Dáil Éireann Debate, Thursday - 11 October 2007
4 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources his views on an east-west electricity inter-connector between Ireland and Britain will be built; the person who will pay for same; the capacity it should have; the acceptable timeframe for the project to commence and be finished; and if he will make a statement on the matter. [23170/07]
Amharc ar fhreagraThe Government is giving high priority to the development of the east-west electricity interconnector between Ireland and Britain. The White Paper on energy policy and the programme for Government underline this commitment which will contribute to security of supply and competitiveness. Greater interconnection between member states is a key priority for the European Union if it is to ensure the Internal Market will work effectively. Work on the east-west electricity interconnector project is progressing well.
Following a 2006 Government decision, the Commission for Energy Regulation is arranging the design of a competition to secure the construction of a 500 MW interconnector at the earliest possible date before 2012. The Government has also decided that the interconnector will, as a national strategic asset, remain in public ownership and be owned by EirGrid. The Government also decided that as a national strategic asset the interconnector will remain in public ownership and will be owned by EirGrid.
EirGrid is progressing work on route selection and technical specification of the interconnector and has recently announced that Woodland in County Meath is the most favoured connection point on the Irish side. Work is also advancing with the relevant authorities on finalising the connection point on the west coast of Britain. EirGrid, overseen by the CER, is also finalising the competition structure, documentation and related contractual arrangements.
To oversee and ensure delivery of the interconnector to schedule, a high level co-ordination group has been established under the chairmanship of the CER and comprising representatives of EirGrid and my Department.
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.
To underpin the interconnector development process, new arrangements have been made in respect of the construction and governance under licence of interconnector operators by the CER in the Energy (Miscellaneous Provisions) Act 2006.
In particular, the Act provides that the CER may, with ministerial consent, secure the construction of an interconnector. Such consent will be contingent on final Government approval. As regards funding, the CER and EirGrid are working to determine the most cost-effective and efficient solution. Funding proposals will be part of the submission seeking Government approval for the CER to proceed with securing the construction of the interconnector.
Is it not the case that the ESB offered to build this interconnector and then hand it over to EirGrid? Why did the Government turn down that offer?
I remind the Deputy that it was the previous Government which made that decision; I only arrived in June. The decision was part of a general development to ensure the separation of EirGrid as a fully separately owned asset company which would develop this transmission asset. The Government has put its confidence in EirGrid and in my experience to date, that confidence has been well justified. EirGrid is proving to be a highly effective, highly capable operator showing that it can deliver projects of this scale.
I wish to inform the Deputy that EirGrid recently secured Woodland in County Meath as a connection point for the interconnector on the Irish transmission side. In the last few weeks EirGrid has received a connection offer on the British side for Deeside in Wales. PB Power and Anderson PS technical advisors have been commissioned to start work on the design and planning in Britain. My assessment of the project and of EirGrid's capability shows they are fully able to deliver these types of assets. I believe it will be completed in time and the Government's original decision will be seen to be well placed.
To clarify the position, the taxpayer will pay for it and it will be handed over to EirGrid who will own it on behalf of the State. It will be linked up with the network which EirGrid controls and will own separately from the ESB when the Minister decides to introduce legislation to make this happen. Is this correct?
Is the Minister satisfied — because I am not — that 500 MW is big enough? People in the industry tell me that if the cable is being laid, there is a question as to why it is being limited to 500 MW instead of 1,000 MW.
I am informed there is no benefit in going to 1,000 MW in terms of the construction costs. It is more debatable whether it makes sense in terms of energy. The analysis carried out by the Department showed that a phased introduction to interconnection was a better way of doing it. Care must be taken to develop our own market systems here by encouraging generation and not to undermine this by introducing a large supply on an interconnection basis which might undermine some of the renewable development projects here. It will be a measured approach which allows us to proceed further and gain experience in new technology such as long distance sea cable interconnection. This will provide information on further opportunities such as further interconnection into the UK or possibly into France or into grids which run in a north-south direction along the Irish Sea.
To answer the Deputy's question, it is proposed that the transmission network will be managed and owned by EirGrid and that includes the interconnector in this case.
I thank the Minister for the clarification. Does the Minister mean there is no cost saving to building a 1,000 MW interconnector at that stage as opposed to a 500 MW? Will it be as cost effective to upgrade in the future? Is this cost being factored in by the Minister?
The point made by the Minister is also the point I wish to make. We are endeavouring to introduce competition into the Irish market by connecting to the British grid. Is it not the case that electricity in Britain has consistently been 15% and 20% cheaper than in Ireland over the past five years for households and businesses? The purpose of the interconnector is not just to provide more capacity and security and perhaps the opportunity to export green energy, but it is primarily about piping in competition into the Irish electricity market place and to allow businesses and households have cheaper bills.
I am informed from the consultants' reports that there is no cost loss to the State by choosing this option and it may well be more cost effective.
With regard to the difference in electricity prices on either side of the Irish Sea, the Government is concerned about the cost of electricity but it underlines that we must be careful to deliver those renewable electricity sources which will be more cost competitive in the long run. Fossil fuels will become more scarce and therefore more expensive. We must take care not to undermine that development in the manner in which we develop the grid.
It will keep costs high so renewables are competitive.
The time has expired for this question.
We need to introduce renewables to keep the costs down.
I remind Members that the same rules apply to Ministers.
