JOINT COMMITTEE ON COMMUNICATIONS, NATURAL RESOURCES AND AGRICULTURE debate

EirGrid and ESB Networks

Chairman

We will resume with the witnesses from ESB Networks and EirGrid. I welcome Mr. Jerry O'Sullivan, managing director, Ms Marguerite Sayers, head of asset management, and Mr. Denis O'Leary, head of sustainability and network systems, from ESB Networks. The representatives from EirGrid are Mr. Dermot Byrne, chief executive, Mr. Andrew Cooke, director of grid development, and Mr. Tomás Mahony, transmission project manager.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence you are to give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

Mr. Jerry O’Sullivan

I thank the Chairman and the committee for the opportunity to have an input into the meeting. I welcome the report from the expert commission and the opportunity to meet the commission during the preparation of the report. The electricity industry in Ireland is very different from what it was a couple of years ago. It is somewhat more complex. EirGrid and ESB are two separate, independent semi-State companies with very different roles and responsibilities under licence, with the ultimate aim of providing a safe, efficient electricity infrastructure to meet customer needs, Ireland's needs and Ireland's future needs. The electricity business is a long-term game. I was interested in the questions put to the expert group. From a regulatory point of view, the distribution system has an asset life of 45 years and the transmission system has an asset life of 50 years. That point came up in earlier questions.

With forbearance of the committee, we will briefly describe the electricity industry as it is and the specific roles of the ESB, ESB Networks, EirGrid and the Commission for Energy Regulation, CER, in the context of transmission and distribution networks. In an Irish context, we will discuss what transmission and distribution mean. I sent some slides yesterday but we do not have the facility to view them online. I will go through them and draw the attention of committee members to particular points.

I will also give the views of ESB Networks on the expert commission report before handing over to Mr. Dermot Byrne from EirGrid. The first slide relates to the electricity industry structure, which is very different and more complex than it was a couple of years ago. Many national and international companies generate power. Many windfarms do the same and they sell output to a single electricity market, called a pool. There are some 2.3 million customers in the Republic of Ireland and the market has been fully open to competition since 2005. Every customer has a choice of company from which to purchase electricity. There are many supply companies, who buy power from the pool and sell it to customers. The easiest way to think about the electricity infrastructure is to consider a toll road. The function of the electricity infrastructure is to safely and efficiently transfer power from generators to end users. It is heavily regulated by the regulator, the CER, and the regulator decides in five-year regulatory periods what will be invested in the electricity infrastructure, the standard of service required and the costs and returns allowed to the electricity companies. Ultimately, the regulator sets the price of electricity.

ESB Networks is a legally unbundled part of ESB and its role is to design, build, maintain and operate the distribution system, which we will explain later. Its role is also to build, fault-fix and maintain the transmission system to the specifications set by EirGrid. EirGrid is a separate semi-State company and its job is to carry out the long-term planning for the transmission system in Ireland, to specify the what, where and how, and to operate the system when it is built. It operates on an all-Ireland basis through its sister company, Systems Operator for Northern Ireland, SONI, the equivalent of EirGrid in Northern Ireland. Our role on the transmission side is to be a contractor, building whatever is decided by EirGrid to the specification set by EirGrid.

A question arose about voltages, which are defined slightly differently in every country. The basic principle is that the higher the voltage, the more efficient it is to transfer power over long distances. The highest voltage available in Ireland is 400 kV, or 400,000 volts, although there are higher voltages available in other countries. A television uses 230 volts so this is high-voltage compared to what is used in domestic settings. As we get closer to end customers, it is stepped down to 220,000 volts and then to 110,000 volts and these three voltages make up the transmission system in Ireland. It is a small transmission system by international standards, with 6,300 km of overhead network and 140 km of underground cables through the centre of Dublin, Cork and Limerick.

From 110,000 volts to medium voltage and to what is used in the home represents the distribution system. There are large volumes on this network, with 140,000 km of overhead network, 230,000 transformers and 2.3 million metres to be managed by ESB Networks as part of its distribution system.

The transmission system is the topic for discussion today. There are 440 km of 400 kV and its purpose is to transfer power from Moneypoint, which was built on the Shannon Estuary to accommodate the largest ships in the world, to the population centres on the east coast. My presentation includes the statistics for the number of kilometres in the 220 kV network and the 110 kV network and its layout on the map of Ireland. As I mentioned, the system operator of the transmission system is EirGrid. It operates the power flows on a day-to-day basis and ESB Networks operates the distribution system.

The next slide shows where the stations are located. The only notable factor is that one of the stations in the 400 kV system is Woodland, which is the take-off point for the infrastructure being discussed today. It is useful to show the committee pictures of what the network looks like. There is a picture of an existing 400 kV line from Moneypoint. There is also a 220 kV line. The notable feature is that they are built on pylons or steel structures. The 110 kV, 38 kV, medium and low voltage supplies to homes are built on wood poles. There is one interconnector with the North, which is shown on the next slide. We have sketched the proposed infrastructure of the further 400 kV interconnector.

On the specific roles of EirGrid and ESB Networks in the context of the infrastructure, the role of the ESB is to fund the development. It is small in the European context but because it is a vertically integrated utility it owns assets it has an active part in generation, transmission, distribution and supply to customers. As we have a credit rating, a very strong international reputation - we work in 40 countries - and the ESB is seen as the third most advanced utility in the world, we are able to borrow money efficiently on the world bond markets. As the committee is aware, we do not depend on the Exchequer for any funding. The important point that needs to be made today is that ESB borrows the funds necessary to invest in the electricity infrastructure in Ireland, including the infrastructure we are discussing.

As I mentioned earlier, we build the network and will build this infrastructure to the specifications set by EirGrid. We will maintain the line, cable or whatever else is built to the standard it sets. EirGrid is the system operator in Ireland and has sole responsibility for the planning and operation, when constructed, of the transmission system. It sets the technical standards. It obtains the planning permission and consent necessary to build this infrastructure, including the line we are discussing. It will deal with any customers who want to connect directly to the transmission system. While ESB Networks will maintain and fault fix the infrastructure, it is to the standard and specification set by EirGrid.

We have an integrated delivery model in Ireland. Tendering and contracting were mentioned. In the presentation the committee can see that EirGrid sets the investment plan in terms of what is needed and obtains land consent. We do the same at distribution level, including the supply to homes. The ESB is in a unique position in that there is no demarcation in ESB Networks. While other utilities have a series of issues, the person who fixes the supply anywhere in Ireland tonight will also be able to fix and build the transmission line.

We supplement our workforce with approximately 1,000 national and international contractors. When what needs to be built is decided upon, we develop a detailed design and decide on project management, procurement, funding and commissioning, using the combined force we have, plus contractors, which can build a distribution line today and transition line tomorrow. That is the delivery model which applies in Ireland. It is a shared process. The specification is set by EirGrid and the building is done by ESB Networks.

Against that background, I will outline our comments on the report of the expert commission. We agree that historically in Ireland and Europe distribution and transmission took place through rural lines which were built overhead. Overhead is the least cost feasible solution, and we concur with that view. The commission, having examined various options, said overhead and HVDC are technically feasible, with which we agree from a construction point of view, which is our role. The commission also said the HVDC solution is three times more expensive and would cost €333 million. From our experience of networks, we would concur with that finding.

Beyond that factual statement, I remind the committee that the ESB needs to borrow money on world markets for this infrastructure. They are quite challenging, which the committee knows. Any incremental cost of any infrastructure will increase the price of electricity for all customers. Our small system was referred to earlier. The €333 million cost has to be funded, as do all the other things that will happen over the next 50 years, and will cost customers in the order of 0.7%, including VAT.

We mentioned EirGrid's role. Our role as the funder and contractor is to build whatever solution is decided upon by it and other policymakers. The committee should think of us as a contractor. I hope the presentation picked up some of the themes of our industry and clarified the roles involved.

Chairman

I thank Mr. O'Sullivan. He has managed to make what is a complicated landscape very understandable, in terms of the structure and interface between the ESB and EirGrid, and transmission and distribution. I invite Mr. Byrne and Mr. Cooke to make their opening statements before we take questions from members.

Mr. Dermot Byrne

I thank the Chair for the opportunity to come before the committee. It is our first time to do so and we are delighted to be here. We welcome the publication of the report. We met Mr. Bo Normark, Mr. Odd-Håkon Hoelsaeter and Mr. Ronnie Belmans as they conducted their research and were happy to provide them with all the information, data and assistance required. Before I invite Mr. Cooke to talk about the detail of our response to the report, I will try to put some context on what we are doing because we face a much greater challenge than just one project.

I will pick up on Mr. O'Sullivan's presentation and discuss our role in the industry. As he said, our role is to operate Ireland's power system safely and securely. We do that on a 24-hour, seven-day a week basis from our national control centre. Some Deputies and Senators have visited it and saw how it operates. In doing that we also have to deliver a secure and reliable power supply to every county and region in the country. The security and reliability of the power supply is fundamental to industry, firms and households. For example, the Intel complex is the biggest load on the system and requires the highest quality and reliability of supply. If there is a blip in the system due to lightning or whatever, it is the first to notice it in its production. Quality and reliability are critical.

Another element of our role is to develop the grid in a cost-effective manner to provide a platform for economic renewal, regional development and to harness Ireland's renewable resources. It is not just a matter of keeping the lights on today, we need to make sure that in 20 years' time when a switch is pressed a light comes on. Make no mistake about it, we are involved in a total transformation of the power system on the island of Ireland to achieve the policy goals of security, sustainability and affordability. We are developing the power system of the future by harnessing the tremendous renewable resources we have on the island of Ireland. Central to that is our GRID25 strategy. The backbone of the power system is the transmission grid. We need the grid to ensure reliability of supply to businesses such as Intel and to households and farms. We need the grid to take the power from where it is generated to the market, where it is needed. Our strategy involves GRID25. This represents an investment in the transmission system of €3.2 billion over approximately 15 to 20 years, and this is central to ensuring Ireland develops a power system that meets the country's future energy needs in a sustainable manner.

There are a couple of key issues that are particular to Ireland. First, we have an island utility. What this means in terms of power systems is that we have a relatively light system. We do not have one such as those in mainland Europe or Scandinavia. Second, we are harnessing renewable resources, mostly wind. Wind generation is very different from conventional gas-fired, oil-fired or coal-fired generation in that it is non-synchronous. "Non-synchronous" is a technical term that effectively means the weight of the rotating masses of the large power systems, such as those in Aghada or Moneypoint, does not exist. As we generate more power from wind, the heavier machinery of the conventional power plant will be displaced, resulting in a lighter system on what is already an island system. This poses particular challenges for operators such as ourselves when we think about the inertial coupling between the Southern and Northern Ireland systems. This is getting technical but these are the technical issues we must deal with when we speak of the development of the grid. This relates to technology choices that must be made in developing the grid.

I will hand over to Mr. Andrew Cooke, who will take us through the detail of the response that we want to make today to the committee.

Mr. Andrew Cooke

I will try to be brief. If possible, I will pick on one or two of the points made in the earlier discussion.

We very much welcome the completion of the report, as Mr. Byrne said. While we have a number of observations on it, we believe the conclusions, in the main, concur with EirGrid's position on the comparative benefits of the various transmission technologies available, and with the findings of a number of international studies by other transmission system operators and experts.

I will refer to extracts from the report to summarise those points that are generally common between the commission's findings, our findings and our understanding of international norms. The first key finding in the slide entitled "Key expert commission findings" is that overhead line is still by far the least costly technology option available for on-land transmission development. It is by far the most widely used for on-land transmission requirements. Some of the figures referred to earlier suggest approximately one third of planned development is DC based. That involves almost entirely submarine DC interconnection where overhead line is not possible. By way of example, in the ten-year period to 2009 in Europe, over 10,000 km of new 400 kV overhead lines were commissioned. As the expert commission noted, it is planned that a further 23,000 km of 400 kV overhead lines will be commissioned in the next ten years. It is expected that approximately 98% of the on-land 400 kV development will be by way of overhead line.

The second key finding is that an AC underground design is not realistic for the length of the Meath-Tyrone 400 kV project. We fully concur with this. It is supported by several other international reports considering projects and the maximum length that can be installed with AC underground lines. It is significantly less than the required distance for the Meath-Tyrone project. That is not to say that AC undergrounding is not feasible over shorter distances. The expert commission's report references some overhead line projects which incorporate relatively small amounts of undergrounding, generally in congested, urban or especially sensitive environmental areas. We are aware of a number of such projects around Europe. Typically, they involve undergrounding of sections between 5 km and 10 km.

We are also aware of many projects in Europe that are based entirely on overhead lines. They do not involve any undergrounding. An example is the 220 km Beauly-Denny project, recently approved in Scotland. This involves a double-circuit 400 kV overhead line and it will involve no undergrounding.

The third point that the commission notes is that HVDC voltage-sourced conversion, VSC, technology is developing rapidly and has undergone significant change in recent years. There have been developments on overhead line technology. We agree in this regard. We are developing the east-west interconnector between Ireland and Wales at present. It employs the VSC technology to which the commission referred. When the project is completed later this year, it will be the largest VSC development in the world to date. We are, therefore, very familiar with HVDC technology and what state-of-the-art technology is. We fully intend to adopt HVDC where it is appropriate. We do not believe it is appropriate for the North-South project and I will explain why.

The commission noted that a disadvantage of the choice of VSC technology is that it is less mature than overhead line technology and will lead to operational risks. I will return to this at the end in the context of some of the questions and answers.

Let me refer to the areas in respect of which we differ or differ to a degree regarding the expert commission's conclusions. They fall into two main categories, the first of which is the suitability of HVDC technology for the project in question and, second, the extra cost of an HVDC solution by comparison with that of an overhead line solution.

Let me address briefly the technology challenges. We set these out in more detail in a briefing document, also supplied to the committee. I will only touch on the matter briefly because it is a quite complex area. In comparing European reference projects, including those referred to by the expert commission, it is important to consider some of the differences between the power system on the island of Ireland and neighbouring European systems. Europe is made up of a small number of generally very large synchronous power systems. There are about five on the entire Continent of Europe, each of which has strong conventional AC connections. They are built on AC technology. Even the system in Great Britain, which is probably about the smallest next to ours, is 12 times the size of ours. The mainland European system is vast by comparison. It is approximately 100 times the size of the Irish system.

The Irish system is much smaller than its European neighbours' systems. Owing to its size and low density, we have a relatively low density of demand. Therefore, we have a thin system in Ireland. It is electrically much lighter and inherently less robust by comparison with those of other European countries. The considerable size, sheer physical momentum and electrical inertial weight of conventional generators turning together give the systems in mainland Europe, Scandinavia and elsewhere significant stability. If one is cycling a bicycle and meets a relatively small obstacle on the road, it can still have a significant effect and derail one. If one is driving a juggernaut, the same obstacle will have little or no impact. If there is a disturbance in one of the large systems in Europe, the huge momentum contributes to stability and to riding through that disturbance.

As Mr. Byrne mentioned, Ireland is at the leading edge in terms of developing renewable energy in the system. The combined system on the island of Ireland will have more wind farms installed and operated as a percentage of the overall energy requirement by 2020 than any other synchronous system of any scale in the world. We spoke about this before in terms of a unique set of challenges. Adoption of wind makes the system somewhat more fragile and at the same time we need to be able to accommodate the large amounts of renewable variable generation on the system. Selecting the right grid technology is key to that challenge.

I return to the choice of technology for the North-South interconnector. The key point is that an AC overhead line solution as proposed by EirGrid naturally reinforces and strengthens the overall stability of the all-island network to respond to disturbance. It tightens the coupling of the two electrical systems North and South and makes them more robust operating as a single system. The expert commission uses the term "inertial coupling" to describe this behaviour which occurs when AC systems are linked together or when systems are built using AC technology. While it is an inherent part of AC technology behaviour, it is not an inherent part of HVDC technology behaviour. An AC solution would give us increased coupling between the North and South systems - inertial coupling - but an HVDC solution would not do that. It is possible in theory to put in place complex control systems to make an HVDC circuit act more like an AC circuit. However, it is unclear how far this can be achieved. It is probably impossible to fully emulate an AC solution and it has certainly never been done anywhere in the world to date.

In addition the dependence on control systems in itself introduces more risk and while that may not sound like a major issue, there are a number of instances internationally where control system failures have caused or contributed to major disturbances or blackouts in other countries and continents. The inherently different performance of HVDC is a key point given the particular characteristics of our network. One of the expert commission speakers earlier said it is possible to make an AC and DC circuit operate in parallel. We are not aware of anywhere that this has been done. The examples given by the expert commission are not parallel examples. In the case of the France to Spain interconnection there are two very large systems already connected by several AC circuits. The important inertial coupling we require from the North to South interconnector is not a requirement to the same degree for the France to Spain link.

I move to cost. The commission has provided cost comparators which concluded that an HVDC solution would be €330 million more expensive than a standard 400 kV AC overhead line solution, or three times the cost. In general, cost differences are more reliable than cost ratios so I will generally refer to differences rather than ratios. The commission also presented some HVDC costs for lower-rated solutions, for example comparing a 700 MW capacity HVDC solution with a 1,400 MW capacity AC solution and estimated a cost multiplier of 1.7. We are unclear of the purpose of this but can confirm that a capacity of 700 MW does not meet the goals or requirements of the project. So the only valid comparison is a like-for-like capacity.

From the table on the slide headed "Cost Review" it is clear that the cost of the HVDC to AC convertor stations adds significant costs to the HVDC solution when compared with the AC solution. This is an inherent consequence of the technology choice.

We note three primary points on the commission's estimates. First, the commission has not included the cost of a substation at or close to Kingscourt in its cost estimates. We may not and probably will not include the Kingscourt substation in our initial planning application as the need for it has receded owing to the reduction in demand as a result of the economic situation. However, it is still very much part of the overall project scheme and will be required to provide adequate supply standards to the north east in coming years. Based on the converter station costs estimated by the expert commission, it will add at least €100 million to €150 million to the cost of the scheme when it is required. Further to this, while the County Cavan substation is a known requirement at this time, it is likely in the future that there will be further requirements to tap into the circuit for other development purposes and if an HVDC solution is adopted, these significant additional costs will be incurred each time.

Second, while the Commission has recognised that electrical losses would be significantly greater for an HVDC solution at the typical operating loads for this project, it has omitted this from its cost estimates on the basis that future energy prices are unpredictable. In our experience it is good practice and common practice to include major lifetime cost elements in transmission investment decisions - we do so routinely. Inclusion of electrical losses will add approximately €70 million to the cost of the HVDC solution. Third, the costs of the cable element - more so than the converter elements - proposed by the Commission appear low based on other available data and references.

The first two of these points - leaving aside the cable cost issue - would increase the extra cost of an HVDC solution from €333 million to approximately €500 million to €600 million when compared with an AC solution. However, it should be recognised that there is concurrence at least that an HVDC solution is more expensive than an AC solution to the tune of several hundreds of millions of euro.

I wish to pick up on some points made earlier. Deputy English asked to what extent failures were an issue. I will make two points on that. First, the question was answered in the context of reliability of the scheme. The question might have been aimed not only at that, but at the potential impacts of a failure on the power system and reliability of supply. It was answered that failures are relatively infrequent and can generally be fixed relatively quickly. I wish to draw two examples from a report issued at the end of January. It mentions a 380 kV installation in Berlin which suffered a serious fault in December 2009. That fault was proven to have occurred as a result of a latent defect in the installation of the cable ten years earlier. It took ten years for it to materialise and resulted in the unavailability of the cable for ten to 12 months. Another example is in the Middle East where at present a 55 km cable circuit has been installed. It mentions that there have been ten joint failures - six during service and four during testing. The reported response time to fix those joint failures averaged two months.

There are still significant reliability issues there, but the more significant point is the impact on the power system. In the event of a failure of the control systems, about which some of the commission experts spoke briefly, unless the system is properly managed and its use is limited, a mal-operation could have the impact of putting all or part of the system in blackout. That was possibly what Mr. Hoelsaeter referred to when he said that an HVDC cable could provide black start - I am not sure about that. However, in the event of a blackout in one part of the system, I accept that we can restart it using the cable, but the blackout is not a tolerable event in the first instance.

Supply of cable was mentioned. We do not see supply of cable as being the major issue. There will be a supply chain difficulty with cable because so much more is being used for submarine applications. While it will tend to push up the price, it should not mean there will not be availability of cable to develop these projects. Manufacturing the cable for the east-west interconnector, which uses approximately 500 km of cable, occupied the full capacity of a major cable factory in southern Sweden for two years. It is, therefore, a significant issue. We are not saying that we do not believe it will prevent projects from happening but it may well result in higher prices of projects which are based on cable technology.

I will leave it at that and hand back to Mr. Byrne if he has any concluding remarks.

Mr. Dermot Byrne

I will hand back to the Chair. We are happy to take any questions.

Chairman

I thank all three contributors. There is a divergence of opinion on, or possibly of interpretation of, the expert commission's report. I will offer the floor to Deputy Ferris first and will get to everybody.

Deputy Martin Ferris

Go raibh maith agat, a Chathaoirligh. I wish to thank both the ESB and EirGrid for their presentations. I have one question for the ESB representatives. Would they have handled this whole debacle any differently than it has been handled by EirGrid, in particular regarding the alienation of local communities and the public at large? I would argue, as would people who know the communities involved, that they have behaved responsibly and support the entire project in principle. Where they differ is on the methodology that would be used in bringing about the system that needs to be done.

I would also argue that confidence has been lost, particularly in EirGrid, by communities and people generally. I have examined some figures in a submission given by Deputy Damien English at the oral hearing where EirGrid was supposed to have said it is 20 to 40 times more expensive to lay cables underground. A source in the Irish Farmers Journal said it was ten times more expensive, while another reputable group said it was five to seven times more expensive. That type of terminology, inflating the cost factor, has done huge damage to the relationship with the public which, in principle, supports the objective and the delivery of the project.

The commission believes that if the will is there, much of what needs to be done can be done underground. While it counsels against a fully underground AC solution, it says technology is available that would contribute to putting a certain amount of the project underground.

Have areas been identified on the route that could be put underground? If so, what distances are we talking about? I think five or ten kilometres were mentioned. I live in Tralee where they managed to bring it underground from the windmills. I know it is totally different but they were able to do that because the will was there. A lot of things can be overcome if people are prepared to be flexible and work with each other through a negotiated dialogue.

This is all about costs, rather than people's rights and entitlements. It is also about inflating the perceived costs in order to try to break down people's will. People have concerns about the environment, health and safety, and what such a development could do to property values. Nonetheless if it is approached properly, the technical people would be satisfied that much of the line can be put underground. The commission has given us costings of 1.7%, which is a small price to pay for community involvement and support. All of that can be recouped at a later date by putting 0.7% on to the ESB costs.

Is EirGrid prepared to continue to negotiate with communities? Is it prepared to listen to what communities have to say? Is it prepared to take into consideration all of their concerns? Effectively, the commission's report agrees with much of what the communities are saying anyway.

Mr. Dermot Byrne

I will kick start and then Mr. Jerry O'Sullivan can speak. I know that Mr. Andrew Cooke may touch on some of those questions. The issue of general community acceptance is at the heart of this matter. We put a huge effort into our communications on all our projects. We have a large number of active projects, either at construction or planning stage around the country. We are currently interacting with hundreds of landowners and thousands of members of the public. We do that in a structured and organised way. In the vast majority of cases we do reach agreement and projects proceed through to planning and build.

In the last year or so, about 150 km of new build has already taken place, albeit at lower voltages. There is a lot more in progress which will be completed in the coming years. We continually try to improve how we do that. We have a consultation road-map and have put a huge effort into arranging meetings with individual landowners and community groups. We do not take our responsibilities lightly and put a huge effort into it.

A number of cost issues were mentioned as well as what we have said about costs. I will ask Mr. Cooke to take that point.

Mr. Andrew Cooke

From the outset of this project we have used a range of six to ten times as the estimated multiplier for underground AC. The discussion at the time was primarily around AC, but the multipliers probably hold reasonably well for HVDC as well. We have certainly stated that cost multipliers of much greater amounts - such as 20, 25 or 30 times - have been reported by other utilities in particular circumstances, for example, in cases where a tunnel is being deployed rather than the more normal techniques of direct or ducted burial. However we have consistently used the six to ten figure and we are comfortable that those figures are generally correct. Notwithstanding that recent advances in technology and HVDC are pushing to the lower end of that, we still believe they are reasonable figures.

As regards whether we have found sections to underground on this cable, as the commission said it is perfectly possible to underground short distances. We did not find any area along the length of this circuit that particularly distinguished itself as meriting undergrounding, as compared to any other section. If it were another project, that might be different; perhaps some area would stand out as meriting undergrounding more than other regions. We have not found it but the planning authority may.

Windmills are connecting into the system at lower voltages, certainly a maximum of 110,000 volts and usually less. At those voltages, undergrounding is technically much less challenging. Undergrounding at 110 kV is still comparatively expensive but the technical issues and risks that arise are very different from 400 kV.

In terms of it being a small price to pay, that is probably a matter for everyone in this room to consider - whether the extra cost is €333 million, as estimated by the commission, or €500 million to €600 million as estimated by us. We do not believe that either is a small price to pay in terms of affordability of infrastructure in this country.

Mr. Jerry O’Sullivan

I thank Deputy Ferris for his comments. ESB Networks, since its inception, puts a significant effort into dealing with its customers and landowners. Coming from a rural background, we both know many of the retractable problems are often getting a supply to a new house past someone else's land when there is a field at play. One cannot do enough communication, showing respect for everyone's position and working with the farming community and landowners. We try and do this on the basis of mutual respect and bringing the better good of the project to the fore.

I agree with Deputy Ferris that it is a huge piece of the equation and something of which we have a lot of experience. Over 80% of wind farms are connected to the distribution system so we are familiar with that.

Mr. Denis O’Leary

Regarding the question about the Tralee project, if memory serves me right the name of the wind farm is Tursillagh which is 38 kV. The technical challenges associated with undergrounding at that level of voltage are different to the technical challenges associated at 400 kV. Thirty eight kV is a common voltage that we would underground in networks in Dublin, Cork and Limerick but it is still more expensive than building overhead. The additional costs associated with the infrastructure project in question were fully borne by the developer. No costs were passed on to the electricity customer.

Deputy Martin Ferris

The very same arguments were made on the costs for the Tursillagh project as has been made by EirGrid and it is just scaremongering. EirGrid is trying to convince people it will cost too much to underground and would be much cheaper by going overhead when the evidence I have is different. The cost is not that much more. The undergrounding costs in the Tursillagh project were borne by the developer and he got kickbacks when it came to the amount of electricity he could put on the grid.

EirGrid and ESB Networks have done themselves much damage by throwing out the claim undergrounding will cost 20 to 40 times more. As Deputy English said, on what are you basing these claims? The international commission told us an entirely different figure earlier. It is not fair and it is not doing any justice to the argument.

Mr. Dermot Byrne

To be clear, we have said AC at 400 kV undergrounding is six to ten times more expensive than overheading. We have also said it can go to much higher levels. The Ecofys report commissioned by the Government several years ago also gave the same figures. When one goes into different types of tunnel technology, the cost can rise up to 25 or 30 times. The independent commission also gave figures of an extra €10 million per km for AC undergrounding. That is consistent with the numbers we have put out.

Deputy Martin Ferris

What about the three times more expensive claim?

Mr. Dermot Byrne

The three times more expensive claim applies to undergrounding HVDC technology. The other figures of 25 times for tunnel type technology referred to AC undergrounding. We have to be clear to which technology we are referring.

Deputy Damien English

The figure of 25 times and 40 times more expensive was used by EirGrid staff. I am not misquoting anyone. I would not put it on the record of this committee on numerous occasions or at An Bord Pleanála hearing if I was not 100% sure of what was said.

Chairman

The options that seem to be the primary consideration are overhead AC with maybe some underground AC or DC underground. The one option the report ruled out was AC underground for the whole or majority of the route. If this debate is to be worthwhile, what we are comparing here is an AC overhead route versus an underground DC route using converters and what limitations that puts on the system and the network.

Mr. O'Sullivan's costing of 0.7% extra is based on the €333 million as opposed to any higher figure.

Mr. Jerry O’Sullivan

Yes.

Deputy Noel Harrington

This particular project is a long way from the constituency I represent. Could Mr. Cooke give the names of the reports on the Berlin and Middle East failings he referred to earlier for the record?

EirGrid referred to the difficulties with connecting the HVDC system to the AC system. Mr. O'Sullivan, as a Cork man, is very proud of ESB Networks and pointed out it is considered the top three in the world. Is it good enough to overcome that challenge?

There are always difficulties with and deficiencies in public consultation. The point has been made by EirGrid and ESB Networks that they can never consult enough. Some of the cases I have encountered in west Cork, however, lead me to believe the two companies could do more and certainly learn more about public consultation. Some of the problems were personality driven, unfortunately, which could have been handled better to achieve good results for the communities involved, EirGrid and ESB Networks.

We are told undergrounding to this extent has never been done anywhere else in the world. How afraid are EirGrid or ESB Networks of creating a precedent? We can deal with costs separately. In the reports, it seems the two agencies do not want to be the first to underground because of pressure coming from communities.

Mr. Jerry O’Sullivan

I took some time during our presentation to explain the respective roles. As a distribution system operator, the Deputy is correct that the ESB is seen as the third most advanced when it comes to smart metering, electric vehicles, and the integration of wind on to the distribution system. The latter is a unique problem for Ireland because in foreign jurisdictions most of the wind is connected directly to the transmission system. The target in Ireland is 40%. We have done pioneering research on how to get so much wind generated energy on to the distribution system.

In regard to the other factor, as I previously noted, we are only the contractor. We have never built HVDC and we take the technology in that respect. We are not the experts in that field and I would bow to the superior knowledge of expert committee and EirGrid in that area. We are a taker which builds the plant that is available in the market. It would not be good practice for Ireland, as a small country, to carry out that preliminary research because we do not have the necessary competence. We are a taker and a builder but we do not have a magic bullet.

Mr. Dermot Byrne

In regard to the challenge of innovation and using new technology, we are one of the few system operators using this technology. Very few operators are building with VSC HVDC systems at present. When the east-west interconnector is completed in September it will be the largest VSC interconnector to use this technology.

We are transforming the power system in terms of using higher levels of wind than any other country. We are recognised in international publications as being at the cutting edge of technology in integrating wind into the power system, with all the challenges that brings. Grid 25 is another example of our use of cutting edge technology. In developing the grid to do all that we want from it over the next ten to 20 years, it is much easier to upgrade the existing grid than to build new lines. We are upgrading 2,500 km of existing grid using high temperature, low sag technology, which is new to Ireland. The commission's report refers to this technology, which we are one of the few to use in a programmed manner to upgrade the grid.

Our concerns are not about the want of innovation or any other issue but about the reliability of supply to companies such as Intel and Aughinish Alumina, which rely on a high quality and reliable power supply. We are not going to put that at risk unless we are satisfied that the technology can do the job for which it is designed. The committee can rest assured that we do not fear new technology and that we are ahead of the curve in many areas of technological innovation.

The commission recognises that every project is different, however, and Mr. Cooke has explained how the North-South interconnector project differs from others. It has been suggested that we should parallel the existing AC connection with HVDC but we are concerned about what happens to the synchronicity between the two systems if the AC connection goes down. Will it cause significant brown outs or black outs in the system? That is our primary motivation and it is our responsibility to take this possibility into consideration because we have to live with the consequences.

Mr. Andrew Cooke

The report to which I referred was the Electricity Transmission Costing Study, which was carried out independently by experts from Parsons Brinckerhoff in association with Cable Consulting International and was endorsed by the Institution of Engineering and Technology in the United Kingdom. The study gave detailed consideration to the comparative costs of AC overhead, AC underground and HVDC underground.

On the Beauly-Denny project, my understanding is that none of the 400 kV line will be underground. I do not immediately recall a reference to it in the expert commission report but it is intended, as I understand it, to underground some lower voltage network in the vicinity of the project. This is being adopted more generally internationally. Where a new high-voltage line is being built and amounts of lower voltage an technically be undergrounded, which are less of an economic burden, this is being adopted. My understanding is that none of the 400 kV line at Beauly-Denny is going underground.

Moyhill is the substation we are referring to. It will still form part of the scheme. The question is around the timing within which it is required. Clearly, the growth rates nationally as well as in the north-east region have reduced since we originally planned the scheme and it looks like the need for that substation has gone back a number of years. It is currently our expectation that we will not be including it in the next planning application but that, depending on what happens in the interim, could change. That is our expectation today. It will be required in due course.

Senator Thomas Byrne

I have a few questions that Mr. O'Sullivan might answer. He does not seem to be at one with what EirGrid said in its conclusions, which is that the HVDC is technically feasible from a construction point of view. I accept that is different from network issues but he also agrees with the costing in the report.

Mr. Jerry O’Sullivan

I am happy to clarify my comments from the point of view of construction, which is our area of experience. As Mr. Byrne said, losses were not included by the expert commission. We do not have data, because we are not system operators, to identify any of that and, therefore, my comments were exactly as I said, which is from a straight construction point of view putting the infrastructure into the ground, we agree with the factor of approximately €335 million and we agree that, from a technical factor, putting it in the ground as distinct from operating it, both are doable.

Deputy Ann Phelan

The comment was made that Ireland is different. It seems that a significant element of how we deal with the connection is to be based on wind energy and that is connected to the connection. If we do not get it right, could the benefits of wind energy be negated? The province of Cadiz in south-west Spain has most of the country's wind turbines. Is Mr. Byrne familiar with how these were constructed and fed into the Spanish energy network?

Mr. Dermot Byrne

We have probably achieved a world leadership position in dealing with the challenge of integrating wind energy into a power system. We are familiar with what happens in Spain and other countries. The difference is that the challenge for us is last year wind energy accounted for approximately 16% in total in Ireland but that is an average. Typically, during a high wind period, we are getting to instantaneous amounts of wind energy of 50%. That is staggering and, therefore, 50% of the electricity for lighting, etc., can be from wind. We stop it at 50% because we are afraid at this point to go beyond that but we have a programme of work that over the next three to five years will get us to 75% instantaneous supply. No other country is doing that and we need to do that to get to the average of 40% by 2020, which is a Government target. It is understood and acknowledged internationally that we are probably at best practice in this space.

The specific issue of grid development to support that and how we do that is important and it is tied in. It is not as though the wind is directly connecting to this line but wind is connecting into the system in Northern Ireland and in the South. We have two systems that are coupled with one AC line. What happens if that line goes down and how will the imbalances in the system be managed? One system will increase in frequency and the other will decrease.

Deputy Ann Phelan

Is this the coupling issue?

Mr. Dermot Byrne

Yes and that issue can lead to brownouts. We recognise what the commission is saying about replicating the behaviour of AC using complex control systems. We believe that may not be good enough for the Irish system because of its lightness. There is a big risk that we are concerned about.

Deputy Mattie McGrath

I do.

Deputy Michael Colreavy

I thank the witnesses for their excellent presentations. I would normally be challenged by some of the engineering terminology used, but they have broken it down and made it simple. Everyone in this room agrees that we must have secure, stable supply of electricity not just for today but for decades into the future. We must never find ourselves forced to turn down an industrial or commercial development because we do not have a good supply. The problem is how we do it in such a way that minimises the adverse effects.

On the question of underground versus overground, as I said in my comments to the representatives of the expert commission this morning, generally we have considerable technical and economic information, some of it conflicting, but we do not have good research information on the adverse impact of such projects on people in terms of tourism, agriculture, and land and house sale values. I believe we do not have such information because those matters are difficult to measure. These factors are then dismissed as a NIMBY, not in my back yard, attitude but it goes deeper than that.

Are any research data available that give a measure of the adverse impact of overground 400 kV lines across land and over people's heads? Mr. Byrne mentioned that EirGrid works on an all-island basis with a company in the Six Counties. How are investment decisions and technical choices made given that they affect the Six Counties and the Twenty-six Counties? What happens if EirGrid has a preference for one option and the company in the Six Counties prefers another? How does it work for policy differences between the Government here and that in Stormont? How were the costs apportioned? I believe EirGrid estimated the increased customer cost for underground at 0.7%? Would that be just for customers in the Twenty-six counties or customers throughout the Thirty-two Counties?

Mr. Dermot Byrne

I absolutely agree with Deputy Colreavy in terms of the points of agreement. The question on which we give huge focus is how we can minimise the adverse effects. We have to recognise that we have a planning system that is designed to balance some of those. In the planning system those issues get aired. I believe that is the right forum for getting that balance right. At the end of the day the role of the planning authorities is to balance the impacts on the environment with not having the infrastructure or having infrastructure that is too costly. It is not an easy task, but that is their role.

Regarding assisting the planning authorities with research, we are doing some research in trying to get a handle on some of those impacts. In any future planning application we would hope to be able to bring that research to the planning authority. That is all I can say on it at the moment.

Deputy Michael Colreavy

I seek clarification on one matter. Does a planning application require an environmental impact statement and would an environmental impact statement not require that EirGrid would have done that research?

Mr. Dermot Byrne

Very much so.

Deputy Michael Colreavy

However, it has not been done.

Mr. Dermot Byrne

We are doing additional research which I hope will get better information to enable the planning authority make its decision. I refer the Deputy to the Ecofys report, an independent study commissioned by the Department in 2008 or 2009. It addressed many of the environmental impacts that come from overhead and underground options. There are impacts from both. That report, which is totally independent of EirGrid, also gave some very good information on environmental impact. That is a good resource, to which members of the committee might wish to refer.

Deputy Michael Colreavy

My second question was not answered. How were the decisions made given that it was for the Thirty-two Counties?

Chairman

Pricing.

Mr. Andrew Cooke

Fundamentally the decisions are made by each responsible company, North and South. At the moment Northern Ireland Electricity is responsible for transmission development in Northern Ireland and EirGrid is responsible for the standards and specifications in the South of Ireland. Obviously any solution needs to be compatible. The decision as to how costs would be apportioned if a different decision were made in one jurisdiction from that made in the other would be a matter for the energy regulators. The existing arrangement is that the costs are borne by the customers in the jurisdiction in which they arise. Northern Ireland customers pay for network infrastructure in Northern Ireland and customers in the Republic of Ireland pay for network infrastructure in the Republic of Ireland.

Deputy Seán Conlan

Chairman

Perhaps Mr. Cooke would like to answer.

Mr. Cooke

We have done various studies, and statements have been made by others such as the Commission for Energy Regulation, on the cost benefit of the project. A specific economic evaluation report has not been published so far as I am aware. We will certainly address the case for the project as part of the planning application. Certainly we can examine conducting a specific economic evaluation report if it is desired that we do so while progressing towards making a planning application.

I will have to check the matter with regard to the 23,000 km. I understood it to be in the report but it was not intentional if I have misquoted it. The European ten year network development plan prepared by the European transmission system operators, TSOs, plans 23,000 km of new 400 kV construction over the next ten years. Therefore, it is factually correct. However, if I incorrectly stated it is in the report, I apologise.

The Grid25 strategic environmental assessment, SEA, was a study on the Grid25 implementation plan generally. Again, I will have to examine the extent to which the North-South project was considered any more or less than other projects in the strategy.

With regard to undergrounding, as Mr. Byrne stated earlier, we will wait to see what is contained in the security of supply guidelines referenced by the Minister in his statement. It is still our position that an underground solution is not appropriate for this project based on cost and technical issues regardless of the route.

Mr. Jerry O’Sullivan

The Government's target of 40% for wind is driven from policy perspectives such as CO2 and the fact that Ireland is approximately 90% dependent on imported fuel, that it needs to be more independent and therefore should exploit its rich resources such as wind. In the longer term it is seen as giving value and independence to Ireland. Our present goal is with regard to the price of electricity in terms of its constituent elements.

Mr. Dermot Byrne

We and the Sustainable Energy Authority of Ireland, SEAI, conducted a study approximately 18 months ago on the impact of wind on the wholesale energy market, and because wind has a zero incremental cost - as wind blows there is no fuel or cost - it suppresses the system marginal price in the wholesale energy market which in turn suppresses the costs to suppliers and consumers. This suppression of the system marginal price balances out the special support schemes in place for wind. This was a very positive result for wind power. There are also all of the points made by Mr. O'Sullivan on indigenous energy, the obligations we have at European level to reach 40% by 2020, the huge potential for jobs here from renewables and moving towards an export industry. This is very much on the cards and many committee members are aware of these moves.

Deputy Seán Conlan

I find it incredible that somebody from the ESB cannot tell me, based on international evidence, whether extra wind generation on the grid would increase or decrease the price of energy for domestic consumers. Mr. Byrne mentioned when wind blows it has a suppressing effect on the cost of wholesale energy. What happens when the wind does not blow? Is it not a passenger on the grid which is an additional energy supply cost?

Mr. Jerry O’Sullivan

To address what Deputy Conlon described as unbelievable, in the earlier part of my presentation I described how ESB Networks is a completely ring-fenced part of the ESB with a separate board. As per third package legislation in Europe, staff in my organisation have no visibility of information on generation, supply or pricing. These are completely separate. I do not have any knowledge of the information quoted by Mr. Byrne, and this is intentionally how the market is constructed to ensure in my role in ESB Networks that no favouritism whatsoever is given to any generator or any supplier. I do my business in the mode I described completely independent of price. Hence, I cannot quote prices on the market in the same way as Mr. Byrne can.

Mr. Dermot Byrne

Another issue arises with regard to the generation portfolio that is right for Ireland, including wind and reaching the 40% target, which perhaps requires a far greater and longer discussion. In a nutshell the great advantages of wind are that we have a lot of it and it is indigenous so it replaces fossil fuels which must be imported from elsewhere. It is good with regard to energy and being indigenous but it is less good with regard to capacity. When it does not blow, we need other sources of generation. This is how the system has developed.

Chairman

I am conscious we are moving away from the nuts and bolts of the report. On the specific question, I do not know whether it was done by the CSO or Forfás, but as recently as two months ago an evaluation was done on the effects of wind on the unit price of electricity. It was more or less in line with the study Mr. Byrne mentioned which was conducted 18 months ago with regard to the reduction in grid price caused by wind being equal to the amount of the PSO and REFIT paid in the first place. Securing extra renewable supply and other benefits is cost neutral on the grid system. Those of us who were members of the previous Dáil and who were members of the Joint Committee on Climate Change and Energy Security had an opportunity to visit EirGrid. We also examined the pricing structure and how the various supply generators to the grid have an impact on price. It is priced on a half hourly basis all day every day in, as Mr O'Sullivan stated, a regulatory period of five years.

We have much work to get through and I am not sure where we are going with this discussion and whether it is relevant to the report.

Deputy Seán Conlan

I fully understand the point made by the Chairman but I specifically asked the representatives from the ESB and EirGrid for their opinion on this.

Chairman

Is this in the context of the report?

Deputy Seán Conlan

There is a theory that if we build the North-South interconnector quickly and overground, we will expand the grid and bring in wind generation from the west and somehow this will be of benefit to Irish consumers and taxpayers. I want to tease out whether going ahead with the overground interconnector, expanding the grid and increasing wind power in the west will increase or decrease the unit cost of energy for Irish consumers. I thought that as the ESB and EirGrid are before the committee, it would be appropriate to ask them.

Chairman

Regardless of whether it is quick or slow, the question was asked as to whether it is necessary and everybody has accepted that it is.

Deputy Seán Conlan

In fairness-----

Chairman

Sorry, hold on. I have not interrupted too many people. It is also necessary to have an all-Ireland grid that secures supply. Almost everyone, including those who have raised serious questions, has acknowledged the need for a robust grid. Deputy English is next, followed by Deputies Humphreys and Ó Caoláin and the Minister of State, Deputy McEntee. At the conclusion of this session, we will stop for a break of 45 minutes. For a particular reason, I will certainly need one.

Deputy Damien English

We are discussing wind. Nature is an amazing thing.

We have come a long way. The original problems related to costs and the feasibility of putting the project underground. We are now discussing wind in Northern Ireland. There have been many changes. A great deal of the information communicated in the past three or four years was not always correct. For example, the information on costs and undergrounding was proven wrong.

I cannot get my head around the idea that wind poses an issue in terms of AC versus DC. Mr. O'Sullivan stated it was a distribution problem, yet the line under discussion is mainly transmission infrastructure. Why does wind make a difference? There is wind all over the world. Some places have more than we do. If Mr. O'Sullivan cannot explain it today, perhaps he could send us a briefing paper. It does not add up. Having read through all of my notes from our many previous debates, it was never raised as a problem.

I cannot get my head around the question of why Northern Ireland has a major problem with joining the two projects together. The experts are adamant that there is no problem or, if there is, that it can be easily overcome. They seemed to be in no doubt in this regard, yet Mr. Cooke seems to be very much in doubt. We need to close the information gap.

It has been claimed that, since France and Spain have a few AC connections, building a DC connection would not pose them a problem. We already have an AC connection with Northern Ireland and people are suggesting that a DC connection be built. I imagine that the connections in Spain and France are much larger than the connection in Ireland and Northern Ireland. I may be wrong. Perhaps the witnesses can explain why it is not a problem for them while it is for us. It does not add up.

It has been stated that the high voltage direct current, HVDC, solution does not deliver the same benefits as overhead cables. Does it have any benefit? The commission sees many benefits and outlined a list of pros and cons, but I am only hearing negativity from the witnesses. Perhaps we could discuss and work on the positives.

The witnesses question the commission's figure on the cost of the underground cable, yet they do not question the commission's figure in respect of the overhead lines, despite the large difference between that figure and their own. Given the witnesses' original figure, it is not three times the cost. At their figure of €500 million, it is not even twice the cost. Perhaps we could have some clarity concerning the witnesses' figures for overhead lines. We have been told that the cost of underground cables has reduced, yet no one has referred to the cost of overhead lines reducing.

The witnesses do not necessarily agree with the commission's cost figures. This morning, the commission told the committee that its cost projections had been supported by recent projects. It seems to be in a strong position and can stand over its assertions. We must sort out the difference. Perhaps the witnesses can respond.

If the Chairman wants me to stop, I can contribute later. The witnesses stated that the commission did not refer to losses, but it did. According to it, there have been major developments in the reduction of the losses suffered by cables versus overhead lines. It also stated that the reduction in losses is greater when the power flow is increased. The commission cannot get into the heads of the ESB and EirGrid in terms of their power flow. They are building a project that can carry much more power than is intended to flow through it. The power flow level affects losses. The commission does not believe there would be a major problem, but the witnesses claim there would be a significant difference. What is "significant" versus the commission's "hardly any"? These are important issues.

No. The systems are linked. Each line is linked to the next higher voltage and so on. If the system gets badly out of control and the frequency changes, the whole of the grid comes down. A stable transmission is the key issue.

Mr. Dermot Byrne

I will take the first question and hand over to Mr. Cooke. We have a light system. Ireland is a relatively small island. It is called an island utility because it is not connected synchronously with anything else. As our system moves, it does not affect the UK's. Although we are connected via a HVDC system, HVDC acts as a barrier between the two systems.

A light system is different to a system on mainland Europe or in Great Britain or Scandinavia. This can become a problem. For example, if a large unit such as Moneypoint on our system trips, the frequency changes and the whole of the system slows down. As it slows, it can reach dangerous levels and customers can be tripped off the network. There are examples of this happening. The most severe occurrence on my watch was on 5 August 2005 when, due to a combination of events, including the failure of the control system on the HVDC interconnector linking Northern Ireland with Scotland, we lost approximately 400,000 customers on the island. Things happen and there can be brownouts and blackouts.

We have a frequency issue because we are a light system. Mainland Europe does not have this problem. Wind is not fundamental to the problem, as the challenge exists anyway, but it exacerbates the problem. As one brings more wind energy into the system, one removes some of the conventional plants. Therefore, the system gets lighter and frequency is much more volatile. I refer the Deputy to Mr. Cooke's analogy earlier of riding a bike or driving a juggernaut and hitting a bump.

Deputy Damien English

I understand that. Why is that more of a problem with DC than AC?

Mr. Dermot Byrne

AC naturally brings inertial coupling. That is how it works, whereas one has to effectively fool DC to behave that way by putting in complex control systems. That is only good enough up to a point. It does not give the solid inertial coupling which AC does.

Chairman

We need to move on. The question of France-Spain has been dealt with.

Deputy Damien English

No, not really.

Mr. Andrew Cooke

We have a single high voltage circuit connecting Northern Ireland and the Republic of Ireland. Although it has a capacity of 1,500 MW, typically it can only be operated up to 300 MW. The reason for this is, if it fails the two systems are separated, with one having a surplus in supply and the other having a deficit. It tends to be a bigger problem in Northern Ireland because its system is smaller. It might always be a bigger problem for Northern Ireland but it usually is. If we were sending 300 MW today to Northern Ireland and the connecting circuit failed then Northern Ireland would be short 300 MW. It needs to keep generation running in Northern Ireland even though it may not be economic in order to try to make good the difference. Also, keeping the supply in balance until the situation can be remedied would result in the loss of a certain number of customers. If we put in a second AC circuit, we could then transfer up to 1,500 MW across the Border on the two circuits taken together. If one trips the other will instantaneously pick up the difference. That is an inherent characteristic of AC systems. If on the other hand the second circuit is a DC circuit and the existing AC circuit trips, the DC does not have that inherent response. While we still have a circuit between the two systems, we no longer have inertial coupling. Unless one can make the HVDC do the same as the AC with control systems there is significant limitation.

With regard to how much one can do to make DC work like AC, no one has yet tried to do this. As regards the France-Spain situation, there are already four AC circuits between France and Spain. So, if the fifth circuit is DC and even one of the four AC circuits trips there are three others to give that instantaneous response. Also, Spain has a much bigger system than Northern Ireland.

Mr. Andrew Cooke

Mr. Andrew Cooke

We would be talking about operating an HVDC link with three ends, or three convertors, with one in Wales, one in Woodland and one on the Border or in Tyrone. That is generally not done anywhere and it is difficult with HVDC. The possibility might increase in years to come.

Deputy Heather Humphreys

Given the information contained in the commission report regarding the latest underground technology, do the witnesses accept that the pre-evaluation report was flawed? I am glad to hear there is some research on the impact on communities to assist planning authorities. Will there now be consultation with the affected local communities as part of this research, bearing in mind there is a viable underground technology option?

The research is more general rather than specific to a line route. We will bring this forward to the planning process as soon as we have it. It is our intention to use this in planning.

There is process with regard to funding, and this hearing is an essential element in that regard. We spoke earlier about the Minister's stated intention to bring a memorandum on security of supply to the Cabinet. Taking on board this hearing and the response from the committee, we will await that action and look forward to seeing what the memorandum will contain. That will set a policy framework for us, which is exactly what we would look for.

Deputy Heather Humphreys

My last question was what is considered best practice in designing a route.

Mr. Andrew Cooke

To clarify, does that relate to the overhead or underground processes?

Deputy Heather Humphreys

I am speaking generally.

Mr. Tomás Mahony

At the outset of a project, the intention is to lodge an application to either local authorities or An Bord Pleanála. In considering the project, one must have regard for a raft of policy documents, environmental legislation, planning legislation and various social impacts. There is an amount of desktop, drive-by studies to be done at the preliminary stages. We try to take account of all the constraints before formulating the best options available. There is a funnelling process which narrows the options until there is eventually a preferred option and route for that option, which can then be taken before An Bord Pleanála. In preparing the application, particularly for large projects, there must be an environmental impact statement and process. In doing this we would measure the impacts across a raft of headings, describe those impacts and present that in the application.

Deputy Caoimhghín Ó Caoláin

I am thankful for the opportunity to join with colleagues at this hearing this afternoon. I welcome the opportunity to meet and address the representatives of both EirGrid and the ESB networks. I have a couple of points and I would like to pick up on the pre-evaluation report, which Deputy Heather Humphreys also alluded to.

EirGrid and the ESB have many resources at their disposal and we should make no mistake that the people lined up against them are ordinary citizens. Before all of this visited their lives, they would have known very little about the technologies, with AC/DC for many only being a rock band. There was a failure to inform the wider public of advances in technology with regard to the potential for an underground approach, although this is favoured. I believe those developments are acknowledged in the commission report and it is clear there have been significant advances in the alternatives to the overhead pylon-supported power line approach.

I am a Deputy for Cavan-Monaghan and I know that within my region, which covers Meath, Cavan, Monaghan, Armagh and Tyrone, a tremendous gulf has been created between EirGrid and NIE and targeted and unwilling host communities. The gulf is so great now that I cannot see it being easily addressed at an early stage. This begs the question of whether EirGrid is intent only on getting its way or is there any development at all in its disposition to this proposition, which in principle is being supported by most, if not all, elected voices and people on the ground. The methodology and approach is the real issue. I have seen no evidence of a shift in the approach from EirGrid. It is the EirGrid way or no way and people are deeply offended by this. It is important to remind both entities before the committee that we, the citizens, are both the stakeholders and the customer base. It is most regrettable that the very valid and reasonable concerns reflected have been so vehemently ignored and opposed by EirGrid. I will not delay the hearing. The rush to press ahead and impose on families and whole communities overhead pylons supporting power lines is in stark contrast to the approach in many other EU member states and non-EU European states in terms of the whole approach to the creation of new interconnector systems and powerline connections. In a number of instances, they are adopting a festina lente approach, whereas the approach of EirGrid is bullish, seeking to move ahead as if the train will leave the station without it. The reality is quite different with the counterpart service providers in a number of European countries. With advancing technology gaining pace for the underground option, which would have universal acceptance, would it not be wiser to adopt the hasten slowly approach rather than the breakneck effort to move ahead of whatever might present in the time ahead?

The real argument that gave rise to this some years ago was need. Regrettably, in terms of the current economic decline, the need today is not as acute as it once was and is arguably less of an issue. This can be measured and I hope for some realisation that this is a cross-Border project and there must be agreement. The process of acceding to the proposition on both sides of the Border is not yet in place. It is a hurdle yet to be crossed.

The document circulated to the meeting is EirGrid's update and conclusions following the Meath-Tyrone review by the international expert commission. I have had the opportunity to engage with a number of the witnesses in a variety of settings over recent years on this issue. It was hammered home to me that the preferred option I advocate, the underground approach, was not feasible. Its feasibility was challenged time after time. However, the first of four conclusion points following the publication of the international expert commission report states "an AC overhead line is by far the technology of choice". The message I take from the conclusions, based on the independent expert commission report, is that choice exists. It is acknowledged in the first conclusion in the document circulated to committee members. Feasibility has been conceded and choice exists. One can only ask whose choice it is. I have been heartened by the considerable strength of the argument presented by people across the political spectrum represented in the Houses of the Oireachtas. I refer to Government, Opposition and Independent voices. We have been of one voice on this matter and EirGrid has a duty responsibility and care to heed those voices and to take on board the concerns of the unwilling host communities that EirGrid has addressed or failed to address heretofore. EirGrid must accept its own conclusions based on the independent expert report. The overhead line approach is not a choice I ticked the box for and I ask that EirGrid, ESB and ESB Networks take on board the appeal of the collective voice of the members of this committee, and others who have joined us, in the course of its engagement.

Mr. Dermot Byrne

There is a lot in what has been said and it covers important topics. Members referred to an information gap and it is fair to say that this issue has been aired extensively at a the number of sessions, including at previous Oireachtas committee sessions. These sessions were based on previous reports, such as the Ecofys report - an independent Government report from a number of years ago - our reports, the PB Power report and the TEPCO report. These reports had a good airing, as did the issue of HVDC versus AC, to the extent that a delegation from the previous Oireachtas committee visited a HVDC link using VSE technology in Estonia as part of the deliberations of previous committees. Perhaps the Chairman can confirm this. There was extensive discussion about the technology choice. The backing document in our application to the planning authorities set out the basis for the choice. There are technology options, including AC overhead, AC underground and DC. This is the submission to the planning authority and we set out the grounds for it. In so far as we have a responsibility to make the choice and bring forward the project, this is the basis for bringing forward the AC overhead submission. We accept that not everyone agrees but the planning authority is the forum for discussion on these issues.

An overriding issue for me as chief executive of EirGrid is that if I was to bring forward proposals for a HVDC link at considerable extra cost and risk, when it does not do what we want it to, this committee would be challenging me for dereliction of duty. The proper forum for factors such as the impact on the environment and the landscape is the planning forum. That is the forum where these issues need to be thrashed out.

I probably have answered all of the questions there. If I have omitted any particular one,-----

Chairman

The rush, given the drop in demand.

Mr. Andrew Cooke

I would say other countries in Europe are getting on with this in the main. In Spain, for example, in the past two years, they have built 3,000 km of 400 kV line driven in large measure by Energías and their renewable objectives.

Certainly, delays in infrastructure has been identified as a problem. Countries are bringing in new legislation. They are bringing in new planning processes. They are looking at other matters. Generally speaking, they are not looking at undergrounding 400 kV lines. The 400 kV lines are going overhead. They are looking at very small sections of undergrounding. They are looking at undergrounding some lower voltage network. They are looking at community gain. They are looking at other matters to mitigate any impact of new infrastructure on the communities through which it is going. They are moving on and they are not undergrounding 400 kV.

Deputy Caoimhghín Ó Caoláin

On Mr. Byrne's point about the planning authority, because of the particular approach adopted here, it goes directly to An Bord Pleanála because it is of strategic infrastructural status, but let us not deny the information to the committee. The planning authorities, as we as elected representatives, have traditionally dealt with and recognised, have themselves made submissions outlining their serious concerns at what is proposed. Certainly both local authorities in my constituency, those of counties Cavan and Monaghan, presented before the oral hearing that had to be abandoned due to the bad preparation for which these companies present were responsible, and the exercise had to be set aside. Planning authorities and expert planners, staff in whom we have considerable faith, have also put their voice and views before these companies present and the public, and before An Bord Pleanála. That needs to be noted also.

Deputy Shane McEntee

As a Minister of State, I must be careful of what I say and not get in conflict with any of my counterparts in a different Department.

We came here today to discuss undergrounding, and we have moved on to many matters. It was music to my ears when I heard Mr. O'Sullivan state that ESB was so strong that it was able to go on the bond market to get its own funding, but under the previous Government the Department of Communications, Energy and Natural Resources had to give ESB permission to do so. The company is not as independent as it thought it was.

This morning the commission came in and stated it was affordable, acceptable and reliable and now EirGrid has clearly stated it is not affordable and reliable. It is crucial, rather than go any further, that the two persons who are looking at this in a room should be brought back in because neither I, nor anybody here, is technically capable of stating whether it is affordable. It is an area that must be cleared up.

At the end of the day, these are the main issues can we afford it and is it reliable? Deputy English has touched on that. Mr. Cooke has been so negative - he should not take this as an insult. If anyone came in and listened to what Mr. Cooke had to say, he or she would say that all of the people from Monaghan and Meath and all their TDs were here merely to be cranks. It is good that the others on the ground will have their say. We know it is affordable, reliable and, most important, acceptable to the public. I will leave it at that, as a comment rather than a question.

Chairman

Does Mr. Byrne wish to respond?

Mr. Dermot Byrne

To make a point about affordability, the commission set out the difference in costs and it is a great deal of money. The affordability issue is probably a policy issue, on which the committee will have a view and will feed back to the Minister. As regards the feasibility of building this, we are building one and it is kind of easy to do. That is not the issue. It is not a question of us not wanting to do something that is easier to do, perhaps, than overhead. We are doing it. The issue is what is right for Ireland. There is a very significant technical issue in this particular project, the concerns technically about which we have given a view to the committee. It is a very real technical issue. We are not making this up. It is very real.

Deputy Shane McEntee

I understand that. It was a game of two halves. Here we are after using taxpayers' money to pay for the first time ever for a specific underground possibility and they have been very fair, and everybody has accepted it, but now, in the second half, it is not an issue. It makes us, in particular, the people of Meath and Monaghan, look like we are merely doing this for the sake of complaint, and that is not true. The one good development over the past four years is that there has been considerable understanding between EirGrid and those in the Gallery who are watching and who will give a professional view that we are not a bunch of people complaining for the sake of it, and we know the importance of this to the State. I am disappointed that the companies have been so negative about what happened with the presentation this morning.

Chairman

We will try to conclude in the next ten minutes.

Deputy Regina Doherty

I agree with Deputy McEntee. Having been involved with local communities for the past five years, I am genuinely ashamed of the treatment by EirGrid of most of those families.

That aside, Mr. Byrne mentioned earlier that at previous presentations to Oireachtas committees there was much deliberation on HVDC. I was not a Member of the previous Dáil and I am only reading previous transcriptions from the committees. I would disagree with Mr. Byrne. There certainly were not sufficient discussions on HVDC and I welcome that we are discussing it today.

Based on what Mr. Byrne stated during his presentation today, EirGrid's original costs for overhead lines are very different from the expert commission's costs. What is he stating today are EirGrid's costs for the overhead project and for the underground project, and do his costs include costs of delays, land, compensation, etc.?

Mr. Andrew Cooke

I propose to suspend until 4.45 p.m., at which point we will give those who have been waiting patiently all afternoon as much time as they need. The meter is full and the lights are working.

Sitting suspended at 4 p.m. and resumed at 4.45 p.m.

JOINT COMMITTEE ON COMMUNICATIONS, NATURAL RESOURCES AND AGRICULTURE debate - Tuesday, 21 Feb 2012

EirGrid and ESB Networks

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Jerry O’Sullivan

Mr. Denis O’Leary

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Jerry O’Sullivan

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Cooke

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Jerry O’Sullivan

Mr. Jerry O’Sullivan

Mr. Jerry O’Sullivan

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Dermot Byrne

Mr. Dermot Byrne

Mr. Andrew Cooke

Mr. Tomás Mahony

Mr. Dermot Byrne

JOINT COMMITTEE ON COMMUNICATIONS, NATURAL RESOURCES AND AGRICULTURE debate -
Tuesday, 21 Feb 2012