Posted on Thursday 19 September 2013 by Ulster Business

Energy Lead

By Stephen McVey

As concerns over future supplies of energy grow, there is divided opinion on whether we need to get real about energy policy and accept the need for unpopular new power sources, or if by doing so we would do irreparable harm to our environment.

Proposals for fracking in Fermanagh, bigger on-shore wind farms and the outlandish prospect of recovering oil off Rathlin Island have all given local people the cause to protest. This has been offset by fears that the security of our electricity supply could be under threat as early as 2016.

There are three compounding factors giving rise to the security of supply risk:

• The delay in delivering a planned second North-South Interconnector, for which a planning application was initially submitted in December 2009.
• The requirement to comply with EU Emissions Directives from 2016, which is expected to result in the withdrawal of some generation capacity at Ballylumford and place restrictions on generation at the Kilroot plant.
• A fault on the Moyle Interconnector whose capacity has been halved and is unlikely to be permanently restored to full capacity using additional cables until 2017.( An interim reconfiguration of the Moyle may allow restoration to full capacity using the existing cables in advance of 2016.)

Garrett Blaney from the Commission for Energy Regulation (CER) is involved in the All-Island Project's Single Electrity Market (SEM). He says CER still has concerns over the security of supply tightening and puts a key part of the risk down to delays in the North-South interconnector.

"This development was always envisaged from the initial stage of the SEM to be a key enabler to get full benefit from the market but there is some level of frustration from a regulation point of view that the interconnector is not yet in place or even started. We are keen to see that move forward as quickly as possible.

"I don't want to be alarmist, but there is the possibility of blackouts. It's a question of risk and there does seem to be a measurable increase in risk beyond 2016 in Northern Ireland and obviously the North-South interconnector would mitigate that and alleviate those concerns," he said.

The North-South Interconnector, which would run from Tyrone to Cavan, is a major infrastructure project being jointly undertaken by Northern Ireland Electricity and EirGrid. The project is seen to be vital to ensure the effective operation of an efficient 'all island' electricity market, to support the realisation of strategic renewable energy targets and to exert downward pressure on electricity prices for customers in Northern Ireland.

In a recent Enterprise Committee meeting, DETI Minister Arlene Foster gave an update on the existing Moyle Interconnector, which connects to the rest of the UK, and the delays with the North-South Interconnector: "I have been very clear in saying that we need to have a North-South Interconnector because I don't think people realise that it's actually costing consumers money not to have it in place and therefore that needs to progress. Then of course we have difficulties with the Moyle Interconnector as well. We really do consider it very important to have that connector restored to its full operating capacity as soon as possible. Currently it's providing 250 mega watts transfer capacity so that's about half of its capacity at present. We need to get that operational again and back up to 500 mega watts. Those are the two constraints if you like on the grid at present and they need to be sorted."

Marian Cree, Head of Energy at the Consumer Council agrees that consumers will be the ones who have to pay for this continued planning delay.

"There are a number of key issues that will potentially have a significant impact on 'security of supply' which may ultimately have a considerable cost implication on NI energy pricing structures going forward.

"It will cost at least £60m to fix the Moyle Interconnector and the North-South Interconnector is currently estimated to cost £89m – but will the costs escalate over time and how much will the consumer have to pay for it? In the absence of the North South Interconnector and the capacity issue with Moyle Interconnector there may be a need to secure short term new generation capacity to keep the lights on in 2016. It will be consumers who will have to pay for this," she said.

IS FRACKING THE ANSWER?

Hydraulic fracturing, or fracking, is the controversial technique designed to recover gas and oil from shale rock.

Mike Young, Director of the Geological Survey of Northern Ireland, has emphasised the economic potential of shale gas in Northern Ireland. He has referred to the exploratory activity of Australian company Tamboran, which holds a five-year Petroleum Licence to investigate fracking potential.

"We do not yet know exactly what the resources are, but Tamboran have made some estimates on the amount of gas that might be recoverable in Fermanagh, which is 1.8 trillion cubic feet of gas. Broadly speaking that's equivalent to something in the same order of one year's gas supply for the whole of the UK or about 50 year's supply for Northern Ireland," he said.

But James Orr, Director of Friends of the Earth NI believes fracking is simply distracting energy firms and the government from investing in renewable sources of energy and is concerned that a political agenda is encouraging a continued reliance on fossil fuels. Prime Minister David Cameron recently came out strongly in favour of fracking during the protests at a site in Sussex where energy firm Cuadrilla proposed to test for oil and gas deposits.

"David Cameron at the same time as making it easier to get fracking approved is making it much more difficult for communities to embrace wind power. Clearly there is an agenda there of the oil and gas industry and he's being lobbied very seriously and that's what Conservative parties do – they are representatives of the oil and gas industry. But I think the risks in Northern Ireland are far too serious, the implications are far too great here," said Orr.

"The evidence is that a regulator can't regulate what is on top of the ground never mind what is a mile deep. So the question is can you have good fracking? Is there such a thing? I don't think there is. Some of the many concerns include the greenhouse gases from fracking that are quite similar to the greenhouse gas emissions from a coal fired power station. There is also inevitable water contamination issues and Ireland is a very wet country, so if you frack Fermanagh you can pollute the Shannon, you could cause significant pollution," he added.

Mike Young has explained the reasons behind the UK government's support for shale gas exploration and suggested some urban myths and scaremongering has tarnished the fragile reputation of fracking.

"It is the media to some extent and the environmental activists who have latched on to the problems in the US and Canada that have been associated with hydraulic fracturing because it was a poorly regulated process in those instances. In the UK we have a much more centralised and informed regulatory process," he said.

"The reported concerns about hydraulic fracturing have been examined in the UK by a joint committee of the Royal Society and the Royal Academy of Engineering. This is absolutely key because UK policy is very much at the moment based on this report, which came out in 2012. The report was compiled independently by the UK's premier science and engineering bodies. They made a review and their conclusion was that high volume hydraulic fracking can be managed acceptably given the right engineering protocols. That is, if the standards are acceptable and in place and if they are regulated properly, this is a process that can be managed safely," added Young.

Whilst speaking to the Enterprise committee, DETI minister Arlene Foster also argued that we should at least try to explore new energy sources.

"Often I'm asked questions in relation to fuel poverty and I'm asked questions about the cost of electricity and I do think it's wrong that we don't at least look at different sources of energy and whether that's renewable energy, whether that's oil and gas that may be conventional or unconventional means I think we have a duty to look at those because people are concerned about the price of their energy. It would be very foolish if we cut off anything that would bring down the cost of electricity and the cost of energy for our consumers," the Minister said.

Mike Young accepts there are some valid concerns about fracking and has stressed that the amenity of local people is paramount. But he points to the superseding necessity to solve what could be a national energy crisis.

"I don't want to be cynical about this but look at it this way – there may be thousands of people protesting in Northern Ireland, we are getting hundreds of letters about this; there have been questions in the assembly and coverage in the media and so on. Well there are 1.8 million people who need energy and it is the responsibility of government to make the right decisions on behalf of everybody in the country," he said.

The central issue in regards to energy use is that we still need fossil fuels until renewable sources have been developed further and can replace them. However that's not going to happen overnight.

James Orr accepts this but wants a long term investment in our future energy resources.

"I think we do need tough decisions but we also need to take decisions that are based on evidence, not decisions that are presented to us by the oil and gas industry. We are not saying stop using oil and gas now, that wouldn't be appropriate, but to make this fantastic transition we really need to scale up our ambition and scale up our investment in alternatives. So yes let's make tough decisions but we'll have to weigh up the pros and cons of each option and I think if you look at the evidence the only future is renewable," he said.

Some of these tough decisions will be in the hands of the new Department for the Environment minister, Mark H Durkan. He has stood by renewable energy but accepts the complexities in any energy decisions that are made by the assembly.

In a statement the Minister said: "Whilst oil and gas will continue to have a very significant role to play in helping meet our energy requirements, the longer term goal must be to decarbonise our electricity supply by increasing the proportion of energy derived from renewable sources.

"In exercising its functions in relation to development, my Department has the important task of integrating a variety of complex economic, social, environmental and other factors. The important task that my Department has is to take account of all material planning considerations before arriving at a balanced decision.

This is a key public interest test. The preservation of the environment and its protection from the effects of pollution are clearly matters of public interest. So too is sustainable economic growth and job creation."

In addition to his initial response to David Cameron's comments on fracking, the Environment Minister told Ulster Business.

"At present there is no planning application for hydraulic fracturing in Northern Ireland. If and when any application comes in, it will be for me to decide. I am on record as saying that there are important questions that need to be asked about fracking I am not going to make any decision until all the facts and scientific evidence are established and until there are satisfactory answers to these questions. Until they are I do not believe it is possible to conclude that we are 'missing out'," he said.

Mike Young concludes that alternative techniques and sources of energy are not as 'ground-breaking' as some may think.

"It's worth saying that the whole business of petroleum exploration has been managed very successfully in the UK since the mid 1960s. We are the world's leader really in petroleum production in very difficult circumstances. Look at the North Sea on which UK prosperity is based for example.

"I also like to remind people about the oil and gas field called Wytch farm in Dorset, this is the largest, on-shore oil and gas field in Western Europe and has 100 oil wells that carry out horizontal drilling.

"It actually extends right underneath areas of outstanding natural beauty and is right next to a UNESCO world heritage site. It's an extraordinary achievement and most people are completely unaware of it," he added.

Ignorance is not always blissful and the challenge for policy makers will be finding the best way to develop our short-term energy resources without blowing the chances for a renewable future.

 

Search ulsterbusiness.com

Follow us

Receive local business news
Direct to your inbox, once a week

Subscribe to Ulster Business Magazine

View Our Digital Library

A L Top 100 2017 button