Major electricity blackouts are usually the result of a number of contingencies. These include generation shortages, transmission network failures or other operational difficulties. While no electricity power system can be fully protected from such events, I am satisfied adequate measures are in place to reduce the risk of a major blackout occurring on the Irish power system.
The Commission for Energy Regulation, CER, continues to monitor the security of electricity supply situation. Demand for electricity is forecast to increase at an annual rate of between 2.9% and 4.3% over the period 2004-2010 and the supply-demand balance will vary on a real time basis throughout the year depending on demand and generation availability. The current supply-demand balance is deemed to be workable, though not ideal.
The CER has initiated positive actions to redress possible generation capacity shortfalls in the short, medium and longer term, as forecast by ESB National Grid in its Generation Adequacy Report 2004-2010. 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 mobile 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 respectively. In addition, the two new peat plants, with a combined capacity of 250 MW, are due to be commissioned by December 2004 and February 2005 respectively.
An ESB plant productivity programme is in place to enhance its availability from 76% in 2003 to a target of 82% during 2004. The CER will impose penalties on a progressive basis to make sure the action programme delivers. The ESB is also undertaking a significant networks investment programme of €4 billion up to 2007 to bring 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 to ensure the supply-demand balance over the coming years. 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, as a priority, which when operational will further enhance security of supply. The desirability and feasibility of increased interconnection between North and South is being investigated.
At EU level, the Commission has brought forward a draft directive concerning measures to safeguard security of electricity supply and infrastructure investment. The draft directive, which Ireland supports, forms part of a new energy infrastructure and security of supply legislative package, designed in the main to promote investment in the European energy sector with a view to both strengthening competition and helping to prevent the reoccurrence of electricity blackouts. Many of the elements of the proposed directive form part of the electricity regulatory framework in Ireland.
In the event of an emergency, the transmission system operator, ESB National Grid, as part of its licence conditions, has in place a number of specific emergency plans which can deal with the incident quickly and effectively. Procedures for activation and implementation of the plans, as well as communication procedures, are tested and reviewed at regular intervals. For instance, a key element of the plans is to ensure, in the event of a shortage of generation capacity, load shedding is kept to the minimum necessary to make sure the power system remains in a stable operating mode at all times.