Exporting Ireland’s wind energy is key to economic recovery
30 May 2013
Fintan Slye, chief executive of EirGrid, is speaking at Engineers Ireland’s 2013 Annual Conference, entitled ‘Building Ireland’s Business Networks’, on Thursday, 6 June at Dublin’s Ballsbridge Hotel
As Ireland battens down the hatches for what is shaping up to be yet another miserable summer, it should perhaps be borne in mind that the country’s windswept location on the edge of Europe may well play an important role in economic recovery.
According to Fintan Slye, electrical engineer and chief executive of EirGrid, connecting Ireland to the UK and possibly other countries to facilitate the exchange of power could yield many benefits to Ireland’s energy sector and to the wider economy. Plans are advancing to develop large-scale windfarms in the Midlands with the aim of exporting electricity to the UK, to help it meet demanding renewable-energy targets by 2020.
EirGrid – an independent, State-owned company – operates Ireland’s national electricity grid. It was created in July 2006, when the operations of the grid were passed to the company from ESB.
“Last year, we completed the construction of a new East-West Interconnector to the UK and that has been fully operational since December,” Slye explained. “The Irish and UK governments signed a memorandum of understanding in January, which set out that by the first quarter of next year, an inter-governmental agreement will be established to allow for the sale of large-scale, communal power generated in the Midlands into the UK to meet their 2020 targets. To be of value to the UK, we need to be generating about 3GW or more.
“We’re working with the two governments, regulators and suppliers to investigate what’s needed in terms of legislation, regulation and technology.”
Ireland’s own target, set out by the European Union, is to secure 40% of its electricity from renewable sources by 2020.“We won’t have enough renewable energy left over to export to the UK without completing some specific projects, such as the proposed Midlands development,” according to Slye. “There are sufficient renewable projects in train to meet the 2020 targets, but it’ll still be challenging. There are 2,000MW connected across the island – we need to get that to over 4,000MW by 2020.”
As part of the Gate 3 Offer Project, the third round of connection offers that are currently being offered to generators under the Group Processing Approach (GPA), connecting offers have been issued that would yield over 3000MW, according to Slye. The GPA allows for strategic processing of generation applications for grid connection and was introduced by the Commission for Energy Regulation in 2004. It allows applications to be processed by the system operators (EirGrid and ESB Networks) in groups or batches known as ‘gates’.
“The Gate 3 process was delayed for a while due to a number of regulatory issues, but they have been sorted out and all of those projects are now starting to move again,” said the EirGrid CEO. “These connection offers are in the process of becoming live over the coming year. There’s enough interest and projects out there to meet our 2020 target and that will largely come from onshore wind. We have to meet the target because, under European law, you can’t export renewable energy unless you’ve hit that target. Last year, we were at 17%.”
In order to meet its own 2020 aims, UK energy policy has become increasingly reliant on offshore wind due to increasing resistance from the public to onshore windfarms. However, offshore development is significantly more expensive than onshore. Companies such as Irish company Mainstream Renewable Power and US-owned Element Power spotted an opportunity to develop a business model that could potentially work to benefit all.
“Ireland is, effectively, offshore of the UK and we can build onshore in this country. Irish people are more accepting of onshore development, maybe because it has happened gradually,” Slye explained. “The connecting distance between Ireland and the UK is the same as the UK and the North Sea. The turbines would be onshore, which is cheaper to build, but the UK would pay the offshore tariff, so that’s the business model behind the Midlands project.”
However, he acknowledged that there had been growing resistance in Ireland to windfarm development, as the scale of the Midlands project would be significantly larger than what has previously been seen in this country.
At the announcement of the memorandum of understanding in January, the Department of Communications, Energy and Natural Resources stated that significant employment opportunities could arise if the Inter-Governmental Agreement was entered into. It said that employment creation arising from a 3,000MW project would be expected to yield in the order of 3,000 to 6,000 jobs in the construction phase, with the actual number dependent on the construction schedule to 2020.
There would also be additional jobs created in the ongoing maintenance of turbines over a 20-year operating life. Further employment opportunities could also arise in both countries from the manufacture of turbines, cables and other technology.
“Another benefit is that this is Ireland’s natural resource. Whoever is selected as the developer will be exporting a natural resource and there should be some income stream payable to the State. Effectively, you’re putting turbines on the Irish landscape to serve the need in Britain because they don’t want them on the land there, so there should be a good financial payback – this would also help with securing public acceptance.”
According to Slye, interconnecting the two islands in a planned way would also deliver significant benefits to consumers on both sides of the Irish Sea by bringing down energy prices. “There are two ways to interconnect the two energy grids – we could radially connect into three points in the UK grid and not connect the UK into Ireland’s grid at all, so there would be no interconnectors.
“The second way, which EirGrid would favour, would be to interconnect the UK and Irish grids. This would cost an extra €100 million but within two years, that would be paid back and we’d gain on average €75 million annually after that – we’ve published a study on that.
“Interconnecting would allow the energy generated to be delivered into the UK, which is the primary purpose of building the cables between the two islands, but the wind will only blow about 30-40% of the time. Without an interconnector, those cables would only be used 30-40% of the time to ship power from Ireland to the UK – never in the other direction or never to shift more power. If we interconnect, then power can come the other way – cheap power can flow from UK nuclear, bring down prices and guaranteeing security of supply.”
The decision regarding which connecting model will be pursued is likely to be made as part of the inter-governmental agreement, which is scheduled for Q1 next year. “My understanding of the way an inter-governmental agreement would work, and this would be the first of its kind to trade renewable energy like this, is that the projects would have to be in some way qualified under the agreement,” Slye surmised. “The agreement will have to set out a process by which projects are approved and how projects that are to proceed under it are selected.
“We need to ensure that as we add in steps like inter-governmental agreements and selection processes, we don’t end up with a process that takes forever. Developers need to be generating energy and selling it to the UK by 2020.”
The East-West Interconnector between the electricity grids of Ireland and Britain is already moving power from the UK and Ireland, including nuclear-generated power. It runs between Deeside in north Wales and Woodland, Co Meath. Approximately 260km in length, the underground and undersea link has the capacity to transport 500 megawatts – enough energy to power 300,000 homes.
“I think the Irish public is pragmatic about receiving nuclear energy,” according to Slye. “It would be different if the discussion concerned whether we should set up nuclear power stations on this island, but taking advantage of more competitive electricity, however it’s generated in the UK, makes sense. I don’t have an aversion to nuclear energy, but I’d have a question as to whether it’s suitable for the Irish system. Plants tend to be very large, which isn’t viable for Ireland so we’ll never do it at scale to build up the necessary expertise.
“I’d be more in favour of building interconnectors to France – we’re actually working with colleagues in the French system operator, which is called Réseau de Transport d’Électricité, to examine the feasibility of an interconnector from either Waterford or Cork to north-western France. The UK is also pursuing more connectivity to France.”
In 2011, the European Council decided that the internal market should be completed by 2014, so as to allow gas and electricity to flow freely. This requires in particular that in co-operation with the Agency for the Co-operation of Energy Regulators (ACER), national regulators and transmission systems operators’ step up their work on market coupling and guidelines on network codes applicable across European networks.
“In Ireland, the move is to implement the electricity market by 2015 to the Target Model, which provides a blueprint and roadmap for closer market integration by setting out clear proposals for the co-ordination and harmonisation of Europe’s electricity markets,” Slye explained. “All countries in Europe are moving to it by 2014, but we got a derogation until 2015 because the scale of changes from our existing market to this new market are bigger – other European countries were much closer to it.
“The key to this is coupling to adjacent markets, such as the UK. If I’m an energy trader in Dublin, I should easily be able to trade with London. At the moment, the markets are different but it should be seamless, using interconnecting tools, by 2015.”
Grid 25, EirGrid’s strategy set out in 2009 for the development of Ireland’s electricity grid up to 2025, is making progress towards Target Model deadlines. “Transmission investments mean that new 110KV lines are being built, while other lines have been upgraded to carry more power.
“We’re also seeing major transmission projects coming to public consultation stages. The North-South Interconnector, for example, has had difficult history in terms in planning process and interaction with community, but we’re engaging with community to try and get to planning application by the end of the year.
“The Gridwest 400KV line from Carrick-on-Shannon to the west is also at the public consultation stage. We’re currently investigating the two line corridor options to either Galway or Mayo. Improving the grid would facilitate inward investment in the west, so there’s a lot of support for that. The dialogue between EirGrid and local communities is developing as the project progresses.”
In terms of securing the right employees to deliver all of the Grid25 projects, Slye acknowledged that finding candidates experienced in power engineering had been difficult. “They were in quite short supply, although there are great graduates coming through so the future looks bright. In Letterkenny, for example, the college is working on maintenance in wind turbines and UCD has the Energy Research Centre. In UCC, there’s a master’s in sustainable energy. We work with universities to encourage interest in electrical or power systems engineering and we do a lot of schools outreach programmes.
“It’s a tight market, but we do manage to make our hires from Ireland most of the time. EirGrid grew quite rapidly over the last number of years as the Grid25 programme geared up for change and there was increased investment in the infrastructure. Now, we’re entering a phase of steady operations, where we’re consolidating and maturing. We struggled to fill positions during the growth period, but things have levelled off now.
“The construction sector has suffered very badly, but energy is a growth area. This is a sector where Ireland has the potential to be a world leader and we need the best engineers to make this happen,” Slye concluded.
Fintan Slye’s presentation at the Engineers Ireland 2013 Annual Conference is entitled ‘Ireland’s future in exporting energy’. For more details or to book your place at the conference, which takes place on 6 June at Dublin’s Ballsbridge Hotel, see www.engineersirelandconference.ie. Other speakers at the conference include:
Michael Phillips, chartered engineer and president of Engineers Ireland
Dr John Tierney, managing director, Irish Water
Laura Burke, director general, Environmental Protection Agency
Naoise Ó Muirí, Lord Mayor of Dublin
Geoff Shakespeare, managing director, technology evolution and development, eircom Group
Eamonn O’Reilly, chartered engineer and chief executive, Dublin Port
Michael Cawley, chief operating officer and deputy chief executive, Ryanair Ltd
Brian Brennan, managing director, Veolia Transdev Ireland
Michael Crothers, managing director, Shell E&P Ireland
John Ahern, managing director, Indaver