I propose to take Questions Nos. 7 and 99 together.
The Commission for Energy Regulation, CER, monitors the security of electricity supply. Demand for electricity is forecast to grow at an annual rate of between 2.9% and 4.3% over the period 2004 to 2010, necessitating additional generating capacity. The CER has initiated positive actions to redress postulated generation capacity shortfalls as forecast in the generation adequacy report by ESB National Grid. Short-term measures put in place for this winter include the implementation by ESB National Grid of a demand side management programme, increased imports of 167 MW of electricity from Northern Ireland contracted on a priority basis and 208 MW of additional peaking capacity. In response to the medium to long-term capacity deficit, two new independent plants successful in the CER's Capacity 2005 competition which will generate up to 500 MW are due to be commissioned by December 2005 and February 2006, and two new peat plants with a combined capacity of 250 MW are due to be commissioned by December 2004 and February 2005.
An ESB plant productivity programme is in place to enhance its availability from 76% in 2003 to a target of 82% during 2004. To ensure that the programme delivers, the CER will impose penalties for failure to deliver on a progressive basis. ESB is also undertaking a significant networks investment programme of some €4 billion up to 2007. This is aimed at bringing the transmission and distribution systems up to required international standards and to meet projected capacity demand requirements. The programme is being delivered within the planned timeframe and budget.
Further increments of capacity will be required by 2007. In this connection, Viridian Group plc has recently announced its plans to construct a second 400 MW gas fired power plant at Huntstown, County Dublin. In addition, the Government has given approval to proceed with the development of two 500 MW interconnectors between Ireland and Wales which, when operational, will further enhance security of supply. The feasibility of increased interconnection between North and South is being investigated.
On the gas sector, under section 19 of the Gas (Interim) (Regulation) Act 2002, the Commission for Energy Regulation, CER, is required to prepare and publish an annual forecast of capacity, flows and customer demand on Ireland's natural gas system over a seven-year period. The 2004 capacity statement will be published within the next week. It outlines a range of possible scenarios that are designed to test the adequacy of the current natural gas infrastructure. The scenarios incorporate various levels of demand, based on forecasts for the domestic, industrial, commercial and power generation sectors, while also considering potential timeframes for new indigenous supply.
The indication from the draft gas capacity statement is that our infrastructure is sufficiently robust to cater for the majority of scenarios modelled. Only in the case of the highest demand forecast, in tandem with delays to the coming on stream of indigenous supply sources, would reinforcements to the infrastructure be envisaged. The CER is working with Bord Gáis, as the transmission system operator, to investigate the requirements for reinforcing the onshore Scotland system, should the need arise.
This reflects the investments Ireland has made in recent years to develop a high standard of security of gas supply through robust interconnection with the UK, to ensure sufficient importation capacity from external sources. We now have two gas interconnectors, bringing Ireland's security of supply status on a par with countries such as France, Italy, Sweden and Denmark, all of whom have duplicated sub-sea pipelines to ensure the availability of alternative routes of natural gas supply.
The Kinsale field continues to provide Ireland with an indigenous supply of gas and with potential supplies coming from the Corrib and Seven Heads fields, Ireland's import demands may be reduced in the coming years.
Additional information not given on the floor of the House.
Ireland continues to monitor developments in the UK market closely and this will inform the further development of security of supply policy.
I wish to address the issue of oil. Over the years oil markets have been severely tested by geopolitical developments in oil producing regions of the world. This is particularly true of recent times with geopolitical tensions in the Middle East, the ongoing conflict in Iraq and tensions in Venezuela and Nigeria. Notwithstanding these scenarios, however, there has been no disruption to oil supplies since late 1990 and early 1991, during the Iraqi invasion of Kuwait, and global production continues to keep ahead of demand. Indeed, in response to concerns in the oil markets, OPEC ministers have made a number of decisions in recent months to increase production, the most recent being a commitment on 15 September 2004 to further increase production to a volume of 27 million barrels a day of crude oil with effect from 1 November 2004.
Ireland, as a member of both the European Union and the International Energy Agency, is required to hold levels of strategic oil stocks. Currently, the EU requires the holding of 90 days' stocks based on previous year consumption, while the IEA requires 90 days stocks based on previous year's net imports of oil. On 1 August 2004, Ireland held 2,171,000 tonnes of oil, which is equivalent to 109 days of net imports using the IEA methodology.
There is no question of Ireland or any other oil consuming country attempting to deal on its own with a major interruption in world oil supplies. If such a crisis were to occur, the response, including the release of emergency stocks and the identification of alternative sources of supply, would take place at international level, primarily within the framework of the formal emergency regime developed and maintained by the International Energy Agency.