Joint Committee on Environment and Climate Action debate -
Tuesday, 30 Jan 2024

General Oversight of EirGrid: Discussion

An Cathaoirleach

The purpose of this meeting is to have a discussion on the committee's general oversight of EirGrid. On behalf of the committee, I welcome from EirGrid: Mr. Mark Foley, chief executive, Mr. Michael Mahon, chief infrastructure officer, and Dr. Liam Ryan, chief innovation and planning officer.

I remind witnesses of the long-standing parliamentary practice that witnesses 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 or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. If witnesses' statements are potentially defamatory in respect of an identifiable person or entity, I will direct them to discontinue their remarks. It is imperative they comply with any such direction. We do not have any witnesses joining us from outside today.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members that they are only allowed to participate in the meeting if they are physically located on the Leinster House complex. In this regard, I ask all members to confirm they are on the grounds of the Leinster House campus prior to making their contribution to the meeting.

I invite Mr. Foley to make his opening statement.

Mr. Mark Foley

The opening statement will be shared between myself and two of my colleagues on foot of their expertise in this space.

I thank the committee for the opportunity to appear before it to outline EirGrid’s contribution to the delivery of the Government’s climate action targets. As members know, electricity will play not just a central role but a profound role in what will happen with regard to the economy and society over the next number of decades. This is reflected across climate and energy policy, which recognises the importance of both decarbonising electricity supply and using this supply of cleaner energy to deliver decarbonisation in other sectors of the economy, with transport and heat being of particular interest.

EirGrid’s Shaping our Electricity Future provides the blueprint for Ireland’s power system in 2030. The targets are ambitious and achieving them will require collaboration across the entire ecosystem. However, the plan is clear and deliverable and is based, in the main, on proven technologies. We can take comfort in that. We must make the electricity grid stronger and more flexible because it will need to carry more power from distributed renewable sources. It is also essential that we invest in the correct technologies to ensure that we have a balanced portfolio in meeting Government targets around carbon emissions. This includes: renewable generation; gas-fired generation, which is renewable gas ready; electricity storage; low-carbon technologies, which provide essential services for a secure power system; and, of course, demand-side flexibility on the demand or consumer side.

I will now talk about generation and demand. The demand for electricity in Ireland is that of a normal prosperous, growing economy. We are fortunate in that we have a fantastic renewable resource on the island, both onshore and off the coast. Over the past year, 39% of our demand was supplied by renewable sources. We have the capacity to accommodate 75% at points in time and are taking measures to increase that to almost 100%. Last December, we reached a new wind record on the system where, for that month, 52% of the electrical energy required came from wind sources. This is a record in a global context.

Electricity demand continues to grow. In the past few weeks, we have seen two peaks for electricity driven by the cold weather and the growth in a prosperous economy. It is essential that the elements I mentioned earlier are in place to allow us to utilise the maximum amount of renewables at a point in time. Higher renewable penetration is not just a goal in itself; we need a safe secure, reliable and low-carbon supply of electricity. Shaping our Electricity Future is the plan that helps Ireland deliver this.

I wish to speak to the facts about electricity demand in order to ground this conversation and, perhaps, the question-and-answer session that may follow. As a nation, we are fortunate to have an economy that has performed well in recent years. Our population continues to grow, foreign direct investment remains strong and Government surpluses have helped Ireland navigate the crisis of Covid and the energy crisis arising from the war in Ukraine.

I emphasise that - and I would like members to take this point on board - electricity demand in the years 2017 to 2022 grew at an average rate of 2.8%. This is according to the CSO report on metered electricity consumption. This is not abnormal. This excluded self-consumption, which is relatively modest. The metered data for 2023 is not yet available. The forecasted centre-line growth for demand for the next ten years is estimated to be at an average rate of 3.63%, as detailed in EirGrid’s recently published Generation Capacity Statement 2023-2032. The recent report from the International Energy Agency as of last Thursday or Friday appears to be based on unrealistic assumptions, particularly an unconstrained view, and is not consistent with our analysis.

We should not get distracted by that report.

As per EirGrid's latest generation capacity statement the demand in 2026 is forecasted to be 39.6 TW, of which 10.2 TW will come from large energy users. This is about 25%, something that should be manageable for an economy as prosperous and as growing as ours. Shaping Our Electricity Future provides for our demand projection and caters for a 50% growth in demand over the decade were such to materialise. We are not sponsoring it and we are not saying that it is necessary but if it happens we will be prepared for it. This is a prudent approach considering the many variables at play during this electricity transition. In the recent all-island generation capacity statement, published by EirGrid and SONI, which examines the balance between electricity demand on one side and supply in Ireland and Northern Ireland, we continue to highlight the challenging outlook for Ireland with capacity deficits identified during the ten years to 2032. The deficits will increase up to 2032 due to the deteriorating availability of conventional electricity generation plants and the ongoing failure of the capacity market mechanism to deliver adequate new generation capacity. This is not related to the Ukraine crisis. This is due to a failure of the market mechanism to deliver. The projects are out there but the mechanism is flawed. We would be very strong on that point. Our analysis for Ireland shows that further new electricity generation such as those powered by cleaner gas, which is renewable-fuel ready, will be required to secure the transition to high levels of renewable energy over the coming decades. There is no inconsistency by saying we need gas generation to backstop the renewables revolution. We need both working in tandem.

To address the immediate capacity deficit challenge, which manifested in 2021, EirGrid proposed an intervention in the form of the direct purchase of temporary generation units, which was supported by Government in the form of legislation, funding and policy direction. The first tranche came on stream before Christmas and that has led to a stable situation over the winter period. This temporary generation is the first for Ireland. It is designed to provide essentially an insurance policy for the electricity system as regulators work to bridge the gap between supply and demand on a more enduring and sustainable basis. The enduring problem of the failure of the capacity market must be resolved as a matter of urgency. We cannot continue to rely on temporary measures.

I will speak briefly about data centres because it has been a confusing debate that has taken place in the public domain. Shaping Our Electricity Future caters for a balanced growth between demand and generation of electricity as part of a holistic system which will operate at between 70% and 80% renewables on an annual basis. Electricity demand will come from: economic growth, which is healthy; from population growth, which is equally healthy; electrification of heat and transport, which is part of the decarbonisation revolution; and from industry including large energy users. Shaping Our Electricity Future provides for growth across all of these demand categories. EirGrid stresses the need for an appropriate Government policy framework and an accompanying regulatory framework that can facilitate the allocation of appropriate demand to support the digital economy, which is key to both the energy transition and the overall welfare and prosperity of the economy. We are not saying we have to have unbridled demand but we do need a policy that supports appropriate demand and that does not exist at this point in time.

Concern about excessive demand growth is not helpful as it fails to recognise the importance of appropriate demand increases that is synchronised with increased renewables. We have provided our views to the Government on this matter. I will now hand over to my colleague, Mr. Michael Mahon, who will speak about the capital programme where we have made extraordinary progress in the last two years.

Mr. Michael Mahon

EirGrid published the Shaping Our Electricity Future Roadmap, version 1.1, in June 2023.

This follows the publication of the original Shaping our Electricity Future roadmap in November 2021. The roadmap outlines how we will meet the ambitious targets in the climate action plan 2023. This will require Ireland to have connected 9 GW of onshore wind generation, 5 GW of grid-connected offshore wind generation and 8 GW of solar PV generation by 2030.

EirGrid needs to transform the grid to achieve these targets and this requires the delivery of more than 350 projects in Ireland by 2030. To achieve this we need unprecedented collaboration with our partner, ESB Networks and across the entire energy ecosystem, as well as strong support from the public, particularly on project delivery. A large element about collaboration with industry is transparency. To support this we provide quarterly updates on our 350 projects. We have been doing this since 2022.

To minimise the requirement for new infrastructure, many of the 350 projects involve uprating or upgrading the existing network. Last year alone, in order to move this along we made 20 planning applications, we looked at 40 projects and concluded that planning was not required for those projects, while also receiving 20 positive planning decisions. In addition, a number of new strategic projects are also required and I will give an update on some of them now.

In north Connacht we need a new circuit to improve security of supply and to transport renewables. We received a positive planning decision from an Bord Pleanála last year. This project has now been handed over to the ESB for construction. Near Dublin, we need two circuits in Kildare, Meath and Dublin to improve the security of supply, transport renewables and meet the increasing demand. The Kildare-Meath project planning application was submitted last April and the east Meath-north Dublin project planning application will be submitted this quarter. Both of these projects will be handed over to ESB Networks for construction next year. We also need to upgrade and effectively replace the existing network in Dublin. In 2022, we launched Powering Up Dublin and after a major stakeholder engagement last year, just this morning we announced three of the five cable routes for these circuits. We also received planning permission for two new substations in Belcamp and Poolbeg.

With each of the projects outlined, there is a strong emphasis on public engagement and listening to community views. We now establish a dedicated community forum for each project where people can have their say. In addition, due to the significant number of infrastructure projects ongoing we established the Dublin infrastructure forum which has brought together many semi-State bodies such as ourselves to co-ordinate and collaborate on projects with the aim of reducing the amount of disturbance on communities. Such is the success of this to date that there are already some ducts installed as a result of other semi-State projects that we can utilise when construction commences for our ducting. An example of this is the Royal Canal greenway.

The last key project I wish to highlight is the North-South interconnector in the north east. While this project has often drawn criticism locally, we cannot underline enough the central role it will play in helping Ireland and Northern Ireland to decarbonise. The project has full planning permission and last year an independent international review cleared the way for us to begin engaging with land owners and communities. We are currently active across Meath, Cavan and Monaghan, engaging with land owners and communities. We ask members to support the project as a key piece of all-island infrastructure.

In summary, we are well under way to the development of all our projects. This requires a €5 billion investment in infrastructure. We expect to have all this in construction by mid-2025. Further details can be found on our website, eirgrid.ie.

I will now hand over to my colleague, Dr. Ryan.

Dr. Liam Ryan

I will focus on the future element. The energy transition is actually happening. In addition to the infrastructure progress Mr. Mahon talked about, we are changing how we operate the power system. Currently, we can operate the power system where 75% of the instantaneous electricity is delivered by non synchronous renewable sources such as wind and solar.

We have reduced the number of must-run thermal plants on the system from five units to four, we are scheduled to execute contracts for the provision of low-carbon inertia services in quarter 2 of this year and we are concluding our recommendations paper to the CRU and the DECC following the EirGrid call for evidence on long-duration energy storage. We are changing how we plan the system and looking at anticipatory investments in collaboration with third parties in the ecosystem – under the well-established contestability approach - to accelerate the energy transition and unlock the renewable energy and storage potential.

Aligned with Government policy, offshore wind is planned to be a key contributor to delivering the renewable ambition. Strong progress is being made to set the required regulatory frameworks and connection principles and methods in place. The initial focus leading up to 2030 is on developments on the east and south coasts, placing the generation close to the largest centre of demand and thereby reducing network constraints and the scale and quantity of network reinforcements required. As detailed in Shaping Our Electricity Future, further interconnection with neighbouring power systems in addition to EWIC, Celtic and Greenlink is required. This will provide additional flexibility to operate the system and will help to maximise the use of surplus renewable generation.

Our ability to deliver the network needed by the target dates is dependent on co-operation, collaboration and support from the wider energy ecosystem. We require planning decisions and offshore licences to be granted in a timely manner, we require availability of sufficient outages to facilitate the delivery of the required infrastructure, the road network will need to be available for the routing of underground cable infrastructure, and suitable land must be available for strategic network investments as well as access to sites for necessary site investigations. In addition, for onshore infrastructure, once consents are achieved, EirGrid hands the project over to ESB Networks, which will build the infrastructure.

We recognise that 2030 is a milestone on the ultimate journey to a net zero energy system. In December, we and SONI, the System Operator for Northern Ireland, opened and held a consultation, entitled "Tomorrow’s Energy Scenarios 2023", to outline our long-term energy scenarios for Ireland and Northern Ireland. Our scenarios consider how electricity demand and generation might evolve from 2035 to 2050 and considers electricity demand, generation, storage and interconnection supported by different technologies coming on the system. TES 2023 will enable us to continue to support the Government and the regulatory authorities in the development of energy policies and market design development required to achieve a net zero system.

In recent days, the offshore network development plan was published by ENTSO-E, the association of transmission system operators in Europe. It calls out the need for further interconnection, including hybrid interconnection, between Ireland and Great Britain and between Ireland and France to unlock our offshore potential and assist in the European decarbonisation journey, mainly focused on the 2040 and 2050 time horizons, which aligns with the work on Tomorrow’s Energy Scenarios 2023.

The committee can see that we are planning in all time horizons to ensure that policymakers are better informed on the transition from now to 2030 and then on to 2050 and beyond. We are also focusing on delivering the targets for the 2030 time horizon. We have taken measures over the past two years to secure the system and we now need to ensure the right types of generation are delivered and the necessary network is in place. We have delivered the roadmap in the form of Shaping Our Electricity Future. It is essential that the energy ecosystem play its role in the delivery of EirGrid and the Government's climate action targets. The role of the Government and elected representatives in supporting our journey is critical. Support from local elected representatives for projects and activity is important and welcome. Trusted leaders in communities are essential as we seek to work together to build a cleaner energy future.

An Cathaoirleach

I thank Dr. Ryan for completing EirGrid's opening statement. We normally allow five minutes for opening statements but it is very useful for us to get so much information, so we have departed from the usual rule. We very much appreciate the detail contained in the opening statement. It is extremely helpful for us.

We are going to get into some of the challenges we have in grid development. Before that, though, I congratulate EirGrid on the work it has done to get us this far in decarbonising our economy. The performance of the grid in December, and even in the last week, was incredible. It is a testament to the leadership shown in EirGrid by the witnesses. Speaking on behalf of the committee, I ask them to convey our appreciation across the organisation for the work done by EirGrid. I say this because it is central to our decarbonisation challenge and this should be acknowledged.

We have a list of committee members who wish to speak already and I will bring them in shortly. Returning to Dr. Ryan, I wish to talk about the long term and the interconnection policy published last summer. Further interconnection post 2030 was mentioned and the challenges that will be encountered from 2040 to 2050. In the context of the State in the years ahead really ramping up our offshore energy generation potential, up to 30 GW and beyond, this represents a phenomenal amount of power. It seems to me that interconnection with mainland Europe, in particular, and also with the UK, will be critical. It seems that more than what was listed in this regard might be required. I think the interconnection policy allows for more but I will be interested to hear Dr. Ryan's thoughts on the longer-term interconnection pipeline.

Equally, regarding the comment made on the report from the International Energy Agency by Mr. Foley, in respect of saying it is based on unrealistic assumptions and unconstrained views and that his analysis is different, I afford him the opportunity to go into this subject in more detail. That would be helpful for us.

Dr. Liam Ryan

Regarding interconnection, there is a need for a significant amount of such interconnection between Ireland and neighbouring countries. I refer to France in particular, where we have the Celtic interconnector, which is progressing and doing so at speed. We see the need for additional interconnection between Ireland and France. We have engaged with the system operator in Spain and had discussions in the context of the Spanish interconnector in relation to connecting to that system. That work is at a very early stage. We are also looking at further interconnection between Ireland and Great Britain. I look as well to my colleagues in mainland Europe, the other TSOs and, as I said, EirGrid, which is part of the ENTSO-E group. We then look at Europe connecting to Great Britain so we can use that interconnection to transport energy and use that energy more effectively and efficiently.

Knowing the scale of what we have, then, more interconnection is definitely needed. This is for two reasons. The first is to give us additional security concerning the energy we need. The second is to be able to export the energy we will have when it is available. Part of this context is also linked to the fact that we need to be very active on the European front to ensure the European market is evolving appropriately to ensure that energy can be exported off the island and used when we have a surplus here.

Mr. Mark Foley

I will also allude to what Dr. Ryan spoke about. I will make two very positive comments. One is the Government's interconnection policy, which came out last summer and is an absolute North Star for Ireland. We now have a policy context in which to start really getting on the ground and considering projects. This is extremely helpful.

I had the pleasure of being in Brussels last week when the ENTSO-E group, in conjunction with the Commission, launched the first-ever offshore national development plan. This is the first time Europe has got together and collaborated on a singular vision for the offshore opportunity. It was a very big day for all of us, and Ireland was right in the middle of it, in terms of Europe recognising that despite our peripherality we have a role to play. We are on the map and we are in the game. The opportunities the Cathaoirleach spoke about can now be realised because we have a mechanism to work through. Whether it is projects of common interest or equity coming from Europe, we are included in the plan. I am extremely positive about the Government's initiative and what has happened in Europe.

With regard to the IEA, analysts are analysts. It took a very theoretical view and asked what would happen if every data centre had a contract and they all got connected in the next two years. I do not have an issue with the young gentleman who did the piece of work but it is not realistic. This is all we are saying.

EirGrid's record on predicting demand in the past ten years has been impeccable. We have been within plus or minus 0.5%. Our recent generation capacity statement sets out the demand protection for the decade. It is crystal clear what we think is going to happen and Ireland has nothing to fear from it if we put the building blocks in place. We will diplomatically work with the IEA on its slightly alarmist view but what it has said will never happen, no more than anything else out there will get built in record time. It is not something to be concerned about. Trust the GCS; the numbers are out there. The entire ecosystem tends to back it because it has proven to be right. Our electricity demand will grow by approximately 3.8% in the coming decade. This is something we as a nation, and we, as a transmission system operator, TSO, should be able to handle. It is good for Ireland and it is good for prosperity.

An Cathaoirleach

As we are speaking about the big European piece and Ireland's role in it, it is probably an appropriate time to pay tribute to the late Dr. O'Connor, who set out that vision on Ireland's place in the European context and how we can become a major provider of power to Europe in addition to ourselves. It is important that we do acknowledge his work and his vision. We pass on our sympathies to his family on his death.

Deputy Jennifer Whitmore

I thank the witnesses for their presentation. I want to go back to the point Dr. Foley made on the IEA report. It is stated on page 1 of EirGrid's generation capacity statement that 30% of all electricity demand will be from data centres by 2032. On another page, it is stated that this will happen in 2030. I assume the latter is a typo and that it is 2032.

Mr. Mark Foley

Yes.

Deputy Jennifer Whitmore

We compare this with the IEA's statement that it will be 32% by 2026. Mr. Foley has said this overly exaggerates the situation. So that we can compare like for like, what are EirGrid's predictions for 2026?

Mr. Mark Foley

We believe it will be 25%. This is based on contracts and it will be there or thereabouts.

Deputy Jennifer Whitmore

Is this 25% based on contracts or what EirGrid believes the data centres will actually be consuming at that point?

Mr. Mark Foley

It is based on contracts and our analysis of what they will consume relative to what the contracts are for. These are two very different things. It has been proven time and again with regard to the ramp rate that the time it would take to get to the contracted amount does not happen overnight. We are very confident and can show the historical analysis. I am very happy to show Deputy Whitmore our forward projections that we will be there or thereabouts at 25%. It is simply impossible for them to ramp up.

Deputy Jennifer Whitmore

EirGrid's predictions are not based on the contracted amounts. Its predictions are based on what it believes the ramp-up capability will be at that point.

Mr. Mark Foley

Yes, and we have a very good track record at predicting this. Equally, we have in-depth discussions with them. We are in conversations with them all of the time. If we are on the wrong side of this there will be significant impacts for the system. We are very confident that they are transparent and we can interrogate the data.

History proves the case. I am very confident in our 25%.

Deputy Jennifer Whitmore

I assume that will be impacted by economic conditions and technology advances like AI-----

Mr. Mark Foley

No, I think 2026 is very close-----

Deputy Jennifer Whitmore

The IEA has made the point that the increase and ramp-up in energy consumption, due to the incorporation of AI into tech and all those services, will happen quicker.

Mr. Mark Foley

I have no evidence to suggest, based on our current customers who are very close to it, that AI is going to be abnormally impacting the next two years. As reported in the press, an awful lot of AI investment is going to other countries at the moment. There is a long lead-in time to build these plants. AI is not going to impact the next 24 months, in our view, in terms of what is going to happen in the data centre world. We are very close to these people and we are very confident that the projections we have set out in the generation capacity statement - we put our reputations on the line in respect of that - are very close to the mark.

Deputy Jennifer Whitmore

I understand that there are low, medium and high predictions and modelling. Is it not worthwhile incorporating into that what the maximum is, and what all these data centres are using? I know Mr. Foley is saying that is not going to happen, but it is my understanding that all these data centres could access that energy with no additional permissions required or anything like that. They are "entitled" to access that energy, up to 2,300 MVA.

Mr. Mark Foley

I think the high-demand scenario is an articulation of things happening faster in the ecosystem than one might normally predict.

Deputy Jennifer Whitmore

It still does not match what-----

Mr. Mark Foley

The IEA has got it wrong.

Deputy Jennifer Whitmore

I am not talking about the IEA.

Mr. Mark Foley

It is a good organisation and most of the time it gets it right, but-----

Deputy Jennifer Whitmore

I am not talking about the IEA here. I am talking about whether, from a precautionary perspective, EirGrid should be incorporating what data centres are actually entitled to access and using.

Mr. Mark Foley

I think our high-demand scenario looks to that possible scenario and------

Deputy Jennifer Whitmore

The high-demand prediction is 2,100 MVA and the actual contracted capacity is 2,300 MVA. Is that correct?

Mr. Michael Mahon

The contracted data centre capacity at the moment is 1,800 MVA.

Deputy Jennifer Whitmore

The document states that "there is presently approximately 2000 MVA of demand capacity that is contracted to data centres and other new technology loads at the transmission level, and approximately a further 300 MVA contracted at the 110 kV distribution level." The document refers to 2,300 MVA.

Dr. Liam Ryan

I would go with Mr. Mahon's figure, which is 1,800 MVA.

Deputy Jennifer Whitmore

Okay. It is just that in the document,-----

Mr. Mark Foley

I can assure the Deputy that we have no concerns, and we are responsible for running the power system and ensuring that the lights stay on. We have no concerns whatsoever that there is going to be an unpredicted exceptional increase in demand in the next years. I can say that with absolute honesty and in terms of the capability of Dr. Ryan's team to analyse forward projections and to work with those customers who have ramp-up plans. I can assure the committee that that is the case. We would not put it out there if we did not believe that was the case.

Deputy Jennifer Whitmore

Can I just ask-----

An Cathaoirleach

Sorry, Deputy. We have to move on.

Deputy Jennifer Whitmore

I can come back in later.

An Cathaoirleach

Senator Dooley is next.

Senator Timmy Dooley

I thank the witnesses for the presentation and echo the comments of others in thanking them for the really important work they do behind the scenes. I also want to add my voice to the recognition of the role of Eddie O'Connor in driving the vision around energy generation and clean and green energy generation in this country. He is a very significant loss to all of us. He was available to many of us to give good advice on occasion.

I want to concentrate on the issue with the CRU. Mr. Foley talked about the market mechanism and its failure, quite frankly. That is a bit annoying for us at this committee, because we have had these conversations before. We had the witnesses and others from the CRU in here in a discussion last year. It seems that from EirGrid's perspective, the market system that CRU operates is not functioning. We had the crazy situation last year where, on EirGrid's advice, the State and the taxpayer had to fund the purchase of very expensive emergency capacity. We should have learned from that, surely. I need Mr. Foley to be as direct as he can, being conscious that we are in committee, as to how he thinks that market should be shaped, changed and how it should be constituted in a manner that will encourage those that generate electricity to put capacity in place so that we are not left in such a situation.

As Mr. Foley identified and as we all accept, there will be greater demand for gas back-up as we transition towards wind, and that is going to be a feature of the future. The more wind that is used, the more back-up gas facility we will have to have.

If time permits, will Mr. Foley talk a little more about floating offshore? I have seen an evolution in the past two to three years, even just in the constituency I know best, where there are now a lot of objections to onshore wind capture. It went away for a while but people are changing because a lot of the easier sites have been developed. We can continue with that apace and continue to upset communities, or we can concentrate and recognise that the real future is offshore and is really floating offshore. If we are looking at the powering of the rest of Europe or parts of the rest of Europe, the real potential is in the Atlantic.

Mr. Mark Foley

There was a lot in that. To the Chairman's excellent observation, 52% of all of Ireland's electricity came from renewables in December. That is an amazing achievement. Gas is essential to see us through the transition and there is nothing heretical about saying that. What Ireland needs is reliable back-up gas to see us on that journey.

Second, it is a matter of record that the capacity remuneration mechanism overseen by the single electricity market committee, SEMC, has failed to deliver gas generation capacity to backstop the system. That is known. The most recent and frightening manifestation of that occurred in the autumn just passed, where the most recent auction had the very exciting high-level number of 3.3 GW for which developers were qualified to bid. Most of them made a decision not to bid, which is the ultimate statement of the market saying it has no confidence in that market mechanism. We continue to have a problem with having reliable gas generated on the system. From our perspective, the projects are out there, but the market is not framed appropriately-----

Senator Timmy Dooley

I might just cut to the chase. Who is responsible?

Mr. Mark Foley

The Commission for Regulation of Utilities and the SEMC, which is the overarching body for the two regulatory units in Ireland.

Senator Timmy Dooley

In essence, therefore, the CRU is not getting it right and is not delivering.

Mr. Mark Foley

If I may add a little bit, and this might be slightly controversial, there is an argument, which we are starting to support, that matters to do with the Irish power system and the procurement of capacity should, in fact, be exclusively under the jurisdiction of the CRU. That it is under the joint regulatory authority for the island is, in my view, creating a conflict. While Northern Ireland does not have a problem at this point, Ireland has an acute problem. The evidence would suggest the decisions being made by the joint committee are not in the interests of Ireland, and the most recent auction proves that point. The fact the Government introduced legislation and provided capital for EirGrid to buy generations proves the point. Our view is we need to take this into a jurisdictional dimension and CRU needs to appropriately frame those auctions to see Ireland through the energy transition. The current insurance policy, if I may use that simple term, that we bought in using temporary generation will run out in three to four years time-----

Senator Timmy Dooley

It is also very expensive, by comparison.

Mr. Mark Foley

The expense is another matter, but I am referring to the environmental conditions that are attached. We will be back in the same place in three to four years time. The solution is jurisdictional and the CRU needs to frame the markets correctly. The projects are out there. I know the developers, including some State developers, and we need to get them contracted. That is our view.

On the floating offshore wind question, I will say something and then hand over to the expert on my right. Floating offshore's time will come, but for the 2030 ambition we need proven technology to deliver us low cost, namely, fixed bed. I will let Dr. Ryan speak to the longer term.

Dr. Liam Ryan

I agree with Mr. Foley. The target for 2030 will not be met in the time horizon we are looking at. Beyond 2030, I believe it will come and it needs to come quickly. The entire ecosystem needs to examine how we bring down the price of floating technology. It is at an early stage of development. Some work is being done on it, in particular in Scotland which is looking at the scale of floating offshore energy. For the 2030 time horizon, there is enough potential on the east and south coasts to meet what we need in respect of connecting to the system, aligned with Government policy. We are acutely aware that, beyond 2030, we need to consider how we harvest that energy appropriately and how it is exported.

Senator Timmy Dooley

Would the witnesses accept that in order to look at the space beyond 2030, we need to show incentives? Quite frankly, we are competing with other countries for investment. The ESB lost an investment partner because it did not feel we were geared up in advance to do the work that was necessary. Should we not put greater emphasis on beyond 2030 now, recognising the massive potential into the future?

Dr. Liam Ryan

In all time horizons, we need to be very conscious of sending out the right investment signals. We need to send out the right investment signals to 2030. We know there are challenges around getting the right services on the system in order to get us to 2030. Beyond 2030, of course we should send out the right investment signals so that the technology is evolving and investors see the opportunity to invest. That has to be balanced with making sure we protect the energy citizen as part of this transition.

Mr. Mark Foley

I will give Senator Dooley a very frank answer to his question. It is premature to give an investment signal for floating offshore wind when Ireland does not have a demand proposition for that energy. We are very clear about 2030 in terms of fixed bed; it is in the climate action plan, etc. Part of the period post-2030 will comprise a long-term development plan and a vision for offshore for the whole of Europe, as discussed at a meeting in Brussels last week. I have no doubt it will play into that. Being very honest, at the moment there is no market. When the market starts to manifest, whether the European element or the deployment of that energy in Ireland, we will then start talking about signals. I have been a developer for ten years, so I know the frustration of developers. It is not reasonable to ask the Government to start putting in place incentives for propositions that do not yet have a route to market. I have no doubt that floating offshore wind energy's time will come.

Senator Timmy Dooley

The difficulty is that EirGrid waits to see where everybody else is going and misses the opportunity for the country to be first up, best dressed and, ultimately, capture the new potential investment that comes with being first to market. I recognise the direction in which things are going. It is a matter of 2032 or 2035. We will have lost to somebody else. We have been talking about this for a long time. Scotland has stolen a little march on us, as have Portugal and Norway. Countries are all looking at floating offshore projects and we are still talking about it.

An Cathaoirleach

I want to be fair to other members. The question is not necessarily for EirGrid. It is very much part of the discussion.

Mr. Mark Foley

It is a fair question from the Senator. We should not lose sight of what happened in Europe last week. There is now a vision for Europe. That is where we can perhaps start to play and exploit that. We are explicitly in that plan. Perhaps we can start to talk about the commercial side and incentives.

An Cathaoirleach

I thank the witnesses and Senator Dooley. I have to leave for another meeting. I will ask a colleague to take the Chair for 20 minutes.

Deputy Kenny will be speaking next.

Deputy Martin Kenny

Senator Dooley is the nearest.

Senator Timmy Dooley took the Chair.

Deputy Martin Kenny

I thank our witnesses for their presentation. I have a number of questions with regard to the capital programme and the investment EirGrid is looking at. We all accept we are looking at a growth pattern over the next decade or more. How we shape up for that and the work that needs to be done around that are the key questions. Dr. Ryan talked about the ability to deliver the network and how EirGrid requires planning decisions and foreshore licences to be granted in a timely manner. Is there some frustration around that and delays or difficulties there? What issues does he foresee as difficulties in that respect?

Also, with regard to the suitable lands and sites; all of that seems to be something which has been flagged a little here and I would just like to tease that out a little more as to where he might see difficulties?

Mr. Mark Foley

I will let my colleague answer that question but what I will say to Deputy Kenny is that we have made enormous progress in the past three years. While we have problems, and every developer and Irish infrastructure has problems in this space, we are very confident in the decisions we have made in the community engagement on the ground with regard to social acceptance that we can make huge progress on this plan. This is the biggest capital programme in the State this decade when one adds it all up. EirGrid-ESB on electricity transformation is arguably the biggest in the history of the State. Mr. Mahon will speak to some of the specifics now.

Mr. Michael Mahon

I thank Deputy Kenny for the question. I will highlight first of all some of the progress which has been made. I touched on the challenges around planning as part of that. We submitted 20 planning applications in the past year, which was a record for us. Some of them were for big projects and some were for smaller ones. Separately, some of those planning decisions came through very quickly, quite a number in fact. Some 20 positive decisions came through from previous years. There was a lull at a period of time with An Bord Pleanála but we are seeing that bank starting to transition out.

We are seeing from the industry that there has not been as many positive progressions of wind projects, in particular, in planning decisions in recent years. That needs, ideally, to speed up. We have, however, seen a number come through in the last number of months. Solar farms seem to be getting a decision more quickly than wind farms. That is starting to progress.

We are advancing our projects and that capital programme is moving at speed. We handed 40 projects over to ESB and into construction last year. There are a number of other projects where we are waiting on the industry and for positive planning consent before we move those projects along. It is actually moving in that space.

We have progressed the foreshore licence we need for the Celtic interconnector and the foreshore licence we required for the interconnector which will connect Kerry and Clare. We are now engaged with the Maritime Area Regulatory Authority, MARA, and will continue to engage with it when we are looking at the consent required for offshore wind. For some of the new infrastructure, we require a connection from Blackrock to Poolbeg to facilitate the upgrade of the network in the Dublin area and for the connection between Poolbeg and North Wall, we need to install a cable across the Liffey.

Things are well under way in the engagement in the foreshore space as well and all the wind projects which were successful in the renewable electricity support scheme, RESS 1, will be submitting their planning applications to An Bord Pleanála before the end of the second quarter of this year.

Deputy Martin Kenny

I thank Mr. Mahon very much for that reply. Mr. Mahon mentioned the ambition both around solar and wind and that the planning permissions for solar seem to get through more easily and seem to work out more quickly, etc. Does that mean there is potential to do more in that area if there is less resistance and more capacity there? How does the network shape up in respect of that, to be able to carry the energy produced from these large farms?

Mr. Michael Mahon

I will start but perhaps my colleague, Dr. Ryan, may wish to touch on that. There seems to have been a little bit of a lull on the planning decisions on the wind projects. They seem to be slower at coming to us for engagement for a grid connection to advance them. I would like to think that what we have seen in the past couple of months is that that is starting to speed up.

Planning decisions for solar farms seem to be coming through faster too, but the pipeline also has to be looked at. There is a strong pipeline for both wind and onshore solar projects that can come along in the next number of years. One of the things we have clearly highlighted, and Dr. Ryan might want to touch on this, relates to Shaping our Electricity Future. That document sets out how we can develop and evolve the grid to be able to connect much of the onshore wind and solar at particular parts of the network while minimising the need for new infrastructure. For example, the north Connacht project I mentioned is now going into construction. That is able to effectively evacuate many of the wind projects currently being built in the north Connacht area. However, we have not factored in for multiple more projects to come in in that area because there are sufficient potential connections in other parts of the network to build on that without significant new circuits. Dr. Ryan might want to talk about shaping in that context.

Dr. Liam Ryan

I will add to Mr. Mahon's point. We are planning a system for approximately 8.5 GW of solar coming in by 2030 and an additional 5 GW of wind connecting in. If that were to shift from one to the other, we would be able to pivot to make sure we are catering for the renewables coming on the system. We see a good blend between wind and solar, both onshore and offshore, because what is seen at times is there may be an output from solar but not from wind. The two of them have a complementary effect on each other. Having a good blend between the two, therefore, is very important. When we look at the system itself, whether it is coming from solar or wind, we would generally be able to manage the system and to connect that renewable energy onto it. We do not see a major challenge or issue, if one were to move slightly in one direction or the other.

Deputy Martin Kenny

Is there any difficulty with regard to storage? Battery storage facilities have been proposed in different areas and have met some resistance. What proposals is EirGrid looking at in that area?

Dr. Liam Ryan

In Shaping our Electricity Future, we call out the need for approximately 2.8 GW of six- to eight-hour duration battery storage on the system. That is the technology currently available that we see could potentially be put on the system. Newer technologies may become available. We are engaging with the manufacturers to see what other technology could come on board. To the Deputy's point, the challenge developers have is that there is some resistance around storage. A key part around it is making sure there is early engagement, the facts are made clear to communities, and there is a clear understanding with respect to the benefits storage is bringing onto the system.

Deputy Darren O'Rourke

I thank the witnesses. I will pick up on a related issue. The wind energy industry's conference is on in Dublin this morning. I attended the morning session. One of the issues raised was the process in dealing with EirGrid regarding grid connection offers and how that relates to applying for RESS. Mr. Foley made the point about a lack of confidence in the auctions for gas and how that is maybe a symptom of the design of those auctions and the bureaucracy in that regard. One of my points relates to enduring connection policy, the time taken for decisions from EirGrid, and the physical letter, which acts as an entry point to the RESS auction. For example, how many offers has EirGrid made to projects that were cleared in enduring connection policy, ECP, 2.3, which was 16 months ago?

Mr. Michael Mahon

Apologies, I do not have the detail in terms of-----

Deputy Darren O'Rourke

Would you say it was any or-----

Mr. Michael Mahon

We are currently completing the ECP 2.3 process and are already looking at the ECP 2.4 process. A significant number of projects are looking to connect to the grid through that process.

Many of those projects are becoming very complex. What happens is that where there were additional projects in a particular area, the first will have been more straightforward because there will not have been a need for new infrastructure. A subsequent project may seek to connect before a preceding one has even started construction. We are waiting for the industry in certain cases and for planning decisions to evolve. In certain cases, we are waiting for those in the industry to decide, once they have a grid connection offer, to sign. We have been waiting for many months for a number of the various industry participants to sign up to particular connection offers or advance them, because they are waiting for further decisions, finance, etc.

Deputy Darren O'Rourke

On average, for how long do they wait for the grid connection offers from EirGrid in the cases of wind and solar, for example?

Mr. Michael Mahon

I do not have the details to hand, but-----

Deputy Darren O'Rourke

Does Mr. Mahon have a rough idea?

Mr. Michael Mahon

-----with regard to the ECP process for ECP 2.3, we have set out for those in the industry when they will receive an offer. I must highlight that, often, we are not the critical path in progressing a project. Typically, those in the industry are waiting for the planning decision-----

Deputy Darren O'Rourke

It is a straightforward question. How long does it take for an ECP offer? How long does it take EirGrid to process the applications?

Mr. Michael Mahon

I estimate that, for the current batch, the period is nine to 12 months.

Deputy Darren O'Rourke

Nine to 12 months. Does EirGrid have a target time? Is there an ambition? I hear very clearly from the industry that EirGrid bureaucracy is impeding the pipeline of renewables projects. I am not necessarily hearing from EirGrid that it accepts or acknowledges that. I am hearing that these issues are becoming increasingly complex, almost as if applications were being shifted. If the objective, which I believe is shared, is to smooth out the barriers and deliver a pipeline that is as full and comprehensive as possible, does EirGrid except there are challenges and delays? Is it offering proposals to address these?

Mr. Michael Mahon

The target we have set out for ECP 2.3 is to conclude all offers by the end of March. We are on track for that and intend to achieve it. ECP 2.4 will commence after that process ends. That is the timeline we have set out for the industry. We have given estimated times to it. We have highlighted to the industry that we are concentrating on the more complex projects because we are trying to connect all of them to the system. In addition, we are processing many of the connection offers on the distribution system. We are on track to meet the targets we have set out and outlined to the industry and CRU.

Deputy Darren O'Rourke

What about the timeline for ECP 2.4?

Mr. Michael Mahon

We have just got the list of applications. We are going through it and will engage with the industry in March to set out when we expect the connection application process to progress. We are going through a due diligence process. What typically happens in that process is that some speculative projects seem to disappear. We will be engaging one to one with those in the industry to understand how that can evolve. We are actually focusing on the projects that are really going to materialise.

Deputy Darren O'Rourke

Regarding some of what we are hearing, there is a decent parallel with the point Mr. Foley made. We had a really disappointing RESS 3. What we are hearing from some in the industry is that we will not be ready for RESS 4, if there is even a RESS 4, based on the pipeline of projects, because of planning issues and the grid offer.

Mr. Mark Foley

I am glad the Deputy mentioned that because the primary issue concerning RESS 3 has two aspects, one being planning. There was a year in which no planning permission was granted for wind farms. Second, there is the inevitable pressure on price arising from the dysfunction that manifests in the markets. I can tell the committee with absolute certainty that the primary reasons are not to do with the ECP process and the issuing of connection offers. If the members want separate engagement so we can evidence that, we can have it. Planning is absolutely an issue. We are not perfect; we provide a period in which we promise and make commitments, and we deliver on those commitments. To be really clear, the reason wind farms are not being connected or winning options is not connected to the connection process.

I can evidence that if the Deputy so wishes. It is important to have the right discussions about the right issues and constraints in the system, rather than about issues that are somewhat peripheral. There are issues with the connection process but they are not the dominant issues in getting wind farms connected to the Irish power system.

Deputy Darren O'Rourke

I am happy to have a separate conversation with Mr. Foley on this. We want the people who are in the business of delivering renewables to be part of the market here and to deliver renewables. They have clearly articulated that this is a sequencing problem and there is an issue in that regard. I take on board what Mr. Foley is saying and I am happy to engage separately on it. One of the things they are suggesting is for there to be a biannual ECP process. Would EirGrid consider that suggestion in the context of offering a quicker turnaround? I take the point regarding EirGrid's-----

Mr. Mark Foley

Our view is that the ECP process needs to be reviewed. We accept that. Ireland achieved extraordinary success up to 2020 in getting to 40% RES-E, mainly on the back of what was referred to as a developer-led proposition. We need to stop running auctions for the sake of running auctions. We need a more plan-led approach. Not every developer in Ireland can have their project connected. It would not make economic or infrastructural sense. There is a need to rethink the parameters and division relating to the ECP proposition. We are honest enough to admit that it needs to be reviewed. We would be very happy to take part in such a review with the Department. Running auctions continuously does not lead to better results. The notion of running an auction every six months for something that has fundamentally reached end of life is not going to give a better answer. There is a need to start looking at a plan-led approach That is an honest reflection on the Deputy's question.

Deputy Richard Bruton

I thank Mr. Foley for his opening statement. Like other members, I thank him for the guidance on policy, as well as the work EirGrid is doing. He pointed to a fairly sharp issue relating to the failure of the capacity markets and stated they are not being framed correctly. Dermot McCarthy prepared a report on what went wrong in the past. He stated that the risks in the scale of transition we were doing were underestimated and pointed to planning risks, as well as capacity and design that was difficult to get and implement. I refer to the payments system where there is more renewables and, presumably, the gas suppliers would not get paid as much. What has happened following the McCarthy report? Have there been discussions in this regard? There was a public consultation by the SEM committee on the way forward. What are the defects now? What are the proposals for remedying them? Do we need the Department to step in and reshape the relationships that exist in this context? What are the remedies in that regard?

Mr. Mark Foley

The report prepared by Mr. McCarthy came out in the early part of last year. EirGrid engaged substantially in the dialogue in that regard and spoke to Mr. McCarthy. The Department is working with great attention to look at the issues arising from that report. Obviously, EirGrid is a third party and does not have a role in that regard. We have given our views affirmatively. We believe market regulatory reform is necessary and that some of the decoupling of the SEM committee matters is necessary and we-----

Deputy Richard Bruton

I ask Mr. Foley to explain in layman's terms what restructuring of the market might be.

The McCarthy report stated that there were issues of architecture and framework. I do not know what that means.

Mr. Mark Foley

We have two TSOs and a single market proposition. Matters to do with Ireland are partly dealt with in the TSO world under the Irish regulator. Matters critical to Ireland are also dealt with at the joint regulatory committee. We have reached a point of view that all matters relating to Ireland's energy system, with a few exceptions, need to be dealt with in the Irish regulatory environment.

Deputy Richard Bruton

Is that the only issue with the architecture?

Mr. Mark Foley

No. The second point is that we do not believe that the capacity remuneration mechanism is fatally flawed. We believe the construct can work with the correct parameters. My evidence for that is that if the numbers had been right with respect to the prescription articulated by this committee for the most recent auction, we would have got a substantial bid and take-up by developers.

Deputy Richard Bruton

In simple terms, will Mr. Foley describe what was wrong with the auction?

Mr. Mark Foley

The number was too low. People who are asked to bid into a market have to make their investment work, to get bank funding and so on. We are firmly of the view that in the past two years the prescription imposed by the regulators was never going to deliver the type of projects-----

Deputy Richard Bruton

It was the scale they were bidding on.

Mr. Mark Foley

It was projects of any scale. Few projects have actually made it through. If the basic parameterisation - I do not want to use the word "design" because design suggests it is fatally flawed and cannot be fixed - had been appropriate, we would have seen a significant number of projects being successfully negotiated through the auction and contracted for.

Deputy Richard Bruton

Which parameters need to change? That is what I am trying to understand.

Mr. Mark Foley

It is 10% or 15% in euro terms. It will not break the bank.

Deputy Richard Bruton

It is just the price.

Mr. Mark Foley

Yes, it is the price. The Deputy is an economist. The price has been got spectacularly wrong. In the last market, 3,300 MW qualified. Most decided not to bid because of the prescription on the price cap was too low.

Deputy Richard Bruton

Mr. Foley also said the policy framework for shaping what is appropriate demand is flawed, missing or inadequate. Will he elaborate on the flaw?

Mr. Mark Foley

For two years, we have not executed a connection offer with a large energy user, data centre or otherwise. That is because there is a conflict or gap between Government policy and regulatory policy. I do not have a basis on which to sign a contract with a large energy user. We need clear Government policy which reconciles its commitment to the digital economy, on the one hand, and our climate action targets, on the other. Out of that must come an appropriate regulatory policy to allow us to sign contracts. At the moment, I cannot sign a contract with anyone in this space because of the policy lacuna. We have made our position known to the Government, namely, that this problem needs to be resolved. The consequences of not resolving it are that key actors in the digital economy might decide they cannot do business here. We are concerned about that. We have been open in our honest articulation that this in an important consideration for Ireland. We are not saying that everyone should be connected. We are saying we need something that allows for an appropriate hierarchy of digital economy players to have some certainty about their long-term investment in the Irish economy. We are currently closed for business, which is unhelpful.

Deputy Cormac Devlin

I thank Mr. Foley and his colleagues for being here again and engaging with us. I will address the last point first. How long has this matter been flagged by Eirgrid to the Department and the powers that be?

Mr. Mark Foley

The policy problem has been flagged for approximately two years.

Deputy Cormac Devlin

Okay.

Mr. Mark Foley

We have had this disconnect - no pun intended - around this matter.

Deputy Cormac Devlin

Is that around the same timeframe as this whole discussion around the temporary emergency capacity?

Mr. Mark Foley

It is really important. I am glad Deputy Devlin asked the question. The demand issue and the issue around generation are not connected to any great extent. Ireland encountered a problem around generation capacity because the market had failed. Whether we had a data centre policy or not, we declared a crisis in 2021 because the auction had failed to deliver generation capacity.

Deputy Cormac Devlin

And continues to fail, from what Mr. Foley is saying.

Mr. Mark Foley

And continues to fail. Whether another data centre is connected or not is somewhat secondary. We have a problem.

Deputy Cormac Devlin

Capacity generation.

Mr. Mark Foley

We are buying generators and Moneypoint is staying open longer than it should. That is not a satisfactory position both for the power system and for our climate ambition.

Deputy Cormac Devlin

It was good that there was a response to temporary emergency generation. We had to have some sort of capacity within the market. Mr. Foley makes the point around Moneypoint as well. How long was this temporary measure or sticking plaster meant to be in operation? Given what Mr. Foley is saying about the latest auction, if the next one does not materialise with many bidders, we are relying on this temporary fix for longer. How long was it built into the system to last and how long might it be needed?

Mr. Mark Foley

It was built-in for three-to-four years. What we need to be concerned about, and why we are so vocal about fixing the enduring problem, is there is no guarantee in a circumstance where Ireland continued to need those plant that they would meet environmental criteria in the planning process because it was a derogation. It was an exceptional situation. It was an emergency. We bought ourselves an insurance policy and we should not think that we can keep these things going for an extended period of time.

Deputy Cormac Devlin

Could they last longer than three-to-four years? We need them.

Mr. Mark Foley

Physically, the plant is fine, but the issue is the overarching planning on environment. We had to do an awful lot of hard work on persuasion working with other State actors to get these legitimised in the planning environment. I would not like to be here in four years' time saying we can achieve that again. We need to fix the core problem.

Deputy Cormac Devlin

Fundamentally, Mr. Foley is saying there is a problem competitively for Ireland if we do not resolve this and there is an energy security problem in tandem with that.

Mr. Mark Foley

That is a fair statement. We need to fix this and not be complacent about the fact that we have an insurance policy in place because it runs out.

Deputy Cormac Devlin

Exactly. That is fine.

I will focus in on Dublin because Mr. Mahon mentioned powering up Dublin in his opening remarks. Mr. Mahon mentioned the Blackrock to Poolbeg connection. I thought Carrickmines was included that. Is that in the next phase or is that in the planning process? What stage is Carrickmines at?

Mr. Michael Mahon

I thank the Deputy for the question. When I referred to Blackrock to Poolbeg earlier, we have identified a route from Carrickmines to get us to Blackrock-----

Deputy Cormac Devlin

That makes sense, okay.

Mr. Michael Mahon

-----and we have a challenge in terms of how we get from, effectively, Blackrock to Poolbeg. Based on the feedback and on the engagement with a lot of stakeholders and communities, we have opted to take the cable offshore at Blackrock rather than coming up through Sandymount, etc., and to go off into the bay and then to come in to Poolbeg.

Deputy Cormac Devlin

Will the majority of disruption be from Carrickmines through to Blackrock and then out across the bay?

Mr. Michael Mahon

Correct. I would also highlight that, as part of that, we are, for example, able to utilise the Leopardstown Racecourse. Rather than closing off roads there, we will be able to take advantage.

Deputy Cormac Devlin

Mr. Mahon might send the committee a note on that element of it.

I must commend EirGrid on the extensive engagement that was done. A lot of money was put behind that campaign and it was really well done. Obviously, there are still people who were not aware of it, but that is a different day's work.

I will ask Dr. Ryan about his comments about the offshore. The Cathaoirleach mentioned this. The floating offshore system is in operation in other jurisdictions.

Reference was made to Scotland in that regard. It may be that there is an issue relating to price. Floating offshore systems are in operation in other jurisdictions throughout Europe, however. Mr. Foley referred to the pan-European model. On the face of it, that seems like a good and worthwhile exercise. As European partners are already using floating offshore, however, why are we so reluctant to use it here? We should be learning from them. The technology exists. There are entire wind farms consisting of floating offshore. What is the aversion to it in this country?

Mr. Michael Mahon

I will come in on that point. A significant amount of offshore wind is currently being built in Scotland, for example. Most of it is fixed technology rather than floating. There are a number of floating wind farms in Scotland and off the coast of Portugal. They are in the 30 MW to 50 MW, or maybe 80 MW, territory. We are looking at offshore wind projects connecting a minimum of between 400 MW and 500 MW, and rising. Several much larger projects have gone through auctions in the UK. Massive investment is required to make those technologies work. It is probably a little too early to go in on that and to ignore the fixed options that are still available, particularly on the east and south coasts. There is a significant amount more potential in that regard. We must also think of it in an Irish context. As Dr. Ryan stated, we are able to satisfy the demand we have with a lot of the fixed that has been planned. There is also the challenge relating to the lack of export potential. Although we believe we will have the export potential in future, we have to look at the Irish demand. The Irish demand is typically on the east coast. Complementing that with projects on a fixed level on the east coast probably makes more economic sense. Floating will be there, however. The price should come down each year and the technology will be more proven. There are several people looking at the west coast. The conditions there are more challenging than in some of the locations being identified in Scotland. There is a need to be able to deploy technologies they are confident will last in the wild Atlantic.

Deputy Cormac Devlin

I thank Mr. Mahon.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I call Senator Higgins, who is joining us online from her office.

Senator Alice-Mary Higgins

I will begin with a question to which I am seeking a short answer and will then address my other questions. What is Mr. Foley's understanding of common but differentiated responsibilities under the Paris Agreement?

Mr. Mark Foley

I do not have a clue, to be honest. I ask the Senator to help me with that question. I am rarely floored, but she has got me.

Senator Alice-Mary Higgins

It is a fundamentally important question because Ireland's energy and environmental policies are meant to be in line with common but differentiated responsibilities. This is a core part of the Paris Agreement. The understanding most have of common but differentiated responsibilities is that wealthier countries and those that have benefited from high energy use in the past should be doing more in respect of climate action. In his opening statement, however, Mr. Foley took the fundamentally opposite view. This was referenced in a previous statement from EirGrid and I am very surprised it has been repeated here. He stated, "The demand for electricity in Ireland is that of a normal prosperous, growing economy." His point is that wealthier countries are entitled to have a higher energy demand. Is it the case that Malawi or Bolivia should not be increasing their energy demands but, as Ireland is a prosperous economy, it is okay for us to be increasing our energy demand? This goes to a fundamental point. EirGrid keeps repeating that demand and energy usage are not an issue, but Ireland is a wild outlier in this regard. Primary energy consumption, which includes all energy users, fell by 4% across the EU, but in Ireland it increased by almost 5%. If we are one of the countries that are meant to be doing more to reduce our energy usage but we are actually increasing in our usage, that is a key issue.

The poorest 50% of the people on the planet are responsible for only 8% of the emissions. In Malawi, the per capita tonnage of the emissions is 0.09 tonnes of CO2 per person. In Ireland, it is 11.9 tonnes of CO2 per person. This is wildly inequitable. I want to know if it is EirGrid's position that the rest of the world can carry the can for Ireland because we are making money and we want to keep banking it in, and we do not have responsibilities because that is what I have heard from EirGrid's statement. What I have heard is that a growing prosperous economy can be ahead of everyone else in Europe in terms of our energy demand, ahead of the rest of the world, and that is okay from EirGrid's perspective. Will the witnesses comment on that?

I want to ask specifically then about data centres. They are being treated as a red herring but this is not a red herring. Data centres are large energy users. A total of 18% of our energy in 2022 was used by data centres. The policy that we are hearing floated by the Minister, Deputy Eamon Ryan, is the idea that they would go green or stay off the national grid and that would somehow address the issues, but we are already hearing that we do not have enough green energy coming on stream through the auctions. We are also hearing that if they stay off the national grid at a time of high demand and use, through backup gas generators such as the power plant that was recently given a special emissions licence in Tallaght, these are still emissions. I would like EirGrid's perspective on the granting of these special industrial emissions licences for additional capacities that large energy users will move to whenever the grid is under pressure. Is that an adequate solution from a climate perspective?

We have heard a lot about the one good day or December being a good month. I would also like if EirGrid to give us hard figures for fossil fuel usage, not the percentage but the actual amount of fossil fuel usage, in Ireland over the past ten years. If Mr. Foley does not have a figure or two from that ten years, perhaps it could be provided in writing to the committee. I am extremely concerned.

Mr. Foley mentioned that there should be a hierarchy in terms of digital users. Where does domestic consumption of electricity, domestic security of supply or public services supply sit in the hierarchy of priority within which, he stated, certain digital users sit?

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I thank Senator Higgins. There are quite a few questions there and I will give Mr. Foley a bit of latitude to answer them.

Mr. Mark Foley

On the first question, I am not sure it is our domain to answer. The Senator is asking fundamental philosophical questions in some respects. We are instruments of Government policy. Our job-----

Senator Alice-Mary Higgins

They are questions about physical capacities. It is as real as a market limitation.

Mr. Mark Foley

I am not diminishing the Senator's questions. I am saying we have a job to do in the context of meeting Government policy. Let us not lose sight of what this country has achieved. We were one of the first countries in the world, in 2020, to have 40% of our electricity coming from renewable sources. We have set an ambition for 70% to 80% by 2030. We are on a trajectory of transformation that is right up there with the best and most ambitious countries in the world and I am trying to put that in context. In order to achieve that, there will be a natural balance between supply and demand. If we do not have demand, we will have no growth and we will stagnate at approximately 40% to 42% of electricity from renewable sources. This is about balance and about having a common vision. Ireland will have, if we achieve this, the lowest carbon power system in the world in 2030. We are not dismissing carbon in any way and we are taking our obligations really seriously. We are part of an instrument of Government policy to try to make this happen.

Our electricity demand has increased in the past couple of years because we have had a strong economy and because we have a growing population, unlike any other country in Europe. These are people who need homes, who need to be educated and who are going to consume power.

Senator Alice-Mary Higgins

The demand has come from large energy users-----

Mr. Mark Foley

No.

Senator Alice-Mary Higgins

-----and the increase has not come from homes.

Mr. Mark Foley

The demand has come from all sources. In the next decade it will come from electrifying the Senator's car, transitioning my home to be electrically heated. It is coming from many different sources.

Senator Alice-Mary Higgins

We have had breakdown and we know that a huge amount of the increase has come from large energy users. Other countries are also hoping to have economies which grow, but without energy demand increase.

Mr. Mark Foley

All I would say to the Senator is that I would point to the facts. The average growth in electricity in the past six years, as mentioned in my opening statement, is 2.8%. That is not huge by any standards. Our job is to figure out how we can cope with that and make it green energy. That is our job.

On the Senator's second point about data centres, she talked about hierarchy, homes and public services. Homes and public services-----

Senator Alice-Mary Higgins

I also talked about-----

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

Senator Higgins, I am going to have let this-----

Senator Alice-Mary Higgins

Could Mr. Foley specifically answer on connections? I want the most important question to be answered. It is the question in relation to additional gas plants attached to the grid.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I have given the Senator quite a bit of latitude and I want to hear Mr. Foley.

Senator Alice-Mary Higgins

If I could have just one question answered, it would be that one.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

Okay. Maybe Mr. Foley can go directly to that one.

Mr. Mark Foley

On data centres, all we have said is it is a matter for Government to get the policy right. We are not involved in gas connections for islanded data centres. That is not our role. We are saying let us have a policy that works and allows for appropriate demand. It is not my job to define "appropriate". That is a matter for Government policy, and we will support that. This is not a question for us.

Senator Alice-Mary Higgins

Does Mr. Foley believe it is an adequate solution to pressure on the grid?

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I want to get an answer on plants, if I can, because Senator Higgins indicated she wants-----

Senator Alice-Mary Higgins

I am just asking whether it is an adequate solution to pressure on the grid.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I know, but I am also conscious of time. There are other people to bring in.

Senator Alice-Mary Higgins

Apologies.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I have been very flexible.

Senator Alice-Mary Higgins

Is it an adequate solution?

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

We will just go to the issue of gas generation, which Senator Higgins raised as one of her most important points. If Mr. Foley could do that-----

Mr. Mark Foley

We are not involved in that matter. That goes back to the matter of Government framing the policy for digital and how that can be met. We have a voice, we have a view, etc., but we are not party to that.

On the Senator's point on people-----

Senator Alice-Mary Higgins

Perhaps Mr. Foley could provide the view in writing, if there is not time now. That would be great.

Mr. Mark Foley

People in public services are functioning today using digital. We are all living in a digital world. Our banking, our health and all of this is in a digital world. We are just saying we need to have a co-ordinated policy. We are not advocates. We want some joined-up thinking whereby we are all playing to some system. A data hierarchy is simply about what data is more important than other data and that conversation should happen.

Senator Alice-Mary Higgins

That is helpful. I thank Mr. Foley.

An Cathaoirleach Gníomhach (Senator Timmy Dooley)

I call Senator Boylan. I apologise that I provided latitude there. I will allow the Senator the same for sure.

Senator Lynn Boylan

I thank the Acting Chair and thank all the guests.

I want to pick-up as well on that quote from Mr. Foley's opening statement, "The demand for electricity in Ireland is that of a normal prosperous, growing economy." On the previous occasion Mr. Foley was before the committee, he told us that the growth in the data centres or the electricity demand was also normal for a European country. When he sent on the data to back it up, it actually showed that Ireland was quite an outlier in terms of its demand growth. It is the same here. Mr. Foley is talking about 2.8% as a small increase. When we are seeing other European countries are decreasing their electricity demand, we are going in the wrong direction.

That 2.8%, while it sounds small, means that our demand is now 15% higher than it was in 2017. The issue, going back to these large energy users, is that we are like that analogy of trying to go down an escalator that is going up because we are bringing more data centres onto the system. When we do not have the back-up of the renewables, it is making that job much more difficult. Also, our economy has been shrinking for the past five consecutive quarters. The economy is not growing. That is another area.

I am particularly interested in what Mr. Foley stated in response to Deputy Whitmore about the IEA getting it wrong. That is quite a big statement. It is a big organisation, with a lot of expertise. The SEAI has also expressed concerns around the growth of demand of data centres. It stated, "There is a clear need to balance the value of data centres to a modern digitised economy, with the challenges of accommodating their electricity demand from available sources of renewable generation." The graph on demand growth clearly shows that domestic is more or less stable and it is the large energy users that are the main cause of the growth in our electricity demand.

It cannot be said that we should not be focused on demand growth. It is difficult for us as members of the committee to take that on board because it is our job to make sure it is fit for purpose. No one is saying we cannot have data centres. The digital economy is important, but it has to be matched with our capacity for electricity generation and our climate obligations.

Mr. Foley accepted when he agreed with Senator Dooley that temporary emergency generation, TEG, is an expensive mode of producing electricity. Mr. Foley said today that there is no correlation between the TEG and the data centres' demand. In 2019, a document released under freedom of information, FOI, by EirGrid to noteworthy.ie told data centres that emergency generation was required to meet their demand. EirGrid told a data centre lobby that EirGrid was doing it to help its clients and customers to get their projects built. Is it not true that temporary emergency generation has had to be developed in part to provide for the demand of these large energy users?

Mr. Mark Foley

I will take the last point. The short answer is "No", because the demand is the demand and the market has failed. That is a matter of record.

Senator Lynn Boylan

Mr. Foley is retracting what EirGrid said in 2019, that emergency generation would be required to meet the demand of data centres.

Mr. Mark Foley

I am not aware of that comment made in 2019.

Senator Lynn Boylan

It is in an EirGrid document

Mr. Mark Foley

It is a fact that when we called out the issue of generation capacity in 2021, that was predicated on the failure of the market. If the market had delivered in 2021, we would never have been having the conversation about temporary emergency generation. That is a fact.

Senator Lynn Boylan

However, to feed the growth in demand we need temporary emergency generation, which is expensive.

Mr. Mark Foley

No, to keep the lights on, we need temporary emergency generation.

Senator Lynn Boylan

It is also needed to keep the data centres on.

Mr. Mark Foley

I repeat that if we had got capacity from the market as prescribed by the regulators in 2021, we would never have had temporary emergency generation and we would not be having this conversation. That is a fact. A few hundred megawatts of market related generation did not arrive. That is why we have temporary emergency generation and we will continue to have it because it has is still not arriving.

Senator Lynn Boylan

EirGrid told the data centre lobby - I think the video is publicly available - that it was doing it to help its clients and customers to get projects built.

Mr. Mark Foley

The temporary emergency generation proposition did not exist in 2019, so there must be some nuance to what the Deputy is saying.

Senator Lynn Boylan

The document is an EirGrid document from 2019.

Mr. Mark Foley

That is before the emergency generation crisis. We called it on 14 February 2021 in the Minister's office. That is when EirGrid called it because the market had failed. I am not sure. We could debate at length who said what when, but our calling of this crisis was in February 2021, on the back of a failure of the market. That is why we are here. That is why the Government passed legislation and-----

Senator Lynn Boylan

Would Mr. Foley accept that the exponential growth in demand has not has not helped?

Mr. Mark Foley

There is no exponential growth. By my mathematics, 2.8% in the past six years and 3.8% in the next ten years does not constitute exponential. This is the type of narrative that does not help us to have a balanced conversation. There is no exponential growth.

Senator Lynn Boylan

Okay, I retract "exponential"-----

Senator Alice-Mary Higgins

It is exponential

Senator Lynn Boylan

-----but Mr. Foley told this committee on two occasions that this is normal growth. Yet, when he provided the data to back it up we saw that we are not normal. We are an outlier.

Mr. Mark Foley

If you compare Ireland coming out of the deep recession in 2008, we are the envy of the rest of Europe because we have had a recovery in economic growth. We are unique in Europe in population growth. That all feeds into a vibrant economy. We are a prosperous economy. I am simply saying what the Minister for Finance or independent financial observers might say. We should be capable of accommodating this. We are just instruments of Government policy. If Government policy is not to have growth and to be like the rest of Europe and not have the tax returns, we will respond accordingly, but we are playing what is in front of us.

In many respects Ireland should be grateful for the growth it has had because of how it has helped us through crises. Yes, we are fortunate as a nation to have this growth proposition and our job is to respond to it. We do not make it. I do not create demand.

Deputy Brian Leddin resumed the Chair.

Senator Lynn Boylan

Does Mr. Foley not believe that economic growth can be decoupled from energy demand?

Mr. Mark Foley

That is way above my pay grade. It is not my job to answer that question here.

Senator Lynn Boylan

The point is that other European countries that have growing economies have reduced their electricity demand and they did so as part of the agreement-----

Mr. Mark Foley

I am not aware of any data to support that statement. However, we are now getting into the planning of the Irish economy. We are just the TSO. Economics and decoupling is frankly not our role.

Senator Lynn Boylan

Mr. Foley is the one who made the connection. He told us we cannot have a reduction in demand in electricity because we are a prosperous economy.

Mr. Mark Foley

I did not say that.

Senator Lynn Boylan

No one is saying it is not wonderful that we have gone from when the country was on its knees to a growing economy.

Mr. Mark Foley

EirGrid does not create 1 MW of demand. The Economic and Social Research Institute, ESRI, produces the economic growth and population growth figures. Government policy produces electrification plans for heat and transport and large energy users are a product of Government policy. We simply report the numbers and our job as a licensed TSO and a statutory authority is to get prepared for that and not have the power system fall over because we did not predict it or did not do our job. We are just reporting it.

Senator Lynn Boylan

Okay.

Mr. Mark Foley

We are not the architects of this, but we need to have an adult conversation.

Senator Lynn Boylan

We are having an adult conversation, but it was Mr. Foley who coupled the two.

Mr. Mark Foley

I am just an observer. They are the facts. We are a prosperous economy

Senator Alice-Mary Higgins

On a point of order, I find the adult conversation line quite offensive.

An Cathaoirleach

I thank Senator Boylan and Mr. Dooley. I thank Senator Dooley for stepping into the Chair while I had to pop out.

Senator Timmy Dooley

I will send the invoice later.

Deputy Darren O'Rourke

I will pick up on the North-South interconnector project. Can I get an update on the project from EirGrid's perspective? Community liaison officers are meeting with landowners. What are the next steps and timeline? I have a particular question about compliance with planning conditions. For example, there was a number of planning conditions related to the development prior to commencement, such as a construction and environmental management plan and a traffic management plan in consultation with the Department and Inland Fisheries. Have they been drawn up? Other planning conditions were engagement with the National Parks and Wildlife Service for pre-construction verification surveys and assessments related to the whooper swan? Has that been done? It came up at previous hearings. Another planning condition was plans for the storage of construction materials. Those are some of the conditions. Have they been submitted or approved and is EirGrid ready to go in respect of those? More widely, what are EirGrid's expectations for the months ahead? Will the witnesses touch on whether there is a threshold or plan for a percentage of community acceptance and agreement? EirGrid will go with specific proposals. Is there a threshold that will give EirGrid the green light and what will it do if there is not sufficient landowner acceptance from EirGrid's perspective?

Mr. Michael Mahon

I will start by highlighting where we are on the North side. We wrote to landowners last October to give them an outline and said that we wanted to engage with them to offer a voluntary compensation package for us constructing the network on their land and for them to host the network for us.

We followed that up in early November with a letter to each landowner, outlining the compensation package they were being offered based on the amount of cable crossing their land. Our landowner engagement team has been seeking to meet and engage with landowners on that basis since the beginning of November. That is continuing and we are due to draw it to a close at the end of February. As part of that, we outlined that there is an early signing bonus, to a maximum of €6,000 and a minimum of €3,000, of which people can avail. That is coming to an end on 9 February. Our landowner team is, in effect, going from door to door, engaging with people. There has been a lot of positive interaction. Many people are happy they are being engaged with and offered compensation. Several other people are saying they do not wish to engage. We have noted that and moved on. We are in the process of going to many landowners who have called us back. We sent an updated letter last week to clarify the dates, outline the next steps of the process beyond the voluntary process and correct some of the narrative that was out there regarding the project, next steps, statutory powers and all that. That letter landed last week and we have had a big uptake, with phone calls from landowners seeking for us to go out and engage. Our team is quite busy meeting landowners this week.

Deputy Darren O'Rourke

Have many of them signed up at this stage? Have many signed up early?

Mr. Michael Mahon

We will not disclose that until we conclude the process. To be fair to everyone involved, we will not give an update on the numbers. We are happy with the level of engagement from many of the landowners, however. That does not mean that every landowner is accepting the offer that is on the table. We had to clarify that this is the first and final offer. There is not another offer coming, although that was suggested in some of the narrative that is out there.

Separate from that, the ESB concluded the construction contract framework and put it in place at the end of last year. I do not have the details to hand but it has several contracted parties that are ready to mobilise the construction of the project. It has construction orders for the materials already in place and can give the green light at a point. From previous engagements with ESB, it indicated that it wishes to get to approximately 70% land access secured through a voluntary and non-voluntary process before construction starts. When construction begins, one wants to be able to continue to move the process along. The next step after the voluntary process is a compulsory process. We have outlined that to all the landowners because it is important we move along the project and develop that. We also had a significant amount of community engagement at meetings earlier last year in County Meath and separate meetings in November in counties Monaghan and Cavan. Those were opportunities for us to meet people and address many of the questions that were out there.

Deputy Darren O'Rourke

I am conscious of time. I ask Mr. Mahon to address the specific questions relating to those planning conditions.

Mr. Michael Mahon

ESB Networks is responsible for discharging the planning conditions. It wrote to each of the three county councils towards the end of quarter 3 last year and has been waiting with the county councils to engage. ESB has prepared construction environmental management plans, a traffic management plan and the required conditions but the first step in that regard for us to consider moving the project forward is to discharge those with the county councils. We understand the county councils wish to meet to agree the process. There is no point taking a different process to each of the counties. The ESB is waiting for engagement from the councils to progress that.

Deputy Jennifer Whitmore

I wish to return to the previous discussion on data centres. I understand the point made by EirGrid in that regard. From its perspective, it does not care from where the energy or demand is coming. In essence, if there is demand, its aim is to meet that demand. That is my feeling on it.

Mr. Mark Foley

That is our statutory obligation.

Deputy Jennifer Whitmore

We have heard concerns in respect of getting renewable energies on the grid. All present would agree there have been delays in that regard and we may not be on target to meet the 2030 obligations. If we continue to facilitate and connect new data centres, or existing data centres that are not using their agreed and contracted capacity, but do not match that with electricity generation from renewables, is there a risk that we are signing a cheque that the grid and energy generation capacity may not be able to meet in 2030?

That is where concerns are arising. EirGrid stated that 2% demand increase is not exponential, but the growth in demand specifically from data centres is very high compared with that from the rest of the economy. We are looking at 30% by 2032, compared with 4% in Europe. A significant proportion of electricity demand is coming from that sector. Is there a risk that if we cannot meet that demand through renewable energy, that is where problems will occur and we will need to have derogations and facilitate temporary generation in order to meet not only the current demand, but also what it could technically ramp up to?

As regards policy, data centre policy was updated in the past year, but my sense is that EirGrid still believes that is not what is needed to manage and facilitate the grid. What would it like to have seen in that policy that is not there? The policy currently focuses specifically on the Dublin area and data centres have to produce their own energy. EirGrid keeps speaking about net zero demand, however. I think that is the phrase it uses in its document. Its view is that even if these data centres come on board, there will be a net zero demand from it. That is not net zero emissions or net zero carbon, however; EirGrid specifically refers to net zero demand. It is saying that those data centres will not take demand from the grid and that as they will be able to generate their own energy, it is not EirGrid's problem, as such. In the wider context, however, it might be EirGrid's problem in the context of emissions targets. That is a long and convoluted question. I hope the witnesses can get some sense from it.

Mr. Mark Foley

There are three parts to the question. As regards data centre policy, there was a policy in November 2021 and another in July or August 2022. The 2021 policy was issued by the CRU, while the 2022 policy was prepared by the Government. Taken together, it is not a policy that allows us to sign a contract with a data centre. We have not signed a contract for two years. I ask the Deputy to please appreciate that we are in the middle of all this. We are not creating demand and we are not the architects of all this. All we are saying is there needs to be a policy that works and allows appropriate growth in demand. I stress the word "appropriate". I have used it two or three times. At the moment, we are in a logjam. Nothing is happening. We are trying to help and offer thought, leadership and ideas as to how this might be fixed. It is ultimately a matter for the Government, however, rather than for EirGrid. We just implement Government policy. It is also a matter for the CRU. Our point is that the CRU can only come up with a rational policy if it is properly informed by a strong Government policy. At the moment, we are stopped. We are not signing any contracts. That is the current circumstance. Is that clear?

Deputy Jennifer Whitmore

It is. The conversation on this point has been going around in circles in recent years, however. One of the things in respect of which we need to be more strategic is the kind of data centres we have here. Does EirGrid believe there should be an allocation whereby a certain amount of energy demand would be set for data centres and the types of data centres we would allow to access that demand are those that can show a certain percentage of efficiencies, including the ability to store-----

Mr. Mark Foley

In fairness, the Deputy has nailed it. She used the word "strategic" and referred to allocation of demand. That is a sensible way to look at it. We are stopped at the moment. Doing nothing runs the risk that Ireland loses the future digital economy, which is not a clever idea.

The Deputy used the words “strategic” and “allocation” and asked which data are important and which is not. That is where the conversation needs to go, and Government policy needs to articulate that. In fairness to the regulator - and I have been critical of the CRU - it needs greater clarity in the Government policy proposition for it to have a regulatory policy that allows us to connect. In many respects, the Deputy eloquently answered the problem that Ireland has.

Regarding net-zero data centres, that is not us. The Deputy is picking that up from the data centre community. It is not something we are advancing.

Deputy Jennifer Whitmore

I will look through this document quickly.

Mr. Mark Foley

I do not think the Deputy will find an attribution to EirGrid in that per se. That is a complex construct.

Deputy Jennifer Whitmore

On page 14, the following is stated: “This makes new data centres 'net-zero demand' from a GCS adequacy perspective.”

Mr. Mark Foley

Give us the rest of the sentence.

Deputy Jennifer Whitmore

It states:

This does not constitute a moratorium for data centres but according to the CRU’s direction, EirGrid can ‘determine whether a connection offer can be made within the system stability and reliability needs of the electricity network.’ It also means that any new data centre demand must also bring equivalent capacity with it which would be intended to largely offset any further growth in data centre.

Essentially, this is gas generation. The document also states: "This makes new data centres 'net-zero demand' from a GCS adequacy perspective."

Dr. Liam Ryan

What we are saying there is we are looking at planning the power system to meet that demand. The demand is being met by the generator itself; it is not being met by EirGrid building out the system to meet the demand. That is where the direction came from. The CRU respected the challenge, as Mr. Foley outlined, with regard to the carbon issue associated. The GCS does not talk about the carbon element rather it talks about the adequacy of getting the right generation to meet the demand we have, which complements the renewables we have coming onto the system as well.

Deputy Jennifer Whitmore

Would EirGrid see it as part of its responsibility to account for the emissions?

Mr. Mark Foley

No.

Deputy Jennifer Whitmore

Essentially, this again comes back to Government policy.

Mr. Mark Foley

This is important, because we need the policy to frame that. That comment is EirGrid giving a narrative that speaks to what the CRU has been saying but, ultimately, we do not have the vires to be getting involved in these matters. We are saying somebody needs to fix it and we are prepared to put our expertise and thinking behind what fixing it might look like.

Deputy Jennifer Whitmore

We will have growth in data centre usage because there is still that spare contracted demand allowable to them. If we do not have renewables on board for whatever reason, be it barriers relating to planning, connection or whatever, is there a risk we will not make our targets?

Mr. Mark Foley

We have two risks that relate to two different potential scenarios. The first risk is very real and present. We cannot seem to get new gas generation from the capacity market. I think the answers are pretty straightforward but we need the CRU to deliver on that. That will relieve this sort of, call it crisis, around generation capacity, which we have mitigated through the temporary emergency generation and keeping Moneypoint open. That needs to be fixed whatever happens because it threatens our reputation as a country. It also threatens the energy transition if we cannot backstop renewables. There is a risk that the new renewables coming on the system will happen more slowly than we would like. Much of that is to do with challenges in the planning system. Offshore is untested and a recent statistic I heard about onshore and the number of projects gone into judicial review was somewhat alarming.

On the other side – this might sound quite contradictory – if we can get the renewables, we need the demand. There is a business case. We need this thing to go in harmony. If, for example, we were to get no further demand, none of those renewable projects would have a business case that works. Therefore, it is important we have a conversation. That is why Shaping our Electricity Future is important - it gives a picture of a joined-up future. If one of those elements falls over, that is, if no demand happens or no renewables happen, we go out of sync.

One is very bad for climate and the other is bad for security. We have to think, in fairness, in a more holistic way. It is about balance, control over demand and getting renewables built. You cannot pick one bit and take it off the table. If Ireland gets no increase in demand, we will stagnate at about 40% or 42% RES-E for the rest of the decade and we will be like the UK across the water where there is no economic growth and so on.

I am respectfully suggesting a balanced conversation, and Shaping our Electricity Future gives that picture. I am very happy to talk through that with the Deputy offline.

An Cathaoirleach

I wish to jump in there. If Mr. Foley is saying that an increased demand profile helps the renewable investment case-----

Mr. Mark Foley

Once it is proportionate.

An Cathaoirleach

Yes. Does EirGrid look at that from a carbon point of view? There could be increased demand and the increased renewable penetration that goes with it but you might still be left with net X Mt of carbon in the system when we are trying to reduce it by 51% by 2030.

Mr. Mark Foley

Can we do the maths? Of course. However, I think the SEAI has been given the responsibility for that. The Chairman is asking a very profound, if I may, question about economic growth. We have a policy and a plan. If we deliver this plan, it will deliver the lowest carbon electricity system arguably in the world on a per-megawatt basis. We can still have economic growth. We can still have a digital economy, electrification of heat and transport, and population growth. That is my understanding of Ireland’s vision for itself. If we challenge that and decide to look at an alternative, let us call it a reductionist model, which might say no economic growth, that is arguably a conversation for a higher authority than us.

An Cathaoirleach

Sure. Fair enough.

Mr. Mark Foley

It is very interesting.

An Cathaoirleach

It goes back to the decoupling question as well. I think you can have economic growth without emissions growth. However, the target for 2030 – again, I acknowledge it might not necessarily be for EirGrid – is real numbers, not a proportion.

Mr. Mark Foley

It is very real numbers, and it is net.

An Cathaoirleach

Yes.

Mr. Mark Foley

I think it is down to 3 Mt of carbon in the power system.

Dr. Liam Ryan

I wish to pick up that point. We are planning the power system for a 50% demand increase and for the 80% renewable targets that the Government set down. We are very clear about that. We are also very conscious of how we utilise all the renewables we possibly can at the time they are available. Part of that will involve getting the right storage solutions to move that power more flexibly with regard to what we are trying to do and making sure that, into the future, we continue to do it. One of the key elements we call out - we are very clear on this - is that the conventional generators that Mr. Foley spoke about need to be renewable fuel-ready into the future. If we will hit the future targets in respect of decarbonising the full economy, we need to make sure the generators we are now purchasing can be capable of running on hydrogen, green ammonia or whatever fuel is available at that point in time. That is a key part of how you go on that transition as well.

An Cathaoirleach

No other members are indicating, so we can finish up. I thank everyone for coming in. I will watch back the section of the meeting that I missed. I understand that everybody was well behaved. I thank the witnesses for their time and expertise. As I said at the outset, notwithstanding all of the challenges we have, I think everybody in the committee appreciates the work EirGrid does. We will simply not get the decarbonisation we need without the witnesses and their colleagues going above and beyond. I ask the witnesses to convey those thanks from this committee to their organisation.

We will now adjourn until the private meeting at 3.30 p.m.

The joint committee adjourned at 1.10 p.m. until 11 a.m. on Tuesday, 6 February 2024.