ESB: Chairperson Designate

The purpose of this part of this meeting is to engage with the chairperson designate of the ESB, Ms Ellvena Graham, to discuss the approach she proposes to take if and when appointed to the role of chairman and her views on the challenges currently facing that body. By now, we are all very well aware of the Government decision in May 2011 that put new arrangements in place for the appointment of persons to State boards and bodies. Reference to this arrangement is made in the guidelines of the Department of Public Expenditure and Reform on appointments to State boards of November 2014. The committee welcomes the opportunity to meet the chairperson designate in public session to hear her views. We trust that this provides greater transparency in the process of appointment to our State boards and bodies. On behalf of the committee, I welcome Ms Graham.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the Chairman to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons, or entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statements witnesses have made to the committee will be published on the committee website after the meeting.

I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or persons outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite Ms Graham to make her opening statement.

Ms Ellvena Graham

I am delighted to have the opportunity to meet the Chairman and other members of the committee today. Perhaps it would help the committee if I introduced myself briefly. I was born and grew up in County Down in Northern Ireland. I joined Ulster Bank in 1982, working in Belfast and, for many years, here in Dublin. My most recent role was as head of Ulster Bank in Northern Ireland and managing director of SME banking across the island of Ireland. Prior to that, I was chief operating officer for Ulster Bank Group, again on an all-island basis. In those roles, I came to know the bank's customers and stakeholders. This included engagement with many public representatives here in Leinster House and in Stormont on issues affecting their constituents. Prior to that, I was in charge of RBS operations for Europe, the Middle East and Africa. This involved responsibility for more than 3,000 staff and servicing retail and commercial banking customers from a range of locations abroad. My other current activities include chairmanship of the Economic Advisory Group in Northern Ireland. I am also a board member of the Northern Ireland Chamber of Commerce and Industry and a member of the advisory board of the Women's Executive Network in Ireland. These roles provide a really helpful perspective on wider policy and community issues both in Northern Ireland and in the Republic.

I do not want to burden the committee with too much biographical detail but it may be helpful if I say that my career to date as an executive and non-executive has taught me the value of sound business judgment, leadership, customer focus, pragmatism, ability to influence people and tenacity. As someone who has lived and worked in Dublin and Belfast, I know at first hand the importance of business relationships between the North and South. These business links have played a key role in the progress we have made in recent years. I am very proud of the contribution women make to business and I am delighted to be the first woman nominated to chair the ESB.

As chairman designate, I am very conscious of the great history of the ESB. It was established as a commercial State company at the very beginning of the State to be a key enabler of the economic development of the country. Electricity remains vital for economic development and the ESB continues to play a crucial role in the national economy. I am mindful of being responsible not only to the Government, as owner, but also to those industries, businesses, hospitals, schools, homes and all those who rely on the ESB for a safe and secure supply of electricity. My appointment is an honour and it is also a challenge that I very much welcome.

As a serving board member, I have come to see the scale and complexity of the ESB's business. The ESB is a major employer, with 7,200 staff, €13 billion in assets and €3 billion in annual revenues, and it contributes more than €2 billion annually to the Irish economy. The ESB has a presence in every county and townland in the country. The ESB Networks business serves more than 2 million customers. There has been major investment in the networks to deliver the infrastructure critical to a modern economy. As the members all appreciate, there is great commitment from staff to maintaining a safe and secure energy supply in all weathers.

The ESB's generation and supply businesses have undergone major transformations over the past decade, from being monopolies to operating in an open and competitive marketplace. We can all see that ESB International brings Irish engineering expertise to serve the needs of clients right across the globe. The ESB is a large-scale business, investing up to €1 billion each year. Some €500 million to €600 million of this is spent upgrading Ireland's electricity network. The ESB invests hundreds of millions of euro each year in its generation, supply and innovation businesses. To finance these investments, the ESB has to be a financially strong and profitable business.

It has to raise debt in the international financial markets. Current debt stands at €5 billion. I am aware of the scale of this investment challenge and of the role of the board in maintaining a financially strong ESB for the benefit of all of us.

On looking forward, the first thing I would say about my vision for the future is that it is a very exciting time for the energy industry. We are all working to address the challenges of climate change and to decarbonise our economies. This is giving rise to a huge focus on renewables, the development of clean energy technologies and the efficient use of energy. EU and national policies are driving these efforts and the ESB will continue to play a leading national role. These developments are changing not only the way we generate electricity but also the way we supply it to customers. Smart technologies are already improving the efficiency and operation of the electricity networks. All of this progress will place the customers much more in control of when and how they use electricity. It will also enhance the whole customer experience and engagement in our own homes.

It is a really interesting time to be on the ESB board. As chairman designate I look forward to the challenge of developing and supporting the ESB's innovation strategy. The key strategic challenges I see for the ESB are supporting public policy in delivering an affordable, secure and sustainable electricity service; meeting the challenges of the all-island and all-islands electricity market, particularly the competition we now face in our traditional home market, including from the big UK utilities; delivering a high-quality, cost-efficient electricity network; disruption in our industry from emerging technologies; maintaining the financial strength of ESB; and attracting and retaining the high-calibre people critical for the success of the company into the future.

It is clear to me that the ESB board is committed to the highest standards of corporate governance. This reflects both the heritage of the organisation and also the commitment of board colleagues. As a board, we are never complacent, and that will continue to be my focus as chairman. I place particular emphasis as chairman on the board's oversight responsibility for strategy and governance, oversight of internal controls and oversight of risk. In doing this, I see the board as supporting and challenging management, who have the operational responsibility for the business. I appreciate the trust that is being placed in me and I am determined to live up to that trust.

As chairman designate of the board of the ESB, I look forward to playing my part in ensuring that the ESB remains a vital facilitator of the economic and social development of Ireland.

I acknowledge the proud history of the ESB since it was established by the members' predecessors in 1927. I recognise the very distinguished chairmen of the past, including most recently Lochlann Quinn. My focus as chairman would be to ensure that Ireland and all of our customers continue to have a safe, secure, sustainable and affordable electricity service. That is the brief for the role and that is what I would be honoured to do. I will take any questions.

I thank Ms Graham for outlining her very clear vision in respect of her responsibilities and also for outlining the challenges and opportunities coming down the line. Her enthusiasm for her new job is obvious from her presentation. I hand over to Senator Mooney, who is leading for Fianna Fáil.

I welcome Ms Graham. I am sorry for sounding so formal. I echo the pride that she has in having been appointed. I am a firm supporter of the breaking of the glass ceiling in relation to women executives. It is a wonderful progression that Ms Graham is heading up one of the most important public utilities on the island, and not just in the Republic. She brings enormous experience as a board member but also from her own background in banking and management, which I am sure will benefit the board and, ultimately, the country.

There is a public perception that the ESB has been one of the success stories of the semi-State sector and that it is a hugely profitable company. At the same time, we have experienced high consumer charges relative to the rest of Europe. Does Ms Graham have any views on that? I appreciate that she points out that the ESB needs to have an asset base in order to develop new technologies and the business, but at the same time the euro in the pocket is what bothers people, and energy prices are particularly high.

Ms Graham touched on the question of renewables. Does she have any views on how the ESB will progress in that regard? As she knows, we have a very high dependency - something like 90% - on imported fuel. Obviously, any alternative to that would be helpful to the economy. Does Ms Graham have any views on the challenges facing the ESB in terms of the expanding economy and increasing population, which place greater demands on the ESB to provide a service? While it is not within her direct area, there is local opposition to the expansion of the infrastructure of the service. I presume Ms Graham will see that as a challenge. I do not have an answer to it, to be honest. If on the one hand we are expanding our economy and increasing our population, there is a need on the other to continually upgrade our infrastructure. However, there appears to be a very strong opposition and - I do not mean to be patronising - a NIMBY syndrome. It is fine to expand the electricity network and ensure we have safe and secure access to energy in our homes, but if that requires extra infrastructure, I do not want it in my backyard or my area. Does Ms Graham see that as a challenge to be addressed in the years going forward?

I congratulate Ms Graham on her appointment. She has a very impressive CV and I have absolute confidence in the fact that she will bring a new dimension to her new job. I wish her well.

Ms Ellvena Graham

I will take the last question first on meeting the challenges of the expanding economy. The Senator is right that we need infrastructure. There is no doubt. If one looks at what the country is doing around foreign direct investment, it is a good example. Foreign companies are coming into Ireland. Very often they ask how much of our energy is produced from renewable sources. That is one of the drivers. If we want to continue to expand our economy, we must demonstrate that we are serious about meeting our decarbonisation and, indeed, climate change targets. We need the infrastructure. I am from Northern Ireland, as the members know, and I see businesses North and South and the absolute need to have strong interconnections between North and South. Businesses in the North in particular need that. I am a supporter of building good infrastructure. It is similar to what we did with the roads many years ago here in Ireland. It is the same type of thing that we are trying to do again. I understand the opposition to infrastructure because, as the Senator says, a lot of people do not want anything anywhere near them. However, if we want to progress as a modern economy, we will have to continue to develop and build out our infrastructure. We will need to keep pushing ahead with our renewables.

The Senator asked about energy prices, which is certainly something everyone has asked me about since I took on the role. The ESB has reduced the price of electricity in the last two years. One of the things I thought was the right thing to do was to reduce the price of electricity at the start of the winter. That allowed customers to benefit when there was high peak usage over the winter months. However, the cost of electricity is made up of a number of things, as the Senator knows. It is not just the networks or the fuel; there are a number of different elements affecting the price. We will continue to work to take down the price of electricity. In my time on the board, we have looked at the ESB's cost base and reduced it since 2010 by more than €250 million. The costs are coming down and the cost of electricity is coming down, but at the same time we have to invest in the networks. We have invested €6 billion there in the last ten years. We are investing in renewables and bringing wind farms online, with the networks having to be upgraded to accommodate that process. It is a balancing act, but we are doing our very best to reduce the cost of electricity.

I have a brief supplementary question. I should have asked Ms Graham whether the ESB is looking at the development of wave energy, which is becoming increasingly important. From being on a committee of the British-Irish Parliamentary Assembly which prepared a report on this, I appreciate that wave energy is at a pioneering stage. However, there has been Government investment in the area. The west of Ireland has the highest potential for wave energy into the future. Is the ESB engaging in that area and investing in it, and does Ms Graham have any views?

Ms Ellvena Graham

We definitely are engaging in the west of Ireland in particular. We are looking at waves and tidal energy and we are investing in those. The only thing I would say is that it is a long-term rather than a short-term play.

The earliest one will see anything there could be the next decade rather than the next year. We are investing in it and we are trialling and testing it. Those things take a long time to come to fruition. However, we are investing in it and we are interested in it. If it works it will be very good because we have plenty of water around us.

I wish Ms Graham well. Having heard her CV she is undoubtedly amply qualified for the role in the ESB. I have some specific questions. At this time of the year we are all conscious that ESB staff members are out working in every type of weather, as they were yesterday in my part of County Limerick. They are out again this morning. They e-mail constituency offices to give us updates on wind damage. This time of the year also brings a fair amount of flooding, particularly in Cork city and Limerick. Both have hydroelectric power plants, on the Lee and the Shannon, and both are susceptible to flooding. In the recent past Cork city endured a devastating flood when the Inniscarra reservoir was essentially opened and Cork city was left vulnerable. Millions of euro worth of damage was done to private and public property and many people are still recovering from that.

Similarly, in Limerick the Shannon flows through Ardnacrusha. Limerick city is low lying and is very susceptible to tidal flooding. If there is a perfect storm with the fluvial and tidal flooding and the hydroelectric power plant, it is a very dangerous situation for people who live along the very narrow channel from Limerick city to Ardnacrusha and onto the base of Lough Derg. Will Ms Graham comment on what the ESB is doing at those two places, in particular, and any other places that have hydroelectric power plants that are dependent on the damming of rivers? Are there others in the country? Have flood risk analyses and assessments been carried out? Neither Cork nor Limerick wishes to have a repeat of what happened in 2008.

The other issue is the ESB's relationship with EirGrid. Representatives of EirGrid appeared before the committee recently and Ms Graham might have seen the exchanges that took place. Given her previous commercial role she will have a keen knowledge of the Northern Ireland energy market. It appears from the evidence the committee received that EirGrid is intent on putting the North-South interconnector through the counties of Cavan, Meath and Monaghan to facilitate an energy deficit in Northern Ireland. Obviously, the ESB could potentially be a beneficiary of that. The representatives of EirGrid said clearly to the committee that as far as they were concerned, under the instructions from the Commission for Energy Regulation based on the type of lattice structures that are proposed to be erected, the consumer in the Republic could look forward to a cut in their energy prices. I am not surprised that Ms Graham raised her eyebrows because pigs will fly before that will happen. What proposal does the ESB have to cut energy costs as a result of the interconnector being built from Maynooth to County Tyrone?

There is a final matter. I welcome the ESB's recent commitment to apprentices. That was hugely welcome. Down through the years the ESB has been regarded as a great company in which to work. Indeed, my learned colleague beside me is testament to that, although I am sure he can speak for himself. It was often a family business, in the sense that fathers, sons and daughters ended up working in the ESB. Will Ms Graham elaborate on what plans there are for future apprenticeships in the company?

Ms Ellvena Graham

The Deputy covered a great deal but I will start with the last question on apprenticeships. The ESB has a long history of taking in apprentices and developing apprenticeships. Pat O'Doherty, the chief executive, is chair of the apprenticeship association. Throughout the recession we had reduced the number slightly. We were taking approximately 60 apprentices, but that is up again now. We intend to do that as we have seen the fruits of our investment in apprenticeships. Often we use our training facilities in Portlaoise. Apprentices spend a number of weeks there in addition to the training provided by the Government. We are entirely committed to the apprenticeships. Pat O'Doherty's personal commitment demonstrates that. It is one of the success stories of the ESB. When others had stopped taking on apprenticeships we continued to take them throughout the leaner years and we will take on more of them into the future. I am fully committed to what we are doing in that area.

The Deputy referred to the storms. Last night was probably the stormiest night we have had, when storm Barney hit us. This morning there are still approximately 15,000 homes without electricity and a number of them will be in the Deputy's constituency. The area south of a line from Galway to Dublin was particularly badly hit. ESB staff unstintingly go out in very difficult weather to keep the electricity supply going and to restore it as quickly as possible. They are hoping to have it restored to all of those homes by this evening. I am very proud of the work they do. It is certainly a 24/7 organisation in that regard. People must work shifts. During storm Darwin we took over 200,000 calls from customers about electricity outages, so we work hard. We have invested in the network. Some of it can be fixed remotely when there are issues. In other cases people must go out. If a tree falls down on a line they must go out to do that work. Unless the wind picks up again today we hope to have the problem addressed by this evening.

On flooding, I recently went to Cork to see the Lee dams and what had happened in Cork, because I am not particularly familiar with the area. We have appealed the judgment so I do not wish to say a great deal about it. I believe we operate the Lee dams, and indeed all of our dams, to the highest international best practice. That is not to say that we do not continue to improve or to examine what we are doing, but I believe our teams on the night managed that as well as they could in terms of what confronted them. The dams were over-spilling and had to be safely managed. We conduct a great deal of analysis. We have had international expertise helping us with analysis of that and we continue to improve how we manage the dams. At the same time, however, there is a large amount of water when there are high floods and the dams are only a certain height and size. I cannot say there will not be another flood in any area in Ireland because of the dams.

The Deputy asked about the North-South interconnector. I cannot comment on any assertion that there will be a cut in energy prices but the interconnector is certainly necessary, particularly for the businesses in Northern Ireland. They were pleased when they heard it is now in planning. I am not sure which route it will take between the North and the South, as that has yet to be conclusively ironed out. We need an interconnector and we need to be able to use the electricity North and South. I am not sure that the ESB will be the biggest beneficiary in Northern Ireland. We only went into the retail supply market in Northern Ireland last month, so we have to build the business of supplying consumers there. We have been supplying corporate customers for ten years or more but we only started to supply retail customers in Northern Ireland in October last.

I thank Ms Graham for her reply. What would she say to the communities in Cavan, Monaghan and Meath who will have this structure erected on top of them? There has been little or no consultation, or it is meaningless consultation, with EirGrid. At the same time EirGrid walked away from a similar project in the south east and it is due to walk away from a similar project in the west, telling us there will be local solutions. I asked another chairperson designate this question so I will put it to Ms Graham as well. Would she like to live beside a pylon?

I want to be fair about this, Deputy, but we are discussing the ESB today, not EirGrid.

I appreciate your intervention, but one cannot operate without the other.

Yes. I do not wish to prevent discussion but it is important that we cover it with the people who are responsible for it. If Ms Graham wishes to comment on it, I will allow it.

Ms Ellvena Graham

I was going to say that. I do not wish to comment on what EirGrid is doing, whether it is north, south, east or west. The Deputy asked a direct question on whether I would live beside a pylon. Honestly, if it was a choice of electricity or no electricity, I would be comfortable if I was beside a pylon.

I will not say any more on that. I do not want to comment on what EirGrid is doing.

I welcome Ms Graham and congratulate her. It is probably an unusual move from banking into electricity supply. When did she join the board?

Ms Ellvena Graham

I joined the board in 2010. I left my job in the bank in May of this year.

The brief details provided here indicate that she is eminently qualified to be chairperson. I am delighted to see that she speaks with a passion for the ESB. I believe I heard on the news this morning that approximately 15,000 homes are without supply. One recognises the good name and reputation of the ESB because most, if not all of those affected will have their electricity restored by this evening. Although we fall out with the ESB every now and again, most of us have a very high regard for the operations of the ESB.

Ms Graham spoke about the North-South interconnector and I will not go into detail on that. What are her thoughts on the potential for EU-wide electricity supply? What are her thoughts on microgeneration and particularly the cost of connections to the national grid? The cost of connections effectively means that we are dampening down the potential for microgeneration of electricity.

I am happy that Ms Graham mentioned affordability in her paper. All of us, as Deputies, come across people who just cannot afford the cost of electricity in their homes. I ask Ms Graham to talk about the role of the ESB vis-à-vis the regulator in terms of affordability.

The next group to appear before the committee is an association set up to represent the owners of electric vehicles. It is unfortunate that the ESB will charge for electric vehicles. Is there any potential to re-examine that decision?

What is Ms Graham's view on the relationship between ESB management and the group of unions in the company?

Ms Ellvena Graham

There is a lot in that. I will take the last one first. I believe ESB management and unions have a constructive relationship. The Deputy will be aware that we have four worker-directors on our board. They make a good solid contribution to the board. I believe they have the good of the company at heart. The ESB has come on a long journey and once one talks about taking costs out of an organisation, naturally there is a tension there. However, I think it has been managed as well as it could have been. The relationship seems to be as open as it could be and I believe both parties are working constructively. I hope that continues throughout my tenure on the board because as we look to the future it is incredibly important that we continue to work well with the unions.

The Deputy mentioned electric vehicles. The ESB has invested significantly and substantially in installing a charging network throughout the country. There are a number of fast charging points and almost 1,000 standard charging points throughout Ireland, as well as, obviously, the opportunity to charge a car at home. Recent press reports referred to a monthly charge of €16.99 for people who wanted to use charging points on the motorway, etc. Up to now it has been free. We need to run it as a commercial operation and the management is considering a range of options. Some customers may never want to do that and just continue to charge overnight at home. They may want to have an option of using one of the public chargers on an emergency basis and paying for that. There are a range of options and I do not believe we have seen the full story yet. The ESB needs to run it as a commercial operation. Those charges will not apply until April 2016, but a range of tariffs will come out between now and then.

The Deputy asked about EU-wide electricity. We no longer operate as an island, but as a group of islands with Great Britain. We have interconnectors between North and South and between east and west, across into Britain. Do I envisage having interconnectors into France? Yes, I am sure that will happen. Having EU-wide electricity will take time. The important thing for us is to have security of supply. That is what the Government is looking for and what ESB is working towards. That is why we have a diverse mix in our portfolio, incorporating wind, gas, water and whatever else. It is important for us to look at the newer technologies as well, which is why we are looking at things such as wave technology and solar. We certainly need to look at energy in an EU context, but we also need to look at it from an Irish perspective and what we are doing to meet our targets and to have a secure supply here in Ireland.

The Deputy spoke about microgeneration and the cost of connections. If I understand his question, he was asking about smaller operators trying to get on to the grid, very often in remote areas. There is an additional cost for a person at the end of a line. Ireland is rather peculiar in that we have double the network that one might have in other places with fewer houses on it. At the end of every road or lane there is a house and therefore the network has to cover all of that. We try to make it as competitive and cost-effective as we can. I am sure not everybody is happy with the price. That is about the height of it.

There seems to be a difference between Northern Ireland and here in terms of the cost of connecting to the grid. Northern Ireland seems to encourage people to set up microgeneration and connect to the grid. I know of a chicken farmer in Monaghan, an area with many poultry units. He spoke to other chicken farmers about plans to convert chicken droppings into electricity. He invested a lot of money in it but the killing point was the cost of connection to the grid. I think he has worked through it and hopefully has resolved that, but it was almost a tipping point. All of his good work might have fallen because of the cost of connecting to the grid. It seems to be much easier and certainly not as expensive in Northern Ireland.

Ms Ellvena Graham

I do not know the cost of connecting in the North. Yesterday I was in Stormont for another reason. I know a number of the smaller producers are coming to Stormont because they are not happy with what is going on in terms of subsidies and connections. So I am not sure they are entirely happy either. I am sorry, but I do not actually know the cost difference between North and South.

Ms Graham might take a look at that area.

Ms Ellvena Graham

We will certainly take a look at it.

I call Senator Brennan, followed by Deputy Fitzmaurice.

I wish Ms Graham well in her new position. I am not the learned friend of my colleague here, but I spent in excess of 30 years in the ESB. The organisation has come a long way. In my young days it was a success to get somebody to sign up to take electricity supply for nothing - people for generations had done without electricity and they did not want it.

We have come a long way. I would also like to acknowledge the reintroduction of the ESB apprenticeship scheme. I am familiar with business people who started out as apprentices in the ESB and are now, as a result of the experience they gained in that regard, running successful businesses in various parts of this country and the world. The ESB has been a great employer. During the weather conditions which we experienced last night and the night before, many of my former colleagues were out risking their lives working on poles of up to 35 ft. high while trying to reconnect electricity supplies.

The North-South interconnector project is a huge problem for the communities of Meath, Monaghan and, in particular, Cavan. I am sure Ms Graham is aware that it is proposed to replace the existing 275kV North-South interconnector with a 440kV interconnector. I do not expect Ms Graham to be able to respond to my question but perhaps she would put to the board the question of whether the existing infrastructure can be used to increase the power or if it would be possible to run a 220kV interconnector underground in parallel with the existing one, such that nothing would change in terms of the current overhead infrastructure. I would like to know the cost of running an overhead 440kV interconnector in place of the existing one. In my humble opinion, and based on my little knowledge of this area, it is possible to run an underground 220kV interconnector in parallel with the current infrastructure and thus satisfy demand. I realise, perhaps more than others, the importance of interconnection in times of demand but I would like to know if what I have proposed is possible and the likely cost in that regard. Many communities and parishes in Cavan-Monaghan and Meath are divided on this issue. Farming families are being compensated for allowing these pylons on their land and this is leading to division among families. Perhaps Ms Graham would put that proposal to the board and communicate with the committee as soon as possible on whether it is feasible. I wish Ms Graham every success.

Ms Ellvena Graham

That would be a matter for the EirGrid board. ESB does not have any remit in relation to the cost of lines, whether overground or underground.

It could respond on whether my proposition is feasible or not.

Ms Ellvena Graham

We will consider the matter.

I thank Ms Graham for her presentation. Like other Deputies and Senators, I would like to see the ESB drive on its apprenticeship programme. For far too long, we have neglected apprenticeships in this country. I would ask Ms Graham to pursue this programme and, where possible, to increase numbers in that regard.

I read in the media recently that the ESB subsidises wind energy to the tune of approximately €100 million. Is that correct and what is Ms Graham's view in that regard? In regard to the control of water, in respect of which Deputy O'Donovan spoke about the River Lee, there is a major problem on the River Shannon in that because the gates are not being opened, houses are at risk of being flooded. Why does the ESB not row in with the farming organisations and so on to ensure a plan is drawn up to clean the river? In many cases, the reason for the flooding is pollution in the river. Gates are not being opened because it is not possible, owing to silt levels, to hold back the river. I would welcome Ms Graham's views on that matter.

I understand five nuclear plants are to be built in the UK. Does Ms Graham foresee a day when Ireland will be able to import electricity at a cheaper cost than it can produce it? I also understand that the existing ESB generator can only handle 50% of electricity generated by wind and that there is pressure on the ESB to increase this to 75%. The cost of upgrading the generator is estimated to be €800 million. I know that the ESB is opposed to this proposal and that its hand is being forced in this regard. I understand the ESB has been asked to review the proposal and report back to the regulator within the next 18 months. What is Ms Graham's view on that? Is the ESB, in terms of subsidisation and upgrade of the generation system, being forced to spend money badly?

Ms Ellvena Graham

I think I have answered the question on apprenticeships. We are happy to drive those forward.

I would ask that ESB drive it on to ensure the creation of as many apprenticeships as possible.

Ms Ellvena Graham

We will. On the wind subsidies, they are Government subsidies. The ESB does not subsidise wind farms.

Is Ms Graham saying that ESB does not give any money to wind farms?

Ms Ellvena Graham

Not that I am aware of. I will come back to the Deputy on that. I am not aware that ESB is subsidising any wind farm. In regard to the flooding of the River Shannon and the need to clean up the river, I am not close enough yet to know if ESB is currently looking at that issue with any other agency. It is something we can take a look it. While the ESB would not have responsibility for cleaning the river, I presume it can be done.

We have been hearing for years from people that they will look at this, that and the other. Actions speak louder than words. I am asking that Ms Graham take an interest in the issue so as to alleviate problems for families and the ESB.

Ms Ellvena Graham

I will look into what is happening in terms of the Shannon scheme. The Deputy asked if it might be cheaper in the future to import electricity from the UK. He also mentioned that the UK are building five new nuclear plants. I was not aware of that. Nuclear energy is cheaper. In terms of the interconnectors, we could currently be importing nuclear energy through our interconnector because we sometimes import electricity through that interconnector from Britain. There is no doubt but that nuclear power will always be cheaper than that which we are currently generating. It is against the law to build nuclear plants here, so I do not think it is likely we will be doing that.

I know that. I am asking if Ms Graham foresees a day when, despite our having put in place additional infrastructure, it will be cheaper for us to import electricity than to produce it here? Electricity prices here are the third highest in Europe. Businesses here are struggling to be competitive because of the cost of electricity.

Ms Ellvena Graham

We can import electricity. I refer the Deputy to what I said earlier in terms of our wanting to have our own secure supply of electricity as an island. To do that, we have to have our own generation capacity. We also have to have that if we want to meet our renewable targets. Currently, approximately 10% or 11% of ESB's electricity is generated from renewables. Our target is to generate 25% of our electricity from renewables by 2025. The Government has set a target of 40% of electricity for Ireland as a whole to be generated from renewables by 2020.

The ESB is playing its part in that. Our target as a company, and what we have signed up to, is to have 25% of our generation from renewables by 2025.

I understand where Ms Graham is coming from, but there are days when the wind does not blow and other days when it is at 50%. With the rock-off on the generation, we cannot handle any more than 50%. There is pressure on the ESB at the moment to bring that higher in order to take more of it when there is a windy day or night. Is it not true to say that an €800 million investment on the generation side is needed to handle that capacity?

Ms Ellvena Graham

Does Deputy Fitzmaurice mean for Ireland as a whole, not just for the ESB?

For the ESB to be able to handle the wind side of it if we go from 50% to 75%.

Ms Ellvena Graham

I honestly do not know what the figure is. I do not know what investment would be required.

Does Ms Graham think €800 million would be a worthwhile investment if my figures are correct?

Ms Ellvena Graham

Given that, as Deputy Fitzmaurice mentioned, on many days the wind does not blow, there are times when the investment would not be of any benefit to us. In order to go to that level we would need to find some way to store the capacity that is created, because very often the wind blows at night when there is an over-supply. We would have to find some way to store that and use it when we need it at peak times. It is a complex question and many things would have to be looked at before anybody would invest €800 million in a network.

The issue is that these answers must be given within the next 18 months because they have to go and look at it. The regulator or other body has given an ultimatum to the ESB that it will need to do that. Are we looking at viable economic options or are we living in cloud cuckoo land because of EU laws that have been shoved on the ESB to the effect that it must meet certain targets?

Ms Ellvena Graham

I do not know the answer to the question about the €800 million, but we are trying to meet Ireland's targets, to which the Government has signed up. It is not a target that anybody else has foisted on us. It is something that Ireland Inc. needs to do and the ESB is happy to play its part in that.

I thank Ms Graham. I apologise for being late, but I saw most of the presentation on the monitor. Much of my focus at the moment is on supply and also diversity of supply. In County Meath there is a proposal for an industrial wind farm, but we are also on the route of the North-South interconnector. There is a lot of upset in that regard. I accept it is not necessarily Ms Graham’s area. I have done much research in the past two and a half years in particular for the oral hearing on the proposed wind farm. There is disappointingly little focus on solar energy or any other type of energy for the 2020 targets. All of the focus seems to be on wind. What is Ms Graham’s view on the future of solar energy, bio-energy or other alternatives in terms of the energy supply for the ESB?

Deputy Fitzmaurice said the ESB needs to find a way to store energy that has been wasted. Is research under way at the moment on how to store energy, for example, from wind turbines when the wind blows at night and energy is not needed?

There is a great debate at the moment on renewable energy. Proposals have been put forward for the conversion of Moneypoint, which uses coal, to sustainable biomass. It has been suggested that such a change would immediately allow us to achieve our 2020 targets, reduce emissions by 85% and solve many problems in terms of wind turbines and pylons. What is Ms Graham’s view on the matter? I wish her well in her new position.

I want to ask a couple of questions about meters and cards. People in poorer areas request that meters be installed and they want to have a card. Is it intended to continue that process or has it come to an end?

Sometimes the fee for reconnection following a disconnection is excessive. Some people struggle in that regard if they move into a new home and they have to reconnect the electricity supply. There is an awful rigmarole attached. Is there flexibility in that regard? I invite Ms Graham to tell us about the process.

The cost of electricity never seems to come down, in spite of the fluctuations in fuel prices. It always lags well behind and the benefit is never passed on to customers. Certainly, that is the impression most people have - that when fuel prices come down the electricity prices do not come down correspondingly.

I assume the ESB is in the market in terms of the roll-out of electric cars. Stations need to be set up. Does Ms Graham see potential for the ESB to expand into that area?

Ms Ellvena Graham

I will take that question first and then come back to the other questions.

Perhaps Ms Graham could take Deputy McEntee’s questions first.

Ms Ellvena Graham

Okay. I will come back to the questions from Deputy Ellis. The first question related to diversity of supply. Deputy McEntee is dead right; everybody does talk about renewables when they talk about decarbonisation. The ESB is also very interested in solar energy. We have signed a deal with Kingspan, another Irish company, to put solar panels onto roofs. In Northern Ireland there is much more of an uptake at the moment because of the subsidies for solar energy there compared to in the Republic. That is something to which we are very committed. Solar energy makes up a small percentage of energy generated at the moment. Wind is a number of years ahead in terms of capacity and the sheer engineering and development of solar energy.

Reference was also made to biomass and Moneypoint. There is much talk about the future of Moneypoint. It is our largest station. It is located in the west and electricity is generated from coal. We have spent almost €300 million on trying to make Moneypoint cleaner, but it is still using coal. If we were to convert it to biomass, which I have heard discussed a number of times, first, there is a significant cost attached to such a conversion and, second-----

Does Ms Graham have an idea of the costs?

Ms Ellvena Graham

I asked the very same question. A similar plant in the UK has been converted from coal to biomass and it cost in the order of £300 million or £400 million. The other thing about biomass is that to get enough biomass to feed Moneypoint, one would end up having to import a significant amount of biomass. That brings with it its own carbon footprint when one takes into account transport by boat from the United States or wherever else. It is not possible to give a straightforward answer and to say we will convert Moneypoint to biomass but it is certainly something we keep under review. Coal is very cheap at the moment so it is helping to keep the cost of electricity down for the Irish consumer. There is no easy answer. It is something we continue to examine. I am keen for the ESB to retain a focus on diversity. We have developed wind energy. We will have to continue with some fossil fuels for the short term but we must have a nice diverse portfolio rather than having all our eggs in the one basket. There is not an easy answer to that one.

Would Ms Graham say that if Moneypoint were converted to biomass it would increase the cost of electricity to the consumer, or could the costs come down further down the line?

Ms Ellvena Graham

Given that it is renewable energy, there may be subsidies available. I do not know what would happen, as that would be a policy decision. It would be hard to say what the cost would be, but at the moment it could cost money just to convert the plant, and we would have to pay to import biomass, so there would be an additional cost. That said, we are paying to import coal as well, but it is important not to lose sight of those two things.

Deputy Ellis asked me about pay-as-you-go meters. We have 60,000 of those at the moment and we do not have any plans of which I am aware to stop having them. We find they are useful. The Deputy asked about disconnections.

Disconnecting somebody is always a last resort. If the customer engages with the ESB, the ESB will not disconnect them. The ESB wants to engage with customers, as it is a hassle to disconnect and then have to reconnect again, and nobody wants to go through that. If a customer engages meaningfully with the ESB then disconnection would be absolutely the last resort.

I am thinking particularly of senior citizens. The ESB has a deal with the Government relating to fuel allowance. Does it contribute towards the allowance or is it compensated for it by the Government?

Ms Ellvena Graham

I have no idea. I am sorry, but I would have to look into that and come back with an answer to the Deputy.

What about my question on storing energy?

Ms Ellvena Graham

We are working on that with the large suppliers such as Siemens. The ESB has been involved in the trialling of that equipment and we have participated in a number of tests. It would be a game changer for everybody if it came in, so we are very interested in it.

Ms Graham mentioned the charges that are to be introduced relating to electric cars. Was it signalled at the beginning that there would be a period of no charge? I heard a suggestion that the events at Volkswagen would kick off a real engagement with electric cars. There was a lot of publicity over the charges and it was stated that the charges for electric cars would be only minimally different from those for diesel cars. We are to have a presentation on this matter later, so I would be grateful if Ms Graham could broaden our knowledge of that issue.

Ms Ellvena Graham

On electric charge points, it was agreed up front that there would be a free period and that charging would be introduced from April 2016, and that is what we are working towards. It is not just about the cost of charging. There are lots of other interventions relating to electric vehicles. Why are there so many electric vehicles in the UK? It is because there are all kinds of incentives such as benefit-in-kind tax reductions.

Yes. Another was legislation to allow the use of taxi lanes.

Ms Ellvena Graham

Yes, and free parking while charging a vehicle. At the moment there is a good grant of €5,000 for buying an electric vehicle, so there are a number of incentives. If a person charges a vehicle overnight at home, when it might take six or eight hours, they use the cheaper units - seven, eight or nine units - and that would be approximately half the cost of doing it during the day.

A lot of education is also required.

Ms Ellvena Graham

Yes; a lot of education is required.

There is a tipping point in every development and I do not believe we are there yet with electric vehicles. It would make sense for the ESB, the Department of the Environment, Community and Local Government and other agencies to sit down together and work everything out, and not just the charge for charging a vehicle. Does the technology exist for a person living on the seventh floor of an apartment block to use domestic overnight charging rates?

Ms Ellvena Graham

It is more difficult because of the electricity supply into a multi-floor apartment. There could be a public charge point in the basement of an apartment block but to have a private one is slightly more complicated, though there is nothing to say it is impossible.

So the technology exists.

Ms Ellvena Graham

The technology exists for public charge points, as far as I am aware. The people coming into the committee later will have a more informed opinion on this matter than I.

It is unfortunate that charges are coming in April, because we are approaching the point at which people will be deciding to go for an electric vehicle. It will be a disincentive. I would like to see a whole-of-Government approach to this.

We can take it up at another forum. I thank Ms Graham for engaging with us. I have no doubt that, with the enthusiastic approach she has demonstrated today, her term will be very successful. We will forward the transcript of today's discussion to the Minister for Communications, Energy and Natural Resources, Deputy Alex White, for his information and consideration.

Ms Ellvena Graham

Thank you, Chairman.

Sitting suspended at 11.15 a.m. and resumed at 11.20 a.m.