Thank you for the opportunity to speak here today at the EirGrid Group Annual Conference. This conference provides a unique opportunity for EirGrid and its key customers to debate Irish electricity market and infrastructure issues and to consider the electricity sector from an Irish, European and international perspective.
This year’s theme "Delivering the Power System of Tomorrow" is certainly timely and will, I am sure, lead to some very interesting debate during the day. I am sure, also, that this conference will provide an opportunity for EirGrid and its customers to discuss the challenges facing the development of electricity grid infrastructure and to continue to endeavour to build consensus, understanding and support in that regard.
As transmission system operator and market operator, EirGrid is responsible for balancing Ireland’s power needs 24 hours a day, seven days a week. It is also responsible for ensuring that Ireland has a sufficiently robust transmission system to accommodate those needs, and to ensure that the future needs of industry and consumers are met.
Development of the high voltage electricity grid is critical to economic recovery, competitiveness and the realisation of our renewable electricity targets. It is vital in order to ensure continued supply to customers, access for renewable and low-cost generators, competition, and development of high tech industries.
From an EU perspective, the development of regional markets and interconnection is a key priority. The Third EU Internal Energy Market package provides support for the development of interconnection as well as a legal underpinning for cooperation between jurisdictions and for the development of a European grid. It is recognised in the EU that a strong grid is the cornerstone of sustainable economic development and recovery on the island of Ireland and in Europe.
As an island on the periphery of Europe, energy security of supply is a particular challenge. The Government’s objective is to ensure that a reliable electricity supply is available to meet the daily needs of business and householders.
The Government fully endorses the strategic national importance of investing in Ireland’s electricity transmission infrastructure. EirGrid’s national grid development strategy "GRID 25" is of key importance.
A well functioning grid is critical to ensuring the security of electricity supply and the transmission grid is the means through which bulk power is transmitted across the island, bringing electricity to various load centres and customers. Any benefits gained from a strong and varied generation portfolio and increased interconnection cannot be realised without the means through which electricity can be efficiently and securely delivered across the island of Ireland.
Peripheral energy markets have very specific challenges to address in order to reap the full benefits of the liberalisation of the electricity and gas markets.
EirGrid is at the forefront of this work through its participation in the European Network of Transmission System Operators, the development of regional and EU technical and market codes and the delivery of key strategic infrastructure projects, such as the East West electricity interconnector.
The reliable provision of secure and sustainable supplies of energy to EU citizens is fundamental to the economic security of the EU.
There is a clear interdependence between achieving a fully functioning internal market and improving the security of energy supply of the EU. The creation of genuine regional and EU internal markets will be predicated on delivery of the requisite infrastructural enhancements. Energy infrastructure with physical links between Member States is an imperative.
I was delighted therefore yesterday to welcome the EU Commission announcement about the Connecting Europe Facility which will finance projects which fill the missing links in Europe's energy, transport and digital backbone between 2014 and 2020.
The energy sector, in particular, can look forward to €9.1 billion being invested in trans-European infrastructure, helping to meet the EU 2020 energy and climate objectives. The CEF will also help to remove financial gaps and network bottlenecks. The internal market for energy will be further developed through better interconnections, leading to security of supply and the possibility to transport renewable energy in a cost effective manner across the EU. The money from Connecting Europe will act as a leverage for more funding from other private and public investors. I imagine Jose Antonio from the EU Commission will tell us a little more about this programme when he speaks to us a little later.
I would like to acknowledge the excellent work on the ongoing facilitation of renewables work being carried out by Eirgrid. In delivering our 2020 target, Ireland will have one of the highest wind penetration levels on an electricity grid anywhere in the world and it is crucial that we can manage and operate the grid in a secure and efficient manner while dealing with such a high intermittency level.
The work being done by Eirgrid is at the leading edge of world research in this area and will help to position Ireland right at the forefront of integrating wind onto grid.
It is also good to see that Eirgrid are one of only three system operators in the ENTSO-E who are carrying out the modelling work for the 10 year network development plan. This is a real sign of their technical expertise being recognised by their fellow system operators. This work is also being fed into the North Seas Grid Initiative which is looking at the benefits that could be realised by member states co-operating with each other on cross border and offshore infrastructure developments.
Despite the current economic situation, the overriding objectives of Irish energy policy are well established - security of supply, competitiveness and sustainability will continue to be the pillars of energy policy. These are the overall objectives and they resonate completely with EU energy policy objectives.
Whereas these are the consistent goals of energy policy, the focus now must be firmly on delivery. In particular, the delivery of the vital energy infrastructure projects to underpin security of supply. This is in the best interests of every citizen of this country.
It is true that the contraction of the economy has been dramatic but it is also true that this type of investment in infrastructure can take as much as a decade to deliver. Therefore, the current economic downturn does not in any way diminish the need to complete, for example, the North-South electricity link from Meath to Tyrone. It is a key strategic project for economies and consumers, North and South and is critical to ensuring energy supply adequacy on the island of Ireland.
It is also very important for the effective operation of the Single Electricity Market. It is an essential investment in the interests of both economies and all energy consumers.
The Programme for Government committed to the establishment of an independent international expert commission to review the case for, and cost of, undergrounding all or part of the Meath-Tyrone line. I expect to receive the Report of this expert commission shortly.
We are all aware of the difficulties in getting planning consent for infrastructure projects and the delays that can result due to local concerns. Indeed, this is a Europe-wide phenomenon.
I believe there is a considerable challenge for all of us to put a convincing argument to the general public that infrastructure development is necessary to provide essential services such as energy, water and communications.
The East West electricity interconnector between Ireland and the UK will improve security of supply, as well as increasing competition and assisting in achieving our ambitious renewable targets. I am delighted that EirGrid are on track to complete the project within budget and on time, by the end of next year.
Good regulation and professional management and operation of the transmission network by EirGrid has contributed to our excellent networks infrastructure and the introduction of strong competition in the generation and supply business. The overall outcome is a modern electricity sector and an evolution to average EU prices from a position where Ireland used to be well in excess of the EU average.
The importance of the electricity sector to economic and social development places the sector in a unique position in the context of public policy and the national interest. Important issues from EU legislative requirements will fall to be addressed in the medium term. We must prepare for the development over time of a pan European energy market served by interconnection.
Ireland will be a small part of very large European regional electricity market. This inevitable development must strongly inform energy policy.
Given the dramatic change to the economic backdrop, both in Ireland and internationally, now is a good time to reassess our energy policy directions.
With that in mind, the 2007 Energy White Paper will be reviewed over the coming months in consultation with stakeholders. It is my intention that a new energy policy framework will be published early in 2012. The new 2012-2030 framework will take account of developments over the past few years since publication of the 2007 White Paper.
The new policy will also be informed by the outcome of the in-depth review of Ireland’s energy policy just recently carried out by the International Energy Agency in late September (the previous IEA review was carried out in 2007). The IEA review will include a detailed assessment of the efficiency of the Irish electricity and gas sectors, taking due account of the EU regulatory context for these sectors.
In Ireland we have set ourselves a challenging agenda for the future. EirGrid, as Ireland’s Transmission System and Market Operator, has a key role to play in the future of that energy landscape.
The continued smooth operation of the all-island market, renewable electricity integration and grid development are critical priorities for Government, EirGrid, industry players and consumers.
EirGrid is delivering on these objectives, working with you, as stakeholders. This conference provides an opportunity to build further on the active and constructive engagement between all parties.
I wish the Conference every success and urge you all to get involved in the discussions and debate today. EirGrid and its customers in the energy sector and throughout the business community have key roles to play in the challenge of returning Ireland to competitiveness and delivering an energy market and energy infrastructure which serves an essential economic need and contributes to protecting jobs, businesses and the domestic consumer.