The Grid25 development strategy lies at the heart of this hearing. Although the focus today is specifically on the North-South interconnector, it is important to bear in mind that each and every political constituency in the country will be impacted by the Grid25 development plan. The slides in front of committee members give an outline to that plan in the different parts of the country. The major backbone projects planned by EirGrid serve to emphasise this point. These include the Grid West Mayo project, the Moneypoint to Cork project, the grid link from Cork to Dunnstown in Kildare, the Dublin ring project, the North-South interconnector in the north east and the renewable integration development plan in the north west.
The North-South interconnector is the first of these backbone projects to have been submitted for planning approval to An Bord Pleanála in 2009, but was withdrawn by EirGrid in June 2010 under controversial circumstances. It is 140 km in length, and runs from Dunboyne in Meath, through Cavan, Monaghan and ends at Turleenan in Tyrone. EirGrid's published cost for the project is €280 million, as a 400 kV overhead line. It has never examined an underground specific route or costing.
As outlined by our chairperson, NEPPC has actually spent more money on commissioning expertise to examine undergrounding the North-South interconnector than EirGrid or any other organisation in this country. Importantly, we have commissioned studies on aspects such as the impact on agriculture, on land and property devaluation, on landscape and tourism and on rural business. These reports are crucial to obtaining an accurate cost-benefit analysis.
It is the contention of NEPPC that four decision criteria need to be met in justifying the recommendation for undergrounding the North-South interconnector, namely, feasibility, affordability, acceptability and achievability. First, the undergrounding option must be examined for technical feasibility, including safety, reliability and security of supply. Responsibility for this decision rests with EirGrid, but also important insights and inputs can be gleaned from the transmission system operators in other countries and from independent experts in industry and academia. In this regard, the international expert commission and the Meath-Tyrone report have particular relevance.
The next decision relates to affordability, and there already have been many discussions on that today. The full project cost-benefit analysis and value for money are critical. Responsibility for the decision lies with the Government, as part of its strategic direction on transmission infrastructure.
The acceptability of electricity infrastructure is very much centred on concerns related to impact on health, environment and local communities. Responsibility for this decision rests with the public in general, but particularly with affected landowners and communities. Finally, overall achievability of the North-South project is the responsibility of all stakeholders in terms of engagement, co-operation and a level of trust.
NEPPC believes that undergrounding the North-South interconnector is feasible, for a number of reasons. We have highlighted those in our slide. First, the Meath-Tyrone report points out that over the past few years there have been tremendous developments in transmission technology that were not considered by several previous reports and thus not considered as an alternative by EirGrid. It further states that for HVDC lines, undergrounding with cables is today a realistic solution. The most recently developed HVDC system using voltage source converter technology, VSC, has in recent years seen significant technical development and a commercial breakthrough, particularly in Europe. There are now three European manufacturers offering full off-the-shelf solutions for VSC-HVDC converters and three European manufacturers offering extruded HVDC cable.
Second, the choice of similar technology by EirGrid for the establishment of the east-west interconnector and its statements on reliability and security of supply are strong support for its use for the north-south interconnector. Some background to the east-west interconnector and security of supply can be seen in the slides. There has been increasing adoption by other countries of HVDC underground systems, as highlighted in the Meath-Tyrone report. As mentioned earlier today by various parties, many of these cable production factories are completely full up in terms of orders. Fourth, the terrain and sub-surface geology in the north-east are suitable for an underground project, and there are various options available including old rail beds, existing road infrastructure or agricultural land.
A key area of discussion centres on the affordability of the underground system. A comprehensive analysis of affordability needs to encompass the full range of costs and benefits involved. These clearly must include capital costs, operating or life-cycle costs, and impact costs such as land and property devaluation and project delays. The report estimates the capital cost of the overhead line option at €167 million, compared with costs of €286 million, €350 million and €500 million for the underground options, depending on the power flow capacities assumed. The slide highlights the power flow capacities that have been published by EirGrid in terms of its estimated requirement for the future. Given this published information, NEPPC is of the view that the €286 million or €350 million options are the appropriate comparisons to use. Using EirGrid's initial estimate of €280 million for capital costs alone - as has been mentioned here already - for the overhead line, the comparative capital cost of underground compared to overhead lines ranges from virtually equal to 1.25 times higher.
The Meath-Tyrone report highlights that costs can vary considerably depending on, for instance, the terrain involved, the tower design being used, metal prices and many other factors. From a solely technical perspective, the cost of undergrounding has reduced dramatically from an estimated 25 times the cost of overhead lines to between one and three times the cost of overhead lines. The key message is that with ongoing technological advances, and when all other associated comparative costs are factored in, the undergrounding option is now reaching a point of being more competitive than the overhead lines alternative.
The human impact of overhead lines on people's livelihoods and assets such as land and property is also a key component of an affordability analysis. A large number of international studies have been carried out over the last 50 years to assess the impact of overhead power lines on the value of residential property and land in close proximity to pylon towers. The results of numerous such studies have shown that such power lines have a statistically significant negative impact on both land and property values. Furthermore, properties up to several kilometres distant with unrestricted views of such overhead lines also suffer a significant negative effect. The most common effects identified and cited in court cases around the world are reductions in market value, difficulty in selling properties, unsightliness of pylons, and visual and noise pollution. In Denmark, Energinet, the Danish transmission system operator, routinely compulsorily purchases all residences within 80 m of new lines, and has a sliding scale of compensation to 180 m distant.
In 2009, a detailed route-specific study was performed by NEPPC in association with Lisney Associates, using international standards to estimate losses in property value along the proposed route. This took into account the proximity of a property to the line, the type of house and the market price at the time and applied a formula to estimate the loss in value. A similar study was performed by Farrelly & Scully to examine losses in land and agricultural productivity value. This very detailed analysis reported that property losses could be expected to total €387 million, with farm devaluation losses of €651 million. Even allowing for a 50% reduction in both property and land values since 2009, the combined devaluation and potential liability figure is nevertheless still over €500 million.
The delays incurred in upgrading the grid also carry a significant cost. Chambers Ireland, which probably received its statistics from EirGrid and ESB, estimates this at approximately €30 million per year. In an earlier session here, a figure of €25 million to €35 million was quoted by EirGrid. Planning delays are a significant obstacle to efficient roll-out of the grid upgrade. Undergrounding, however, does not require planning and so provides an immediate solution to this problem. It is often assumed that delays are caused solely by public opposition to new overhead lines. This is not the case. The North-South interconnector planning application was withdrawn by EirGrid after a 21-day hearing by An Bord Pleanála and awaits resubmission. Many of the challenges relate to onerous compliance requirements and the practical difficulty of finding a straight-line route option through a countryside where one-off housing has been facilitated. Other impact costs that have not been quantified relate to tourism and local business effects in the vicinity of an overhead line. Taking these costs into account, the overhead line option is between two and four times more expensive than the underground alternative, depending on the level of property and land devaluation. When one factors in all of the additional costs associated with overhead lines that are not covered in this report, it makes the undergrounding option economically justified and viable and thus affordable.
The next decision criterion is that of public acceptance. This is not specific to Ireland. Across Europe, 20 of the 32 main electricity infrastructure projects face delays. This is in stark contrast to the main underground gas pipeline projects, for which no significant delays have been reported. The reasons for delays in ten of the 11 top-priority electricity projects include the common theme of opposition from local populations for health, environmental and visual intrusion reasons. In this regard, the Commission has stated: "It is vital to reduce the planning and construction time for prioritised EU infrastructure, in a way that duly takes into account environmental, safety and health concerns."
Health effects from proximity to pylons are the key public concern. As evidenced from many international studies and opinion surveys, the overwhelming majority of people believe that electromagnetic fields emitted from overhead electricity lines adversely affect their health. Underground cable systems deal with concerns related to both health and proximity to property. No electric fields are emitted from underground cables, and, importantly, the magnetic field is also greatly reduced. Underground cable routes can if necessary be placed within 11 to 17 m from dwellings, versus 95 m for overhead lines, in order to comply with an exposure limit below the 1 microtesla level. Many European countries - for example Italy, Sweden and the Netherlands - have, based on research related to childhood leukaemia, set safe precautionary levels for human exposure to EMFs that are up to 500 times lower than the informal levels adopted in this country and used by EirGrid. The EMF from an overhead electricity line cannot be shielded, and residences need to be more than 90 m from the line to meet the precautionary safe reading currently adopted in this country. In contrast, even during peak loads, the EMF levels above underground cables reduce to 1 microtesla within 11 m or less. EirGrid is willing to commit, at the most, that overhead lines will be a 25 m distance from residential properties. This distance would be acceptable if undergrounding was adopted.
The key players in terms of acceptability are affected landowners. These landowners have recently signed form of authority contracts with NEPPC requesting that we represent them in all dealings with EirGrid related to the North-South interconnector. The form of authority contract also serves notice on EirGrid not to enter any lands or property without approval from NEPPC. We carried out a comprehensive survey of such landowners along the proposed route. The survey comprised more than 200 fully completed detailed questionnaires and interviews, representing 95.1% of the non-State landowners and close to 98% of the overall proposed route in terms of distance. Some of the results are highlighted on slides 30 and 31.
Some crystal clear messages were recorded. Some 99% of landowners "object strongly" to EirGrid's plans for overhead transmission lines. The same percentage, 99%, of landowners "prefer underground cables" as an acceptable alternative. It is encouraging to note that 89% have stated that they would permit their land to be crossed by underground cables. Achievability of this project requires clear leadership by Government, and full involvement of all stakeholders and this is highlighted on slides 32 and 33.
I will now hand back to Ms Treacy to make our concluding remarks.