of possible demand scenarios that may be expected to arise over the coming years. The scenarios incorporate various levels of demand, based on forecasts for the domestic, industrial and commercial, and power generation sectors, while also considering potential timeframes for new indigenous supply.

The current gas capacity statement that our infrastructure is sufficiently robust to cater for the majority of scenarios modelled. Only in the case of the highest demand forecast would reinforcements to the infrastructure be envisaged within the period of this forecast.

Developments in the UK market are closely monitored and this informs the ongoing assessment of security of supply policy. The Kinsale field continues to provide Ireland with an indigenous supply of gas and the potential for additional indigenous supplies when realised could reduce Ireland's import demands in the future.

Turning to natural gas storage, in the context of the all-island energy market development framework, as part of the strategic goals enunciated, scope for a common approach on storage and liquefied natural gas within a timeframe of 2005 to 2007 has been identified. Work is progressing in bilateral discussions in both jurisdictions involving the Departments and regulatory authorities on the issue.

Under the Gas (Interim) (Regulation) Act 2002, the CER has the function of licensing natural gas storage facilities. In carrying out its functions, the commission must have regard to the need to secure that there is sufficient capacity in the natural gas system to enable reasonable expectations of demand to be met and to secure the continuity, security and quality of supplies of natural gas.

The CER is in discussion with Marathon Oil Ireland Limited about the development of natural gas storage facilities at south west Kinsale. The CER has recently completed a public consultation on the proposed regulatory regime for the storage facility. A further consultation on a natural gas storage licence will commence shortly. It is planned that the storage facility will be operational by the middle of 2006.

Bord Gáis Éireann, in its role as the natural gas transmission system operator, has developed contingency plans in the event of any curtailment in gas supplies. These plans include switching gas-fired power generation plant to alternative fuels, seeking voluntary reductions from large industrial gas consumers and utilising BGE's reserves from the south west Kinsale reservoir. BGE has estimated that, at current levels, the Kinsale reserves would supply 50% of non-daily metered customer requirements, that is, small business and domestic, for up to 50 days. This is in addition to stocks held in the UK.

Under the umbrella of the Commission for Energy Regulation's task force on emergency procedures, BGE's contingency plans are being co-ordinated with the electricity transmission system operator so as to minimise the impact on power generation. There are no plans currently to export electricity or gas from Ireland to the wider European market.