(Mayo): I wish to share time with my colleagues Deputies Naughten, Gerry Reynolds, Crawford and Boylan.
"That Dáil Éireann
–conscious of the critical importance for the continued growth of the economy of adequate and reliable supplies of electricity, and of the very real fear of a major power collapse
–aware of the large energy requirements of key technological sectors in the economy, particularly in the major growth area of data hosting
–noting the slow progress in the implementation of the deregulation of the energy generation market
–concerned at the acknowledgement by the ESB that it has serious problems with its generation and transmission capacities
–mindful of the return to the United States of the five leased energy generators deemed necessary to augment supply;
–acknowledging IDA concerns that inadequate electricity supply will pose a threat to existing jobs and threaten foreign investment;
condemns the Government for its failure to plan adequately for the energy needs of the economy, and calls on the Government
–to make urgent provision for new substations to service data hosting sites in Dublin
–to undertake a major programme for the immediate upgrading of the electricity transmission system within a two year time frame, and
–to ensure that the required additional annual 200MW generating capacity is brought on stream immediately to meet the anticipated increased demand."
Two weeks ago, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, was on an official visit to Japan. One of her speeches, which was widely reported in the media, carried a very significant comment coming as it did from a Minister, particularly the Minister for Enterprise, Trade and Employment. She stated that Ireland has a first world economy but a Third World infrastructure. How right she is. The country has a ramshackle rail system, an inadequate public transport system and a road system that is becoming even more strangled day by day through gridlock. The Tánaiste as Minister for Enterprise, Trade and Employment with responsibility for the industrial jobs sector must also have been very mindful of our current perilously critical electricity power situation.
Last January, California suffered a major power collapse. The State of California has the most advanced industrial park in the world, the very heart of America's technology boom, yet, because of lack of planning and the failure to manage privatisation and de-regulation properly, the lights went out in Silicon Valley. Right across San Francisco Bay, because of the electricity blackout, traffic lights failed to function, petrol stations closed, bank-telling machines were paralysed, lifts stalled and television and PC screens went blank. The hub of the American technology miracle had to resort to generators, flashlights and candles.
Last week, California experienced an even worse power collapse. The message from the power hungry companies based in Silicon Valley was blunt and forthright: "If we cannot anticipate a reliable supply of power to run our computers, then we will move elsewhere." If they decide to move, they certainly will think twice about moving to Ireland because of the very real prospect that a California type power collapse could well be on the cards here. All one has to do is look at the growing number of amber and red alerts to see that we are in an extremely fragile situation as regards electrical power supply.
Three weeks ago, RTE's 6.01 and 9 o'clock news bulletins on TV ran a sobering series on the critical state of electricity supply. On three successive nights the RTE news team visited Dublin, Ballina and Cork. In all three locations the story was the same – power supply problems were causing major headaches for existing companies. In the case of Dublin, data hosting companies complained they were being contacted by the ESB at peak demand times and asked to switch off their plant. In Ballina, the manager of Hollister, Mr. Pat O'Malley, confirmed that because of the frailty of the electrical system, the company had no option but to bring in its own one megawatt generator. The whole industrial and commercial fabric of Cork city is under threat because of threatened power shortages.
The IDA was interviewed on the same programme and had no hesitation in confirming that because it could not guarantee power supply to prospective industries, foreign investment prospects will be badly affected. The ESB was asked on the same programme for its observations on the situation. The reply was extremely significant on two fronts: first, as the monopoly power supplier who knows exactly what the situation is and, second, because time and time again when Opposition Members raised concerns about the electricity supply, the Minister has repeatedly told the House that she has been assured that there would be "adequate electricity supplies provided by the ESB up to and including winter 2000". Yet, on the same RTE programme, the ESB said the network is – in the company's own words –"creaking" and that the problem is getting worse. According to the ESB, it has problems both with transmission and generation. Mr. Seán Dorgan was quoted as confirming that from the point of view of generation, in order to keep pace with demand, the system would need 480 megawatts additional generation every two years.
Is it any wonder that we have a critical power position when political and departmental management is so lacking? Today we had oral questions to the Minister for Public Enterprise. One of the questions I had tabled was to ask the Minister if a report had been presented to the Government warning of an imminent electricity and gas crisis. On Thursday last I received a telephone call from the Minister's Department asking me to what report I was referring. The Department of Public Enterprise seems to be totally oblivious to the existence of any such report being presented to the Government. I had to refer the Department toThe Irish Times of 22 February 2001, Business and Finance section, page 19, which contained an article entitled “Energy Crisis in the Republic could mean capital funds loss”. It is incredible that neither the Minister nor the Department would appear to have seen the report.
The newspaper article confirmed that the Department had commissioned DKM Economic Consultants to carry out the study. The report is extremely ominous. It confirms that many areas of the State face high risks of unplanned electricity outages due to transmission system weaknesses. In addition, depleted gas supplies and inadequate generating capacity for electricity are increasing the risk of outages this winter and next. The report stated
The risk of unplanned outage this current winter is markedly higher than it was in the peak of January 2000, and that risk will increase shortly again for the winter of 2001-2002.
The report warns that a failure to invest in generation and transmission facilities over the next few years would lead to social and economic dislocation. The report also stated
Clearly, a lack of action in relation to the serious energy situation in which the economy now finds itself, will result in a flight of digital capital to economies where reliable and secure telecommunications and energy supplies are guaranteed.
What is particularly significant is the time lag, lack of vision and lack of planning because EirGrid, the national electricity grid company, admits that the upgrading of the transmission system has a lead in time of seven years due to planning, legal and construction processes.
Here we have a key report, commissioned by the Department of Public Enterprise, identifying a critical power supply situation which would totally undermine the well being of the Celtic tiger. It is a report one would imagine should have sent shock tremors right through economic Departments, which should have gone straight to the top of the Government agenda and should have triggered a major review of energy policy. The impression I got from the telephone call last Thursday was that the Department was blissfully unaware of its existence or, at best, might have been mildly aware that there was a report somewhere.
The report highlights the various areas at risk and, like the RTE programme, there is a particular emphasis on the Cork region. The power supply requirements of the data hosting industry is a central theme of the DKM report. Data hosting has become massive business and millions of dollars of investment have been poured into Dublin in the past few months. As we speak, several warehouses full of servers are being built in Dublin to host and manage data that makes us part of the world wide web. At least 23 further centres of this kind are planned for the Republic, which will bring in more than $1 billion dollars to the State. To date, only two of these are planned for outside Dublin.
Here we have a huge growth area with major revenue earning potential and, without any new centres coming on stream, existing centres are being telephoned by the country's monopoly power supplier, the ESB, and asked to switch off their systems because of inadequate power in the grid. In fairness, the surge in popularity of data hosting centres was not expected by those involved in the e-business arena, not to mention those in the utility sector. However, the reality is that e-business companies depend for their survival on facilities being provided immediately and the ESB is simply unable to facilitate them. Data centres only began springing up in such huge numbers last year and each needs the same amount of power as a medium sized town. As a result of the speed of the sector's development, they need the power to be made available almost immediately.
This sudden growth and surge has caught the ESB unawares and the infrastructure to deliver the power is simply not available. The ESB has grossly under estimated the requirements of the digital economy and the e-commerce sector. While it would steadfastly maintain that there is a safe margin between supply and demand, one has to ask why it was necessary for the company to lease five massive generators from General Electric in the United States in order to sustain supply over the winter months. The ESB located three of the generators at Aghada, County Cork, and two in Killala, County Mayo. Each generator had a 22.9 megawatt capacity output.
In total, it cost £10 million just to lease these generators for the six months and a further £10 million to fuel and maintain them. Each generator is now wending its way back to the United States in what must be the sweetest of sweet deals for the American leasing company. Such expensivead hoc measures are the clearest possible illustration of the Government's failure to plan properly for the energy needs of the country. What is even more evident is the grossly inadequate level of infrastructure. I refer here to lines cables and the sub-stations which simply cannot carry the power from the generating facilities across the country to their destinations. That is an appalling indictment. On one hand we have the IDA and Ministers, who are absent from the country on a regular basis, aggressively marketing Ireland as the place to locate, while those who locate here are being asked to close down their operations at peak demand time. What more need I say?