Dáil Éireann Debate, Tuesday - 21 May 2013
465. Deputy Finian McGrath asked the Minister for Communications, Energy and Natural Resources if he will consider applying for TENS funding for a Natural Gas Spur from Corrib to Sligo, on to Enniskillen and Derry; and if he will make a statement on the matter. [23995/13]
View answer466. Deputy Finian McGrath asked the Minister for Communications, Energy and Natural Resources if he will consider different funding options for the connection of towns to Corrib Gas whose connection has been appraised as having a negative NPV, such as a loan from the EIB or funding under European Regional Funding post 2014; and if he will make a statement on the matter. [23996/13]
View answerI propose to take Questions Nos. 465 and 466 together.
The development and expansion of the natural gas network within the State is in the first instance a commercial matter for Gaslink - a subsidiary of Bord Gáis Éireann (BGE) - which is mandated under Section 8 of the Gas Act 1976, as amended, to develop and maintain a system for the supply of natural gas that is both economical and efficient.
The Commission for Energy Regulation (CER) is the statutory, independent body, charged with the assessment and licensing of prospective operators seeking to develop and operate a gas distribution system within the State. I have no direct statutory function in relation to connections to the gas network.
In 2006, the CER approved a new network connections policy which enabled reassessment of the feasibility of connecting certain towns to the gas network. This policy was updated in 2011. In order for any town to be connected to the gas network, certain economic criteria need to be satisfied as a prerequisite.
The policy allows for the appraisal of a town either on its own or as part of a regional group of towns. The policy framework provides that, over a certain period, the costs of connecting a town, or group of towns, to the network are recouped through the actual economic consumption of gas and the associated tariffs. Otherwise, uneconomic projects will increase costs for all energy consumers.
Having regard to the CER policy on new towns connections, Bord Gáis Networks, and more recently Gaslink, have carried out a comprehensive review of towns not connected to the national gas network. In April 2010, Gaslink published its ‘New Towns Analysis Phase 3’ report. The study included a review of the feasibility of connecting 11 towns in the West and North West region, including Sligo town. However, the Gaslink report found that none of the towns qualified for connection on economic grounds.
Nevertheless, Gaslink continues to review towns which did not qualify for connection under the Study and other towns on an ongoing basis. The key factor which would qualify a town or group of towns in any future review would be a significant increase in demand for natural gas, probably resulting from the addition of a new large industrial or commercial facility.
Where, taking account of CER decisions on new towns connections, it is determined that a town qualifies for such a connection, it is then a matter for BGE to determine the optimum funding option, which may include any available EU funding mechanisms, having regard to statutory limits and controls on expenditure.
