Comment:It has been a good week for energy users, for the environment and for competition, with the launch of the first energy policy in many years. The White Paper deals comprehensively with major issues around energy provision up to 2020, writes Dermot Byrne.
Delivering a Sustainable Energy Future for Ireland sets down detailed actions necessary to deliver on the policy objectives. Speaking at the publication of the White Paper, the Minister for Communications, Marine and Natural Resources, Noel Dempsey, said he expected the State organisations with responsibility in this area to move forward with resolve and with pragmatism to achieve the targets.
As chief executive of EirGrid, the independent transmission system operator, I welcome the White Paper. EirGrid is fully committed to progressing the policy actions.
EirGrid can play a positive role in relation to the significant growth of renewables in the Irish power system, competition, the future generation portfolio and plant performance, energy efficiency and fuel diversity.
Security of supply is a key area in the White Paper and it makes wide-ranging recommendations in relation to fuel supplies, additional electricity interconnection to the UK, the provision of adequate generating capacity operating at a satisfactory level of availability and the ongoing provision of infrastructure to meet the demands of customers.
EirGrid has initiated a major strategy review in relation to the development of the transmission network over a 20-year horizon, which will address issues such as facilitating growing levels of renewable energy, increased interconnection, supporting a competitive electricity market and regional development.
Putting in place incentives and penalties to ensure that generators maintain satisfactory levels of availability of their power station is very important and the notion of EirGrid and the Commission for Energy Regulation working on this is welcome.
The involvement of EirGrid as an independent body in the development of a landbank of suitable sites for new power stations will assist the development of competition.
The White Paper rules out nuclear generation but this debate will not go away in the context of meeting our challenging targets on carbon emissions. The call by the Oireachtas Joint Committee on Communications, Marine and Natural Resources for such a debate is worthy of support. EirGrid will play its part fully in the debate in our area of expertise.
The commitment in the White Paper to review energy policy in the future is welcome and the issue of nuclear energy is a subject which should be looked at in the context of a future review.
The White Paper makes major recommendations in the area of sustainability. In particular, it firmly targets the achievement of 33 per cent of electricity consumption in the State from renewable sources by 2020.
This target is challenging. If it is to be achieved, it will require progress on interconnection, energy storage, flexible thermal generation and the ability to control wind generation output.
EirGrid has facilitated the connection of 750 megawatts of wind capacity to the system and current developments will take that to more than 2,000 megawatts. The progress to date is shown by the fact that Ireland's power system is well on target to meet the 15 per cent renewables target by 2010.
In terms of competitiveness, economic and competitive electricity prices are vital for the future development of the Irish economy and the recommendations in the White Paper will help their achievement. It states that electricity networks are strategic national assets and will be kept in State ownership. It continues: "We will establish EirGrid as the National Transmission Grid Company by end 2008, transferring to EirGrid ownership of the transmission assets."
This decision on the ownership and operation of the electricity transmission system is welcome. Currently, EirGrid operates and has responsibility for developing and overseeing maintenance of the transmission system, which is owned by ESB. This means that responsibility for the transmission business is split between two entities, and consequently no single party currently has responsibility for minimising overall costs.
The decision to combine the asset ownership and operation is a logical step in the evolution towards a fully competitive market in electricity in Ireland. It is a progressive step and it will drive efficiencies in the electricity sector, ultimately benefiting all consumers.
The key benefits include:
• promotion of competition by ensuring that all transmission services are provided by a fully independent body;
• improved efficiency by removing existing boundaries between ownership and control of the transmission system;
• facilitating increased transparency and clarity of accountability;
• adoption of a model that is simpler and more logical than the current model and has been proven to be effective in many European countries;
• safeguarding State ownership of the transmission system, which is a key strategic national infrastructure asset.
In summary, the measures in the White Paper are good for consumers, for competition and for a sustainable future. We should all now move forward together and implement the actions.
Dermot Byrne is chief executive of EirGrid plc, the independent transmission system operator and wholesale market operator in Ireland.
