Saturday 24 March 2018

We can't let energy plan be the new water debacle

Proposals for a new electricity interconnector between the Republic and the North in the border region are now at the centre of High Court hearings. Stock photo: PA
Proposals for a new electricity interconnector between the Republic and the North in the border region are now at the centre of High Court hearings. Stock photo: PA
Ailish O'Hora

Ailish O'Hora

Is Eirgrid, the state-owned firm that manages and operates the transmission grid across the island of Ireland, set to knock Irish Water off its perch as one of the most unpopular companies since the foundation of the State?

That remains to be seen, of course.

But proposals for a new electricity interconnector between the Republic and the North in the border region are now at the centre of High Court hearings including one involving a group representing about 100 landowners affected by the project who have secured permission to challenge An Bord Pleanala's decision to give it the go-ahead.

The grounds of the challenge range from claims that the board failed to consider the potential impact of Brexit to the impact on lives on the region.

The case is against An Bord Pleanala, the Minister for Energy, and the State, with EirGrid as a notice party.

The interconnector was subject to three High Court cases, all of which concern the An Bord Pleanala decision to grant Eirgrid permission, subject to certain conditions, to construct almost 300 above-ground pylons in Meath, Cavan and Monaghan.

Since then, one case has been dropped and recently a judge has granted EirGrid's application to vary a stay which had prevented it doing preparatory work on the proposed interconnector.

Eirgrid, for its part, believes the interconnector to be a critical piece of national infrastructure.

And I believe, on balance, that it is correct.

The interconnector is a central plank to ensuring a secure and affordable supply of energy for the island of Ireland into the future.

And while there may be some issues to be addressed around the interconnector and those affected absolutely have the right to protest and demand their questions be answered, its future development is in the interest of job creation and economic development as well as the ongoing attraction of inward investment, especially given the uncertainty that Brexit brings with it - particularly a hard one.

While part of the argument in the courts has been that Eirgrid has not assessed the impact of Brexit on the interconnector, it is my understanding that under World Trade Organisation rules, tariffs cannot be applied to member states for electricity interconnection.

But maybe Eirgrid could have made its life easier for itself if it had made this point earlier.

A recent report from IBEC/Grant Thornton highlighted the high cost of electricity for all businesses operating on the island of Ireland.

It has estimated that the delivery of the second north-south Interconnector will help alleviate these by allowing the single electricity market to work to its maximum possible level of efficiency.

This estimated all-island savings each year is in the region of £25.5m (€30m) with the figures likely to grow in time.

The Eirgrid interconnector also takes into consideration green energy commitments that we have given the EU.

Another big issue is cost.

While some have proposed that Eirgrid considers an underground option, the cost does seem prohibitive.

An expert group has estimated the underground option, given its scale and potential complications, would be three times the original estimated cost of €286m.

It is expected that €180m of this would be incurred in the Republic and the remaining €106m from Northern Ireland.

While cost is not the only issue, we have to be mindful of spending pots of money we don't have given lessons from the past - ranging from e-voting machines, to the more recent hit taxpayers took following on from the banking crisis and the recession.

I also accept that Eirgrid does not have the authority to determine the country's future electricity/energy strategy.

But it does have a responsibility to ensure a smart and sensible approach to it. There is a price for progress in the globalised world we now live in and it is unfortunate that this time it's the people of the Border counties who have been asked to pay.

But it's likely that given future energy requirements, other parts of the country will also have to accept changes to their lifestyles and environments in the future.

There are other big unpopular electricity projects ongoing around the country including the Laois/Kilkenny project that's reinforcing the network in the Midlands and includes the construction of new pylons and substations.

We also have to be ready to support the growing economy.

According to a recent report from Davy Stockbrokers, despite a softening of some indicators because of Brexit, Ireland is set to be the fastest-growing economy in the eurozone for the fourth year in a row.

The broker predicts that gross domestic product (GDP) will grow 5p in 2017, up from a previous forecast of 3.7pc.

With this is mind, Eirgrid is also looking to develop an interconnector to France to secure other sources of electricity into the future.

I don't know if it's an Irish thing, but looking for solutions when it is too late seems to be one of our weaknesses.

So the parallels between Irish Water and Eirgrid don't just end with unpopularity.

It is unfortunate that it has taken a recent spate of leaks and ruptured mains in places like Cork, Dublin and Tipperary for the realisation to finally sink in that our water network is crumbling following decades of under-investment. Let's not make the same mistake with the energy sector.

In France and other parts of the world, energy generation from nuclear, for example, is part of daily life.

We need to grow up or be left behind.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business