Transform the power system for future generations EirGrid plc Annual Report 2019 Introduction . 1 Who we are and what we do . .2 Transmission system map . 3 Report from the Chair . 4 Chief Executive’s review . 8. Forecasting the future of electricity . 12 Financial review . 14 Lead the Island on sustainability and decarbonisation . 18 Enough power, at the right price . 24 Operate, develop and enhance the all-island grid and market . 26 Managing a system alert . 34 Work with partners for positive change . 36 Partnering for a more flexible power system . 40 Engage for better outcomes for all . 42 Running a community fund . 48 CSR achievements 2019 . 50 Value our people and enable them to deliver our ambitions . 52 Learning on the job . 54 Board of EirGrid Group . 56 Our executive team . .61 . Key data on operations . 64 Glossary . .66 . Financial statements . 71 Our cover shows some of the EirGrid Group staff who helped develop our new strategy. Left to right: Conor Farrell, Caoimhe McWeeney, Ciara Corby, Katie Killeen and Alan Campbell. We spent the past year developing our new strategy for 2020-25. To discover our focus for the next five years meant considering in detail what we do, why we do it, and how it could be even better. As a result, this year’s annual report focuses not only on our achievements this year, but also on our ambitions for the future. In this report, we will also share with you some stories from the people at EirGrid Group. They work tirelessly to ensure the power system delivers a reliable supply of electricity at a competitive price. In everything they do, they embody the purpose that is the ultimate goal of our new strategy: to transform the power system for future generations. EirGrid plc Annual Report 2019 Page 1 EirGrid Group operates and develops the electricity system in Ireland and Northern Ireland. This comprises the grid, the wholesale electricity market and interconnection with other systems. In both jurisdictions, we implement and enable government policies on electricity. We are regulated as monopoly service providers. We perform our services for the benefit of every electricity user on the island of Ireland. We support the economy in both jurisdictions rather than to pursue our own commercial interests. We are an independent entity, with no vested interest in the generation or selling of electricity. We don’t own the grid infrastructure and have no self-interest in adding to it. Grid The high voltage transmission grid is the backbone of the electricity supply chain. It transports power from where it is generated to where it is needed – in every part of Ireland and Northern Ireland. We balance supply and demand every minute of the day, while also planning for the island’s long-term electricity needs. The transmission grid brings power to industry and businesses that use large amounts of electricity. The grid also powers the distribution network. This supplies the electricity you use every day in your homes, businesses, schools, hospitals, and farms. In Ireland, we deliver this service as EirGrid. In Northern Ireland, we are SONI – the System Operator for Northern Ireland. Electricity market Our services include SEMO, the Single Electricity Market Operator. This wholesale market is run on an all-island basis, and operates 24 hours a day, seven days a week. It is integrated with European markets so electricity users always have reliable power at a competitive price. Interconnection EirGrid Group develops and operates interconnections with neighbouring grids. This includes the East West Interconnector that connects with Great Britain. We are also developing the North South Interconnector between Ireland and Northern Ireland, and the Celtic Interconnector with France. Finally, we enable interconnections developed and operated by third parties. These include the Moyle Interconnector and the proposed Greenlink Interconnector. EirGrid plc Annual Report 2019 Page 2 Coleraine Letterkenny Transmission System , , and kV Strabane January Magherafelt Belfast Antrim kV Lines Omagh kV Lines Lisburn Enniskillen kV Lines Banbridge kV Lines Sligo kV Cables Newry Dundalk kV Cables Louth HVDC Cables Castlebar Carrick -on- kV Station Shannon Navan kV Station Mullingar kV Station Kinnegad Finglas Dublin Athlone Poolbeg kV Station Maynooth Electricity Galway Carrickmines Generation Newbridge Connected to the Transmission Grid Portlaoise Hydro Generation Nenagh Ennis Arklow Thermal Generation Carlow Pumped Storage Thurles Kilkenny Generation Moneypoint Limerick Wind Generation Tipperary Wexford Charleville Waterford Tralee Great Island Mallow Dungarvan Macroom Bandon Cork Dunmanway Dublin Area Cork Area Belfast Area Midleton Finglas Artane Cork City Maynooth North Wall Antrim Belfast Central Cork Harbour Milltown Citywest Blackrock Lisburn Whitegate Carrickmines EirGrid plc Annual Report 2019 Page 3 Report from the Chair Steering through the challenges of transformation Brendan Tuohy, Chair Wind Record “We need a rapid and deep Meanwhile, in relation to change in the way we do Northern Ireland, the UK On 12th December 2018, business, how we generate Committee on Climate Change the record for most power, how we build cities, published a significant report in all-island wind- how we move, and how we feed February 2019. the world. If we don’t urgently Entitled ‘Reducing Emissions generation in a single change our way of life, we in Northern Ireland’, day was broken. jeopardize life itself.” the report states: António Guterres, Secretary- ‘The proposals in the report General of the United Nations MW are not a prescriptive list of 3,990 The past year has seen a policy actions over the next significant increase in the decade. Instead, they serve as recognition of the scale of the a starting point for the general challenges posed by climate principles and policy areas that change. There is also now a policymakers could prioritise to widespread acknowledgement of deliver the necessary long-term the urgency required to address decarbonisation of the Northern these challenges. Ireland economy.’ In June 2019, the Irish The transition to low-carbon and Government published the renewable energy will require Climate Action Plan. Its objective a significant transformation of is to enable Ireland to meet the electricity system. There EU targets. To support the will be major changes in how Climate Action Plan, EirGrid electricity is generated, how it must prepare the power system is bought and sold and in how so that renewable energy can electricity is used - such as for provide 70% of all electricity by transport and heat. 2030. This is an ambitious but necessary target. EirGrid plc Annual Report 2019 Page 4 The electricity system will In September 2019, EirGrid This includes the Celtic carry more power than ever published ‘Strategy 2020-2025: Interconnector, an estimated before and most of that Transform the Power System for €1bn plan to connect the power will be from renewable Future Generations.’ This is our grids of France and Ireland. sources. Coal, peat and response to these challenges. EirGrid and Réseau de oil based generation will Transport d’Électricité (RTÉ), By 2030, Ireland will need be phased out. our French counterparts, 8,400MW and Northern Ireland are committed to delivering These changes will start 1,600 MW of new renewable this landmark project. The the journey towards generation - and offshore wind European Commission recently decarbonisation of the will play a major role. committed €530m of funding power system in Ireland and This clean energy will be to the project, with EirGrid and Northern Ireland. essential to replace fossil-fuel RTÉ investing the balance. And while this is happening, generators and meet expected Similarly, in Northern Ireland, new technology will allow growth in demand. As we SONI published its strategy for electricity users to generate transition from other fossil 2020-2025. This commits SONI and store power, and return fuels, gas-fired generation will to designing a green energy any surplus to the grid. still play a key role to meet system that can accommodate demand for electricity. These changes will need to 95% renewable energy be managed in a coordinated There will also be a need to at any one time. and cost effective way. EirGrid increase significantly the This is a significant increase Group is uniquely placed level of interconnection from from the current 65% – to play a leading role in the the island of Ireland to Great reaching it would be a radical transformation that Britain and Europe. This will world-leading achievement. is now required. need to rise to at least 15% of This increase will also be total capacity from the current necessary if Ireland is to reach 7%. Work is already underway its 70% renewable energy in these areas. target by 2030. EirGrid plc Annual Report 2019 Page 5 EirGrid plc Annual Report 2019 Page 6 The transition required to These organisations can I would like to thank the achieve climate change assist in helping EirGrid Minister for Communications, targets can only be realised Group to deliver the required Climate Action and with major societal change. transformation. Strong Environment, Richard Bruton, New and strengthened grid partnerships are essential TD. I am grateful for the honour infrastructure will be essential - not only to address the he has given me by appointing - including the critical North technical challenges, but also me as Chairperson of EirGrid. South Interconnector. Over the to win hearts and minds. We I wish to offer my next five years, an investment need communities, and the congratulations to Northern of €2 billion and £500 public at large, to support the Ireland’s Minister for the million will be required in the huge transformation that is Economy, Diane Dodds MLA, respective grids in Ireland and required of us all. We can only as she takes office. I also Northern Ireland. successfully address climate want to thank the officials change in a timely manner EirGrid Group recognises that it in the Department for the with this support.