The economy and society overall, require that energy supply meets the demands of Irish consumers, and industry at all times. In this regard, the Government recognises the views being expressed by industry and representative bodies generally, and not just recently by the IDA and ESB, concerning the adequacy of electricity generation and a number of proposed measures, including greater interconnection, aimed at enhancing security of supply for the foreseeable future.
Security of supply in relation to electricity in Ireland is the statutory responsibility of the independent Regulator, the Commission for Energy Regulation (CER). The independent Transmission System Operator (TSO), EirGrid, monitors the adequacy of generation capacity over time and reports to the CER accordingly. The relatively small size of the Irish electricity market underlines the need for greater interconnection as a means of enhancing security of supply, promoting competition and integrating the Irish electricity market into the wider European market.
The recently published Energy Policy Green Paper "Towards a Sustainable Energy Future for Ireland" underlines the Government's commitment to deliver enhanced interconnection on the island of Ireland as well as with Britain as a key strategic priority. The delivery of this further interconnection will be central to improving access to new supply sources and is fully in line with the EU emphasis on physical interconnection.
To facilitate the development process, the Government has provided new arrangements in respect of the construction and operation of future interconnectors in the Energy (Miscellaneous Provisions) Act 2006. On foot of a Government decision, the CER is arranging the design of a competition to secure the construction of a single 500MW interconnector between Ireland and Wales at the earliest possible date before 2012. The interconnector will be owned by EirGrid. While work is progressing on final route selection and technical specification of the interconnector, the CER is also finalising the competition structure, working on the associated competition documentation and related contractual arrangements and going to market as soon as possible within 2007.
In addition to this East West interconnector, the Government, working together with the Northern Ireland authorities, will continue to progress electricity interconnection initiatives in the context of the All-Island Energy Market. In this regard, the two transmission system operators, Northern Ireland Electricity and EirGrid, are planning a second North-South electricity interconnector which will more than double the existing cross-border electricity transfer capacity to over 600MW with an expected completion date of 2012 at the latest.
While it is too early to say precisely when these projects will be completed, the CER and EirGrid are committed to providing the new interconnections by the timeline the Government has set. In this regard, the Planning and Development (Strategic Infrastructure Act) 2006, which provides for a streamlined planning process for strategic infrastructure developments, includes special provisions designed to expedite the planning process for electricity interconnector projects.
With regard to existing generation capacity, and with particular reference to the winter of 2008 to 2009, the most recent advice to me from CER and EirGrid is that there is sufficient generating capacity, both installed and planned, on the system to meet the predicted demand. The CER advises me that this is particularly so in light of the addition of almost 550MW of new generation capacity in 2006, (the independent plants at Tynagh and Aughinish), the expected commissioning of a new 400MW plant in Autumn of this year (Huntstown 2) and the further development of almost 900MW of new plant in the South West by the end of 2009.
Notwithstanding this assessment, the expected balance between demand and supply is being kept under consistent collective review by my Department in consultation with the CER and EirGrid. Should there be any indication that the situation regarding generation adequacy may change, the CER is charged with the responsibility of taking action to ensure that supplies of electricity are protected. I am assured by the CER that the monitoring in place will ensure that any risk to security of supply will be identified at an early stage in order to provide any precautionary actions to be taken early. The Government has indicated to CER that it believes some further capacity should be put in place over the next few years.
System alerts are indicators issued by the EirGrid, as the independent TSO, to power station operators so as to encourage conservative operational practices at times of lower than usual spare generating capacity. The CER advises that the occurrence of any alerts on the system is contingent on both the level of demand, particularly over the winter, which will be determined, in part, by the weather, and the availability of plant to meet that demand. Similar to recent years, during times of peak demand, the CER anticipates that there may be times when alerts will be initiated in order to signal the appropriate actions for generators.
I am advised by the CER and EirGrid that within the past calendar year (2006), there were 28 amber alerts, which represents a drop of almost 50% over the average of the previous four years. There have been two amber alerts in 2007 to date, which compares to four over the same period in 2006. There have been no red alerts experienced since August 2005.
While I have been assured by the CER and EirGrid that there has been no occasion in recent years when electricity supply to customers was affected by a capacity shortfall, I am advised that they are considering additional measures that can be put in place to minimise the occurrence of instances where alerts are called for.