To ensure power supply across Ireland on a 24/7 basis is an immense requirement resting on EirGrid's shoulders. To do it at a time of transition in the energy business, with renewables ramping and increased demand, greatly adds to the task.
For its chief executive Mark Foley, what he calls "a revolution, not an evolution", is probably more than enough to be going on with. However, he believes the utility must go further in raising its voice on the urgent need to decarbonise Ireland.
He acknowledges increased public awareness of climate change, but there is much unfinished business to be addressed through effective communications and education. Equally, there is a critical need to maintain momentum on the outgoing Government’s Climate Action Plan, which put a robust, flexible grid centre stage in decarbonising power generation and electrifying heat and transport.
EirGrid's capital programme up to 2030 is divided into two five-year chunks, with a €1.2 billion spend up to 2025 and a separate €1 billion on the Celtic Interconnector it is building with French partner RTE connecting Ireland to Europe's grids via a subsea cable linking east Cork with Brittany. It will rise to a total of €4 billion by 2030 based on a 30 to 35 per cent rise in "core demand".
Asked if coronavirus risks derailing that investment, he says: “I genuinely don’t know until it peaks. It would be premature to do an impact assessment until we get to normality.” Foley’s immediate concern is “staff welfare and keeping the power system going”.
Much of that increased demand is coming from data centres – predicted to account for 29 per cent of electricity use by 2025. He agrees they get an unfair press, when they are a vital to the Irish foreign direct investment ecosytem. Just as pharma and biotech companies need manufacturing facilities, data centres are factories for ICT companies. Essentially, data – “the currency of 21st-century living” – runs business and our lives. “We recognise the reality of that; it’s not discretionary.”
Data centres are not only demanding renewables be used, they are contributing to marketplace change. Up to recently, renewable energy production was driven by government policy underpinned by feed-in tariff in a single electricity market model.
Amazon Web Services, in building a facility near Drogheda, has struck a deal to buy the entire output of an Invis Energy windfarm in Co Donegal, thereby offsetting its carbon footprint. It is taking responsibility for its power needs and using 100 per cent renewables, Foley underlines. He expects other big corporations will follow suit.
That won't replace the imperative for EirGrid to ratchet up renewables. It has been mandated to build a system capable of catering for 70 per cent renewables (in effect wind and solar) by 2030. To average 70 per cent over a year requires having a system capable of taking up to 100 per cent at any one time. Getting the Celtic Interconnector in place as early as possible is an important "safety relief valve".
Record-breaking month
Nearly half of all electricity consumed in Ireland has come from wind farms in the first two months of this year. Wind accounted for 49 per cent of electricity demand during the period, with February proving to be record-breaking month with 56 per cent of demand met by wind energy.
By the end of 2020 the system will be able to take 70 per cent at peak, so that 2030 target is well within reach. In reality, the latter has to be achieved much earlier to reassure and provide certainty for developers. “They need to know EirGrid has this in the bag,” and will not switch them off when the system cannot handle their output.
That is why it’s pursuing a “FlexTech Initiative” to engage with the marketplace to maximise opportunities from new and existing technologies and break down barriers to integrating renewables – and getting international partners on board.
On whether the planning system is fit for purpose, Foley points to the challenges for those trying to progress infrastructure of any type, though the Strategic Infrastructure Act, allowing projects to go directly to An Bord Pleanála, "has served the country well". Of great concern to him is the ability of the individual with relative ease to pursue judicial reviews "with impunity" on costs. Accordingly, project timelines are never predictable.
He welcomes moves to change legislation while respecting the constitutional rights of individuals. EirGrid has learned lessons too. Environmental impact assessments have to be “precise and near perfect”, while it now seeks to start consultation with communities much earlier, to “increase understanding of the why” on objections.
Foley believes the concept of just transition focuses almost excessively on, for example, coal and peat plants shutting down, while future benefits don’t get much of a look in, though he accepts developers have to give more to communities. That includes a stake in developments, and fostering understanding of projects. With injection of funds locally, it can ensure “better quality of life and make green living more possible”, he adds.
Rollout of developments supported by the Renewable Electricity Support Scheme is key to transitioning to a green power system. The first technology-neutral auction round this summer will inevitably be dominated by onshore wind projects. EirGrid hopes subsequent auctions will have dedicated “buckets for each technology”, notably offshore wind and solar.
He underlines the need to free up blockages to enable development. The onshore sector has been “formidable”, yet proposed new wind energy guidelines on noise compliance are of deep concern. On offshore, there are lot of projects in the Irish Sea but difficulties with legacy consents and licences – crucial enabling legislation is due in 2021.
Separately, "Ireland needs a masterplan for exploiting offshore resources from Mayo round to Cork and even Waterford" – a mix of fixed and floating turbines.
He does not agree the offshore opportunity will be missed because of current blockages, as others such as Scotland are already scaling up massively. "We will benefit from technological advances . . . Our timing is not bad."
But interconnection with France and the UK (assuming some sanity on trading in a post-Brexit scenario) are essential. Within that connected network, he has no doubt Ireland can become a significant power exporter when the wind blows, as happened in January and February.
With two ESB peat-burning stations in the midlands going out of service this year and the ageing coal-fired Moneypoint power station increasingly out of the mix, EirGrid has to ensure critical baseload supply is always in the system. Likewise storage technology's most important role will be to ensure stability, Foley stresses – rather than storing renewable power for use later.
Climate disruption by way of extreme weather has never posed a challenge to EirGrid, but lessons from inadequate flood defences and an age of more frequent storms and tornado-type events has prompted it to review risk to operations.
‘Utterly unacceptable’
On the broader imperative for climate action, he believes the country has a big job, to change behaviours; get investment in a green economy and build understanding of why carbon tax makes sense. The absence of a carbon tax on aviation, Foley says, is “utterly unacceptable in this day and age”.
Efforts need to be redoubled and "the Richard Bruton ethos" must be retained within the next administration, he insists. The stakes are so high it prompted a philosophical debate internally within EirGrid and understanding it has no choice but to stick its head up and carry the baton for the Climate Action Plan.
That applies too in defending continued use of gas as a transition fuel. “I cannot run the power system without gas.” Not all gas is equal, he points out, so focus on carbon intensity is warranted. Fracked gas is a multiple of that for conventional gas – therefore a conversation about different sources is helpful; low-carbon gas should be subjected to lower carbon tax.
EirGrid is closely watching developments in hydrogen, notably the possible role of green electricity enabling electrolysis to generate the fuel, which he regards as a truly green solution. “How real is it at scale? That’s the question.”
His personal transition is progressing. He has an eGolf with more than 48,000km on the clock. The benefits, especially in making economic sense, means there is no going back for the country, he says – it's only a question of how fast EVs are adopted. The bigger issue for government will be "the how" on converting houses backed by the right mix of finance and incentives. A retrofit for his Wicklow home is next on his to do list.
The massive scale of electrification required underlines the importance of partnership internally and internationally, he says, backed by a common narrative from State companies of “one voice; one vision”.
In the meantime, EirGrid having launched a new strategy last September is in the delivery phase reinforced by a new management structure and hoping the next government does not lose momentum. Entering the decade of decarbonisation, they will be putting on pressure to deliver milestones.
