Brian O'Shea (Waterford, Labour)
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Question 154: To ask the Minister for Communications, Marine and Natural Resources if he is currently examining an extension of Ireland's strategic gas reserves; his views on the development of electricity storage projects in view of the dramatic increase in wind generation; and if he will make a statement on the matter. [38862/06]

Noel Dempsey (Meath, Fianna Fail)
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I can advise the Deputy that one of the strategic objectives set down in the All-island energy development framework for natural gas is a common approach on natural gas storage and Liquid Natural Gas (LNG). With this in mind, the issue of a strategic gas reserve is one of the issues to be addressed by means of an all-island study to be commissioned jointly by my Department and the Department of Enterprise, Trade and Investment for Northern Ireland (DETINI). Both Departments are jointly engaged in a tender process in this regard, which closes at the end of this month.

The successful tenderer will be required to assess the medium to long-term position with regard to security of natural gas supply and to consider the scope for a common approach on storage and LNG with a view to optimising that position. The study will have regard to industry views and to any existing capacities, as well as to any planned or proposed developments for storage and LNG. I am advised that a contract for the study will be placed by the end of January next at the latest with a view to the report being finalised by mid 2007.

Security of supply in relation to electricity is a matter for the Commission for Energy Regulation (C.E.R) in accordance with the provisions of Article 28 of the European Communities (Internal Market in Electricity) Regulations 2005 (S.I. No. 60 of 2005). Specifically, Article 28 provides that it shall be the duty of the CER to monitor the security of supply of electricity and that the Commission shall take such measures as it considers necessary to protect security of supply. In the performance of its functions, the CER is advised by EirGrid, the Independent Transmission System Operator.

In its Generation Adequacy Report 2006-2012, EirGrid identifies system operation issues as a result of increasing wind generation as one of the key issues to be addressed to ensure that electricity demand continues to be met. With this in mind, I am advised by the CER that it has requested EirGrid to update its study carried out in 2004 on the economic and operational impacts of wind penetration with a view to identifying any necessary actions which need to be taken.

With regard to electricity storage projects, the CER advises me that while it would welcome initiatives in relation to electricity storage and the potential benefits which could be accrued from these, it would not view them at present as having a significant role in relation to security of supply. In terms of security of supply, the CER advises that other mechanisms such as increased interconnection, the development of the Single Electricity Market, continued improvements in thermal plant efficiency and availability as well as medium to long term needs for new plant should be given priority consideration in order to ensure generation adequacy into the future.