Fintan Slye, Chief Executive, EirGrid
Opening Statement
Joint Committee on Transport and Communications
April 21st, 2015
Chair and members of the committee
Firstly, I would like to thank you for the opportunity to be here today.
I am joined by Rosemary Steen, director of public affairs, John Fitzgerald
director of grid development and Aidan Geoghegan, project manager on
the North South Interconnector project.
As you are aware, last month we published a new, draft strategy for the
development of Ireland’s transmission grid.
The draft strategy, on which EirGrid is seeking public feedback, is shaped
by three key pillars; open engagement with communities, making the most
of new technologies and a commitment to make the existing grid work
harder before building new transmission infrastructure.
It looks at the changing technical and economic context for Ireland’s
electricity transmission system. It examines the energy challenges facing
Ireland and identifies the steps we need to take to develop a strong, secure
transmission system for homes, farms and businesses across Ireland, so
1
that the electricity grid is capable of providing for the energy needs of our
country now and into the future.
The review includes an independent report from Indecon which shows that
investment in the electricity grid will directly benefit Ireland’s economy and
can help reduce energy costs.
As well as supporting indigenous businesses and consumers, a modern
transmission grid will put Ireland in a strong position to continue to attract
foreign investment - and to support new and emerging opportunities in the
energy sector.
This approach will also support Ireland’s current policy objectives –
including the Government’s Action Plan for Jobs and the IDA’s regional
development strategy.
This draft strategy reflects the change in economic circumstances and
where we as a country, an economy and a society are now.
In recent years we have seen technology advances – some of which we
have deployed already to great effect - others which are now emerging.
Based on all of this, our new strategy is firmly focused on maximising the
existing assets and deploying appropriate advanced technology solutions.
For the North South Interconnector, the review determined that there
remains a clear need for the project and that a 400kV overhead line
remains the most appropriate solution for the project.
2
The interconnector is a 400kV overhead line linking a substation in
Woodland, County Meath with a new substation in Turleenan, County
Tyrone. It will provide a second high-capacity transmission line between
Ireland and Northern Ireland.
The project will more than double the power transfer capacity between
North and South, improving the efficiency of the all-island electricity market.
It will enhance the security of the electricity supply throughout the island of
Ireland, which is essential for economic growth, the creation of jobs and
improving the standard of living and quality of life for all.
It will also enable more renewable energy to be connected to the network,
reducing our production of greenhouse gasses and our reliance on
imported fossil fuels.
The interconnector is needed now as a cross-border bottle-neck has
developed on the all-island electricity system.
This is having serious financial consequences. Last year the ESRI reported
that the North South Interconnector would fix the bottle-neck and reduce
electricity costs by €30 million a year.
As we are all aware, the proposed scheme has been the subject of public
scrutiny and debate for some time, with the focus on whether or not it can
be put underground.
There have been a number of independent reports into the issue.
3
In 2008, the Government commissioned Dutch energy consultancy Ecofys
to carry out a “Study on the Comparative Merits of Overhead Electricity
Transmission Lines Versus Underground Cables.”
In 2009, EirGrid published a report from industry experts PB Power which
examined overhead and underground options for the project. A key
component of this study was a comprehensive and site-specific
underground cable evaluation that identified and evaluated a specific route
corridor. This report was reviewed and updated in 2013.
Other reports commissioned by EirGrid include a technical study by
Transgrid Solutions of Canada that investigated the impact of HVDC
schemes in the Irish transmission network. We also commissioned an
assessment of the technical issues relating to significant amounts of
underground cable in the all-island transmission system by Tokyo Electric
Power Company.
In 2012 the Department of Communications, Energy and Natural
Resources, published a study by an International Expert Commission which
reported on the case for, and cost of, undergrounding the North-South
Interconnector.
It is worth noting here that the Government-appointed Independent Expert
Panel, headed by Justice Catherine McGuinness, has acknowledged that
the evaluation of undergrounding on the North-South Interconnector is
4
compatible with the methodologies now being employed on the Grid West
and Grid Link projects.
We don’t have the time here to examine in detail the findings of these
reports. However, there are two themes that have emerged from them.
First, undergrounding the project is more expensive.
The
International
Expert
Commission
report
concluded
that
an
underground solution would be three times more expensive than an
overhead option.
Our own estimates are that an underground system would cost in excess of
€500 million more than the overhead option.
As a state-owned company whose mission is to develop, maintain and
operate a secure, economical and efficient transmission system, this is an
additional cost that EirGrid cannot pass on to consumers.
It is an additional cost that would not be acceptable to our regulator, the
Commission for Energy Regulation, either.
This is made clear in a joint-letter to EirGrid in 2013 from the CER and the
Utility Regulator in Northern Ireland.
The regulators stated that “the project must not only be progressed quickly
but also cost effectively. The Committee understands from the Irish
5
Government review that the cost for the undergrounding of the project
would be significantly higher than the AC overhead line construction
employed elsewhere in Europe. The regulatory authorities would therefore
be of the view that customers should not be expected to pay for any
unnecessary costs associated with undergrounding of the cables given
there would be no enhancement in service.”
Now I would like to deal briefly with some of the technical aspects of the
project.
The International Expert Commission in its 2012 report made one, and only
one, recommendation; and that is that the North South Interconnector
should not be undergrounded using AC technology. EirGrid agrees with
that recommendation.
The Commission, while not recommending that the interconnector should
be undergrounded, stated that if it were to be undergrounded for all, or a
significant portion, of its length, then the best solution would be to use
HVDC technology.
EirGrid is very familiar with HVDC and keeps abreast of the development
and application of this technology. It is the technology that we successfully
deployed on our East West Interconnector.
However, it also the case that it was the only technically feasible option
available for the East West Interconnector.
6
The same cannot be said for the North South Interconnector project. There
are technical options to be considered, and they have been considered.
The International Expert Commission found that AC overhead line
technology is the standard in Europe for implementing projects similar in
application to the North South Interconnector. That remains the position
today.
There are significant technical issues with putting projects such as the
North South interconnector underground using HVDC technology.
One of the key benefits of the North South Interconnector is the ability to
operate the networks North and South as if they were one system. This will
bring cost savings for electricity consumers as a larger electricity system
can be operated more efficiently than smaller ones.
However, if the project was to be put underground, it would be an HVDC
system linking two alternating current, or AC, networks.
As HVDC is not compatible with AC, there would be additional complexities
as it requires equipment to convert the power from AC to HVDC and back
again.
In order to function properly, an HVDC interconnector would also require a
computerised control system. Such a system would be bespoke and very
complex, and would introduce a risk of mal-operation.
7
Taking such a risk when there is a technically superior and less risky option
readily available is unnecessary.
In addition, ‘tapping’ in to an HVDC interconnector at some intermediate
point to provide a new grid connection or network reinforcement in the
future would add to the already complex control system. It would also be
significantly more costly, potentially in excess of €100 million more, than
tapping into the proposed AC overhead line.
This would disadvantage
future development in the region.
So where are we now with the project?
EirGrid has recently re-published its proposed line route that will form the
basis of an application for planning approval to An Bord Pleanála.
The review resulted in some of the proposed tower locations being repositioned along the alignment. The alignment itself has not changed and
the owners of the landholdings affected were notified prior to publication.
We are looking to submit a planning application to An Bord Pleanála in the
coming weeks. In fact we have been liaising with the board regarding the
planning application for some months now.
We have been doing this because 18 months ago the European
Commission designated the interconnector a Project of Common Interest or
PCI.
8
This is a significant development and means the project is subject to a new
EU regulation for trans-European energy infrastructure that is designed to
facilitate a more efficient permit-granting process.
An Bord Pleanála was designated as the competent authority for managing
the PCI process in Ireland and, as per the EU regulation, we submitted a
draft application file to it for review. Last month we submitted additional
information to the board which is currently reviewing it.
Once the board is satisfied with the draft application it will draw up a
schedule for formally submitting the planning application. We expect this to
happen very soon.
As I mentioned earlier, open engagement with communities is a key pillar
of our draft strategy.
Over the course of this project we have endeavoured to meet with every
landowner affected by the development and we have had productive
discussions with many. Others have chosen not to deal with us directly,
appointing intermediaries to represent them.
This is their undoubted right and prerogative. However, it is also a barrier to
effective engagement and we would encourage all landowners to talk to us.
We have recently opened offices in Meath and Monaghan and will shortly
open a new office in Cavan. We are encouraging anyone who is interested
in the project to pop in and discuss it with our project team.
9
These offices will remain open right through to the submission of the
planning application and afterwards.
In fact, our staff will be on hand in the local offices to provide assistance to
landowners and members of the public who wish to make a submission to
An Bord Pleanála, once the statutory consultation process starts, following
the submission of the planning application.
The interconnector is critical to ensuring a safe, secure supply of electricity
throughout the island of Ireland.
It will bring about major cost savings and address significant issues around
security of electricity supply, particularly in Northern Ireland.
Finally, on behalf of the EirGrid representatives here today, I would like to
thank you for giving us the opportunity to brief you on this critical
development and we are happy to take any questions you may have.
10