EirGrid plc Annual Report 2020
EirGrid Group operates and develops the electricity system in Ireland and Northern Ireland. Our primary role is to operate, develop and enhance the all-island power system and the wholesale electricity market. We also develop and operate interconnections with neighbouring grids and enable third-party interconnectors.
We send power from where it is generated to where it is needed, at the most economic price possible. We also ensure that electricity is always available, when and where it’s needed, every second of every day – and for decades to come.
Because electricity can be generated without carbon emissions, it will play a crucial role in our response to climate change.
The growth in clean electricity from renewable sources will require a decade of change to the electricity system. It is our responsibility to define and deliver much of this transformation.
Our annual report covers the period from 1 October 2019 through to 30 September 2020. The second half of these twelve months was a time of immense challenge for the entire world, due to the COVID-19 pandemic.
This report outlines our efforts this year to secure the supply of electricity in the context of restrictions and lock-downs. And at the same time, we continued to develop our plans for a sustainable electricity future for Ireland and Northern Ireland.
Securing today, sustaining tomorrow.
I am very pleased to present the Annual Report for EirGrid Group for the financial year 2019/2020. This year the theme of the report is "Securing today, sustaining tomorrow", a theme chosen because we consider that it accurately reflects the year gone by, both across the island and within the EirGrid Group.
The year was in two distinctly different parts – the five months to the end of February, which were relatively normal, and the remaining period to the end of September which presented some unprecedented challenges for society and, indeed, for every organisation, including our own. These challenges posed by the global pandemic, while being global in nature, required local responses that tested the capability, resilience and nimbleness of most organisations.
Thankfully, as an organisation, EirGrid Group responded well to these challenges by building on the organisational preparedness, quickly re-configuring the work environment and drawing upon a sustained commitment from all staff. That commitment and response is much appreciated.
The past financial year was the first year of the new EirGrid Group Strategy (2020-2025) – a strategy aimed at de-carbonising the island’s electricity system, with a key target of delivering 70% renewable energy on the power system in Ireland by 2030. This target was informed by the Irish Government’s Climate Action Plan (2019) and reinforced in the Programme for Government (2020).
In Northern Ireland, we pledged to significantly increase the amount of renewable electricity we manage on the system, rising from the current world-leading 65% that can be handled on the all-island power system at any given time.
The Department for the Economy has also begun the process of developing a new energy strategy, with a goal of de-carbonising the Northern Ireland energy sector by 2050. Minister for the Economy, Diane Dodds MLA, signalled an interim target of at least 70% by 2030, which aligns with the target set for Ireland.
The COVID-19 pandemic created an unprecedented and challenging backdrop for the first year of Strategy 2020-2025, but this did not prevent the organisation from staying focused on the key goals to support the delivery of the strategy, while also learning lessons from such a challenging experience.
Climate change in the context of a pandemic
The crucial driving force behind the EirGrid Group Strategy (2020-2025) is addressing climate change and this is still, despite the pandemic, the most urgent existential global crisis facing humanity.
It is gratifying to see the continued strides made by EirGrid Group in the area of renewable electricity integration on the power system. Northern Ireland has already achieved its target of 40% renewable electricity by 2020 and Ireland is on track to achieve its 40% renewable electricity target by the end of 2020. Moreover, February 2020 was a record-breaking month for wind generation, reaching its highest level ever of 4,249 MW on 21 February 2020.
The threat posed by climate change is accepted (almost) universally and, notably, at EU level, where a twin-track approach to the economic response in the aftermath of the COVID-19 pandemic is aligned with the European Green Deal, which encompasses a significant commitment to addressing the challenges of climate change.
However, the transition to a low carbon society is hugely challenging. There are significant obstacles to be overcome – political, policy, economic, technical and scientific. But the greatest challenge will be the significant behavioural changes that will be required, particularly at local community and individual level.
There is a parallel to the challenges of addressing COVID-19. Despite the significant scientific challenges of developing new vaccines to address COVID-19, there was a huge level of co-operation between normally competing companies and research institutions and there was wide-scale global collaboration and sharing of information to tackle what was perceived as a common adversary.
But the public also had a key role to play in mitigating the effects of the pandemic. The decisions by individuals to limit contacts, to practice correct handwashing and to wear masks show how individual choices play a key role in determining the outcomes of societal challenges.
Tackling climate change will also require significant behavioural changes. Collaboration and sharing of accurate information is key, as are the actions taken by individuals and communities to embrace the challenge and accept the solutions – over a sustained period.
At best, this process can be facilitated by Government and others, including State companies, but local communities and the individuals within them will always have a critical role to play.
Working with communities
Reaching our renewable energy targets will be hugely challenging and a major part of the overall response to meeting our targets will require a significant increase (more than 33%) in the generation of electricity, much of this to cater for the large energy users and also the electrification of heating and transport. The electricity network will require large upgrading to accommodate additional renewable generation and a significant proportion of this new generating capacity will be required to come from the offshore and almost all from renewable energy sources.
There will also be a requirement for additional interconnection to other countries and, if the full capability of Ireland’s offshore is to be utilised, a new approach to the integration of offshore generation into the European grid will be required, with Ireland becoming an exporter of renewable electricity to Europe.
Therefore, we acknowledge and hugely appreciate the important role that communities play in facilitating new and upgraded grid infrastructure. As we work with local communities in providing the necessary electricity infrastructure, we would hope to contribute to creating suitable ecosystems that support the creation of new businesses and jobs that are built upon the transition to low carbon.
We recognise the opportunities we have had to work with local communities in 2020, in areas such as South Armagh, Lanesboro (Co Longford), Leixlip (Co Kildare) and North Kerry and we would like to extend our gratitude to these communities for facilitating the Group.
The European Union and the Government of Ireland have also identified the importance of a 'Just Transition’ and this will ensure that communities that may have been reliant upon fossil fuel industries will be assisted to transition to a low carbon future. We also see the ‘Just Transition’ as relevant to the communities that facilitate the transition to low carbon by supporting the erection of electricity infrastructure in their local communities, even though they may not see themselves as immediate beneficiaries of that infrastructure.
I would like to thank all the staff in EirGrid and SONI who have worked so diligently throughout the year to keep critical operations going and to seek to deliver on key milestones. I would also like to thank Chief Executive, Mark Foley, the Group’s Chief Officers and my fellow Board members for their strong leadership and support during this time.
I would especially like to thank the members of the cross-functional Crisis Management Team, which was established to ensure contingency plans were in place to cater for all potential outcomes of the pandemic.
I would also like to thank the Minister for the Environment, Climate and Communication, Eamon Ryan TD and his officials, who have given us unwavering support throughout the year. Similarly, I wish to thank Minister for the Economy, Diane Dodds MLA and Minister of Infrastructure, Minister Nichola Mallon MLA and their officials in Northern Ireland, who have been very supportive and have worked very well with the Group in one of the most challenging years in recent history.
Finally, I would like to thank the Commission for the Regulation of Utilities in Ireland and the Utility Regulator in Northern Ireland for working so constructively with the company.
The Challenges Ahead
EirGrid Group will continue to stay focused on its key goal of creating a cleaner power system that will help address the challenges of climate change, while also enabling our sustainable economic development and supporting local communities to prosper as low carbon communities.
I would like to conclude with a quote from President John F Kennedy that could be seen to reflect where we are now on the path towards trying to halt and reverse the damage of climate change. In many ways, the difficulties of putting the first person on the moon, while hugely challenging in its day, is dwarfed by the challenges of addressing climate change, as these challenges are not just technical, but also political, economic and behavioural and will require whole-scale change at a depth, scope and speed that is unprecedented.
"Frank O’Connor, the Irish writer, tells in one of his books how, as a boy, he and his friends would make their way across the countryside, and when they came to an orchard wall that seemed too high and too doubtful to try and too difficult to permit their voyage to continue, they took off their hats and tossed them over the wall – and then they had no choice but to follow them.
"This nation has tossed its cap over the wall of space, and we have no choice but to follow it. Whatever the difficulties, they will be overcome. Whatever the hazards, they must be guarded against…. we will climb this wall with safety and with speed – and we shall then explore the wonders on the other side." – John F Kennedy, President of the United States of America, 21 November 1963.
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 the Single Electricity Market (SEM). The East West Interconnector earns revenue from congestion income arising from price differentials between the SEM and Great Britain markets and also for the provision of system services.
Group revenue for the year to 30 September 2020 of €688.4m was lower (€59.4m / 7.9%) than the previous year.
The profit before tax for 2020 was €14.0m. This is down from €96.0m in 2019, mainly as a result of the occurrence of significant regulatory over recoveries in the previous year.
Excluding the impact of over and under recoveries on reported profit, management’s estimate of the underlying operating profit for 2020 was €18.3m (2019: €22.3m).
EirGrid paid a dividend of €4.0m in June 2020 in respect of 2018/19. A dividend of €4.0m in respect of 2019/20 is proposed to be paid in the second quarter of 2021.
EirGrid Group consists of several licenced activities. As the transmission system operator (TSO) our activities in Ireland and Northern Ireland are regulated by the Commission for Regulation of Utilities (CRU) and the Utility Regulator (UR) respectively. The Group also holds two licences as Interconnector Operator, one from the CRU and one from the Office of Gas and Electricity Markets (Ofgem) in the UK. In addition, EirGrid Group’s role includes acting as Single Electricity Market Operator (SEMO) for the SEM, which is regulated by the SEM Committee. This committee comprises the CRU, the UR, an independent member and a deputy independent member.
Key Financial Highlights €m
|Other Operating Costs||(137.7)|
|Profit Before Tax||14.0|
|Other Operating Costs||(139.2)|
|Profit Before Tax||96|
Finally, 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 a Group company called SEMOpx, which is a 75/25 joint venture between EirGrid plc and SONI Ltd.
The Group’s licenced activities are subject to multi-year price controls. These generally are for a five year period. The TSO price controls in Ireland and Northern Ireland for the five years to 2025 were finalised in December 2020.
In addition to the multi-year framework, in advance of each tariff year each licensee submits a forecast to the relevant regulatory authority. This covers customer demand, direct 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.
In any year, the revenues collected under these licences may vary from the levels that were previously agreed with the 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.
Therefore the financial results in any year can include regulatory over or under recoveries in the year in question or the correction of prior year over or under recoveries. Underlying profits are based on the elimination of such regulatory deviations.
In the year to September 2020 the profit before tax was €14.0m and the underlying profit was €18.3m. However, in the previous year direct costs, in particular the procurement of certain system services from generators, were significantly below the ex-ante (forecasted) regulatory allowance and this gave rise to the profit before tax of €96.0m compared to the underlying profit of €22.3m. The related over-recovery will be returned to customers through the reduction of tariffs in future years.
The Group continues to be in a sound financial position. While the COVID-19 pandemic has been challenging, the Group’s cashflows have proven to be resilient. A sharp focus has been maintained on the Group’s available cash resources and adequate working facilities have been put in place to protect the Group’s liquidity.
The Group’s largest borrowings relate to the East West Interconnector, have long repayment dates and are fully hedged against interest rate fluctuations. The priorities in the coming year will be to continue to manage the liquidity challenge and to start the process of raising the funding required to support the Celtic Interconnector project.
As the world moves away from fossil fuels, clean electricity will become the dominant energy source. Everyday habits that traditionally burned dirty fuels – from commuting to home heating – will switch to electric power. Combined with the projected growth in population and economies, this means more electricity will be used for more reasons than ever before.
Watch Dave talk about the challenges of the next decade
This means we have to prepare for three challenges. First, an unprecedented increase in the demand for electricity. Second, most electricity will come from renewable sources like wind and solar power. These forms of generation depend on the weather and are more technically challenging to manage. And finally, strong sources of renewable energy are typically located far away from urban centres that need the most power.
EirGrid and SONI operate the electricity transmission systems in Ireland and Northern Ireland respectively.
We have a responsibility to plan and develop these systems in response to government policy. In both jurisdictions, there is a policy to phase out the use of fossil fuels to generate electricity. The Irish Government’s policy is driven by the ten year targets in the Climate Action Plan, while Northern Ireland is working towards net zero by 2050.
This means we must ensure the whole island is ready for at least 70% of its electricity coming from renewable sources by 2030. This will require direct actions, but also a process of working with other stakeholders across the wider energy sector.
EirGrid Group is uniquely positioned for this role. Our expertise and insights allow us to offer trusted, independent advice to policy makers at a local, national and European level. The policy moves in both the EU and UK towards a "Green New Deal" – to revive economies after the pandemic – shows how crucial our role is. A reliable, safe and secure electricity supply has always been the foundation of a strong economy. And now, the evolution of our sector has the potential to transform both economies on the island of Ireland.
Activities in Ireland
In 2019, the Government of Ireland published a Climate Action Plan with the ambition of significantly reducing CO2 emissions in the next decade. This plan aims to meet EU and international targets and to support the policies that underpin these targets. It sets out the reductions needed by sector – and electricity has been asked to achieve the greatest reduction.
This places a clear responsibility on EirGrid. We must enable and deliver the greatest change to Ireland’s power system since the rural electrification project that began in the 1940s and spanned over two decades.
The Programme for Government agreed in June 2020 set even higher ambitions. This was followed by the Climate Action and Low Carbon Development (Amendment) Bill in October 2020. This bill commits Ireland, in law, to move to a carbon neutral economy by 2050. It also requires the government to revise and update the Climate Action Plan on an annual basis. EirGrid’s 2020-25 Strategy aligns with the Climate Action Plan – we are key contributors to 14 out of the 21 actions for the electricity sector in this plan.
In the year covered by this Annual Report, EirGrid completed the following actions under the Climate Action Plan. They help move Ireland closer to 70% by 2030.
In partnership with ESB Networks, we published new rules on connecting new renewable generation. The Climate Action Plan projects that Ireland will need an additional 10,000 MW of renewable generation to achieve 2030 targets. We subsequently accepted over 150 applications for connection and continue to process new applications.
We published a System Needs Assessment report. This identified where the transmission network in Ireland will need development. The assessment of these needs is based on the scenarios we published in Tomorrow’s Energy Scenarios 2019.
We published funding proposals on network development, operational and service delivery plans for 2021-2025. EirGrid must seek funding approval from the Commission for Regulation of Utilities every five years. As part of our proposals, we outlined our plans to operate and develop the grid. These plans are largely driven by the needs of the 70% target.
We developed and published an options paper for Offshore Grid Models. Offshore wind is crucial to 2030 goals.
We successfully delivered the auction for the first Renewable Energy Support Scheme (RESS). This offers Government-funded incentives for smaller-scale renewable electricity generation, including local community projects. EirGrid has been tasked with implementing and operating the auction processes for RESS.
Throughout the year
We published the Transmission Development Plan 2019-28, the All-Island Generation Capacity Statement 2020-29 and the All-Island Transmission Forecast Statement 2019. These reports outline the work required to meet increased capacity requirements and to make the grid more resilient.
Activities in Northern Ireland
In Northern Ireland, the Department for the Economy (DfE) has begun the process of developing a new energy strategy. Their goal is to de-carbonise the Northern Ireland energy sector by 2050.
Whilst work is ongoing to set an interim target, the Economy Minister Diane Dodds MLA has stated her belief that this should not be below 70% by 2030. SONI is using its expertise to support the DfE in this process and we are working closely with NIE Networks as we do so. During the past year, SONI worked on the following tasks to support these aims.
We collaborated with NIE Networks to align our respective energy modelling scenarios. This will provide the Department of Economy with a set of agreed scenarios as they develop Northern Ireland’s energy strategy.
Our work together involved projecting agreed growth rates for the use of low carbon technologies – such as solar energy, electric vehicles and heat pumps. These shared projections then allow us to underpin our respective processes.
As a result, we agreed on a range of common scenarios that were then used in our 2020 report on Tomorrows Energy Scenarios for Northern Ireland. NIE Networks will then use these scenarios in their next price control process.
SONI participated in two of the five thematic working groups convened by the Department for Energy to support the development of their energy strategy. As members of the power and consumer working groups, SONI provided information and evidence to the DfE. This included information on how the different scenarios could affect the electricity sector. We informed the DfE that there will need to be development of transmission grid infrastructure to meet a 70% goal.
As part of its work on the energy strategy, DfE is developing whole system energy modelling. In partnership with NIE Networks, SONI helped DfE to develop an Energy Transition Model for Northern Ireland. The model is specific to Northern Ireland and takes account of its unique characteristics. Ultimately this model will provide insights into the different choices for the future of the energy sector.
Every five years, SONI seeks funding approval from the Utility Regulator in Northern Ireland. In October 2019 we submitted our operational and network development plans for 2021-25.
This form of generation will play a significant role in helping to reach the goal of 70% renewable electricity by 2030. These forms of renewable generation have several advantages compared to onshore wind. First, their location allows them to benefit from more consistent wind speeds. Secondly, offshore locations can have larger numbers of turbines with higher hub heights and longer blades – and so generate more power.
The Irish Government’s Climate Action Plan (published in 2019) has an ambition of achieving at least 3.5GW of offshore wind by 2030. The Programme for Government published in July increased this target to 5GW. It also outlines a clear ambition for at least a further 30GW of offshore floating wind off the Atlantic Coast from 2030 to 2050.
Watch Louise talk about the importance of offshore wind
The Irish Government plans to introduce a policy framework to deliver these targets. In March 2019, EirGrid published a paper on Offshore Grid Delivery Model Options. We commissioned a consultancy firm to review international models and propose options. This report was then put out to consultation by the Department of Environment, Climate and Communications. This consultation process will then help inform their policy framework.
In the meantime, EirGrid continues to work with offshore developers that request connection to the grid. Following our 2019 East Coast Study, we are now assessing the grid reinforcements needed for these connections. We expect to complete this work in early 2021.
At a European level, EirGrid supports the EU’s ambition to be the first climate-neutral continent by 2050. We took part in the consultation on the European Green Deal and on the EU Offshore Renewable Energy Strategy.
In Northern Ireland, Tomorrow’s Energy Scenarios outlined three credible projections showing growth of offshore wind.
These range from a current base of 0 MW to a range of 350 MW to 500 MW by 2030. Our most progressive scenario anticipates total decarbonisation in twenty years. Called Accelerated Ambition, this scenario also projects growth of tidal energy up to 100 MW by 2030.
EirGrid and SONI will continue to work closely with key stakeholders to support this emerging industry. Although offshore wind plays a minor role now, it is a critical enabler for a cleaner energy future.
Shaping our electricity future
Achieving 70% by 2030 will need a scale and pace of change to the electricity system that is without precedent. EirGrid Group has been working since 2019 on developing our approaches to this challenge.
We must identify and resolve the technical, operational, infrastructural, regulatory and market challenges. These transformations will need to happen while we continue to sustain a reliable and efficient power system. Finding the best route to 2030 is driven by the need to protect the security of your electricity supply while still pursuing a cleaner energy future.
Our work to investigate and resolve these challenges is careful, detailed and ambitious. In the year covered by this report, we started to consider what paths are available for us to reach 2030 and 2050 goals.
The key considerations are the transmission network, interconnection, the operation of the system and the running of the wholesale market. All will need considerable changes. And these changes need the consent of government, regulators and the public – in Ireland and Northern Ireland.
Developing the options
Throughout this year, our teams developed approaches to running the power system and electricity market in 2030. This was done on an integrated, all-island basis and used new analyses and existing insights. We also sought expertise and insights from external bodies, as well as from within EirGrid Group.
We then started to define a selection of possible alternative solutions to minimise these impacts. The final approach, determined after consultation, will involve a combination of actions across grid, system and market. We are not going to find a solution in a single, binary choice. A successful route to 2030 will involve a range of new approaches, rather than one overarching change.
The lessons of lock-down
In 2020, the COVID-19 pandemic radically changed lives across the globe in a very short period of time. Governments around the world imposed extensive quarantine measures throughout the year. This led to the immediate and widespread closure of most workplaces and households spending most of their time at home. This alteration in behaviour created a significant shift in electricity consumption patterns.
This was most notable in the first lock-down in March 2020, which was more extensive. In Ireland, this led to a notable drop of approximately 10% in electricity consumption. In the UK, including Northern Ireland, the reduction was 20%.
There was also a notable change in when power was used. For example, the typical peak in demand before the morning commute was now dispersed throughout the morning.
These changes are a useful preview of the challenges of a power system dominated by renewable generation. As demand for electricity dropped in March 2020, we had a system that was sometimes dominated by renewably generated power.
The sudden reduction in the demand for electricity and the change in the profile of use was a challenge to the Control Centres in EirGrid and SONI. Our Control Centre operators had to quickly adapt to the evolving demand patterns – when there was too much or too little power on the system.
At times this needed short-notice transfers of power to and from Great Britain using the Moyle and East West Interconnectors. These transfers were essential to ensure the integrity of the electricity system. This kind of fast-response co-operation had long been flagged as a vital tool to maintain the stability of a renewables-led system. They show the importance of interconnection as we move towards a system where most power comes from renewables.
One of the other issues arising from the drop in the demand for electricity was the challenge of maintaining system voltage. With an unprecedented decrease in power use, we had to ensure voltage levels remained stable – a challenge in this context.
Left unchecked, this would result in the electricity system becoming unstable. In turn, this could damage and disconnect vital grid infrastructure, which could ultimately cause power loss.
In response, one of the actions we took was to redirect power around sections of the electricity grid. This gave us the ability to successfully manage voltage levels and so prevent any risk to the system.
This issue highlights the importance of voltage controls. The grid of 2030 will need generators, users and technology partners to help with voltage control. This is why greater use of renewables requires grid reinforcement, to make it more flexible, resilient and responsive.
Another key challenge this year that offers learnings for 2030 is that of curtailment. This is when we need to ask wind generators to stop their turbines due to excess power on the system. 2020 saw higher curtailment levels compared to previous years, as we simply could not have forecast the drop in demand due to the pandemic. By 2030 we need to operate the network and market with high levels of renewable generation yet with minimal unplanned curtailment.
Finally, the key learning of 2020 was to highlight the skill and adaptability of the people in Dublin and Belfast who run our critical operations. This reassures us we that can meet the challenge of 2030. It also demonstrates the capability and competence of our workforce.
While EirGrid Group now has a long-term goal of enabling renewable generation, our core purpose is always to sustain a secure supply of electricity. Maintaining this balance will require continued hard work and innovation on our part.
This is vital for economic and societal stability throughout Ireland and Northern Ireland. We meet this promise through our work to operate, develop and enhance the all-island grid and market. This section of our annual report showcases the work we did this year on that topic. We start with an overview of progress on key projects.
In September 2020, the Northern Ireland Minister for Infrastructure, Nichola Mallon MLA, approved planning permission for this project in Northern Ireland. (It was granted planning permission in Ireland in December 2016.)
This project is critical to improving the security of electricity supply across the island of Ireland. Due to its economic, environmental and societal benefits, this project is strongly backed by governments in both jurisdictions. In particular, it resolves an historical bottleneck on the all-island grid that is vital if we are to carry more renewables in future. It will allow for the flow of 900 MW of renewable electricity across the border, in both directions. This is enough to power 600,000 homes using clean electricity from renewable sources.
This project will lead to a high-capacity connection between substations in Kildare and Meath. When complete, this upgrade will create a new link between two key lines that transfer power from the west to the east of the country.
This will make these transfers more effective and secure and will also provide new options to distribute power in the project region. This project is key to move power from likely future sources of renewable energy on the west coast to areas of high energy use on the east coast.
In 2020, we started to engage with the public in the project area on the overall need for the work and on the broad range of solutions. This included both overhead and underground options. Shortly after the end of this financial year we held a consultation on a short-list of five options.
In September 2020 EirGrid restarted public consultation for the North Connacht 110 kV Project. This followed work over the summer to communicate to the public in North Connacht on the need for the project and on how we planned to meet those needs. The project will lead to a new overhead line or underground cable that runs from Ballina in Mayo to Ballaghaderreen in Roscommon. This will underpin investment in the region and allow for more growth of renewable energy from this area.
Drumkee and Mullavilly Battery Storage
These two 50MW battery storage projects will be the first large-scale storage schemes connected to the grid on the island of Ireland. Their principal function will be system services – such as a offering a fast solution to stabilise frequency (see page 25). This will help enable an even larger integration of renewable generation on the grid.
Connecting battery storage requires consideration and changes throughout the electricity system. This year, despite the interruptions due to COVID-19, the delivery schedule remained on track. These battery storage installations were both energised at the end of calendar year 2020.
Cross Shannon Cable
This is a submarine cable that will link the substation at Kilpaddoge in North Kerry to the Moneypoint generating station in Clare. In the south and west of Ireland there are large amounts of existing and projected sources of renewable generation.
When this project is complete, this cable will help flows of power from these sources to areas of high consumption on the east coast. In July, we submitted an application for planning permission. This covers the cables and related infrastructure at the existing substations. Subject to approval, we plan to construct this project in 2022 and make it operational in 2023.
Research and Development on Composite Poles
This year, EirGrid studied alternative supports to carry lines on the electricity grid in Ireland. Steel lattice pylons are often resisted because of visual impact, but wood poles are limited in the capacity they can reliably carry.
Finding a more visually acceptable structure would increase the options open to us when upgrading the grid or developing a new line. Composite poles have great potential in this regard. Made from composite materials like resin and fibreglass, they have been successfully adopted in other transmission and distribution systems.
EirGrid is currently investigating composite poles as a solution to uprate existing 110 kV lines to carry 220 kV. The benefits of this solution include an increase of up to four times as much power using an existing line route. This would be achieved with minimal visual impact, as composite poles are almost indistinguishable from wood poles. Composite poles also have ultraviolet (UV) protection – which means they don’t need preservative treatments or repainting. This offers significant operational savings and environmental benefits in their 80 years of predicted use.
In 2021 we will complete our studies and then expect to approve this technology for future use. We can then review the network to identify specific lines where we can implement upgrades to 220 kV using composite poles.
Planning for the future
Planning for and managing growing demand for electricity has always been a part of the everyday challenges in EirGrid Group. According to our recent Generation Capacity Statement 2020-29, demand in Ireland is expected to grow significantly in the next decade. Our forecasts predict a rise of between 19% in the low demand scenario, to 50% in the high scenario. This is due to increased economic growth and the expansion of many large energy users, including data centres. Even in our median demand scenario, the demand for power from large energy users could make up a quarter of all demand in Ireland by 2029. In contrast, demand in Northern Ireland has been relatively stable and this is expected to remain stable in the next decade.
The COVID-19 pandemic has had a significant real-time impact on electricity demand. This occurred across the all-island electricity system and all over the world. While there are signs that this may be short-term, at the time of writing (January 2021) it was too soon to assess the length and duration of COVID-19 impacts. Our initial analysis shows around an average 4% drop across Ireland and Northern Ireland for the year as a whole. This is a strong recovery from the drop in demand seen in March 2020.
In Ireland, EirGrid has incorporated the Governments targets from the Climate Action Plan 2019 to shape our path to 2030. This plan offers guidance for anticipated levels of electric vehicles and heat pumps by 2030. We are factoring in these targets and will update them as more incentives are announced and public uptake is assessed.
Recent analysis shows that, based on our median forecast, Ireland may not have enough electricity to meet demand from 2026 onwards. This is based on two assumptions. First, that the coal-fired Moneypoint power station is expected to close – it has a generation capacity of 915 MW. Secondly, that long term demand continues to rise.
In contrast, Northern Ireland has a forecasted surplus of electricity in all scenarios in 2026. However, high demand forecasts show a potential lack of capacity in both jurisdictions by 2028. These projections also highlight the continuing and growing need to deliver the new North South Interconnector. Without this project, there remains a significant bottleneck that impedes our ability to balance supply and demand across the two jurisdictions.
These projected shortfalls show why we always need to plan ahead. For this reason, in collaboration with regulators in both jurisdictions, we hold auctions for the all-island Single Electricity Market every year. These allow us to seek bids to ensure the system has adequate capacity of electricity in the near to medium term. We based our forecast of the demand for electricity on the five year Generation Capacity Statements that we update every year. This forecast is then used to calculate how much capacity we need to seek bids for in our Capacity Market auctions.
Since 2017, we have run several auctions for best-priced capacity in the year ahead (T-1 auctions), for two years ahead (T-2 auction) and four years ahead (T-4 auctions). The most recent auction was a T-4 auction aimed at securing competitive bids to deliver electricity from October 2023 to September 2024. This auction took place in April 2020 and secured 7.3 GW of future electricity at competitive prices for Ireland and Northern Ireland.
Auction for Renewable Electricity Support Scheme (RESS)
The Renewable Electricity Support Scheme is a pivotal component of the Irish Government’s Climate Action Plan (2019). It offers Government-funded incentives for smaller-scale renewable electricity generation. This includes projects organised by local communities. EirGrid was asked to run the auctions where participants bid to obtain supported pricing for their electricity. Successful bidders can then develop their projects, based on the security of a guaranteed price for their power. The completion of this auction was a notable first step in delivering on the potential of RESS.
On 28 July 2020, EirGrid operated the first Renewable Electricity Support Scheme auction (RESS 1). This was the culmination of work led by the Department of Environment, Climate and Communications and the Commission for Regulation of Utilities.
Watch Edel talk about the first RESS auction
RESS 1 used a competitive auction process to provide support to a set of renewable generators at the best price to the end-consumer. Projects successful in the RESS 1 Auction receive support over a period of 15 years in the form of a guaranteed price.
If the wholesale price for electricity is below the guaranteed price, supported projects are paid the difference. But if the wholesale price is above the guaranteed price, supported projects return the difference. This mechanism means better value for the end-users of electricity, as it caps the government subsidy.
In spite of the challenges from COVID-19, the RESS 1 qualification window opened for an eight-week period over March and April 2020. A total of 114 projects applied and 109 projects were qualified to participate in the auction. This included eight community projects. A community project is one with at least 51% ownership by the community and where at least 51% of the profits from the project are returned to the community.
The RESS 1 Auction submission window opened for a week at the end of July. A total of 108 projects submitted an Offer Price for their project via the online portal before the deadline. The auction took place on 28 July. A total of 82 out of 108 projects were successful, including seven of the eight community projects. The process secured 2237 GWh of electricity at an average price of 74.08 €/MWh – which represents significant savings on previous schemes.
The final auction results were approved by the Minister for Environment, Climate and Communications on 10 September 2020.
Community - at the heart of RESS
RESS 1 included the use of a preference category for community projects, worth approximately 1% of the auction volume. Seven out of eight community projects that participated in this auction were successful. This should encourage other communities to develop their own renewable energy projects and sell the electricity back to the grid.
The 2020 Programme for Government recognises the importance of community involvement in energy projects. Apart from the community category, RESS also required commercial bidders to offer community benefit funds. These funds will deliver approximately €4.5 million to local communities every year.
These funds will be targeted at sustainable projects in communities near the successful RESS 1 projects. The community focus of RESS will be expanded in future auctions. Communities and individuals will have the opportunity to invest in commercial projects and there will be increased allocations for community-owned projects.
Managing Supply Alerts
|Status of Electricity System||Definition|
|When there is an elevated risk that there may not be enough electricity to meet the demand on the system. It can also describe the risk of breaking the operational security limits on key measures like frequency or voltage.|
|When there is a high risk of failure to meet the demand for electricity on the system, or of breaking operational security limits.|
|When more than 50% of the electricity system has lost power, or when the system has been split into sections, some of which are without power.|
Watch Emma talk about how we manage system alerts
One of the key tasks we undertake in operating the power system is to maintain a secure supply. This means ensuring there is enough electricity being generated to meet the demand for power. The total electricity generated must also include a security margin. This allows us to manage uncertainties. These include the variable output of wind generation, or the risk of conventional generators shutting down due to faults.
On five occasions during the year, we experienced a reduction in the margin between supply and demand below normal levels. On these occasions we issued an alert to generation and supply companies. These alerts highlight an increased potential risk of failure to meet the daily peak demand for electricity. Three of these alert events occurred in Northern Ireland. They were on 6 November 2019 and on 21 January and 11 March 2020. Two occurred in Ireland – on 5 August and 15 September 2020.
The circumstances behind each of these alerts are unique. However, there are several common factors that generally contribute to alerts. These are:
Alerts tend to be active for several hours over the peak demand period of the day, generally between 5 and 7pm. This is typically when generating sources reach their maximum production level.
We resolve alerts by operating the power system in a more defensive manner. This affects generation, demand side reductions and interconnection. At these times, we use all available generation. We also call on demand side partners – large power users who can lower their demand on request – to reduce their consumption of electricity. Finally, we can secure emergency power using the East West and Moyle Interconnectors with Great Britain.
However, an additional fault during an alert could risk the supply needed to meet peak electricity demand. In a worst-case scenario, this would lead to the disconnection of electricity consumers. To date, all alerts have been successfully managed with no interruption to electricity consumers. We continue to monitor margins, pro-actively manage risk periods and prepare for alerts. This will minimise the risk of disruption, as we are aware of how crucial a secure supply electricity is for the economy and for life.
Maintaining Stability during Lock-down
As noted in the previous section, COVID-19 lock-downs gave us unique learning opportunities for a system led by renewables. But these learnings were hard-earned in response to considerable and totally unprecedented challenges.
The most fundamental challenge was to protect the operational security of our grid Control Centres in Dublin and Belfast. This was our first priority and ensured we could sustain uninterrupted service during a global pandemic. We started to take first precautionary measures at the start of the calendar year. This was when China first reported serious outbreaks and before restrictions were announced locally.
First, we implemented social distancing, cleaning and contact tracing protocols for Control Centres. We also activated the use of our standby Control Centres in each jurisdiction. This allowed us to split Control Centre staff into separate "bubbles". It also gave us the option to have a back-up if either of the primary Control Centres in Dublin and Belfast became unavailable due to a suspected or confirmed outbreak.
Throughout the pandemic, we maintained contact with generators to assess their risks. Where system stability allowed, we could then respond with flexibility.
For instance, some generators restricted working arrangements at their facilities due to COVID-19. To mitigate this, we committed to giving extra notice when asking these generators to increase or decrease supply of electricity.
Planned outages for generator maintenance play an important role in ensuring system stability. The initial lock-down came into place at the start of the traditional outage window. Most generators had to cancel this maintenance due to COVID-19 restrictions.
We then had to facilitate and manage requests for postponed maintenance over the summer. This was to ensure system stability over the more demanding winter months. We managed a similar process to reschedule planned testing of generators.
Similarly, some key transmission lines were due to be taken offline in 2020 for planned maintenance. During the initial lock-down, a large number of maintenance and development works had to be postponed. From May, as grid asset owners developed pandemic-safe work practices in line with Government and industry guidelines, work was re-planned and recommenced.
We then worked to strike a balance between essential works that were priority for system stability and those that we could defer. This was a highly collaborative and co-operative process with ESB Networks and NIE Networks. We wish to recognise both organisations for their flexibility and hard work during this challenging period.
The other consequence of the pandemic was shortages and delays of both personnel and materials on key transmission works. Most notably, work on the Arklow – Carrickmines 220 kV line went on a forced outage for these reasons in May. The overseas personnel required to complete these repair works could not attend on-site until October. This had a significant impact on generation constraints in the south east and south during that period.
Finally, throughout the pandemic, we maintained close lines of communication with key stakeholders. This included governments, regulators and distribution system operators in both jurisdictions. We also maintained regular contact to share insights with Gas Networks Ireland and Mutual Energy in Northern Ireland.
Achieving 70% by 2030 will require an unprecedented transformation of the entire electricity sector. This places the need for action far beyond the roles of the companies in the EirGrid Group. However, as the operator of the transmission system and electricity market, we have a central role in the overall power system that gives us a unique responsibility.
In particular, we must identify and encourage cooperation, collaboration and innovation with key partners. This process will encourage and enable the critical changes that are needed over the next decade. This section talks about some of these partnerships and the progress made this year.
ESB Networks and NIE Networks
Getting electricity from where it is generated to where it is used is a partnership in itself. On any electricity system, the high capacity grid sends power to a distribution network that supplies homes and businesses.
On the island of Ireland, ESB Networks operates the distribution system in Ireland, while NIE Networks does so in Northern Ireland. EirGrid became independent from ESB Networks in 2006. This was in response to EU initiatives to increase competition. In 2009, EirGrid acquired SONI, the transmission system operator for Northern Ireland. This followed the establishment of the all-island single electricity market in 2007. In 2010, NIE Networks was acquired by ESB Group.
While EirGrid and SONI plan for the future of the electricity grid, it is ESB Networks and NIE networks that build and own the assets on this grid. This means we must work very closely with both ESB Networks and NIE Networks. They are our core partners to ensure we operate the all-island transmission system in a safe, secure and reliable manner.
This year we continued to work with these partners to reach an understanding of the shared challenge to achieve 2030 goals.
Watch Paul and Declan talk about the partnership between EirGrid and ESB Networks
|Generation companies create electricity and compete to supply it at the best price.||Eirgrid and SONI ensure there is enough electricity, then safely deliver this directly to large energy users and all around the grid.||ESB and NIE Networks take electricity from the grid and send it to everyone who needs it.||Consumers choose an electricity supplier, confident that they'll have a reliable and secure supply - now and in the future.|
We established new joint working groups to start progressing a common roadmap. The roll-out of this roadmap will see the implementation of several major and transformative initiatives. 2020 also saw the successful implementation of a new standard on the electricity system. Occasionally there will be an imbalance between supply and demand. This can happen, for example, when a generator disconnects and its power is lost.
In this scenario, the supply from the system will be temporarily below the demand and so the system frequency of 50 Hz will start to fall. Maintaining a constant frequency is important for anything that runs on electricity – see the side bar to learn more. EirGrid and SONI are responsible for restoring the balance – and getting back to 50 Hz – in the moments after it drops. The rate at which frequency falls is called the rate of change of frequency (RoCoF).
During 2020 we started a trial with all industry participants, including ESB Networks and NIE Networks. This led to an agreement on doubling the safe limit for changes in frequency – from 0.5Hz to 1Hz per second. This will help integrate greater levels of renewables.
Partnership with ESB Networks
EirGrid and ESB Networks are regulated monopolies. This means we both need to secure funding from the regulator for significant spending.
In 2020 we collaborated on an extensive joint submission to the Commission for Regulation of Utilities for 2021 to 2025. This will see us jointly invest €1bn in the power system over the next 5 years. These investments will be key to achieving 70% clean electricity by 2030.
This funding will help us work together to adopt new technologies and scale the use of existing technologies. This collaboration is already showing promise on current needs, such as the Kildare-Meath project. This project was put out to public consultation in 2020 and offered five possible options.
What is frequency and why is it important? European electricity systems operate at a frequency of 50Hz. This is because legacy power stations burn fossil fuels to spin generation turbines at 3,000 revolutions per minute – or 50 times per second. If a generator unexpectedly goes offline, the system frequency will momentarily dip below 50Hz. Other generators will then supply extra power, known as "operating reserve", to help restore the frequency to 50Hz. But if the frequency drop is too large, other generators may disconnect to protect their own equipment – which could lead to a black-out.
Two of these options are technically innovative and have never been used in Ireland before. One increases the capacity of existing infrastructure by using new pylon technology to increase the voltage carried on existing lines.
The other uses a 400 kV underground cable running for approximately 50km. If progressed, this will be the longest such cable in Ireland. However, it should be noted that this use of a high-capacity, long-distance underground AC cable is only possible because the local grid is already relatively strong and well connected.
In 2020 we also increased the number of projects developed jointly with ESB Networks by 30%. One example was our work together to successfully negotiate with landowners on a project in Leixlip. This work was required to deliver a new connection to the grid for a large high-tech manufacturing facility. We secured landowner and planning consent thanks to successful community engagement from EirGrid and ESB Networks. Construction is now well advanced and will deliver the 220kV substation and associated connections on time.
Two of these options are technically innovative and have never been used in Ireland before. One increases the capacity of existing infrastructure by using new pylon technology to increase the voltage carried on existing lines.
The other uses a 400 kV underground cable running for approximately 50km. If progressed, this will be the longest such cable in Ireland. However, it should be noted that this use of a high-capacity, long-distance underground AC cable is only possible because the local grid is already relatively strong and well connected.
In 2020 we also increased the number of projects developed jointly with ESB Networks by 30%. One example was our work together to successfully negotiate with landowners on a project in Leixlip. This work was required to deliver a new connection to the grid for a large high-tech manufacturing facility. We secured landowner and planning consent thanks to successful community engagement from EirGrid and ESB Networks. Construction is now well advanced and will deliver the 220kV substation and associated connections on time.
Partnership with NIE Networks
The SONI and NIE Networks relationship is governed by Transmission Interface Arrangements (TIA). This year, we worked together to review and update these arrangements to improve services for customers and consumers. In particular, we improved the clarity and transparency for both companies’ pre-construction roles. This culminated in a consultation process that took place in summer 2020.
Senior Lead Engineer, Eirgrid
Why can't we put everything underground?
What works well for one project may not be a viable option for another: there is no "one size fits all" answer when it comes to overhead vs underground. We always look for solutions that are best for the area and that secure Ireland’s grid for the future.
This year, SONI also continued to work with NIE Networks to progress elements of the North South Interconnector. This took place while awaiting the planning decision of the Infrastructure Minister, Nichola Mallon MLA, that came at the end of the year.
The lack of this interconnector is limiting the efficiency of the wholesale energy market and the electricity system. Its completion is critical to the delivery of any increased renewable electricity ambitions. As a result, SONI and NIE Networks worked together closely to make progress wherever possible.
The role of NIE Networks is also evolving. This year, we established a working group to focus on their role as distribution system operator and on how we can work better together to benefit Northern Ireland.
SONI is also working closely with NIE Networks to provide input to the Department for the Economy (DfE) as part of their energy strategy development. A joint working group provided analysis and feedback to the DfE in an aligned and consistent manner. This recognises that the future delivery of policy will lead to even greater collaboration between SONI and NIE Networks.
Watch Jason talk about the challenges of undergrounding the electricity grid
The Celtic Interconnector
This project will create a direct, high-capacity electrical link between Ireland and France that will allow a two-way flow of power. It is being developed jointly by EirGrid and its French counterpart, Réseau de Transport d’Électricité (RTÉ.) The Celtic Interconnector responds to the needs of the energy transition in response to climate change. It is an EU "Project of Common Interest" and has strong support from French and Irish governments and from the European Commission.
When completed, this project will be a key enabler for greater levels of renewably generated electricity. When Ireland has excess power from renewable sources, we will be able to export this surplus to the integrated European grid. And if we have a deficit of power, we can then import power from Europe. This is key for sustaining security of supply on a system dominated by renewable electricity.
Just as important, the European grid will gain access to Ireland’s enormous potential for renewables. Also, the integration of our grid with Europe will increase competition on the wholesale market. This should lead to lower prices for consumers of electricity. Finally, the project also includes a fibre-optic link that will increase broadband connectivity between Ireland and Europe.
This year, the project team at EirGrid and RTÉ made further progress on this vital project. In particular, they progressed the technical specifications for the connection. This included agreeing the specific technology to be used in the undersea cable. Joint committees also agreed developments on topics such as procurement, governance and finance.
As a long-distance, high-capacity electricity cable, this project will need to convert power from AC to DC and back again at either end. (See the "Why can’t we put everything underground?" video on page 26 to learn why this is necessary.)
Switching between AC and DC requires substantial converter stations. At the Irish end of the cable, EirGrid continued with our engagement process to agree the location for our converter station.
We consulted with communities in Co Cork on the specific landfall site and on the route the inland cable will take. Our engagement process also covered discussions on how the project could benefit the local area. This process continued without delay or interruption, despite the unexpected challenges of COVID-19.
The Celtic Interconnector is due to enter the construction phase in 2022 and is expected to be complete in 2026. It will be approximately 575 km long and will have a capacity of 700 MW – enough to power 450,000 homes. It has a projected cost of approximately €1bn and is part-funded by the EU.
Our customers as partners
EirGrid and SONI customers are those directly connected to the transmission system. Some customers generate electricity from conventional or renewable sources. Other customers have a high demand for electricity, which only our grid can provide. Some of these are demand-side units that agree to reduce power when asked. Others provide the services necessary for operating the transmission system.
Finally, interconnector customers provide access to neighbouring electricity systems. The insights and experience these organisations bring is important to us and we need their support to achieve 2030 goals. When we work together with stakeholders like our customers we can make better decisions for the electricity system. That’s why one of the foundations of our strategy is to build stronger partnerships.
Just as with the public, it is important that customers affected by our decisions are given the chance to have their say and to input into our decision-making process. They can then understand how their contributions have been considered and contributed to demonstrably better outcomes. This year marked the start of a renewed focus on engagement activities with our customers.
Our customer partnership processes are focused on quality engagement. This includes customer clinics, account management, conferences, forums and webinars on specific topics.
We also ensure that our website contains easily accessible content that meets customers’ needs. This includes date lists of consultations, publications, forums and grid development project consultations.
From the start of the COVID-19 pandemic, we acted quickly to continue engagement through the channels that were still available online. We also worked with customers to move meetings, forums and working groups online in place of in-person contacts. This allowed us to continue to engage meaningfully.
We used these channels to provide updated information on our risk mitigation steps. We also used them to discuss the impacts due to government restrictions or in response to customer circumstances.
Using insights received from our customers, we regularly review and aim to improve our partnerships. As this progresses through the lifetime of each customer’s connection, we can then work together to achieve 70% by 2030.
FlexTech – Partnerships to integrate renewables
The Flexible Technology Integration Initiative, otherwise known as FlexTech, is an all-island initiative to support greater use of renewables.
Conventional generators deliver power at a constant voltage and frequency, which is in sync with the grid itself. Renewable electricity is more challenging, because the amount of power is variable, as is its voltage and frequency. This makes renewable energy much more complex to integrate on an electricity system.
At EirGrid Group we recognise that enhanced engagement across the sector is essential to help make this happen. It provides a way for system operators, regulatory bodies and industry to find solutions together.
FlexTech is run in collaboration with ESB Networks and NIE Networks. Our shared aim is to foster greater cooperation and collaboration across the sector to solve this common challenge.
This year, we established a working group to look into how hybrid technologies could be implemented. This term refers to a system-wide view of renewables, storage and control changes for more flexible grid operations. This gives system operators the chance to optimise existing assets yet still diversify how power is generated. Most importantly, the hybrid approach has the potential to improve security of supply as use of renewables increases.
Leading an unprecedented change in the electricity system could be seen as a mainly technical or engineering problem. But the scale and pace of this challenge needs collective support from a wide range of stakeholders. When most electricity is renewable, the grid will need to carry more power, over longer distances and from variable sources.
Watch Daniel talk about engaging during a pandemic
This is both a key solution for climate change, but also a challenge to deliver. It will require a decade of work to make grid infrastructure more resilient and flexible. As a result, more communities and individuals will be asked to accept new or upgraded infrastructure.
This process of transformation offers the chance to collaborate with communities on a common journey towards sustainability and a low-carbon electricity system.
We need to prioritise and resource how we listen, inform and persuade. This will help us achieve support for our projects – and so deliver the required infrastructure – with fewer delays. This is essential to address the challenge of climate change.
For this reason, both EirGrid and SONI’s five-year strategy recognised engagement as a key enabler. This section of our Annual Report explains what we did in financial year 2020 to engage more effectively.
Developing a better way to engage with the public
We have been tasked with preparing for 70% of electricity coming from renewable sources by 2030. For this to happen, EirGrid and SONI will need to make an revolutionary shift in how we engage with the public.
More than ever before, we need the support of individual landowners, their neighbours and their wider communities. We must acknowledge the cooperation we seek from individuals and communities for the benefit of wider society. If we don’t engage successfully with those affected by grid development plans, we won’t achieve climate action goals.
In recent years, we’ve seen key benefits if we prioritise social acceptance when creating or assessing projects. Faster project time-lines and fewer disruptive actions have often compensated for higher project costs. This has resulted in work this year to start creating a new approach to engaging with communities on our grid development projects.
In early 2020 EirGrid established a programme delivery team to achieve this purpose. This team then started a detailed process of investigation and recommendation. They outlined objectives, assessed practices, gathered learnings and defined a path to new standards.
This process was informed by a comprehensive analysis of independent reviews on this topic. The research also considered insights from workshops held with internal and external stakeholders. Finally, the team evaluated local case studies and a range of international, European and UK best practice reviews.
This process allowed us to consider specific lessons learnt from our own projects and from similar work across the energy sector.
Our new engagement strategy will be developed to work across the EirGrid Group. SONI will then localise this approach to suit their specific regulatory and social context.
With these changes, we are endeavouring to make community engagement and communication a central part of our core competence. This will compliment and enable our well-established expertise in electrical engineering. It will be a significant development for EirGrid Group and shows our commitment to achieving renewable goals in a cohesive way.
Engagement with elected representatives and government
EirGrid and SONI are regulated monopoly utilities. Our work is defined by public policy – at national and EU level. We are subject to regulatory oversights and enabled or constrained by their decisions on budgets and resources. It is important to sustain positive working relationships with government and political stakeholders. We need each other’s support for shared goals and to meet our societal obligations.
This year EirGrid continued our ongoing engagement with the government department responsible for our work. Before government formation, this was the Department of Communication, Climate Action and Environment. The Department was then renamed Environment, Climate and Communication. We work with Minister Eamon Ryan TD and his officials to implement government policy and to engage collaboratively to secure sustainable decarbonisation.
A key area of delivery this year was EirGrid’s running of the Renewable Electricity Support Scheme auction on behalf of the Department. The successful auction saw the go-ahead being given for 82 new renewable energy projects, including seven community projects.
EirGrid’s government liaison team also continued to sustain support for the Celtic Interconnector. This project helps meet both national and EU policy objectives, so we need to keep governments and EU institutions informed.
In January, EirGrid signed the grant agreement of €530 million for the Celtic Interconnector. The Department was represented by the former Minister of State, Seán Canney TD. Also in attendance was EU Commissioner for Energy Kadri Simson, former Irish EU Commissioner Phil Hogan and François Brottes, the former President of our French counterparts – RTÉ France.
Another area of ongoing engagement is the Department’s working group on offshore wind. This year, EirGrid developed a comprehensive options paper on this topic. This paper explored the potential models for delivery of this key area in Ireland’s future growth of renewable energy.
As well as working with Department officials, EirGrid also maintained contacts with all public representatives. This took place at a national, regional and local level. Our intent with this engagement was to ensure that elected representatives were kept up to date on our activities. We also provided information on grid projects that were progressing in various constituencies.
In recent years, the lack of a devolved administration in Stormont has presented a challenge in terms of our engagement with government in Northern Ireland. Despite this, SONI continued to engage in a meaningful and inclusive way with elected representatives across the political spectrum. This covered local councils, MLAs and Members of Parliament. It also included representatives of the Secretary of State at the Northern Ireland Office.
This engagement included exhibiting at a number of party conferences, which allowed the SONI team to discuss energy issues both with grass roots membership and party leaders. These discussions ranged from our transmission development proposals, to the green economy and the climate emergency.
SONI welcomed the return of devolved government in January 2020 following the New Decade New Approach agreement. In particular, SONI welcomed its ambitious climate action commitments. SONI sustained this momentum by engaging with key departments, ministers and spokespersons. This ensured SONI’s new purpose and strategy were understood, as was the unique role of the power system in enabling climate action.
This process of engagement allowed us to make the case for grid investment as a vital step in moving away from fossil fuels. This culminated in the granting of planning approval for the North South Interconnector from Minister for Infrastructure, Nichola Mallon MLA.
Our engagement with Stormont also included giving evidence to the Committee for the Economy in June 2020. This was to support the development of a new energy strategy from Minister for the Economy, Diane Dodds MLA and her officials. SONI also submitted a response to the Macro Economic Micro Inquiry held by the Committee for the Economy.
During this time three significant grid development projects went live in Northern Ireland. These were the Agivey Cluster Project, the Kells Cluster Project and the Sydenham Road Substation Project. As part of a community consultation process for these projects, we also engaged in extensive briefings of elected representatives. These engagements included contact with constituency MPs and MLAs to help them respond to constituency queries. We also formally engaged with local councillors by presenting at their planning committee meetings.
Engaging during a pandemic
The challenging public health context of the COVID-19 pandemic had a significant impact on how EirGrid and SONI could engage this past year. Our direct contacts with communities, landowners and elected representatives were significantly affected. We could no longer safely hold open exhibition days, visit landowners, or engage with the public in our mobile information unit. This was disappointing, as our liaison teams have achieved greater acceptance of grid projects in recent years.
However, this context gave us an opportunity to accelerate our innovation in the digital engagement space.
In the first instance, we postponed all planned project consultation for the first half of 2020. We then used this time to build our capacity internally to prepare for virtual engagement.
We investigated technical solutions, conscious of the need to stay accessible for stakeholders.
We then trained our liaison, communication, engagement and project management teams. Finally, we trialled solutions including webinars, digital workshops, virtual exhibitions and micro-sites.
As we investigated solutions for projects, we reviewed our communications and engagement plans. In some cases, this saw us extend consultation periods. We also created further project communications or considered new ways to reach stakeholders.
This ensured that the appropriate level of information could reach all our project stakeholders in good time. And throughout the year, we diligently monitored and followed public health restrictions in both jurisdictions.
In summary, we successfully completed 23 consultation events throughout this financial year. Many of these benefited from innovations required due to COVID-19 restrictions.
Engagement innovations on the Kildare-Meath Project
The Step 3 phase of public consultation on this project was due in the summer of 2020. Its strategic importance led to trials of new ways to deliver a safe yet wide-reaching consultation. On this project, we could not carry out face-to-face engagement to assess levels of awareness and understanding.
That prompted us to run a "recap" campaign on the project. This aimed to inform the public on the need for the project and of the constraints that shaped our options.
In July, we started a 10-week campaign. This saw 50,000 leaflets distributed to homes and businesses and the creation of a new standalone website. This site included a suite of interactive maps that allowed visitors to use their Eircode to explore local constraints.
We also partnered with local authorities, Public Participation Networks (PPNs), Chambers of Commerce and Library Services. This ensured project information was widely available.
This clear and informative content was then supported by a persuasive and engaging advertising campaign. This was the first time we ran a fully realised advertising campaign – on newspaper, radio, billboards and digital channels – for a local project. The campaign – ‘Upgrading Lines, Upgrading Lives’ – used emotive messaging to inform locals of the need for and benefits of the project.
The awareness-raising phase was then followed by a 12-week consultation period. To increase accessibility and avoid a digital divide, we worked closely with NALA, the National Adult Literacy Agency. We also created a freepost address for respondents, offered a call back service and sent a questionnaire to all homes in the project area.
Engagement innovations on the North Connacht 110kV Project
This project was also due to start key consultations, in this case Stage 4, when the pandemic intervened. As with Kildare-Meath, we pivoted to new forms of engagement, starting with a postal survey. This asked respondents how they wanted to engage with us and receive information on the project.
We also used leaflet distribution and created an online questionnaire to gather feedback. And while our mobile information unit could not be staffed or host visitors, we used it as a mobile billboard across the project area.
Finally, this project pioneered EirGrid’s use of a virtual open day. This online format allowed stakeholders to see information typically seen on project open days. Site visitors entered a virtual "room" displaying project information posters. They could then walk through the room and get more detail by interacting with each poster. The virtual exhibition space also allowed for stakeholders to register for webinars and submit their views – all in one place. This model was adopted by leading developers on high-profile projects across a range of sectors in Ireland this year.
Learnings for future projects
Collectively, this work ensured that local stakeholders were aware of key project consultations. We also offered multiple ways to learn about projects and to respond to options. This was all achieved within the COVID-19 restrictions. The lessons learnt from these projects have the potential to improve the reach and effectiveness of all future consultations.
Preparing and producing a national information campaign
At EirGrid, we regularly track levels of public understanding and awareness of what we do. This is because we know from our nationally representative surveys that when somebody understands our role, they’re twice as likely to trust us. And crucially, those who understand what we do are 50% more likely to accept new grid infrastructure in their community. Our research also helps us understand the quality of our engagement with the public and identify areas where we need to improve. It also helps us identify localised regions where levels of concern may need particular attention.
Research in 2019 showed us that awareness had increased since our previous information campaign which last ran that year. The focus of that campaign was simply to tell the public who we are and what we do. But in 2020 we had a greater challenge. Achieving the Irish Government’s target of 70% renewably generated electricity by 2030 will lead to many grid projects. And to complete these in time will require a significant shift in public support and acceptance. For all these reasons, EirGrid began preparations for its new national information campaign in spring 2020, with the aim of launching in October 2020.
Watch Amy talk about creating the national campaign
This campaign has a very simple purpose. It spells out who we are and what we do, which we know is critical to improving levels of trust and acceptance. But this campaign also explains how our role puts EirGrid at the heart of Ireland’s climate action. Our research for this campaign showed this was a key message to help persuade people on the need for grid reinforcement projects.
We then adapted this message so that it appeals to people’s hearts as well as their minds. Therefore, we based the campaign on the theme of "stepping up". This shows how people are already taking their own climate actions and compares this to the scale of change we can deliver – with public support. We featured real people telling their real stories throughout the advertisement, to help underscore the credibility of our message.
The campaign was produced over a busy week in September, with the EirGrid team overseeing shoots across the country. The production was tailored to COVID-19 restrictions at the time, to protect the health of the volunteer groups and individuals in the ad.
We are also aware that the public has more questions about EirGrid than can be answered in a short video. So we created a standalone public-facing website at eirgrid.ie. For the first time, this offers a simple and accessible explanation of our role and how this is key to climate action. It also answers questions – in text and videos – on the topics we most frequently encounter during project engagement.
This campaign is just one part of an integrated effort to achieve the societal support we need to transform the electricity system. It will support, and be supported by, a range of initiatives across everything we do.
This section of our annual report gathers together an overview of some of the activities carried out to support our commitment to being a responsible business.
Our own environmental impacts
EirGrid Group has a target to cut our own organisation’s energy consumption in half by 2030. In the last financial year, we achieved our target to ensure this goal is met – energy use in our offices fell by 4% compared to 2019.
In Ireland, we continued to co-chair the ‘Low Carbon Economy’ leaders group as part of our commitment to Business in the Community. This initiative sees participants committing to reduce their carbon emissions by 50% by 2030. Working towards this target, we reported a 22% reduction in emissions compared to 2018.
In Northern Ireland, SONI became a ‘Climate Champion’ for Business in the Community Northern Ireland. This saw SONI sign the ‘Climate Action Pledge’ that challenges businesses to set and achieve ambitious greenhouse gas reduction targets.
Finally, this year we also continued our financial support for the Friends of the Earth ‘Hands up for Solar’ campaign. This sees schools in Ireland compete to win solar panels.
This year, we expanded the size of the wild-flower meadow at SONI’s offices in Belfast and planted more pollinator friendly seeds. This is a local effort that reflects our wider sustainability efforts, which saw biodiversity initiatives on six of our grid projects.
COVID-19 had an immediate impact on communities across Ireland and Northern Ireland. In 2020 EirGrid Group made donations to both the Community Foundation of Ireland and the Community Foundation of Northern Ireland. This was in response to appeals to support those most affected by the pandemic.
These specific donations were just part of a total of €319,108 donated to charities and community groups this year. These donations were made through the Corporate Social Responsibility Programme and our Community Funds.
Just as important, our staff donated their time to good causes, with 1,070 volunteering hours supported across the Group this year. Staff at EirGrid also continued their support for ElectricAid, a charity that funds development projects in Ireland and overseas.
EirGrid continued to work with Margaret Aylward Community College. This Dublin secondary school for girls is recognised for its work with pupils from disadvantaged communities. Our volunteers offer practical skill-based and mentoring support to pupils and teachers. This year, we started a pilot programme with 2nd year students to encourage continued participation in the education system.
We also delivered workshops to teaching staff on social media and online tools – which became unexpectedly useful during pandemic school closures. During the restrictions, the school requested funding for health and hygiene care parcels for students at home and we were happy to help.
Removing barriers to education is a core focus of our community investment strategy. SONI has a partnership with BookTrust NI to encourage an early love of reading. This year, pupils from four secondary schools in South Armagh received a book and visit from author Dan Freedman. SONI was named a Responsible Business Champion for its work with Book Trust NI.
This year, EirGrid also continued to support the DCU Access Programme. This provides financial support to disadvantaged students to pursue a college education. We also sponsored a lesson in the Science and Technology in Action Education pack distributed to secondary schools across the country. This lesson focused on our work to prepare the grid for 2030 goals and shows the real world application of the secondary school curriculum to help tackle climate change.
This year, EirGrid was awarded the Business Working Responsibly Mark for the fourth time. This is the leading standard for CSR and Sustainability Certification in Ireland.
During the year, SONI started the process of independent certification to the CORE corporate responsibility standard. This involved a detailed audit from the perspective of people, planet and place.
In addition, SONI was named a Responsible Business Champion in the NI Responsible Business Awards 2020.
Finally, EirGrid was recertified for the ISO 14001 (Environmental) and ISO 45001 (Health and Safety) quality standards for management systems.
When we developed the five-year strategies for EirGrid and SONI (2020-25), we recognised that our people were the foundation of our commitments and our ambitions. This truth was never more tested than this year, as EirGrid Group – and the whole world – responded to a global pandemic.
Thanks to their commitment and hard work, we sustained a secure supply of electricity throughout this period, while still delivering a significant part of our planned work programme for the year. This section of our annual report explains how our people helped us to deliver our goals and how we supported them as they did so.
Safeguarding our people – and your power supply
At EirGrid Group the safety and well-being of the people who work for us is a priority – and was of particular significance this year. As the pandemic hit, we took several important steps to protect our people and to ensure the continued operation of critical systems.
Watch Shiral talk about how the EirGrid and SONI teams worked safely during the pandemic restrictions
From early in 2020, our team closely monitored the developing situation as a notable risk. In the early stages of the crisis, we acted pre-emptively to protect our workforce and our essential operations – even before Government advice was issued. We established a Crisis Management Team to create contingency plans for different potential scenarios, in line with our business continuity protocols.
As operators of essential services in both jurisdictions, we had a responsibility to keep the power system operating to the highest standard. Running the electricity system required critical staff to work in the Dublin and Belfast Control Centres. These critical operations then needed to be supported by back-office operations and critical IT services. Finally, we had to ensure that all other staff could continue to work remotely.
We implemented additional measures to ensure that critical people who needed to be at our workplaces could do so in as safe a manner as possible. We also needed to ensure that the all-island wholesale electricity market continued to run effectively. Finally, it was vital that critical infrastructure construction continued. We achieved all these goals, enabled by solid processes, stable IT systems and thanks to the goodwill and flexibility of our people.
We recognise that we are fortunate that our business has not been impacted to the same extent as other sectors across the island of Ireland. However, some of our colleagues still had to deal with difficult situations and challenges during this pandemic. Because of this, our employee assistance programme has been essential during this time. This service offered information, advice and counselling for staff members that requested help – for any reason.
This year we also introduced a well-being service called Positive Occupational & Wellness Resources – or POWR. It ensures our people had the encouragement and supports to look after their health and well-being. It allowed staff to create a personal plan for ongoing well-being across a range of areas, including physical and mental health.
This year, more than ever, there was an unprecedented demand to collaborate and share information. Returning to work together in our offices will enable this even more. It will be an important step forward as an organisation and will catalyse our work to transform the power system for future generations.
At the time of writing, we are not yet out of this pandemic. We are, however, ready to safely move forward again once restrictions allow us to return to our offices.
Enabling work from home
Before it became mandatory, EirGrid Group had already developed remote working protocols. Some of our people already had the option of working occasionally from home, so this gave us a platform to build on.
The speed of the unprecedented change presented us with challenges. But it also enabled the implementation of new systems and supports that will serve our needs long after the pandemic.
We had to substantially increase our remote working capability so that most of our people could work effectively from home by the middle of March 2020. This rapid change truly shows how COVID-19 influenced our digital transformation.
While the initial focus was to maintain critical operations, it soon became clear that this new approach would continue for some time. As a result, EirGrid placed a significant importance on sustaining and improving the experience for our people at home. We expedited the roll-out of laptops and remote working solutions to all our people and rolled out a platform for virtual meetings. This enabled video conferencing and instant messaging in a secure way across the organisation. It was a major step to help colleagues get much-needed face time and to enable less formal communication options.
These unusual times led to a need for change in the way we approached our communications strategy. By introducing vlogs and blogs we managed to keep staff engagement interesting, fresh and relevant.
We established a dedicated portal for staff to stay updated, share information and stay connected. This provided a focal point for our people to access all available collaboration technologies. It also allowed them to ask questions, share learnings and most importantly, to learn how to stay secure. This portal then evolved to include information on mental health and well-being, as well as "how to" technical guides.
The pandemic has accelerated our digital transformation. This applies equally to our employee experience and to our customer and stakeholder experience. Looking to a brighter future after the pandemic, we have a real opportunity to embrace new ways of working. We will be able to leverage modern collaboration tools and information technology solutions. And at the same time, we will still effectively protect our critical access from cyber threats.
Diversity and Inclusion
"Diversity is being asked to the party, inclusion is being asked to dance"
For us, diversity means all the ways we differ – and it includes everyone. It includes visible disabilities and visible differences such as gender, race, ethnicity and age. It also includes our unseen disabilities and invisible differences. These can include sexual orientation, social class, heritage, religion, education and family status. It can even include diversity of how people view or think about a situation.
For EirGrid Group, inclusion means valuing and celebrating differences. It also means encouraging a workplace culture where all can thrive. This means individuals are supported, respected, engaged and have a voice. It means they are able to develop skills and talents in line with our values.
In the financial year 2019-2020 there were 32 nationalities represented in our workforce. This shows the level of diversity in our teams and is reflected in their fresh perspectives and new ideas.
We continue to hire a range of graduates to join our diverse and engaging group graduate programme at EirGrid Group. This aims to give the organisation a pipeline of future talent that complements more experienced people we hire on an ongoing basis.
The injection of early talent to the organisation has a very positive impact on the environment and culture. Last year, we hired 25 graduates with a wide variety of experiences and backgrounds.
We also run an early career programme. This supports those who wish to enter employment after second level instead of proceeding to third level. It allows people join us and add immediate value while pursuing third level qualifications part-time.
In January 2020, EirGrid Group Managers and Team Leads attended a training session on unconscious bias. This aimed to increase awareness of personal biases and learn practical ways to address them. This will help nurture a culture of inclusivity, respect and dignity.
Encouraging female engineers
At EirGrid Group our core purpose has traditionally been driven by engineering expertise, although we also value other areas of expertise. Historically, engineering has attracted more men than women. Alongside parallel changes in society and education, we want to enable more women to pursue and succeed in engineering. This is a long-term challenge that requires change far beyond EirGrid Group – but we will do all we can to achieve this aim.
Part of our journey towards this ambition is our support of International Women’s Day. This year our planned in-person events in Dublin and Belfast were cancelled due to COVID-19. Our networking then moved online. As a corporate partner of Professional Women’s Network in Dublin our staff participated in several webinars and forums.
Jana: During school I was always interested in sciences and maths. I was really curious about how things work and what's happening in the world. And I think I always wanted to make a difference.
Sarah: I loved maths, I loved science. But engineering was never really proposed as an option until my dad, who studied engineering, helped steer me down that path.
Jana: My parents always treated my brother and me exactly the same. They never said, "Oh yeah, she's a girl, she should be doing a certain job." My dad worked in an engineering profession; he would have been very handy and hands-on at home as well – and I was always very curious. And I think that really showed me that I had a real interest in how things work and how to put things together and take them apart.
Sarah: If I told anyone I was studying engineering, they'd say, "Wow, you must be the only girl in your class," which wasn't true at all. Out of maybe 250 people, we had 100 girls – and they were getting the top marks.
Jana: The biggest challenge in secondary school is that – in sciences and maths – you don't really have many women teaching. And in university it's very similar. And I always think if you can't see somebody else doing it, it's very difficult to motivate yourself and to believe that you are able to do it yourself. When I was leaving school and I applied for an internship in an engineering company, they told me I couldn't do it – because they didn't have facilities for ladies. It really shouldn't be like that.
Sarah: The biggest challenge is in second and third level education. I went to an all girls school and there just weren't options to study engineering, technical graphics, or even accounting. These subjects are seen as "male subjects." I studied applied maths as an extra subject for the Leaving Cert, and I came in before school in the morning to take my applied maths classes at 8:00 AM. I think a lot of girls would be interested in engineering if they knew it was available to them.
Marie-Therese: I think for girls coming through, it's difficult for them to see what roles are available to them. EirGrid and SONI have a lot of female engineers in the company, thankfully. We can educate and be role models in that space.
Jana: I've always been really interested in renewable energies. EirGrid – being a transmission system operator and supporting renewable energies – was a very obvious choice. Being able to make a difference for the renewable energy targets is really great.
Sarah: Three years ago I was doing all the sustainable things – I had my keep cup, I became vegetarian, I was cycling more. And I had this light bulb moment when I thought, "OK – I studied engineering and I'm really interested in having a positive effect on the environment. Those two things can be married together."
Marie-Therese: We're facing a real crisis in terms of climate change. Although our role can seem quite abstract, I just look at the paradigm shift over the last 10, 15 years: we are now putting more renewables onto the grid than ever before.
Watch these three female engineers talk about how they pursued their careers
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.
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.
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.
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.
Mark Foley joined EirGrid as Group 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 executives 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.
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.
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.
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.
Interim Managing Director & Head of Infrastructure Projects and Connections, SONI.
Alan Campbell was appointed as Interim Managing Director of SONI in October 2020 and to the SONI Board in December 2020. Alan joined SONI in July 2017 as Head of Grid Infrastructure Projects and Connections from ESB where he was responsible for managing its 400MW Coolkeeragh Power Station in the North West. Alan graduated from Queen’s University Belfast with a First Class Honours degree in Mechanical Engineering and began his career at AstraZeneca in England before joining ESB. Alan has over 18 years’ experience working in the electricity industry.
Chief Strategy Officer
Martin Corrigan was appointed Chief Strategy Officer of EirGrid Group in June 2020. Martin joined EirGrid in 2017 and previously held the role of Director - Strategic Initiatives. Prior to joining EirGrid, Martin held senior executive positions in One51 plc from 2006 to 2017 and before that senior finance roles in a number of Irish and overseas companies. He is a graduate of Dublin City University and a Fellow of Chartered Accountants Ireland.
Chief Operations Officer
Rodney Doyle is the Chief Operations Officer at EirGrid and General Manager of the Single Electricity Market Operator (SEMO). He previously held the position of Director of Information Services. 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. 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. 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.
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.
Chief Infrastructure Officer
Michael Mahon joined EirGrid Group in August 2019. In his role he is responsible for planning and consents for grid infrastructure across the island, including 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 major project delivery. He is also a Chartered Engineer with Post Graduate Diplomas in both Project Management and Management.
Chief Innovation and Planning Officer
Liam Ryan is the Chief Innovation and Planning Officer of EirGrid Group. Prior to this Liam was Interim Director of Grid Development & Interconnection.
Liam also held a number of other positions in EirGrid including Head of the Integrated Single Electricity Market transition, Head of Transmission Engineering & Maintenance, Head of Market Operations, Head of Power System Operational Planning and Head of Programme Management Office. Before joining EirGrid, Liam held a number of senior roles in Hewlett Packard manufacturing and innovation departments and before that worked in consultancy. A graduate of Trinity College Dublin, he has a PhD and Bachelor of Mechanical Engineering and holds a Masters in Mathematics
Chief Financial Officer
Aidan Skelly is the Chief Financial Officer of EirGrid Group. He has held this position since June 2005. He was also Interim Chief Executive of EirGrid Group between January 2018 and June 2018. Aidan was formerly Finance Director with Waterford Stanley Limited. He also 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 in Corporate Leadership from Dublin City University.
Chief People and Information Officer
Siobhan Toale is the Chief People and Information Officer at EirGrid. Siobhan previously held the role of Human Resources Director within EirGrid. In her current role Siobhan is responsible for information systems, HR and organisation development with a remit to manage change and improve processes across the organisation. Prior to joining EirGrid, Siobhan held leadership positions in Eir, Telefonica O2 and Bank of Ireland. Siobhan holds a BSc in Computer Science from Trinity College Dublin and a Masters in Organisational Behaviour from the University of London. She is a Chartered Fellow of the Institute of Personnel Development.
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.
Grid infrastructure that converts electricity from alternating current (AC) to direct current (DC) and vice versa. This is done by means of high-power, high-voltage electronic semiconductor valves.
Day ahead trading
When contracts are made between seller and buyer for the generation and supply of electricity the following day.
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 and Company for the financial year ended 30 September 2020. The Group comprises of the Parent Company and its subsidiaries disclosed in note 30 (e).
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 70 and the related notes 1 to 29.
The current period being reported on is the financial year ended 30 September 2020. The comparative figures are for the financial year ended 30 September 2019.
Commentaries on performance during the financial year ended 30 September 2020, 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 Minister for 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 €0.6m (2019: €1.1m) and overseas travel costs of €0.2m (2019: €0.4m). Settlement and related legal costs for the year were €nil (2019: €nil). Staff Welfare costs were €0.2m, of which external relations were €0.005 m (2019: €0.25m, of which external relations were €0.02m).
|Yr to 30 September 2020||Year to 30 September 2019|
|Notes||€ '000||€ '000|
|Electricity market services||(i)||2,297||11,104|
|Legal services & advice||3,248||2,723|
|Transmission Network project services||(ii)||7,014||5,019|
|IT systems support||(iii)||565||500|
|Corporate finance advice||171||403|
|Organisational & actuarial advice||776||765|
|Regulatory advisory services||1,957||325|
|Costs charged to income statement||8,963||4,421|
Note (i): Electricity Market services include costs of enhancing the all-island electricity market arrangements known as SEM.
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 Environment, Climate and Communications 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 2019/2020
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 and Risk Committee (Separate Audit and Risk Committees merged on 18 March 2020), the Remuneration Committee, the Grid Infrastructure Projects Committee, the Northern Ireland and All-Island Committee and the Innovation Committee. The Public Affairs Committee was dissolved on 18 March 2020. During the financial year the Board reviewed the remit of each of the committees.
The Audit and Risk 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. It also oversees and monitors the Risk Management Policy and Risk Management Framework, review EirGrid’s risk appetite and review the effectiveness of responses to key risk exposures. 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 Minister for Public Expenditure and Reform and the Minister for Environment, Climate and Communications. 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 Northern Ireland and All-Island Committee’s function is to provide support in matters relating to Northern Ireland and matters that affect the operation and efficiency of the all-island Electricity System and Market.
The Innovations Committee’s function is provide assistance in establishing a culture of innovation across the organisation, reviewing key work streams to support and guide a balanced approach of risk versus innovation.
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 2020.
|Eligible to Attend||Attended|
|John O’Connor (Chairperson - retired 11 November 2019)||1||1|
|Brendan Tuohy (Chairperson - appointed 12 November 2019)||10||10|
|Theresa Donaldson (Deputy Chairperson)||11||11|
Members of the Board at the date of signing of the financial statements were Brendan Tuohy (Chairperson – appointed 12 November 2019), Theresa Donaldson, Mark Foley, Shane Brennan, Tom Coughlan, Lynne Crowther, Michael Hand, Eileen Maher, Liam O’Halloran and John Trethowan.
This committee was established on 18 March 2020 merging the Audit and Risk Committees.
There were 3 Audit and Risk Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below
|Eligible to Attend||Attended|
|John Trethowan (Chairperson)||3||3|
Members of the Audit and Risk Committee at the date of signing of the financial statements were John Trethowan (Chairperson), Brendan Tuohy, Michael Hand and Eileen Maher.
There were 8 Remuneration Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|John O’Connor (Chairperson - retired 11 November 2019)||1||1|
|Brendan Tuohy (Chairperson - appointed 12 November 2019)||7||7|
Members of the Remuneration Committee at the date of signing of the financial statements were Brendan Tuohy (Chairperson), Theresa Donaldson and Liam O’Halloran.
There were 4 Grid Infrastructure Projects Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Brendan Tuohy (Retired 18 March 2020)||2||2|
|Shane Brennan (Appointed 18 March 2020)||2||2|
Members of the Grid Infrastructure Committee at the date of signing of the financial statements were Michael Hand (Chairperson), Shane Brennan, Tom Coughlan, and Lynne Crowther.
There were 7 Northern Ireland and All-Island Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Theresa Donaldson (Chairperson)||7||7|
Members of the Northern Ireland and All-Island Committee at the date of signing of the financial statements were Theresa Donaldson (Chairperson), Brendan Tuohy, Tom Coughlan, and John Trethowan.
There were 3 Innovation Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Liam O’Halloran (Chairperson)||3||3|
Members of the Innovation Committee at the date of signing of the financial statements were Liam O’Halloran (Chairperson), Shane Brennan, Lynne Crowther and Eileen Maher.
This committee merged with the Audit Committee to establish the Audit and Risk Committee on 18 March 2020.
There were 2 Risk Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Liam O’Halloran (Chairperson)||2||2|
This committee merged with the Risk Committee to establish the Audit and Risk Committee on 18 March 2020.
There were 3 Audit Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|John Trethowan (Chairperson)||3||3|
This committee ended on 18 March 2020.
There were 2 Public Affairs Committee meetings held during the financial year ended 30 September 2020. The Committee Members’ attendances at these meetings were as set out below:
|Eligible to Attend||Attended|
|Theresa Donaldson (Chairperson)||2||2|
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 and Risk Committee. The Group has an Audit and 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.
There is a risk that work streams associated with strategic actions will be delayed as a consequence of prioritising Covid-19 mitigation measures. Staff wellbeing, cyber threat and return to workplace are also risks associated with Covid-19 that could impact the delivery of the multi-year Strategy Execution Programme.
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 Ireland/Northern Ireland Protocol to the Withdrawal Agreement has provided the basis for the continued operation of the Single Electricity Market and trade of wholesale electricity across the island of Ireland, in Northern Ireland after 1 January 2021. Under the Free Trade Agreement (FTA), new SEM-GB trading arrangements for the Day-Ahead market are to be established, agreed and implemented by April 2022. This will be the focus of work for SONI, SEMO and the UK interconnectors over the short term. Over the short-medium term, new Intra-day and Balancing arrangements are to be clarified as well as a new Co-operation Framework between UK TSOs and ENTSO-E. The directors are confident that new future arrangements can be put in place to reduce any efficiency loss in cross border trading. EirGrid continues to work closely in this regard with the relevant Government Departments in Ireland and the Northern Ireland and with the respective regulators.
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. Any such under recoveries must be funded by EirGrid until such time as the regulated tariffs are uplifted in a subsequent tariff period. 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 17% 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 exposureby 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.
The Group is responsible for the secure operation of the transmission systems in Ireland and Northern Ireland. System interruptions can pose a risk to essential services which rely on the 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 2020, before deferred tax, is €42.6m (2019: €50.6m). 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. The grid infrastructure required to be built in the 2020 -2025 strategy period is a step change from that which has been delivered in the 2015-2020 period. 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. We 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.
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.
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. As 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.
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. Our Group Health & Safety Risk Hierarchy of Controls includes a focus on sustainability within the control methods.
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 de-carbonise 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.
Diversity and inclusion is a key pillar of the Group strategy. The Group recognises the value of difference and is aware of the reputational, economic and societal benefits that arise from having a diverse workforce. Diversity and inclusion has been discussed further in the front section of the annual report on page 40.
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 and Risk 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 (2019: €122,000) for Chairperson’s and Directors’ fees, in accordance with the levels of remuneration for the Chairperson and Board Members of State Bodies as approved by the Minister for Finance and the revised arrangements for payment of board fees to public sector employees under the Minister for Public Expenditure and Reform’s "One Person One Salary" Principle. Under the approved remuneration levels, the Chairperson’s fees were equivalent to €21,600 per annum during the financial year (2019: €21,600 per annum). Directors’ fees were equivalent to €12,600 each per annum during the year (2019: €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 Minister for Public Expenditure and Reform and the Minister for Environment, Climate and Communications.
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.
30 Sep 2020
30 Sep 2019
|Pension contributions paid (all defined benefit)||40||40|
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 (2019: €4,000,000) for the financial year ended 30 September 2020.
The Directors and Secretary who held office between 1 October 2019 and 30 September 2020 had no beneficial interest in the shares of the Group.
One ordinary share of the Company is held by the Minister for Environment, Climate and Communications 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 2020, Brendan Tuohy, Mark Foley and Martin Corrigan 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. Since March 2020 Covid-19 has had a significant impact on local and global economic conditions. While there has been some drop in electricity demand, there was no significant drop in the EirGrid Group turnover due to Covid-19. However the Group is undertaking continuous reviews of the Group’s liquidity and is satisfied that there is adequate funding and banking facilities to withstand the adverse impact of a range of electricity demand scenarios that may arise from Covid-19.
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 28 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:
21 January 2021
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.
21 January 2021
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").
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.
We have nothing to report in respect of the following matters in relation to which ISAs (Ireland) require us 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.
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.
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.
Based solely on the work undertaken in the course of the audit, we report that:
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 those parts of 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 2020. 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.
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
29 January 2021