Transform the Power System for Future Generations
We spent the past year developing our new strategy for 2020-25. To discover our focus for the next five years meant considering in detail what we do, why we do it, and how it could be even better.
As a result, this year’s annual report focuses not only on our achievements this year, but also on our ambitions for the future.
In this report, we will also share with you some stories from the people at EirGrid Group. They work tirelessly to ensure the power system delivers a reliable supply of electricity at a competitive price.
In everything they do, they embody the purpose that is the ultimate goal of our new strategy: to transform the power system for future generations.
EirGrid Group operates and develops the electricity system in Ireland and Northern Ireland. This comprises the grid, the wholesale electricity market and interconnection with other systems.
In both jurisdictions, we implement and enable government policies on electricity. We are regulated as monopoly service providers. We perform our services for the benefit of every electricity user on the island of Ireland. We support the economy in both jurisdictions rather than to pursue our own commercial interests. We are an independent entity, with no vested interest in the generation or selling of electricity. We don’t own the grid infrastructure and have no self-interest in adding to it.
The high voltage transmission grid is the backbone of the electricity supply chain. It transports power from where it is generated to where it is needed – in every part of Ireland and Northern Ireland. We balance supply and demand every minute of the day, while also planning for the island’s long-term electricity needs. The transmission grid brings power to industry and businesses that use large amounts of electricity. The grid also powers the distribution network. This supplies the electricity you use every day in your homes, businesses, schools, hospitals, and farms. In Ireland, we deliver this service as EirGrid. In Northern Ireland, we are SONI – the System Operator for Northern Ireland.
Our services include SEMO, the Single Electricity Market Operator. This wholesale market is run on an all-island basis, and operates 24 hours a day, seven days a week. It is integrated with European markets so electricity users always have reliable power at a competitive price.
EirGrid Group develops and operates interconnections with neighbouring grids. This includes the East West Interconnector that connects with Great Britain. We are also developing the North South Interconnector between Ireland and Northern Ireland, and the Celtic Interconnector with France. Finally, we enable interconnections developed and operated by third parties. These include the Moyle Interconnector and the proposed Greenlink Interconnector.
Brendan Tuohy, CHAIR
Steering through the challenges of transformation
“We need a rapid and deep change in the way we do business, how we generate power, how we build cities,how we move, and how we feed the world. If we don’t urgently change our way of life, we jeopardize life itself."
António Guterres, Secretary-General of the United Nations
The past year has seen a significant increase in the recognition of the scale of the challenges posed by climate change. There is also now a widespread acknowledgement of the urgency required to address these challenges.
In June 2019, the Irish Government published the Climate Action Plan. Its objective is to enable Ireland to meet EU targets. To support the Climate Action Plan, EirGrid must prepare the power system so that renewable energy can provide 70% of all electricity by 2030. This is an ambitious but necessary target.
Meanwhile, in relation to Northern Ireland, the UK Committee on Climate Change published a significant report in February 2019.
Entitled ‘Reducing Emissions in Northern Ireland’, the report states:
‘The proposals in the report are not a prescriptive list of policy actions over the next decade. Instead, they serve as a starting point for the general principles and policy areas that policymakers could prioritise to deliver the necessary long-term decarbonisation of the Northern Ireland economy.’
The transition to low-carbon and renewable energy will require a significant transformation of the electricity system. There will be major changes in how electricity is generated, how it is bought and sold and in how electricity is used - such as for transport and heat.
The electricity system will carry more power than ever before and most of that power will be from renewable sources. Coal, peat and oil based generation will be phased out.
These changes will start the journey towards decarbonisation of the power system in Ireland and Northern Ireland.
And while this is happening, new technology will allow electricity users to generate and store power, and return any surplus to the grid.
These changes will need to be managed in a coordinated and cost effective way. EirGrid Group is uniquely placed to play a leading role in the radical transformation that is now required.
In September 2019, EirGrid published ‘Strategy 2020-2025: Transform the Power System for Future Generations.’ This is our response to these challenges.
By 2030, Ireland will need 8,400MW and Northern Ireland 1,600 MW of new renewable generation - and offshore wind will play a major role.
This clean energy will be essential to replace fossil-fuel generators and meet expected growth in demand. As we transition from other fossil fuels, gas-fired generation will still play a key role to meet demand for electricity.
There will also be a need to increase significantly the level of interconnection from the island of Ireland to Great Britain and Europe. This will need to rise to at least 15% of total capacity from the current 7%. Work is already underway in these areas.
This includes the Celtic Interconnector, an estimated €1bn plan to connect the grids of France and Ireland. EirGrid and Réseau de Transport d’Électricité (RTÉ), our French counterparts, are committed to delivering this landmark project. The European Commission recently committed €530m of funding to the project, with EirGrid and RTÉ investing the balance.
Similarly, in Northern Ireland, SONI published its strategy for 2020-2025. This commits SONI to designing a green energy system that can accommodate 95% renewable energy at any one time.
This is a significant increase from the current 65% – reaching it would be a world-leading achievement. This increase will also be necessary if Ireland is to reach its 70% renewable energy target by 2030.
The transition required to achieve climate change targets can only be realised with major societal change. New and strengthened grid infrastructure will be essential - including the critical North South Interconnector. Over the next five years, an investment of €2 billion and £500 million will be required in the respective grids in Ireland and Northern Ireland.
Working with Partners
EirGrid Group recognises that it cannot achieve this transition on its own. There will need to be work with partners to deepen and broaden community engagement.
EirGrid will also support an education and information programme on climate change. This was a key recommendation from the Joint Oireachtas Committee on Climate Action and the Youth Assembly on Climate Action.
Similarly, SONI will deepen and broaden its community engagement in Northern Ireland. SONI will also seek to work with partners to support an education and information programme on climate change.
EirGrid Group needs to deepen relationships with communities, businesses and the non-profit sector. It needs to strengthen ties to local authorities, public bodies, governments, regulators and the EU Commission. Finally, EirGrid Group will seek to build strong links with education institutions and research bodies.
These organisations can assist in helping EirGrid Group to deliver the required transformation. Strong partnerships are essential - not only to address the technical challenges, but also to win hearts and minds. We need communities, and the public at large, to support the huge transformation that is required of us all. We can only successfully address climate change in a timely manner with this support.
I would like to express my sincere thanks to my predecessor, John O’Connor, for his stewardship of the board for the past six years. He has left behind a very impressive and successful company.
I also wish to express my gratitude to the very committed board members. They offered their dedication, expertise and service during the year.
I wish to thank Mark Foley, Chief Executive, and his colleagues on the executive, who offered me a very warm welcome. In particular, I want to thank the staff in the Group, many of whom I have already met in person. I have been hugely impressed by their dedication, professionalism and sense of commitment. They appreciate the vision and purpose of the Group. They also see the importance of its ambition to ‘transform the power system for future generations’.
I would like to thank the Minister for Communications, Climate Action and Environment, Richard Bruton, TD. I am grateful for the honour he has given me by appointing me as Chairperson of EirGrid.
I wish to offer my congratulations to Northern Ireland’s Minister for the Economy, Diane Dodds MLA, as she takes office. I also want to thank the officials in the Department for the Economy in Northern Ireland. They been very supportive and have worked very well with the company.
I look forward to working with my fellow directors, management and staff in Dublin and Belfast for the good of all the people on the island of Ireland.
Finally - we are living in a time of major transition, and some may have a sense of despair and powerlessness at the existential threat of climate change.
However, I am reminded of the words of the Kerry poet, Brendan Kennelly. In his poem, ‘Begin’, he reminds us that, as humans, we possess an indomitable spirit. It is this spirit that we can now call upon to address climate change:
“Though we live in a world that dreams of ending, that always seems about to give in, something, that will not acknowledge conclusion, insists that we forever begin.”
Mark Foley, CHIEF EXECUTIVE
The journey towards our new purpose
2019 was a notable year for EirGrid Group. The highlight was the development and publication of the EirGrid Group strategy 2020-2025. Against the backdrop of the imperative for action on climate change and the decarbonisation of society, this is a seminal milestone in our history.
Towards a greener power system
A transformation of the power system is afoot due to the disruptive effects of climate change. EirGrid Group will be at the forefront of a revolution that will impact every individual on the island of Ireland. Electricity from renewable sources is going to play a pivotal role in this island’s response to the climate crisis.
That is the motivation behind our new strategy. EirGrid Group now aims to provide real leadership of the island’s electricity sector on decarbonisation and sustainability.
In particular, we now have the key target in Ireland of meeting 70% of electricity demand from renewable sources by 2030. This target, as set out in the Government’s Climate Action Plan, published in June 2019, is one of the most important drivers of our strategy. It will provide a clear focus for our organisation in the years ahead. I know we have the capability within the Group to achieve this ambitious goal.
The UK Government, meanwhile, has set a goal of achieving net zero carbon emissions by 2050. While Northern Ireland has not yet set a target, the move to clean energy generation is well underway.
In Northern Ireland, over 40% of electricity consumption was generated by renewable sources in the 12 months to September 2019. In Ireland, we operated with an average of 36% of renewables on the system in the same period.
Sustaining a dependable power system
Throughout 2019, we continued to operate a safe, secure and reliable power system. We achieved this while overseeing the first year of the restructured all-island wholesale market, which is now integrated with the European electricity market.
During its first year, the new market design has delivered improved efficiency in cross-border trading. It has also opened up new opportunities for market participants and has seen trade move in response to price changes. This means that we buy electricity from neighbouring markets when they are cheaper, and sell to them when they are more expensive. This benefits both the end customers and those investing in generation. This was the result we planned to achieve when implementing the new market.
Developing the grid
There have been significant developments made on the grid. During 2019, EirGrid progressed a major upgrade to the network that supplies power to Intel’s proposed new manufacturing plant in Leixlip.
We carried out several successful consultation events on this project. In November An Bord Pleanála approved our planning application for the infrastructure needed to support Intel’s expansion. This work enabled the largest ever foreign direct investment in Ireland.
This year EirGrid also began consulting on a new electricity project called Capital Project 966. This project will help us achieve our primary strategy goal: to lead the island’s electricity sector on decarbonisation. It will contribute to this goal by strengthening the electricity grid between Dunstown and Woodland in Kildare and Meath. This will ensure that the high amount of wind generation in the west of Ireland is transferred to and distributed to the east of the country. In turn, this will help meet growing electricity demand in this region.
We also carried out a number of consultation events for the Celtic Interconnector project. This project will create a vital link between Ireland and the European energy network. It will be a key element in our strategy to deliver 70% renewables on the power system by 2030.
In October 2019 we welcomed the decision by the European Commission to provide €530 million of funding to the Celtic Interconnector.
This followed the submission in June of an application for funding. This was made jointly by EirGrid and our French counterpart, Réseau de Transport d’Électricité.
The North South Interconnector also cleared a major hurdle this year. This project is a proposed new electrical link between Ireland and Northern Ireland.
In February 2019, the last of the legal challenges in Ireland was dismissed for this project. However, in Northern Ireland, prior planning approval was withdrawn. This was due to a legal challenge that argued permission could not be granted in the absence of the Infrastructure Minister. The application has now returned to the Department for Infrastructure for re-consideration. We are hopeful that the recently appointed Infrastructure Minister will make a new decision in the coming months.
Forecasting for the future
Planning for and managing growing demand on the system has become part of the everyday challenge for the EirGrid Group. According to our Generation Capacity Statement for 2019-2028, demand in Ireland is expected to increase significantly over the next decade.
This is due to increased economic growth and the expansion of many large energy users, including data centres. In contrast, demand in Northern Ireland has been relatively stable and this is expected to continue.
However, we need always to plan ahead. This is why we hold auctions every year where we seek bids to ensure the system has adequate capacity in the near to medium term. The first four year capacity auction took place in March 2019. This secured capacity to meet our forecasted needs for power from October 2022 to September 2023.
Since 2017, we have introduced scenario planning in our grid development process - called “Tomorrow’s Energy Scenarios”. This examines a range of future visions for demand and supply on the power system, depending on a range of different assumption sets.
In 2019, we went out to consultation on our future energy scenarios for Ireland and Northern Ireland. The feedback from this process will help us to outline a clear pathway for the island’s clean energy transition over the next twenty years. It will also ensure we continue to operate the system in a safe, secure and stable manner.
Managing the transition towards renewable energy
EirGrid and SONI are recognised as world leaders in integrating renewable sources of electricity on the power system. In particular, we have a track record of meeting the technical challenges in running a power system with very high levels of wind energy.
In 2019 we continued our important work in this area by leading a major EU research project into the deployment of renewable energy. EU-SysFlex, entering its third year, comprises 34 organisations from 15 countries across Europe and has a budget of €26 million.
The project aims to make practical improvements and to offer recommendations for policy-makers. In the second year of the project, detailed analysis of a range of future scenarios has been conducted. In 2019 we also devised the Flex-Tech Initiative. This initiative provides a platform for engagement with stakeholders across the island of Ireland.
We use this to explore how to transform the power system so it can handle ever-increasing levels of renewable electricity. Through Flex-Tech, we collaborate with industry, regulators, ESB Networks and NIE Networks. This helps us to identify and breakdown key barriers to the integration of renewables in Ireland and Northern Ireland. Learnings here will inform our European counterparts and stakeholders in the EU‑SysFlex project.
Thanks and appreciation
I wish to record my thanks to John O’Connor who retired as chair of the board of EirGrid Group in November 2019. This followed six years of outstanding and dedicated service, including stewardship of the process which created our new strategy. I am delighted to welcome our new chair Brendan Tuohy to the role, and I look forward to working with him.
I also wish to thank Minister for Communications, Climate Action and Environment, Richard Bruton TD, and his officials.
In Northern Ireland, we look forward to supporting Minister for the Economy, Diane Dodds MLA in her role to develop and implement an energy policy. I also want to thank officials in the Department of the Economy. Both departments provided constructive relationships and support throughout a milestone year.
Finally, I would like to thank the EirGrid Group staff and executive team. In particular, I want to recognise those who engaged with and contributed to the development of our new Strategy for 2020-2025. This achievement would not have been possible without your hard work and dedication. I look forward to the execution phase of this ambitious and exciting strategy which will transform the power system for future generations.
"It’s our job to make sure the grid works today, tomorrow - and in twenty years. To do this, we think about what the future might look like, and how it could affect the power system. We call this Tomorrow’s Energy Scenarios.
"The need for grid development is driven by long-term changes - in how the grid will be used, in the location and scale of generation, and in the demand for electricity. We don’t know exactly what these changes will be, so we use scenario planning to consider all eventualities.
"We know that Irish government policy - and the likely direction of policy in Northern Ireland - points towards a huge shift away from fossil fuels. What we don’t know is how quickly this transformation will happen.
"Despite this uncertainty, we have to plan for a safe, secure and reliable electricity system. So we use Tomorrow’s Energy Scenarios to assess several ways that future changes could affect the grid. Each time we publish these scenarios, we look at three levels of possible change.
"We then ask the public, industry, our regulators and our expert partners to tell us what they think. Based on their response, we update the scenarios, and use them to help plan for a stronger, more flexible electricity system.
"We publish separate scenarios for Ireland, and for Northern Ireland. In our latest scenarios, we look at how the move to renewable energy could happen in different ways, and at different speeds. These include a government-led move away from fossil fuels, enabled by large renewable energy projects. We also considered a scenario with a slower pace of change – that doesn’t hit targets. Finally, we looked at a scenario with a proactive, individually-led move towards energy efficiency. If this happened at the same time as a big switch to renewable energy, we would see a dramatically different power system."
- Arthur Moynihan, Head of Scenario Planning
Watch the video below or click here.
Aidan Skelly, EXECUTIVE DIRECTOR, FINANCE & LEGAL
Reported profits rise due to statutory rules on financial reporting
Our reported operating profit increased from €82.9m in 2018 to €113.3m in 2019. Reported profit before tax also increased from €65.8m in 2018 to €96.0m in 2019.
EirGrid Group consists of several regulated businesses. In any year, the revenues collected by these businesses may vary from the levels that were previously agreed with its regulators. This is because tariffs are agreed based on forecasts and are collected based on actual energy consumption. Costs may also vary from forecast levels.
When this happens, it can make our reported profits appear inflated - as is the case for this financial year. Disregarding these statutory adjustments, the underlying profit before tax for the Group was €22.3m in 2019.
Our TSO activities in Ireland and Northern Ireland are regulated by the Commission for Regulation of Utilities and the Utility Regulator respectively.
The Group also holds two licences as Interconnector Operator, one from the Commission for Regulation of Utilities and one from the Office of Gas and Electricity Markets (Ofgem) in the UK.
SEMO in its role as Market Operator for the SEM, is regulated by the SEM Committee. This comprises the Commission for Regulation of Utilities (CRU), the Utility Regulator (UR), an independent member and a deputy independent member.
EirGrid plc and SONI Limited were designated as Nominated Electricity Market Operators (NEMOs) by CRU in Ireland and UR in Northern Ireland respectively. We provide NEMO services through SEMOpx a 75/25 joint venture between EirGrid plc and SONI Ltd.
In advance of each tariff period, we submit forecasts to the relevant regulatory authority. These cover customer demand, operating costs and other revenue requirements. Following a detailed review process, the regulators then issue a formal determination of the allowable revenue that the business can recover.
As with any forecast, there can be variations between the projections and the actual revenue recovery, or cost out-turn. This can result in regulatory under or over recoveries. Any such under or over recoveries are adjusted for in the reported revenue for a subsequent accounting period.
This can give rise to volatility in the statutory reporting of earnings for the Group. This is because accounting regulations do not permit results to be smoothed by anticipating under or over recoveries.
In 2019, ancillary service costs were much lower than expected. This resulted in an over recovery of €63.4m which makes up a significant element of the profit before tax of €96.0m. The over recovery was as a result of contracted volumes been lower than expected in some services.
One of the reasons for this was the forecast was set for the new SEM Market without the availability of live market data. This made it more difficult to compile an accurate forecast of spending on DS3 system services, as assumptions can change quickly. Dispatches were more benign from a DS3 system services perspective so the annual spend was significantly lower as a result. Local reserve contracts were also under budget.
EirGrid TSO is operating under the 2015-2020 Price Control issued by the Commission for Regulation of Utilities in December 2015. SEMO is operating under the 2016-2019 Price Control, as published by the SEM Committee in August 2016.
SONI is operating under the 2015-2020 Price Control, as amended in November 2017. This was due to a determination from the Competition and Markets Authority (CMA) following an appeal from SONI. Price Controls for SEMO and SEMOpx are determined by the SEM Committee which is responsible for the regulation of both the SEMO and SEMOpx.
The SEMO and SEMOpx price controls provide, on a combined basis, for the recovery of allowances for the EirGrid (75%) and SONI (25%) portions of SEMO and SEMOpx operating costs and depreciation and return on their Regulatory Asset Bases (RAB).
The current SEMO Price Control period runs from 1 October 2018 to 30 September 2021. The current SEMOpx Price Control period runs from 1 October 2018 to 30 September 2019. Consultation on the next SEMOpx Price Control period from 1 October 2019 to 30 September 2022 is currently ongoing.
Revenues and Profitability
The Group’s revenue is primarily derived from regulated tariffs. The main revenue is the Transmission Use of System (TUoS) tariff. This is a charge payable by all users of the transmission systems in Ireland and Northern Ireland.
We also earn a share of tariffs as Market Operator and Nominated Electricity Market Operator for SEM. Revenues are also derived from the use of the East West Interconnector through auctions. We also earn congestion income for the provision of daily capacity into the energy markets.
Group revenue for the year to 30 September 2019 of €747.8m was slightly lower (€10.6m 1.5%) than the previous year.
The profit before tax for 2019 was €96.0m. This is up from €65.8m in 2018, mainly as a result of lower than anticipated costs relating to new DS3 System Services arrangements.
Excluding the impact of over and under recoveries on reported profit, management’s estimate of the underlying operating profit for 2019 was €23m. EirGrid paid a dividend of €4.0m in April 2019 in respect of 2017/18.
A dividend of €4.0m in respect of 2018/19 is proposed to be paid in the second quarter of 2020.
The Group continues to be in a sound financial position. The Group’s largest borrowings relate to the East West Interconnector and have long repayment dates and are fully hedged against interest rate fluctuations.
New credit facilities were put in place for the go-live of the new SEM. During the year, the Group had drawn down €109.6m from these revolving credit facilities. This was used to fund working capital requirements in the balancing market. Interest on these borrowings is at floating rates.
Key Financial Highlights €M
|Other Operating Costs||(139.2)|
|Profit Before Tax||96.0|
|Other Operating Costs||(103.3)|
|Profit Before Tax||65.8|
From 2020, our new strategy commits us to be at the forefront of climate action in our sector, across Ireland and Northern Ireland.
This ambition is built on our long-standing work to prepare the electricity system for the transition away from fossil fuels. In 2019, there were several notable developments in this area.
Managing wind power
As we move towards less predictable generation, we must ensure the electricity system stays secure and reliable. We face two key challenges: managing too much wind, and too little wind.
During the storm season in 2018-19, there were six that reached orange warning status: Callum, Diana, Deirdre, Erick, Gareth and Hannah. In response, we carried out a number of defensive and preparedness actions.
First, we prioritised the return to service of any lines that are already undergoing works, so the grid is as strong as it can be before the storm.
We then made detailed plans for conventional generation to balance the system. This takes into account that we will first have more wind power, but we may then have less - as turbines are disabled if wind speeds go higher than 90km per hour.
We also needed to plan for potential changes in demand if schools and workplaces close, and as lines fail on the distribution system. This comprehensive approach has allowed us to successfully weather the storms of recent years.
In contrast, when forecasts show we have little or no wind, we also have to make careful plans. In this context, the power system increasingly relies on fast-start gas turbine generators.
Unlike legacy fossil-fuel burning stations, these can come online very quickly. Although they cannot yet provide high capacities, they have proved to be a useful tool to help manage the uncertainty of wind generation.
Climate Action Plan for Ireland
The Irish Government’s Climate Action Plan was published in June 2019. EirGrid is central to facilitating the implementation of government policy on climate change as outlined in the plan.
The plan requires that renewable energy provides 70% of all electricity by 2030. This electricity will be generated from renewable sources such as offshore wind, solar and onshore wind. EirGrid is actively working with stakeholders to deliver our contribution to this plan.
Offshore wind will be a key component of a clean electricity system. We need to ensure that offshore wind is developed to suit the context of the electricity system across the island of Ireland. To achieve this, we are carrying out an objective assessment of offshore grid delivery models around the world.
Addressing Climate Change in Northern Ireland
The current Strategic Energy Framework comes to an end in 2020. While Northern Ireland’s exact target for 2030 is not known, the direction of travel is clear. The UK has made a legislative commitment to achieving net zero greenhouse gas emissions by 2050.
In the absence of a target, SONI has published its strategy for 2020 - 2025. This is focused on transforming the power system so that it can be ready to manage increasing levels of electricity from renewable sources. This transition is necessary to realise net zero carbon emissions by 2050.
Through the period of this report SONI has worked and continues to work closely with key stakeholders. These include the Department for the Economy, NIE Networks and the Utility Regulator. We are aiming to inform the Department’s development of the next energy strategy for Northern Ireland. For this reason the first Northern Ireland-specific ‘Tomorrow’s Energy Scenarios’ was a vital step in 2019.
Renewable Customer Connections
In 2019, 11 new wind farms were connected to the Grid in the South West, West and North West providing a total of 300 MW of renewable energy. This includes new wind farms at Booltiagh, Glenree, Knockacummer, Knockalough, and Srahnakilly (Oweninny).
This follows 739 MW of wind farms that EirGrid connected to the system in the previous three years from 23 renewable projects. We anticipate that an additional 906 MW of renewable energy will be connected, from 18 renewable projects, by the end of 2020. This will provide a total of 1,945 MW of renewable generation connected to the electricity system since 2016.
In Northern Ireland, approximately 1,035 MW of renewable projects were connected to the system during the 2016-2018 period.
An additional 131 MW of wind farms have applied for connection to the transmission system in Northern Ireland. There are also accepted connection offers for a 100 MW data centre project and five battery storage projects – with a total capacity of 300 MW.
Battery storage will be vital to balance the system as more renewable energy is added in the coming years.
Renewable Energy Support Scheme
A key part of realising Ireland’s 2030 climate action targets will be the Renewable Energy Support Scheme (RESS). This in an initiative from the Department of Communications, Climate Action and Environment to encourage community participation in smaller renewable energy projects. The goal across the EU is for this scale of project to make up 32% of all renewable generation by 2030. This diversity will increase security of supply.
EirGrid has been tasked with developing and managing the auction process for this scheme. Considerable progress was made this year on the high-level design of the first RESS auction. This concluded with EirGrid signing off on the agreed approach. This was co-signed with the CRU and the Department of Communications, Climate Action and Environment.
East Coast Opportunity Generation Assessment
In February 2019, EirGrid published the East Coast Opportunity Generation Assessment. This report identifies the capacity available for new offshore wind at multiple locations along the east coast of Ireland.
It also considers the capacity available for new conventional generation along the east coast. The report states how the grid would need to be reinforced to increase capacity.
The DS3 System Services Framework
We want to make sure that the power system operates securely and efficiently. At the same time, we need to facilitate higher levels of renewable energy. To achieve this, we established our DS3 Programme - Delivering a Secure, Sustainable Electricity System.
One of the key elements of this programme is System Services. These support the electricity system to make it more flexible. This is essential when we have high levels of renewable on the systems. We use a range of technologies to provide this flexibility. They include conventional generators, wind units and other new technologies.
System Services also gives us a mechanism to trial new technologies. This allows us to prove their capability before we integrate these services on the electricity system.
To date, we have used System Services to integrate technologies such as wind, batteries and demand-side management. These services will form a key part of our plans to integrate high levels of renewables onto the power systems of Ireland and Northern Ireland.
To combat climate change, electricity systems across Europe must integrate more renewable generation. The EU‑SysFlex project, now entering its third year, is a European Commission funded project led by EirGrid. The project seeks to enable the transition to a pan-European power system with high-levels of renewables.
The project aims to make practical improvements and to offer recommendations for policy-makers. In the second year of the project, detailed analysis of a range of future scenarios has been conducted.
The analysis indicates that integrating high levels of renewables brings many benefits to the power system. It reduces reliance on fossil fuels and carbon emissions. However, the project has also shown that a greener power system will be more technically challenging to operate.
The EU-SysFlex studies also show that the challenges are not only technical; they are also financial. As renewables increase, the changing market environment will cause the cost of energy to fall.
Future revenues may not be sufficient to cover the costs of investing in wind and solar technologies. The studies show that a further revenue stream is needed to meet renewable generation investment costs.
It is essential that the correct signals are provided to wind and solar generators, and to investors in these schemes. This will be key to driving the transition to a more sustainable power system.
Mitigations and solutions are required and EU-SysFlex will propose a range of these in the third and fourth years of the project. One of the solutions that will be proposed is the System Services Framework. This has already been implemented with great success in Ireland and Northern Ireland.
Across Europe, energy policy continues to change at a significant rate.
This is apparent in national climate change objectives that followed 2016 Paris Agreement. There will also be new EU policies implemented in the coming years.
EirGrid Group has an active role in the development of these policies, and together with our partners, we will deliver the ambitious targets. This will provide a sustainable energy future for Ireland and Northern Ireland.
How we manage our environmental impact when planning the network
Respect for the environment is a key consideration in the development and operation of the transmission system.
Electricity transmission infrastructure includes elements such as overhead lines, underground cables and substations. These all interact in different ways with many environmental factors.
To comply with European and national laws in Ireland and Northern Ireland, we carry out Strategic Environmental Assessments (SEA). These assessments are based on our plans to develop the grid, and are published every five years.
Our current plans and SEAs cover the period 2017-2022. The latest Transmission Development Plans (TDP) 2018-2027 were published by SONI in July 2019 and EirGrid in August 2019 and they set out the transmission projects we are developing or intending to develop for the period of the plan. They also contain information about the needs and drivers of the projects.
In August 2019, EirGrid published an Environmental Appraisal Report (EAR). This report makes an environmental assessment of our current Transmission Development Plan. In particular, it looks at how our new plan complies with the SEA for our Grid Implementation Plan 2017-2022. Individual projects are all subject to environmental assessment outside of the SEA process. Some projects fall under a class of development requiring an Environmental Impact Assessment (EIA). When this happens, we submit an Environmental Impact Statement to the relevant planning authority.
In 2019 an EIA was completed for the North-South Interconnector in both jurisdictions. This was submitted to An Bord Pleanála in Ireland, and the Department for Infrastructure in Northern Ireland.
Energy use & environmental policies
EirGrid Group aims to lead the way by pursuing energy reduction and efficiency in our own operations. These efforts make a modest difference, but show our commitment - at a detailed level - to sustainability and decarbonisation.
Year on year, we have achieved a minimum standard of 3% energy reduction for our Dublin sites. This totals a 42% reduction since 2009, exceeding the 2020 reduction target of 33% set for public bodies. Our sources of energy usage across the group are from electricity and natural gas.
In 2019 EirGrid consumed 3,355 MWh of energy in both our Dublin locations. This energy use can be broken down as follows:
We continue to find ways to reduce our own energy use. In 2019, this included installing LED lighting in our second Dublin site.
We also installed LED lights in certain locations at our Dublin and Belfast offices. In 2020 we will continue to refurbish our headquarters to further improve energy efficiency and increase capacity.
Energy performance in SONI’s office has improved by 3% on electricity and 11% on gas compared to 2015. This year, SONI consumed 1,955 MWh of energy. This is broken down as follows:
In SONI we intend to change the remaining office lighting to LED. We will also install a building energy monitoring system to better manage energy usage.
Our work towards greater sustainability in the energy sector was recognised with a number of awards and nominations in 2019. These included:
"Part of what EirGrid Group does is run the wholesale electricity market. This allows us to make sure that across the island of Ireland, the right amount of power is always available at the right time - at a competitive cost.
"Key to this is the capacity market. This market sets the most economic price for future capacity to balance demand on the system. This helps ensure that enough power is available to everyone who needs it.
"This capacity could be in the form of generation, or in battery storage. It could even be a commitment from groups of customers to reduce their energy usage when we ask - this is known as demand-side capacity.
"We need to have this extra capacity on hand to cope with changes in demand for power. This is becoming particularly important as the electricity system uses more renewable generation. We have to cater for windy days with low demand and still days with high demand – and all the scenarios in-between.
"The new capacity market works as a competitive auction amongst pre-qualified bidders. This is designed to strike a balance between ensuring we have enough reliable capacity, but at the lowest possible cost. We ask bidders to offer their most competitive price to provide an agreed amount of power for a specific period in the future.
"We run one auction for a year ahead - called T-1 - and another for four years ahead - called T-4. The four year auction gives bidders time to build further capacity if they're successful. This approach ensures the successful bidders are ready to provide capacity if the system needs it down the line.
"We held the first T-1 auction in December 2017, and the first T-4 auction in March 2019. They're a really important step in the transformation of the power system."
- Aodhagán Downey, Market Operations
Watch the video below or click here.
At EirGrid Group, one of our responsibilities is to make sure that the grid can meet the future needs of all electricity users
Overall, it has been a very successful first year of the new energy and capacity markets.
The all-island Single Electricity Market integrated with wider European energy markets in October 2018.
During the first year of operation, the new market has delivered improved efficiency in cross-border trading. This increased liquidity in the long and medium term markets and opened up new opportunities for market participants.
EirGrid and SONI have also introduced new operational and planning procedures as well as grid connection processes. These reflect the harmonised European practices, and so allow for seamless trading with Europe.
We continue to engage closely with our stakeholders for future market amendments. The Day Ahead market coupling has seen interconnector trade move in the direction of price changes. This means that we can buy electricity when its cheaper, and sell it when it’s more expensive. This was one of the key reasons for integrating the market with Europe, and is exactly what we set out to achieve.
The capacity market is a key service to secure the stability of the electricity system. It allows EirGrid Group to find the most economic price for the forecasted amounts of electricity needed to meet demand in future. This ensures there is always power available to everyone who needs it. To read more about the capacity market, see Case Study 2.
Tomorrow’s Energy Scenarios
In June, EirGrid launched a consultation called Tomorrow’s Energy Scenarios 2019. This report outlined EirGrid’s first revision to the scenarios originally produced in 2017. The new scenarios reflect changes driven by a number of evolving factors.
Most notably, they capture changes in climate and energy policy. These reflect new multi-sector targets for decarbonising energy use, as set out in the Government’s Climate Action Plan.
Many stakeholders participated in the consultation and provided a lot of useful feedback. The consultation included a briefing session with external stakeholders at Engineer’s Ireland. This was very well attended and facilitated positive debate about Ireland’s energy future.
It also shows the vital role that Tomorrow’s Energy Scenarios plays from an industry and government policy perspective.
In September 2019, SONI launched Tomorrow’s Energy Scenarios for Northern Ireland. This report detailed a first set of draft scenarios. These were based on feedback from stakeholders in the earlier scenario-building phase.
This report outlined three potential pathways for the Northern Ireland energy system to 2040. These pathways reflect the impact of societal, political, economic, technological and environmental changes.
The common factor across all three scenarios is the switch to low-carbon electricity for Northern Ireland. Where the scenarios differ is in the pace of change. To read more about Tomorrow’s Energy Scenarios, see Case Study 1.
EirGrid and SONI provide a critical service, as every person, every business, and every household is dependent on the power system that we run. Increasingly, grid operators are under threat from the risk of cyber attack from malicious third parties. We make it a priority to respond to this threat.
At a foundation level, we fulfil our obligations for cyber security under the EU critical Network Information Systems directive. We are doing so in co-operation with the relevant authorities in Ireland and Northern Ireland.
At an operational level, we have a set of mission-critical procedures on cyber security to ensure our operations are as secure as possible. This includes defensive actions, as well as trialling our response to potential attacks.
At an individual level, we carry out a Group-wide awareness programme to educate our people on the risks, and how they can mitigate them. These include computer based training and monthly educational communications.
Large-Demand Customer Connections
Since 2016, we have seen in Ireland a significant increase in the number of, and consumption by, large-demand customers. The pace at which the customers want to connect is quicker than previously seen.
The same pressures from large-demand customers do not apply in Northern Ireland. However, there has still been an uptake in connection requests.
The large-demand customers in Ireland are almost exclusively made up of data centres. For data centre projects, we have connected 251 MVA across five projects since 2016.
In the same time-frame, we commenced the connection of six further data centres. These will add an additional 716 MVA of demand and will make for a total of 11 data centre projects connected to the grid. These additional data centres are expected to connect by the end of 2021.
During 2019 we worked with ESB Networks to start connecting the new Castlebagot 220 kV station to the transmission system. When connected in late 2019, the station will support large industry in the area.
A new 220 kV and 110 kV station is nearing completion in North County Dublin at Belcamp. This will relieve load congestion at the existing Finglas 220 kV station, and support future expansion in the area. This includes Dublin Airport, Beaumont Hospital and several high-profile business parks and data centres supported by the IDA.
In North Kildare, Intel has applied for an increased power supply. This will support ongoing and future manufacturing activities at the facility. To accommodate this, we identified a new connection method.
This will connect the existing Maynooth – Woodland 220 kV overhead line to a new 220 kV station using 2.3km of underground cable. We held public open days in Leixlip, Co Kildare in early and mid-2019, and there was good local engagement. Planning consent was approved by An Bord Pleanála in November 2019.
East West Interconnector
EirGrid owns and operates the East West Interconnector. This is a 500 MW high voltage direct current electricity interconnector that links the grids in Ireland and Great Britain. It helps provide a safe, secure, reliable and affordable energy supply for both systems.
EirGrid continues to maintain the East West Interconnector to a high standard. This includes the recertification of the Asset Management System to the ISO 55001:2014 standard in June 2019.
This ensures the interconnector is available to help further integration of renewable energy on the system. In doing so, it will help to transform the power system for future generations – the primary purpose of our new strategy. In December 2018 we also celebrated our strong safety record of five years of operations with no lost time accidents.
North South Interconnector
The North South Interconnector is a key project for EirGrid and SONI. It will provide a second high-capacity connection between the two electricity systems on the island of Ireland.
Delivery of the North South Interconnector is critical to deliver value for consumers across the island. This project will make the grid more robust, which will allow for the connection of more renewable generation. It will also enhance security of supply and will enable more competition in the wholesale electricity market.
This will benefit householders, communities, businesses and the economy - in both jurisdictions. We estimate that these benefits will save electricity users at least €20 million per annum when put into service.
In Ireland, planning approval for the North South Interconnector was granted by An Bord Pleanála in December 2016. The approval faced a number of legal challenges, the last of which was dismissed by the Supreme Court in February 2019.
This ruling means that the North South Interconnector has now cleared all of the planning related legal hurdles in Ireland. It is now clear to proceed to construction in this jurisdiction.
In Northern Ireland planning approval was granted in January 2018. However, in February 2019, that planning approval was withdrawn. This was due to a legal challenge that argued that it could not be granted in the absence of the Infrastructure Minister. The application has now returned to the Department for Infrastructure for re-consideration. We are hopeful that the recently appointed Infrastructure Minister can make a new decision in the coming months.
Other transmission projects progressed this year
Every year, EirGrid and SONI works to strengthen the electricity grid. This includes refurbishment and upgrades, as well as the development of new infrastructure, when necessary.
Poolbeg Reactor (50 Mvar): The second Poolbeg reactor was energised in October 2018. Reactors provide a combination of benefits to the grid, but in this context they help us manage voltage issues in the region, when needed.
Carrick-on-Shannon-Arigna-Corderry 110 kV line uprate: This was completed in October 2018. This project is a system reinforcement to enable the connection of wind generation in the North West region. It allowed us to grant a further 1113 MW of access to generators in this region.
Moneypoint 400 kV transmission station: There was a range of works competed to support this station, which is a key for security of supply. This included the transfer of the Moneypoint to Oldstreet 400 kV line, two transformers and the Moneypoint to Prospect 220 kV line.
North Connacht 110 kV Project: In January 2019, EirGrid announced the best performing locations for this new 110 kV line to connect to the grid. These are Moy (Ballina, Co. Mayo) and Tonroe (Ballaghaderreen, Co. Roscommon). Throughout 2019, we engaged with stakeholders and local authorities in the region. Our liaison team also visited Tubbercurry and Swinford and held public information days. We used this engagement to collect information on technical, environmental and other constraints. In turn, this will inform the proposed route for both the overhead line and underground cable options.
Cross Shannon 400 kV Cable: In October 2018, we started the marine survey operations for this project, which were completed in December. This allowed EirGrid and its consultants to identify the best performing marine route. We also developed cable routes and associated infrastructure. Public consultation on the best performing project option started in June 2019, and engagement is ongoing. EirGrid is currently preparing the applications for a foreshore licence for this project.
Lanesboro 110 kV Substation Redevelopment: Public consultation took place in April 2019. The feedback received from local residents, community groups and local representatives was positive. We submitted a planning application to Longford County Council in July 2019 and expect planning consent in early 2020.
Kilbarry 110 kV Station: This is one of the key 110 kV stations supplying load to Cork city and the surrounding areas. Its development allows us to meet requests for distribution system load connections. Planning permission was received from Cork County Council in June 2019.
Airport Road 110 kV substation: This is a reinforcement of the transmission system in Belfast. This is driven mainly by recent growth in demand due to several redevelopment sites. The most notable of these is Titanic Quarter, which has the potential to increase total demand growth in the city by over 50 MVA. To meet this demand, we are developing a new 110/33 kV substation and uprating an existing 110 kV double circuit tower line currently operated at 33 kV. We held public consultations for this project in March 2019. We held a public consultation event for this project in March 2019. We submitted the planning application in December 2019, with construction expected to commence in 2021.
Agivey 110 kV Wind Farm Project: We submitted a planning application for the new 110/33 kV station and 110 kV overhead line in February 2019. The new station and circuit will allow for the connection of 90 MW of renewable energy to the grid in the Garvagh area of Northern Ireland
Drumkee and Mullavilly Battery Energy Storage: We started to work on the connection of two new 50 MW battery storage schemes. These are near the Tamnamore and Tandragee 275/110 kV substations. SONI and NIE Networks are working closely to meet the target energisation date of Q3 2020.
Strengthening the grid in the East
This year EirGrid ran a consultation on a new electricity project called Capital Project 966. This project aims to strengthen the grid in the east of the country. It will transfer electricity from the west of Ireland and distribute it across the network in Meath, Kildare and Dublin.
Following the consultation, several best-performing technical solutions emerged. These have now progressed to the next stage for further evaluation. At the end of this next stage we will put forward a best-performing solution which will then be developed.
Laois Kilkenny 400 kV Substation
National infrastructural development projects can generate considerable debate and, on occasion, public opposition. An example of this is the Laois Kilkenny project. In this instance, protesters are blocking access to a construction site for a 400 kV substation. The project itself is a vital development. It will resolve the quality and security of supply issues across the Midlands and South East. EirGrid is working in conjunction with ESB Networks to resolve the issues raised by local interest groups. We will continue to reach out to them over the duration of the project.
In the south west of Ireland, significant levels of wind generation are connected to the electricity system. This will continue to increase in the coming years. Growing levels of renewables requires further reactive power support. The optimal solution here is to install two new ±100 Mvar Statcoms at existing stations.
A Statcom is a dynamic and fast-acting voltage control device. New devices will be installed in Ballynahulla station in Co. Kerry and in Ballyvouskill station in Co. Cork. Planning permission was received for these projects this year. Trials to increase voltage on existing lines from 220 kV to 400 kV.
New developments in electrical composite insulators have made it possible to convert existing 220 kV lines to 400 kV. In 2019 we investigated an innovative solution to increase the transmission capacity of 220 kV lines. We achieve this by redesigning the top portion of the pylons. This technology has the potential to greatly increase power capacity on the electricity grid. Most importantly, this could be achieved without requiring new lines that are costly and slow to develop.
This innovative up-voltage project is being trialled on the existing Donard test line in West Wicklow. The next phase of this voltage uprate trial is to build the single circuit and double circuit towers on this test line. Planning consent was granted in October 2019 by Wicklow County Council. The construction of these towers will take place in 2020.
"When we operate the grid, we classify the potential problems. Amber alerts are the lowest category - they happen if we suddenly lose some electricity generation. These kinds of problems don’t often happen - but when they do, it takes expertise, cool heads and clear thinking to resolve them.
"At 2:30pm on 9th October 2018, something almost unprecedented happened. Two large Northern Ireland generators suddenly went down at the same time. In order to ensure system stability in Northern Ireland, three large generators need to be on the system at all times. This loss made the Northern Ireland electricity system vulnerable.
"And on top of this, too much power was now being pulled from Ireland. If the line between the two jurisdictions had become overloaded - or if another larger generator went down - it risked a complete system collapse.
"The team in the SONI control room near Belfast acted quickly. We ordered fast-start generators dispersed across the region to come online immediately. This geographic spread reduced the risk of further system deterioration if we experienced another generator loss.
"As the fast-start plants started to produce power, we then needed to slowly re-balance the power flows from Ireland to Northern Ireland. But we faced a worsening of the situation as the afternoon moved closer to peak demand time in the evening. This is because the fast-start generators can't provide the same capacity as the large units that were down. So, we then asked customers who could reduce their power use - we call them demand-side units - to stop drawing electricity from the system.
"In combination with the fast-start generators, this successfully got us through till 6.57pm. At that point the large generators were back on the system, and we could clear the Amber alert.
"It certainly was a challenging event, especially for a couple of hours until we were able to remove the Amber alert. But that's what we're trained for, that's what we do here in SONI. We keep the lights on and keep the system secure. What's interesting is you come into work and you don't know what you're going to get. But that's what happens in a real-time environment."
- Tom McCartan, Assistant Grid Control Manager; Michael Flynn, Assistant Grid Control Engineer; John O’Higgins, Grid Control Engineer
Watch the video below or click here.
We have always recognised the need for successful partnerships. Now that our strategy is evolving to respond to the climate crisis, we need these partnerships more than ever
Partnerships across the island
As part of the strategy development process we engaged closely with our partners and key stakeholders. These included our shareholder, ESB Networks, NIE Networks, our regulators, and government departments in Ireland and Northern Ireland.
Our partners and stakeholders were asked about their views on industry and policy trends and the likely impact on EirGrid Group. We also discussed their priorities and strategic objectives. The aim was to see how EirGrid Group could assist them in achieving their goals, and to seek their views on EirGrid Group’s own strategic ambitions. These meetings helped us enormously in creating EirGrid Group’s strategy for the next five years.
The FlexTech Initiative
Another area where we are supported by and work closely with our partners is the FlexTech Initiative. This initiative, which we devised in 2019, is a platform of engagement for our sector. It brings together key decision makers across the island. This includes operators of transmission and distribution systems, regulators and the wider industry.
FlexTech aims to maximise opportunities for effective use of new and existing technologies. It also identifies and helps to break down key barriers to integrating renewables on the island. The electricity industry is evolving at an ever increasing pace in response to the move away from carbon-emitting fuels. To react to this, transmission and distribution system operators need to work together.
FlexTech gives EirGrid and SONI the chance to embrace opportunities and resolve issues as they arise.
In June 2019, EirGrid and SONI held the first FlexTech Integration Initiative industry forum. This was in partnership with ESB Networks and NIE Networks. It was a welcome opportunity to engage with industry and gain cross-sectoral insight in Ireland and Northern Ireland.
SONI and NIE Networks Joint Working Group
We established a joint working group between SONI and NIE Networks in August 2019. It aims to produce a common roadmap for the move towards a decarbonised energy system in Northern Ireland.
This working group will provide input as the Department of the Economy develops the future energy strategy for Northern Ireland.
Distributed Series Reactors
Since 2016, EirGrid has trialled Distributed Series Reactors (DSRs) in County Waterford. This was done in collaboration with Smart Wires and ESB networks.
DSRs are power flow devices that operate by diverting power flows to underutilised assets. They are installed on existing overhead line infrastructure.
When installed, they resolve existing or anticipated thermal loading issues. In doing so, they maximise the use of existing transmission infrastructure.
The success of the trial with SmartWires and ESB networks was on an 110kV line in Cullenagh, County Waterford.
This means DSR technology is now tested and ready to be used, when needed. In 2019, EirGrid visited the French TSO RTE. This allowed us to gather insights on RTÉ’s recent experiences in deploying the DSR technology on their transmission system.
Later in 2019, a procurement process was completed by ESB Networks. This resulted in Smart Wires being awarded the contract for supply of a large number of DSR units for deployment on the transmission system.
A project is being progressed in 2020 for the DSRs to be installed on a 110 kV line in County Roscommon.
Development of the Celtic Interconnector
EirGrid, together with our French counterpart Réseau de Transport d’Électricité (RTÉ) is continuing to develop this project.
The Celtic Interconnector is a proposed link to allow for the movement of electricity between Ireland and France. It will send high voltage electricity as high-voltage direct current (HVDC) using an undersea cable.
The European Commission sees interconnection between member states as strategically important. This is because interconnection makes the European electricity system stronger and more integrated.
Because of this, the Celtic Interconnector has been designated as a Project of Common Interest. This means it benefits from accelerated procedures and funding.
In October 2019 the European Commission announced that it would provide €530 million of grant funding to the project.
This interconnector will be Ireland’s first direct electricity link to continental Europe. It will allow large amounts of electricity to be exported to and imported. When complete, it will have the capacity to import and export up to 700 megawatts of electricity, enough to power 450,000 homes. The interconnector is scheduled to begin operation in 2026.
The Celtic Interconnector will put downward pressure on electricity prices for end users. It will also offer increased options for market participants in terms of where to buy and sell electricity.
Adding this interconnector will also increase security of supply for the power system here. This will help us break new ground in the amount of renewable energy we can integrate. For these reasons, this project is a key step towards our new focus on sustainability and decarbonisation.
New York Power Authority
In September 2019, EirGrid and ESB Networks formed a memorandum of understanding on a project in the United States. This agreement sees both organisations collaborating with the New York Power Authority.
Together, we will carry out research with the Electric Power Research Institute, a U.S. non-profit organisation. This agreement lays out plans to model, create and test new solutions for energy systems.
This will take place in New York state’s first collaborative electric utility research facility. The collaboration aims to accelerate improvements to energy infrastructure.
The benefits of this work will be more reliable and efficient electric grids. This will allow distributed generation and related resources to be integrated on local and regional power grids.
"One of our core strategic goals is to build stronger partnerships with the service providers who support the power system. We are always looking to find ways to work better together. We want to understand and meet their needs more effectively and more efficiently.
"One of our core partnerships is with companies who supply power and other services to the grid - we call them our customers. Most of the capacity on the power system comes from generators, but an increasing amount comes from demand side units. These are high-volume users of electricity who agree to use less power at peak times, or on request.
"This year, we’ve worked to build a stronger working relationship with DRAI - the Demand Response Aggregators of Ireland. They are a representative body for demand-side management across the island of Ireland. They provide several services to help us operate and manage the power system more efficiently. They’re particularly useful in allowing us to increase the amount of renewable electricity we can carry on the system.
"Before this year, we sometimes worked with DRAI, and sometimes with individual companies on an ad hoc basis - which wasn’t always effective. In 2019, we set up quarterly meetings with DRAI members to prioritise key issues and to work on specific challenges.
"These meetings have provided a platform for each party to understand the other’s needs, and to find common ground. DRAI also now have a regular opportunity to raise and progress key issues directly with us. As we start to work on these issues, we’ve already had some positive feedback from members.
"Paddy Finn, a DRAI member and MD of Electricity Exchange, said: ‘The regular meetings are a welcome development. They encourage delivery on action items, and help to progress decisions. The new relationship also allowed us to set up sub-groups to explore complex issues in more detail - which is already starting to deliver results.’
"Lisa McMullan, a DRAI member and head of regulatory affairs at GridBeyond, said: ‘The new engagement approach is very helpful. We now have the opportunity to discuss market issues in detail, and to present our perspective to decision-makers. This gives us all a better understanding of how each issue affects different stakeholders. We’re now able to develop lasting solutions.’
- Gill Nolan, Customers & Stakeholders
Watch the video below or click here.
EirGrid and SONI recognise the need to broaden and deepen our current approach to engagement. This is essential if we are to successfully deliver our shared strategic goals
Our new strategy will test the advances we have already made to date, and challenges us to go even further. The climate crisis, and our strategy to help tackle it, provide an urgent rationale.
Engagement with the public
Asking landowners and local communities to accept new infrastructure is challenging. Our aim is to achieve the highest standards of engagement, and to deliver better results as a consequence. We will enhance our role in educating on climate change, and we will respond in meaningful and persuasive ways to fears and concerns.
We made significant progress in this area in the last financial year. To provide a solid platform for our engagement and to raise awareness and understanding of what we do, EirGrid rolled out a new advertisement campaign in Ireland. This was entitled “Grid of Life”, and was launched in late 2018. The campaign depicts the role of electricity in scenes of everyday life. It demonstrates how critical EirGrid’s role is in keeping this electricity flowing across the country.
This campaign ran throughout the year. It appeared on TV, in cinemas, on national and local radio, and digital and social media. It reached a wide audience, including over half a million impressions on Twitter and two million impressions on Facebook leading to an increase in awareness and understanding.
From an engagement perspective it has been a busy year. Our mobile information centre and liaison team continued to travel around the country. We provided updates at local agricultural events on key projects such as the North South Interconnector.
These included the Castleblayney Agricultural Show in Monaghan and the Virginia Agricultural Show in Cavan. We also updated members of the public and stakeholders on the North Connacht project at the Bonniconlon Agricultural Show. Finally, we attended the National Ploughing Championships on three beautiful days of sunshine in September.
We also carried out eight weeks of consultation on the Celtic Interconnector project.
We looked for feedback on a short-list of three proposed landfall locations for the cable and six proposed location zones for the converter station in east Cork.
In Northern Ireland, we also continued our engagement in relation to our grid projects at several agricultural events. These included the Balmoral Show, the Armagh Show, the Omagh Show and the Clogher Valley Show. Our stands were busy, and our agricultural liaison team answered many questions from the public. Our work at these shows deepened our relationship with landowners and the wider community.
Our regional offices in Armagh, Carrickmacross and Castlebar have remained open. We are always happy to receive members of the public in our regional offices and to answer any questions they might have.
Our community fund programme has continued to go from strength to strength. Last year we awarded over €70,000 to community groups in north Kerry as part of the Knockanure-Duagh Community Fund. The money was used for a wide range of community initiatives. These included the purchase of a defibrillator and training on its use. It also funded basketball equipment for a junior team, and the purchase of laptops for an after-school club.
In recent years, our organisation has taken great care to ensure the material with which we communicate with the public is accessible. This effort was recognised at the Plain English Awards during the year. We received two awards this year in the ‘Highly Commended’ category for two of our infrastructure project brochures.
At a political level, we continued to engage with elected representatives. We do so to inform them of our activities, and so we can answer queries from their constituents. We engaged with local authorities, regional assemblies, the Oireachtas, and with European Union representatives.
We also appeared at a number of Oireachtas Committee meetings throughout the year.
These included the Committees on Communications and on Climate Action and Environment. We also appeared before the Climate Change Committee as they deliberated on the report from the Citizen’s Assembly.
In Northern Ireland, SONI continued to engage despite the absence of the Stormont Executive.
Our team engaged with members of the NI Civil Service across various departments. Through sharing knowledge and data, SONI is supporting the Department for the Economy as they shape their updated energy policy. In addition, we continued to educate and inform elected representatives in Northern Ireland. This spanned local government, Stormont and Westminster.
We also engaged with representatives and members at party conferences, and held briefings at constituency offices.
We have and will continue to engage with broad range of stakeholders in relation to Brexit. It creates a potential for uncertainty in our operations, but we are planning on the basis that Brexit will not materially impact our activities.
This reflects assurances from the UK and Irish Governments, as well as the EU. All have stated their commitment to maintaining the all-island Single Electricity Market.
Our sponsorships and supports
EirGrid and SONI carried out a number of sponsorships in 2019. The aim of these activities is to raise awareness and understanding of what we do while giving something back.
We continued our sponsorships at grassroots level. This included our main sponsorship programmes with Monaghan United Cavan Football Partnership, the Hinterland Festival in Kells and the Ed Reavy Music Festival in Cavan. Other small sponsorships last year included Meath Chambers, Armagh Hockey Club, Carrick on Shannon Carnival Committee and Youth Work Ireland in Cavan Monaghan.
2019 was the fourth year of the EirGrid GAA U20 Football Championships. In Northern Ireland, we continued our sponsorship of the Ulster Rugby Premiership. We built on our partnership with Armagh RFC by delivering the well-supported Armagh Blitz event. Over 1,400 children from all parts of the country took part in this one day tournament.
These partnerships give us a platform to engage with communities. They also increase awareness and understanding of our work in the region.
Removing barriers to education is one of our key CSR focus areas. In support of this, SONI extended its partnership with Book Trust NI. This promotes early years’ literacy by providing book packs to families to encourage reading together.
EirGrid also partnered with the DCU Access Programme to support students from a socio-economically disadvantaged background.
Finally, we participated in the ‘Access to the Workplace’ programme. This sees DCU Access students carrying out summer internships in EirGrid. SONI also hosts several week-long work experience placements for Northern Ireland students throughout the year.
Customers and stakeholders
A key highlight of the year was engaging with our customers and stakeholders about our future strategy. We carried out this work as part of the development and roll-out of the new EirGrid Group strategy, launched in September 2019.
As part of EirGrid and SONI’s new strategy development process, we held executive level meetings with 35 organisations. These ranged across the spectrum of stakeholders in Ireland and Northern Ireland.
In Ireland, this included ESB, the National Advisory Committee, Chambers Ireland, the Sustainable Energy Authority of Ireland, the European Commission and IBEC. In Northern Ireland, we sought the views and insights of NIE Networks, the Ulster Farmers Union, the Northern Ireland business community, the energy industry and Consumer Council Northern Ireland.
Another key event of the year from a stakeholder perspective was SONI’s engagement with the Stakeholder Expert Challenge Group.
This group was established by the Utility Regulator in Northern Ireland as part of the SONI Price Control process.
This group was made up of independent stakeholders who have in-depth industry experience and knowledge of the Northern Irish electricity sector. This was an important milestone in the commencement of engagement on the next Price Control period. It also provided a good opportunity for SONI to set out clearly where it expects to go over the next five year period.
EirGrid also welcomed the creation by the CRU of the Networks Stakeholder Engagement Evaluation Panel.
This is composed of CRU staff, industry and wider stakeholders. The panel were tasked with assessing and scoring the network operators.
The aim was to assess the quality, implementation and effectiveness of their stakeholder engagement strategies. EirGrid was pleased to be awarded a score of 7.14 out of a possible 10 by the Panel for its activities in 2018.
We also welcomed the feedback of the panel on potential areas of focus into the future. As continuous improvement is a principle that underpins all our work we are striving to attain a higher score in 2019.
We continued to grow our relationships with the business community. This helps us better understand the challenges they face and assists us in planning for future electricity use. In Northern Ireland, we engaged with the Confederation of British Industry, the Institute of Directors, NI Chamber, the Federation of Small Businesses, Retail NI and Londonderry Chamber.
In Ireland we engaged with the IDA, IBEC, the Electricity Association of Ireland, Chambers Ireland and many of the local chambers around the country.
Being a responsible business
Business in the community
In 2019, EirGrid was once again very involved with the Business in the Community Ireland Leaders’ Group on Sustainability.
EirGrid co-chairs the Low Carbon Economy sub-group with Gas Networks Ireland. This Group was responsible for developing the ‘Low Carbon Pledge’.
This pledge commits companies to halve their greenhouse gas emissions by 2030. EirGrid was proud to sign this pledge in 2018, and the first collective progress report was published in June 2019.
Also in 2019, EirGrid achieved the Business Working Responsibly Mark for the fourth time. This is an external validation that we prioritise corporate social responsibility and sustainability. Most importantly, this achievement was a team effort. People all across the business played their part to input into the submission, gather evidence, and undergo the audit.
Our CSR pledges
EirGrid Group is committed to being a socially responsible business. 2019 was the second year of our corporate social responsibility strategy. The strategy is based on five pledges for excellence. Activities under each pledge this year included:
We added sustainability as a core CSR focus area. This sits alongside education and community infrastructure.
We developed an information video to mark the end of the ‘Power Off and Save’ programme in late 2018. This pilot programme took place across Ireland between 2016 and 2018. It educated consumers on the options that EirGrid uses to manage the grid, and rewarded them for reducing their energy use at times of high demand.
EirGrid Group signed the Marine Grid Declaration. The Declaration pledges to develop marine projects in line with principles of nature conservation and early stakeholder engagement.
We launched ‘Give Time, Get Time’ a competition for staff in SONI and EirGrid to win paid days’ volunteering with a charity of their choice.
Our diversity programme aims to ensure that we attract and retain a diverse range of talent across all of our businesses.
We are particularly focused on improving gender diversity across the group and at all levels. We support this aim with several initiatives. These include partnering with Professional Women’s Network Dublin, our graduate entry programmes and our development and training schemes. We also ran related events on International Women’s Day and carried out a social media campaign highlighting our key female talent.
"Accepting new overhead transmission lines can be a big ask for nearby communities. That’s why on these projects we set up an EirGrid community support fund. They recognise the local knowledge, support and co-operation that we depend on.
- Derval O’Brien, Corporate Social Responsibility Programme Manager
Watch the video below or click here.
At EirGrid Group, we are proud of our people and their achievements. That’s why we’ve featured their stories throughout this report. Throughout 2019, we also carried out day-to-day work to make sure our team could deliver on our ambitions.
This year we refreshed our staff recognition programme ‘Going the Extra Mile’. We expanded the programme to include more categories of work across the Group.
Staff members nominate individuals or teams who exemplify any one of our values and put them forward for recognition.
At EirGrid Group, we place significant emphasis on the development of our people.
As a result, we run our “EirSkills” staff and leadership development programmes every year. 343 team members participated in a training programme this year.
We continually refine and improve the training and development programmes we offer. This ensures the interventions align with our strategy and meet the needs of our people.
This year we delivered a new programme for our customer-facing staff members. Titled ‘Managing Community Relations’, this is a highly interactive and practical course.
Core to the delivery of the EirGrid Group strategy is an engaged workforce. We have a busy annual calendar of events. These include International Women’s Day celebrations, ‘Going the Extra Mile awards’, group induction programmes and sports & social events.
In September 2019, we held a series of “Wellness Week” initiatives with the emphasis on physical and mental well-being. Staff engaged in workshops, speaker events, fitness classes and health checks.
The highlight of the week was an on-site spinning challenge for all levels of ability - where many in EirGrid and SONI donned their Lycra and fitness wear for the day!
We are embracing digitalisation through the use of social media and the internet. We use these channels to enhance our corporate brand as an employer of choice and to attract top talent.
We have introduced the use of technology-driven assessment centres in graduate recruitment. This has both reduced our environmental impact and increased our efficiency. Over the next two years, we will seek to pilot this process in our wider recruitment drives.
This year we welcomed a large intake of graduates in September. They have been deployed across the group through our diverse and engaging graduate programme.
This year we placed a particular focus on staff engagement for the Group 2020-25 Strategy. We sought out feedback and insights from individuals across the group in a process that saw many staff contributing to the strategy. We also conducted research projects on information technology and also on culture. We did this to understand the key trends and their potential strategic impact for EirGrid and SONI.
We also held a series of semi-structured interviews. These were held with other transmission systems operators, technology companies and Irish semi-states.
We also engaged and informed staff on how the strategy development was progressing throughout the year. The strategy launch in September recognised staff contributions towards building the strategy. It also generated considerable excitement about the opportunities ahead.
A suite of highly complex, interdependent IT systems underpin our core functions. The performance of these systems is essential to help our people achieve our strategic goals.
To assess the effectiveness of our critical systems, we measure their availability. The energy management system and the newly integrated Single Electricity Market systems held a 99%+ availability in 2019.
The focus of 2019 was in transitioning the market systems to normal operations. This followed the integration of the Single Electricity Market with wider European energy markets on October 1st 2018.
We improved our service capability in several ways. This included the creation of a service catalogue, assigning service ownership, and reviewing our service management processes. We also moved to operate a 24x7 on-site IT service to support the new market.
We also developed an innovative IT data visualisation tool. This tool enables data exploration and advanced analytics, and has proved very useful in analysing price spikes. It also automates the creation of a number of reports relating to the operation of the Single Electricity Market.
"The main reason I wanted to work in EirGrid Group was you get the opportunity to work across a range of disciplines. Also, it has an inspiring focus on sustainability.” - Rachel
"I was lucky enough to spend my university placement year working for SONI. I really enjoyed learning about the technical challenges of operating the transmission system. Given this, I was thrilled to gain a place on the graduate programme following the completion of my studies in power systems engineering." - Matthew
"The graduate programme offers a really broad experience. I studied Commerce in UCD, so I can apply my learning in many ways. Working here, I get exposed to lots of disciplines - I'll work with three different teams in two years." - Rachel
"I've worked across two teams at SONI so far. First in the access planning team, and now in energy systems analysis. In this role I'm working on modelling the European transmission system for a variety of economic scenarios. These scenarios help European transmission systems decide how to meet renewable energy targets. It's a big learning curve, but the people in SONI have been really generous in sharing their insights and skills to support me in this challenge." - Matthew
"My main role now is internal comms and employee engagement. In my first placement, I worked on the launch of the new strategy to 500 employees in both Dublin and Belfast. That was a highlight. In my job, I ensure that employees understand how their work plays a critical role in delivering the strategy. This means I'm connecting with staff across the seven directorates - including the senior leadership team - which is very rewarding experience." - Rachel
"The amount of responsibility the company has taken on is inspiring. It’s an exciting time to be a power engineer. It's also great to know we are making a real difference by transforming the power system for future generations." – Matthew
- Rachel Harrington & Matthew Whiteside, Graduate programme participants
Watch the video below or click here.
Brendan Tuohy was appointed to chair of the EirGrid Board in November 2019. He served as Secretary General of the Department of Communications, Energy and Natural Resources from 2000-2007. Since then, he has been a director of several boards of companies.
He holds a degree in Civil Engineering from University College Cork, and postgraduate qualifications in environmental engineering and management from Dublin University Trinity College. He is a Chartered Engineer, Fellow of the Institution of Engineers of Ireland and a Fellow of the Irish Academy of Engineering.
Brendan is also currently chairman of MAREI (the Science Foundation Centre for Climate, Energy and Marine); Chairman of TILDA (Irish Longitudinal Study on Ageing); Chairman of the UN body Global eSchools and Communities Initiative and Chairman of the Quality Council of the Kerry Education and Training Board.
Mark Foley joined EirGrid Group as chief executive in June 2018, having held the role of Managing Director of Land Solutions in Coillte since January 2016. Previous to that, Mark was Managing Director of Coillte Enterprise where he led the development of new businesses in renewable energy, telecommunications, land development and land sales.
Before that, from November 2000 to August 2008, Mark was Director of Capital Programmes at Dublin Airport Authority. In this role he was responsible for master planning, permitting, planning and delivery of c. €1.5bn in airport infrastructure at Dublin, Shannon and Cork airports.
Prior to that Mark held a number of senior executive roles with multinationals in the Speciality Chemicals and Electronics sectors. Mark has a Bachelor of Chemical Engineering Degree from University College Dublin, a Masters in Industrial Engineering from University College Dublin and has attended executive development courses in Penn State University and IMD.
Deputy Chairperson & Board Member
Dr. Theresa Donaldson is a Chartered Director with the Institute of Directors.She holds Non- Executive Director roles with NI Probation Board, NI Equality Commission and the Centre for Effective Services.
She is a member of the Lord Chief Justice Solicitors’ Disciplinary Panel for NI and is a member with NI Appeals Committee for BBC Children in Need. She was Chief Executive of Lisburn & Castlereagh City Council (June 2014-September 2018) and Chief Executive of Craigavon Borough Council (2010-2014). Prior to this Theresa held several senior management positions in health and social care and legal services in NI including as Director of Policy and Civil Service Delivery in the Northern Ireland Legal Services Commission.
Shane Brennan was appointed to the board in December 2016 as EirGrid staff representative. He is an engineering graduate from the University of Ulster, holds a post graduate diploma in Environmental Engineering from Trinity College Dublin, post graduate diploma in corporate governance from UCD Smurfit and is a member of Engineers Ireland. He has over 20 years of engineering experience and commenced employment with EirGrid in 2008 as a Project Manager in Grid Development.
He is currently the Senior Project Manager for the Northern Ireland element of the North South Interconnector project and has represented the company at many public engagements throughout Ireland and Northern Ireland.
Lynne is an experienced social media consultant who has developed and implemented award winning online content for many blue chip organisations. She has worked on local, national and international initiatives for a wide range of companies and provides guidance, training, mentoring, activation and evaluation. Lynne also lectures at the University of Ulster on the PG Cert/Dip/Masters in Digital Media Communication in the areas of digital strategy and content strategy. She is a Board member of the Consumer Council for Northern Ireland and writes an award winning blog.
John Trethowan is a native of County Down, and is married with one son. He is a career Banker, and is currently the Head of the Credit Review Office, which provides an appeals mechanism for Small Businesses and Farms which have been refused bank credit in Ireland. He is also a Commissioner of the Central Bank of Ireland, where he is a member of its Audit Committee and Risk Committee. John chairs the EirGrid Audit Committee, and is a member of the Risk Committee. He has extensive Boardroom experience in Banking, Public Transportation, Public Healthcare and in the Voluntary Sector.
Michael Hand was appointed to the EirGrid Board in July 2015 for a period of five years. Michael has extensive experience over 30 years as a senior leader in the Consulting Engineering and Construction sectors in Ireland. He has acted as Director and Managing Director of private and public companies.
He has also acted as CEO and Director of Grangegorman Development Agency. He has a track record in the design and delivery of major strategic infrastructure projects throughout Ireland. He has also worked with distinction as a volunteer and Director in the voluntary community sector.
Michael is highly qualified in Engineering and Business. He holds a Degree in Civil Engineering from NUIG and a Masters in Business Administration from UCD. In 2014, he was conferred with an Honorary Doctorate by TU Dublin in recognition of his contribution as an engineer, a public servant and as a servant to his community. He is a Fellow of four professional institutions and is a Chartered Engineer, a Chartered Director and a Chartered Water & Environment Manager.
Eileen is an experienced strategic advisor having spent the past 30 years in the telecoms industry. She is also a member of the Board of Nama and the Compliance Committee of the Broadcasting Authority of Ireland.
She was the Director of Strategy and External Affairs in Vodafone. She has strong strategic, commercial, transformation, regulatory and legal experience. She has a track record for developing and executing key strategic infrastructure projects. She also has a history of negotiating commercial joint ventures, partnerships and acquisitions.
Tom Coughlan has extensive senior management and leadership experience having retired as Chief Executive of Clare County Council following a career in local government. He has wide experience of the public sector having served as chairman of various committees and boards at national and local levels.
Tom is the Chairperson of the Health and Safety Authority and non- executive Director of Fáilte Ireland. He is a lay member of the Complaints and Client Relations Committee of the Law Society of Ireland, an Associate Tutor with the Institute of Public Administration, and a member of the Institute of Directors of Ireland.
Company Secretary (Interim)
Michael Behan was appointed Company Secretary of EirGrid on an interim basis in April 2019. He also holds the Group Financial Controller role for the EirGrid Group. He is an experienced Chartered Accountant with over 25 years’ experience in industry and audit practice. He is a Fellow Chartered Accountant and holds a Diploma in Corporate Finance.
Liam O’Halloran has extensive senior management experience in multinational electronic and telecommunications companies. Liam previously held the position of Senior Vice President of DEX Europe, a US based company providing repair and logistics services to major electronics multinationals and Vice President of European Operations for Jabil Global Services, a global electronics services company.
Liam was also Director of Customer Operations and Regulation at Magnet Networks and later served as Executive Chairperson of ALTO, the Association of Alternative Telecommunications Operators. He is a Director of Alcomis, a company development consultancy with clients in Electronics, Software, Distribution and Services sectors.
Liam was also Director of Customer Operations and Regulation at Magnet Networks and later served as Executive Chairperson of ALTO, the Association of Alternative Telecommunications Operators. He is a Director of Alcomis, a company development consultancy with clients in Software, eLearning and Services sectors.
Mark Foley joined EirGrid Group as chief executive in June 2018, having held the role of Managing Director of Land Solutions in Coillte since January 2016. Previous to that, Mark was Managing Director of Coillte Enterprise where he led the development of new businesses in renewable energy, telecommunications, land development and land sales.
Before that, from November 2000 to August 2008, Mark was Director of Capital Programmes at Dublin Airport Authority. In this role he was responsible for master planning, permitting, planning and delivery of c. €1.5bn in airport infrastructure at Dublin, Shannon and Cork airports. Prior to that Mark held a number of senior executive roles with multinationals in the Speciality Chemicals and Electronics sectors. Mark has a Bachelor of Chemical Engineering Degree from University College Dublin, a Masters in Industrial Engineering from University College Dublin and has attended executive development courses in Penn State University and IMD.
Director, Human Resource & Corporate Services
Siobhan Toale was appointed Director of Human Resources & Corporate Services in July 2015 having previously held the position of Director of Human Resources since joining EirGrid in 2013. Siobhan has extensive HR, Leadership Development and Change Management experience from the Telecommunications and Banking Industries. She has previously held senior HR positions in eircom, Telefonica 02 Ireland and Bank of Ireland Group. Siobhan has a BSc(Comp) from Trinity College Dublin and an MSc in Organisational Behaviour from Birkbeck College, University of London.
Executive Director – Grid Development & Interconnection
Michael Mahon joined EirGrid Group as Director of Grid Development and Interconnection in August 2019. In his role he is responsible for planning and consents for grid infrastructure across the island. This includes public consultation processes and landowner engagement. He previously held the position of General Manager, ESB Smart Energy Services. Michael has 20 years’ experience with ESB, with significant leadership experience in the delivery of major projects. He is also a Chartered Engineer with Post Graduate Diplomas in both Project Management and Management.
Director, Market Operations & General Manager, SEMO
Rodney Doyle was appointed Director of Market Operations and General Manager, Single Electricity Market Operator (SEMO) in July 2015 having previously held the position of Director of Information Services since February 2013. Rodney also held a number of other positions in EirGrid including European Market Integration Manager; Manager of the East West Interconnector business readiness project, and Ancillary Services Manager. Rodney has across his roles led projects to deliver major systems and policies which are in use today across the electricity market and the TSO's. Before his time with EirGrid and ESB National Grid Rodney worked as the chief adviser in the networks division of the Competition Authority of New Zealand concentrating on electricity and gas regulation/market design issues and before that worked in consultancy. Rodney is a member of a number of key European TSO and market cooperation groups. Rodney has a BA (Economics), MA (Economics) and an MBA from UCD.
Interim Executive Director, Grid Development & Interconnection
Liam Ryan was appointed Interim Director of Grid Development & Interconnection in November 2018. Prior to this, Liam was head of the Integrated Single Electricity Market transition, responsible for the overall readiness, transition and deployment of the market solution, which fully integrated the Single Electricity Market to Europe. Liam also held a number of other positions in EirGrid including Head of Transmission Engineering & Maintenance, Head of Market Operations, Head of Power System Operational Planning and Head of Programme Management Office for developing the transmission grid. In all cases he lead the development of policies and innovations which are central to the performance of the market and system operator functions. Before joining EirGrid, Liam held a number of senior engineering roles in Hewlett Packard manufacturing and innovation departments and before that worked in consultancy. Liam is a member of a number of key European TSO corporation groups. A graduate of Trinity College Dublin, he has a PhD and Bachelor of Mechanical Engineering and holds a Masters in Mathematics.
Director, Operations, Planning & Innovation and General Manager, SONI Ltd.
Robin McCormick was appointed Director of Operations, Planning & Innovation in July 2015 and is also the General Manager of SONI Ltd. Robin previously held the role of General Manager of the Single Electricity Market Operator (SEMO) and SONI.
He has significant experience in the power industry in a regulated utility environment. In his role as Director, he is responsible for the operation and planning of the power system in Ireland and Northern Ireland, Robin is a fellow of the Institution of Engineering and Technology and Vice Chairman of the IET Engineering Policy Group – Northern Ireland. He holds an MBA from the University of Ulster, Jordanstown, and an MSc from Napier University, Edinburgh.
Director, Finance & Legal
Aidan Skelly was appointed Director of Finance & Legal in July 2015. Aidan previously held the position of Chief Financial Officer since June 2005. He was formerly Finance Director with Waterford Stanley Limited.
He worked with Waterford Crystal from 1987 to 2002, during which time he held a number of finance and commercial positions in Ireland and in the UK. He trained as a Chartered Accountant with PricewaterhouseCoopers and is a Commerce graduate of University College Dublin. He also holds an MBS from Dublin City University.
Director, External Affairs
Rosemary Steen was appointed Director of External Affairs in July 2015 having previously held the position of Director of Public Affairs since joining EirGrid in 2014. Rosemary also serves on the board of the AsIAm charity organisation.
Rosemary has extensive Corporate Affairs, Government Relations and Corporate Social Responsibility experience from the Telecommunications, Utilities and Business Industry Body sectors.
She has previously held senior positions in Vodafone, Shell and IBEC. Rosemary has a BA in Economics and Philosophy from Trinity College Dublin, an MBS in Logistics and Manufacturing from University College Dublin and a Postgraduate Diploma in Legal Studies from Dublin Institute of Technology.
Managing Director, SONI Ltd
Jo Aston joined EirGrid Group as Managing Director of SONI Ltd in May 2019. Jo joined from the Utility Regulator, where she most recently served as Director of Wholesale Energy Regulation for more than five years. In this role, she was responsible for the regulation of the Single Electricity Market (SEM) on the island, in partnership with the electricity regulator in the Republic of Ireland.
In 2018, Jo led a fundamental redesign of the Single Electricity Market. This involved the introduction of new arrangements to both increase competition and downward pressure on prices.
Prior to her work in the regulation of electricity, Jo was director of water regulation for seven years. She is a graduate of Queens University, Belfast, is a chartered civil engineer and has worked in the private and public sectors.
An Bord Pleanála
Ireland’s independent national planning authority.
The amount of electricity that can be safely transferred on the system or a circuit.
The Commission for Regulation of Utilities. This institution regulates our activities in Ireland.
The overhead line or underground cable linking two substations. For example, the Moneypoint – Dunstown 400 kV circuit.
An object or material that can transfer electricity. For example some metal wires are good conductors of electricity. Conductors are found in underground power cables and overhead lines.
The generation of electricity using fossil fuels, such as natural gas, coal or peat.
Day ahead trading
When contracts are made between seller and buyer for the generation and supply of electricity the following day. After the transition to the new SEM, a new division of SEMO will operate the day-ahead market for electricity in Ireland and Northern Ireland.
A large group of networked computer servers used for remote storage of information.
The removal of carbon-emitting forms of energy generation from the power system. Carbon-emissions occur in this context when conventional generators burn fossil fuels to create electricity.
The amount of electrical power that is drawn from the network by those who use electricity. This may be talked about in terms of ‘peak demand’, which is the maximum amount of power drawn throughout a given period.
This is the lower voltage network, owned and operated in Ireland by the ESB and in Northern Ireland by NIE Networks. It delivers power from the transmission network to households and businesses.
‘Delivering a Secure, Sustainable Electricity System’ is an EirGrid initiative designed to ensure the secure operation of the grid while achieving renewable energy targets.
When a newly completed line or cable is fully operational and made a working part of the electricity grid.
Electricity Supply Board is a commercial semi-state organisation in Ireland. This group of companies includes ESB Networks, who operate the electricity distribution system in Ireland.
These are fuels - such as coal, oil or gas - that originate underground from the decomposing remains of plants and animals. They emit carbon when burnt, and so cause climate change.
A facility that produces electricity. Power can be generated from various sources, for example, coal, gas and wind.
This is the maximum amount of electricity available to be generated, based on the output potential of electricity generators connected to the grid.
See Transmission Network.
Industrial Development Agency (Ireland) is responsible for attracting foreign direct investment to Ireland.
The transmission of high voltage electricity between electricity grids in different jurisdictions.
Operating voltage of electricity transmission equipment. One kilovolt is equal to one thousand volts. The highest voltage on the Irish transmission system is 400 kV.
A megawatt is 1,000,000 watts. A watt is the standard unit of power (See below for a definition of Watt).
An organisation that offers a service without any competitors.
Nominated Electricity Market Operator. Each territory in Europe has a NEMO, as designated by their respective energy regulator. The NEMO is responsible for running day-ahead and intraday trading for that electricity market. There can be more than one NEMO serving each territory, as its functions are open to competition. These are commercial services, and are separate from the essential market services required to maintain a functioning electricity market.
This term describes the integrated whole of the wider electricity system - from generation, through transmission, and finally to distribution.
Increasing capability on the existing electricity grid by building new infrastructure or upgrading existing equipment.
The generation of electricity using renewable energy, such as hydro, wind, solar, tidal and biomass.
Réseau de Transport d’Électricité (RTE)
Electricity Transmission System Operator of France. It is responsible for the operation, maintenance and development of Europe’s largest electricity grid.
This is a term we use to describe the enabling and supporting services that allow the electricity system to carry a greater proportion of renewably generated power.
The practice of considering how a variety of possible outcomes - or scenarios - could affect the future needs of the electricity grid.
The Single Electricity Market. This market comprises both the Ireland and Northern Ireland. It allows for electricity to be traded and supplied on an all-island basis.
Single Electricity Market Operator. This is the EirGrid Group joint venture that runs the Single Electricity Market of Ireland and Northern Ireland. It carries out the essential services required to maintain a functioning market for wholesale electricity.
System Operator for Northern Ireland. This organisation is part of the EirGrid Group. It manages, operates and develops the electricity transmission grid in Northern Ireland.
These are individuals or organisations that may be affected by, or can influence, the operations of EirGrid Group companies.
A set of electrical equipment used to interlink circuits and change the voltage being sent down a line or cable.
A high-voltage power line running at 400 kV, 220 kV or 110 kV on the Irish transmission system. The high-voltage allows delivery of bulk power over long distances with minimal power loss.
Transmission Network or Grid
This is the network of around 6,800 km in Ireland and 2,200km in Northern Ireland of high-voltage power lines, cables and substations. It links generators of electricity to the distribution network and supplies large demand customers. In Ireland, it is operated by EirGrid and owned by the ESB. In Northern Ireland, it is operated by SONI and owned by NIE Networks.
Transmission System Operator (TSO)
The organisation responsible for operating the high-voltage electricity system in a particular region.
The Utility Regulator. This institution regulates our activities in Northern Ireland.
Voltage is a measure of the potential strength of the flow of electricity – similar to ‘pressure’ in a water system. Voltage is the measure of electrical charge or potential between two points (in an electrical field) such as between the positive and negative ends of a battery. The greater the voltage, the greater the potential flow of electrical current.
A watt is the standard unit of power in the International System of Units (SI). A watt measures the rate at which energy is produced or consumed. For example, a high-watt electrical appliance will consume more energy than a low-watt appliance.
The Directors present their annual report and the audited Financial Statements of the Group for the financial year ended 30 September 2019.
The Group’s principal activities are to deliver quality connection, transmission and market services to generators, suppliers and customers utilising the high voltage electricity system in Ireland and Northern Ireland. EirGrid plc also has the responsibility to put in place the grid infrastructure required to support the development of Ireland’s and Northern Ireland’s economies. The Group is also responsible for the operation of the wholesale electricity market for the island of Ireland. The Group owns and operates the East West Interconnector (“EWIC”) linking the electricity grids in Ireland and Great Britain.
In this context, the term Group includes all the above mentioned activities (transmission system operator in Ireland and Northern Ireland; market operator and nominated electricity market operator for the island of Ireland; operator of EWIC and telecommunications activities on EWIC).
The Group collects tariffs to support these activities. These tariffs allow for incentives and a regulated return for capital invested in the business, generating value for the Group over the longer term.
Details of the financial results of the Group are set out in the Consolidated Income Statement on page 89 and the related notes 1 to 28.
The current period being reported on is the financial year ended 30 September 2019. The comparative figures are for the financial year ended 30 September 2018.
Commentaries on performance during the financial year ended 30 September 2019, including information on recent events and future developments, are contained in the Chairperson’s Report and the Chief Executive’s Review.
The Group is committed to maintaining the highest standards of corporate governance. During the year the Group was compliant with the Code of Practice for the Governance of State Bodies (“the Code”) issued by the Department of Public Expenditure and Reform in August 2016. The Code sets out the principles of corporate governance which the Boards of State Bodies are required to observe.
The Group also complies with the corporate governance and other obligations imposed by the Ethics in Public Office Act, 1995 and the Standards in Public Office Act, 2001. The Group also has regard to the principles of the UK Corporate Governance Code revised in July 2018 and the Irish Corporate Governance Annex issued in December 2010.
During the year the Group incurred travel costs in Ireland and Northern Ireland of €1.1m (2018: €1.1m) and overseas travel costs of €0.4m (2018: €0.4m). Settlement and related legal costs for the year were €nil (2018: €nil). Staff Welfare costs were €0.25m, of which external relations were €0.02m (2018: €0.22m, of which external relations were €0.01m).
|Yr to 30 September 2019||Year to 30 September 2018|
|Notes||€ '000||€ '000|
|Electricity market services||(i)||11,104||24,095|
|Legal services & advice||2,723||3,619|
|Transmission Network project services||(ii)||5,019||5,648|
|IT systems support||(iii)||500||323|
|Corporate finance advice||403||1,256|
|Organisational & actuarial advice||765||520|
|Costs charged to income statement||4,421||2,972|
Note (i): Electricity Market services include costs of implementing the new all-island electricity market arrangements known as new SEM reflecting the European target model. This target model arises from the EU’s Third Energy Package and is a set of harmonised arrangements for the cross-border trading of wholesale energy and balancing services across different timeframes throughout Europe. The new SEM went live on 30 September 2018.
Note (ii): Transmission Network project services represents the specialist costs of bringing network projects from initial concept through to the granting of planning permission.
Note (iii): IT Systems Support are external support costs for key systems across the business.
The Board constitutes a non-executive Chairperson, the Chief Executive, in his role as an executive Director, Deputy Chairperson, an employee representative Director and seven non-executive Directors. All Directors are appointed by the Minister for Communications, Climate Action and Environment and their terms of office are set out in writing.
While day to day responsibility for the leadership and control of the Group is delegated to the Chief Executive and his Management Team, within defined authority limits, the Board is ultimately responsible for the performance of the Group.
The Directors have individually resolved to comply with the Group’s Code of Business Conduct for Directors.
Annual reviews are conducted of the performance of the Board and the Chairperson. The Board has a formal schedule of matters specifically reserved to it for decision at the Board Meetings normally held monthly. Board papers are sent to Board members in the week prior to Board Meetings.
The Board Members, in the furtherance of their duties, may avail of independent professional advice. All Board Members have access to the advice and services of the Company Secretary. Insurance cover is in place to protect Board Members and Officers against liability arising from legal actions taken against them in the course of their duties.
The Board conducts an annual review of the effectiveness of the system of internal controls including financial, compliance and risk management. As noted in the Internal Controls section of the Directors’ Report, the Board has not identified, nor been advised of, any failings or weaknesses which it has determined to be significant.
Board Committees in 2019
The Board has an effective committee structure to assist in the discharge of its responsibilities, consisting of a number of committees. During the financial year the standing committees were: the Audit Committee, the Remuneration Committee, the Grid Infrastructure Projects Committee, the Public Affairs Committee and the Risk Committee. During the financial year the Board reviewed the remit of each of the committees.
The Audit Committee’s function is to assist the Board in fulfilling its oversight responsibilities relating to the financial reporting process, the system of internal control, the audit process, monitoring the independence of the auditors and compliance with laws and regulations including the Code of Practice for the Governance of State Bodies. The Board is satisfied that at all times during the financial year at least one member of the Committee had recent and relevant financial experience.
EirGrid plc has adhered to Government policy in relation to the total remuneration of the Chief Executive. The Chief Executive’s remuneration is set within a range determined by the Department of Public Expenditure and Reform and the Department of Communications, Climate Action and Environment. The Remuneration Committee approves the structure of remuneration for Senior Management.
The Grid Infrastructure Projects Committee’s function is to oversee the implementation of grid development strategy and review infrastructure projects which are expected to come forward for approval to the Board.
The Public Affairs Committee’s function is oversight of public affairs and stakeholder engagements across the Group.
The Risk Committee’s function is to oversee and monitor the Risk Management Policy and Risk Management Framework, review EirGrid’s risk appetite and review the effectiveness of responses to key risk exposures.
The tables below summarise the attendance of Directors at Board and Committee meetings which they were eligible to attend during the year ended 30 September 2019.
|Eligible to Attend||Attended|
|John O’Connor (Chairperson - retired 11 November 2019)||11||11|
Members of the Board at the date of signing of the financial statements were Brendan Tuohy (Chairperson – appointed 12 November 2019), Mark Foley, Tom Coughlan, Shane Brennan, Lynne Crowther, Theresa Donaldson, Michael Hand, Eileen Maher, Liam O’Halloran, and John Trethowan.
There were 6 Audit Committee meetings held during the financial year ended 30 September 2019. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|John Trethowan (Chairperson)||6||6|
Members of the Audit Committee at the date of signing of the financial statements were John Trethowan (Chairperson), Tom Coughlan, Michael Hand, and Eileen Maher.
There were 9 Remuneration Committee meetings held during the financial year ended 30 September 2019. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|John O'Connor (Chairperson - retired on 11 November 2019)||9||9|
Members of the Remuneration Committee at the date of signing of the financial statements were Brendan Tuohy (Chairperson – appointed 12 November 2019), Liam O’Halloran and Theresa Donaldson.
Grid Infrastructure Projects Committee
There were 4 Grid Infrastructure Projects Committee meetings held during the financial year ended 30 September 2019. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Michael Hand (Chairperson)||4||3|
|John O'Connor (retired 11 November 2019)||4||4|
Members of the Grid Infrastructure Committee at the date of signing of the financial statements were Michael Hand (Chairperson), Brendan Tuohy (appointed 12 November 2019), Tom Coughlan, and Lynne Crowther.
Public Affairs Committee
There were 4 Public Affairs Committee meetings held during the financial year ended 30 September 2019. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Theresa Donaldson (Chairperson)||4||4|
Members of the Public Affairs Committee at the date of signing of the financial statements were Theresa Donaldson (Chairperson), Shane Brennan, Lynne Crowther and Eileen Maher.
There were 4 Risk Committee meetings held during the financial year ended 30 September 2019. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Liam O'Halloran (Chairperson)||4||4|
|John O'Connor (retired 11 November 2019)||4||4|
Members of the Risk Committee at the date of signing of the financial statements were Liam O’Halloran (Chairperson), Shane Brennan, John Trethowan and Brendan Tuohy (appointed 12 November 2019).
The Group has in place an appropriate risk management process that identifies the critical risks to which it is exposed and ensures that appropriate risk mitigation measures are taken. The Directors continually carry out robust assessments of the principal risks facing the Group. The Group’s internal audit function continually reviews the internal controls and systems throughout the business and makes recommendations for improvement to the Audit Committee. The Group has a Risk Committee in place to oversee and monitor the Risk Management Policy and Risk Management Framework, review EirGrid’s risk appetite and review the effectiveness of responses to key risk exposures.
The main financial risks faced by the Group relate to liquidity risk, market risk (specifically foreign exchange rate risk, interest rate risk and cash flow risk) and credit risk. Policies to protect the Group from these risks are regularly reviewed, revised and approved by the Board as appropriate.
The Group’s principal financial risk is that there is inadequate liquidity in the event of a significant regulatory under-recovery. EirGrid Group is a regulated entity with regulated tariffs set in advance and as a result can be subject to under recoveries of the required revenues. The Board seeks to ensure that adequate banking lines
are in place to enable it to fund such a requirement, pending recovery in a subsequent regulatory pricing period.
As a regulated business operating in Ireland and Northern Ireland, the Transmission System Operator activities do not involve any significant pricing risks. The Group derives approximately 19% of its revenues from the UK and hence has an exposure to Euro/Sterling currency fluctuations. This risk is partially mitigated by the majority of both revenue and expenditure from UK operations being denominated in Sterling. The Group has sought to further reduce this exposure by funding UK operations using Sterling borrowings.
The Group funds some of its operations using borrowings. The Group seeks to minimise the effects of the interest rate risks arising from its operational and financial activity by using derivative financial instruments to hedge risk exposures. The Group has entered into interest rate derivatives to fix interest rates on its EWIC related debt. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
The Group discharges its Market Operator obligations through contractual joint ventures between EirGrid plc and SONI Ltd. Namely, SEMOpx for the day ahead and intraday markets, and SEMO for the balancing market.
For the day ahead and intraday markets, European Commodities Clearing (ECC) performs the clearing and settlement of the SEMOpx power exchange and takes financial responsibility for all concluded trades. ECC maintain collateral requirements with the exchange members and their clearing banks with any bad debt borne by ECC as the counterparty.
For the balancing market, under the terms of the Trading and Settlement Code for the Single Electricity Market (“SEM”) each participant is required to provide credit cover at a level notified to it by the Market Operator. Such credit cover can be provided by means of an irrevocable standby letter of credit or a cash deposit held in a SEM collateral reserve account (security accounts held in the name of market participants). Any bad debt arising in
the SEM, to the extent that it exceeds the available credit cover, is shared by market participants and is not
borne by the Market Operator.
Appropriate arrangements are also in place to effectively manage the Group’s credit risk arising from its Transmission System Operator activities.
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is exposed to credit risk from the counterparties with whom it holds its bank accounts. The Group mitigates its exposure by spreading funds across a number of financial institutions which have a credit rating, from an independent rating agency, consistent with the Treasury Policy approved by the Board. The Group is also exposed to counterparty risk on undrawn facilities and interest rate swap instruments. Consistent with our Treasury Policy the Group deals only with counterparties with high credit ratings to mitigate this risk.
The Group’s policy and practice is to settle invoices promptly according to terms and conditions agreed with suppliers.
System and Market Operations
The Group is responsible for the secure operation of the transmission systems in Ireland and Northern Ireland, interruption to which could pose a risk to the essential services of secure operation of the transmission systems. The Group is also responsible for the operation of the all-island Single Electricity Market, interruption to which could pose a risk to delay in the timely settlement of the market. A complete programme is in place to discharge these responsibilities and includes:
EirGrid operates two defined benefit schemes for qualifying employees. Risks to the cost of providing such schemes include changes in interest rates, level of return on pension assets, changes in life expectancies and changes in price and salary inflation. The current IAS19 Employee Benefits deficit included in the financial statements at 30 September 2019, before deferred tax, is €50.6m (2018: €32.4m). The Group also operates approved defined contribution schemes for employees of EirGrid plc and SONI Limited.
EirGrid has the responsibility to put in place the grid infrastructure required to support the development of Ireland’s and Northern Ireland’s economies. EirGrid’s principal activities in this regard are the planning for, and delivery of, new connections to generators and customers utilising, or seeking to utilise, the high voltage electricity system and transmission network reinforcement projects across Ireland and Northern Ireland. There is a risk of delay and consequential increase in cost associated with complex network projects of this nature. To manage this, EirGrid publishes guidance on network development and has a robust project assessment framework in place. It also continually assesses its processes and procedures to ensure that they are in line with best practice and appropriate for the business and meets the needs of the public and those communities we engage with.
EirGrid operates in a regulated environment (with the exception of its Telecoms business which manages the fibre optic connection between Ireland and Great Britain). Regulatory policy changes could materially affect how we operate and our financial performance. We have a dedicated Regulatory team in place and seek to engage constructively and pro-actively at all times with the Regulatory Authorities.
The Group is responsible for the asset management and operation of the East West Interconnector (“EWIC”) which links the electricity grids in Ireland and Great Britain. There is a risk of physical damage to EWIC resulting in possible prolonged outage of EWIC together with significant reinstatement costs; however there are comprehensive operational procedures and maintenance arrangements for the East West Interconnector in place, including appropriate insurance arrangements.
A Review Group has been established by EirGrid to monitor risks associated with Brexit. The group continues to monitor developments and reports regularly to the Board. It considers a range of Brexit related scenarios and the possible impact on the group’s activities. The main area of focus has been the continued operation of the SEM and in particular the operation of the day ahead auction between the SEM and the rest of Europe. The services provided by the East West Interconnector could also be impacted. EirGrid continues to work closely in this regard with the relevant Government Departments in Ireland and the Northern Ireland and with the respective regulators.
EirGrid recognises Cyber Security as a critical risk. We operate a full suite of security policies and standards and have deployed comprehensive perimeter defence mechanisms. Security Awareness training is rolled out to all staff and we have ongoing IT Security monitoring and compliance reporting. We maintain a close working relationship with the National Cyber Security Centre and European TSOs on all cyber matters. We are actively engaged with the relevant Government bodies in Ireland and Northern Ireland on cyber security matters and on preparations for complying with the Network and Information Systems (NIS) Directive.
Other – Non Financial Information
In September 2019 EirGrid Group launched its new five year Strategy (2020 – 2025) and its’ redefined Purpose Statement “To Transform the Power System for Future Generations”.
The new strategy has been shaped by two factors - climate change and the impending transformation of the electricity sector. The response at government, EU and global level is to plan for the transition to a sustainable low carbon future. This is reflected in the 2016 Paris Agreement, the EU Climate and Energy Framework to 2030 and in the Irish Government’s 2019 Climate Action Plan.
The transition to low carbon and renewable energy will have widespread consequences. There will be major changes in how electricity is generated, bought, sold and used, such as for transport and heat. The electricity system will carry more power than ever before and most of that power will be from renewable sources. And while this happens, new technology will allow electricity users to generate and store power, and return any surplus to the grid. Combined with real-time consumption information from electricity users, this creates opportunities for all.
Realising these opportunities will require significant transformation of the electricity system. More importantly, these changes will need to be managed in a co-ordinated and cost effective way. EirGrid Group has a unique role to play in leading the radical transformational that is now required and this is recognised in our new strategy which consists of a set of key goals, underpinned by our purpose.
Health, Safety & Environment
EirGrid is committed to achieving and maintaining the highest standards of Health, Safety and Welfare for all of its staff and for any other persons who may be affected by our activities, and to the protection of the Environment.
EirGrid operates a Health, Safety & Environmental (HS&E) Management System based on the requirements of
the International Occupational Health & Safety Standard: OHSAS18001:2007 and the Environmental Management Standard ISO14001:2015.
Our HS&E Management System enables us to consider various risks associated with our activities, to staff and others who may be affected by these activities, and those to the environment; and to place these risks in the context of any relevant legal or other requirements, thereby ensuring that preventative & control measures are adequate and meet best practice standards.
We recognise that we have a responsibility to demonstrate sound environmental management and promote sustainability. We have in place a programme to manage our environmental impacts responsibly through setting strategic objectives annually, and will endeavour to implement best practice when practicable. We set strategic objectives annually to support the ‘Preservation’ area of our corporate social responsibility strategy. Our Preservation Pledge is: “We respect the environment: We strive for best practice in environmental protection when developing the grid. We enable the grid to carry ever-growing amounts of renewable electricity.
We carefully manage our own environmental impacts”.
Our commitment is to conduct our activities in an environmentally responsible manner to protect the environment from harm, degradation, prevent pollution and continually improve the management systems performance. We will actively promote awareness among our employees through appropriate communication and training programmes. We also recognise the indirect impacts of third parties in our supply chain and operate our procurement processes in line with local Government Guidelines. Policies actively utilised in managing these processes include Anti Bribery and Modern Slavery Policy.
The Group Health, Safety & Environmental Committee, which is made up of staff members from across the business, is responsible for evaluating and proposing suitable environmental objectives to the Executive Team.
In the context of climate change and the need to decarbonise the electricity supply, EirGrid is playing a key role in connecting high levels of renewable energy and in developing the electricity grid to connect renewable sources, in line with EU and Government targets. EirGrid is developing the Transmission System with due regard for the environment through sound environmental practices and full compliance with its environmental obligations.
An internal control system encompasses the policies, processes, tasks, behaviours and other aspects of a Group that, taken together:
The Board has overall responsibility for the Group’s systems of internal control and for monitoring their effectiveness and in this regard the Board’s objective is to maintain a sound system of internal control to safeguard shareholders’ interests and the Group’s assets. These systems are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. In order to discharge its responsibility in a manner which ensures compliance with legislation and regulations, the Board established an organisational structure with clear reporting procedures, lines of responsibility, authorisation limits, segregation of duties
and delegated authority.
The key elements of the Group’s internal control processes are:
The Group has put in place a framework for monitoring and reviewing the effectiveness of internal controls, including its risk management process. The Directors confirm that they have reviewed the effectiveness of the system of internal control operated during the period covered by these Financial Statements. During the course of this review, the Board has not identified, nor been advised of, any failings or weaknesses which it has determined to be significant. Therefore a confirmation in respect of necessary actions has not been considered appropriate.
The Group has an internal audit function which delivers an annual programme of audits to ensure that there are effective controls operating across key financial processes and those areas of higher risk exposure. The Group’s Head of Internal Audit & Compliance reports to the Audit Committee quarterly and, on an annual basis, presents an assurance statement on the effectiveness of internal control, risk management and corporate governance. Under the internal audit arrangements in place, Internal Audit has access to external specialist resources to support its activities.
The Financial Statements include €122,000 (2018: €122,000) for Chairperson’s and Directors’ fees, in accordance with the Department of Finance approved levels of remuneration for the Chairperson and Board Members of State Bodies and the revised arrangements for payment of board fees to public sector employees under the Department of Public Expenditure and Reform’s “One Person One Salary” Principle. In 2009 the Department of Communications, Climate Action and Environment issued an instruction that Chairperson and Directors’ fees be reduced. Prior to this instruction being issued the Chairperson and Directors had already decided to take a voluntary 10% reduction in their fees. Under the approved remuneration levels, the Chairperson’s fees were equivalent to €21,600 per annum during the financial year (2018: €21,600 per annum). Directors’ fees were equivalent to €12,600 each per annum during the year (2018: €12,600 each per annum).
The executive Board Member during the year was the Chief Executive Mark Foley. The Chief Executive’s remuneration is set within a range determined by the Department of Public Expenditure and Reform and the Department of Communications, Climate Action and Environment.
The remuneration of the Chief Executive consists of basic salary, taxable benefits and certain retirement benefits. The retirement benefits of the Chief Executive are calculated on basic pay only and aim to provide in retirement a pension of one-eightieth and a gratuity of three-eightieths of salary for each year of service as Chief Executive.
Chief Executive's Remuneration
|Year to 30 September 2019||Year to 30 Septemer 2018|
|Pensions contributions paid (all defined benefit)||40||39|
In evaluating the annual dividend that the Group may propose the Board considers the following key factors:
Having considered these factors the Directors of the Group propose the payment of a final dividend of €4,000,000 (2018: €4,000,000) for the financial year ended 30 September 2019.
The Directors and Secretary who held office between 1 October 2018 and 30 September 2019 had no beneficial interest in the shares of the Group.
One ordinary share of the Company is held by the Minister for Communications, Climate Action and Environment and the remainder of the issued share capital is held by the Minister for Public Expenditure and Reform, or on his behalf.
At the balance sheet date 30 September 2019, John O’Connor, Mark Foley and Michael Behan held one share each in the share capital of the Company on behalf of the Minister for Public Expenditure and Reform.
The Group does not make political donations.
The Financial Statements are prepared on a going concern basis as the Board, after making appropriate enquiries, is satisfied that the Group has adequate resources to continue in operation for the foreseeable future.
The measures that the Directors have taken to secure compliance with the requirements of Sections 281 to 285 of the Companies Act 2014 with regard to the keeping of accounting records are the employment of appropriately qualified accounting personnel and the use of suitable accounting systems and procedures. The accounting records are kept at The Oval, 160 Shelbourne Road, Ballsbridge, Dublin 4.
Details of significant post balance sheet events are set forth in Note 27 of the financial statements.
The auditors, Deloitte Ireland LLP, Chartered Accountants and Statutory Audit Firm, have indicated their willingness to continue in office in accordance with Section 383(2) of the Companies Act 2014.
So far as each of the Directors in office at the date of approval of the financial statements is aware:
For the purposes of section 225 of the Companies Act 2014 (the “Act”), we, the Directors:
(i). a compliance statement (as defined in section 225(3)(a) of the Act) setting out the Company’s policies (that in our opinion, are appropriate to the Company) respecting compliance by the Company with its relevant obligations has been drawn-up;
(ii). appropriate arrangements or structures, that are, in our opinion, designed to secure material compliance with the Company’s relevant obligations, have been put in place; and
(iii). during the financial year to which this report relates, a review of the arrangements or structures referred to in paragraph (ii) above has been conducted.
The Directors’ are responsible for preparing the Directors’ Report and the financial statements in accordance with the Companies Act 2014 and the applicable regulations.
Irish company law requires the Directors to prepare financial statements for each financial year. Under the law, the Directors have elected to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and the Company financial statements in accordance with FRS 101 reduced disclosure framework (March 2018). Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Company and the Group as at the financial year end date and of the profit or loss of the Group for the financial year and otherwise comply with the Companies Act 2014.
In preparing these financial statements, the Directors are required to:
The Directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy, enable them to ensure that the financial statements and Directors’ Report comply with the Companies Act 2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.
Approved by the Board and signed on their behalf:
Report on the audit of the financial statements
Opinion on the financial statements of EirGrid plc (the “company”)
In our opinion the group and parent company financial statements:
The financial statements we have audited comprise:
the group financial statements:
the parent company financial statements:
The relevant financial reporting framework that has been applied in the preparation of the group financial statements is the Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting framework applicable to the group”). The relevant financial reporting framework that has been applied in the preparation of the parent company financial statements is the Companies Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the Financial Reporting Council (“the relevant financial reporting framework applicable to the company”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our responsibilities under those standards are described below in the “Auditor’s responsibilities for the audit of the financial statements” section of our report.
We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) requireus to report to you where:
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group and parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that the auditor identifies during the audit.
This report is made solely to the company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
Matters on which we are required to report by exception
Based on the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report that have been specified for our review.
The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by Regulation 5(2) to 5(7) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 (as amended) for the financial year ended 30 September 2019. We have nothing to report in this regard.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to
you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not made.
Under the Code of Practice for the Governance of State Bodies (August 2016) (the “Code of Practice”), we are required to report to you if the statement regarding the system of internal financial control required under the Code of Practice as included in the Corporate Governance Statement in the Directors Report does not reflect the group’s compliance with paragraph 1.9(iv) of the Code of Practice or if it is not consistent with the information of which we are aware from our audit work on the financial statements. We have nothing to report in this respect.