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Leah Farrell
winter power supply

Eamon Ryan did not sanction €10m emergency power contract payment, says spokesperson

The Dáil heard claims that EirGrid made a €10 million payment to ESB for a contract that was never completed.

ENVIRONMENT MINISTER EAMON Ryan did not sanction an alleged €10 million payment from EirGrid to the ESB, a spokesperson for the Green Party leader has told The Journal.

Last week, Fianna Fáil TD Barry Cowen alleged that EirGrid made a €10 million initial payment to the ESB on a €110 million contract.

He claimed the contract did not transpire following a court challenge, and therefore was querying if the money had been repaid.

Speaking in the Dáil chamber last Wednesday, Cowen asked if a “cosy arrangement” between national grid operator EirGrid and the energy supplier is giving the ESB an unfair advantage over other firms.

“Could the ESB have orchestrated this crisis by exercising its market power knowing that it would be rewarded as I have outlined?’ he said.

Labour’s Alan Kelly raised similar concerns with the Taoiseach in the Dáil this week, explaining how he saw the situation:

“I have a deep concern, and I don’t say this lightly, about how our energy market has been regulated over the last number of years.

“On the direction from the Commission for Regulation of Utilities (CRU) in May, Eirgrid put out a call for 200 megawatt emergency power – it was going to cost €110 million,” Kelly said.

“The plan was for these emergency gas operators to be in place for 22 weeks. The contract was awarded to ESB, but Eirgrid messed up the tender.

“Another company Tynagh Energy threatened to go to the High Court saying the procurement run by Eirgrid was anti-competitive, so the plan was abandoned.”

Both Cowen and Kelly have asked if Minister Ryan signed off on the payment.

“How was €10 million paid by Eirgrid to ESB as a down payment for these emergency generators? How did this happen? Was it sanctioned by the Minister [Eamon Ryan] and where is the money now?” Kelly asked this week.

The Journal asked Environment, Climate and Communications Minister Eamon Ryan to comment on the matter at a press conference at Government Buildings last Thursday, but he declined.

However, after further questioning on the matter as to whether Ryan signed off on the €10 million payment, a spokesperson said he did not approve such a payment, stating that the “minister did not sanction any specific spending as part of this consent”.

The ESB emailed its staff last week to reassure its staff amid the allegations made in the Dáil and claims that that semi-state may have “orchestrated” the current energy crisis for its own benefit. 

The company reiterated its statement that the ESB “wholly rejects” the assertions.

The Journal asked the ESB for an updated statement on the issues in light of the minister saying he did not sanction any payment. However, the company said it had nothing to add to its initial statement. 

A statement to The Journal from EirGrid did not address the claims relating to the €10 million payment, but said said a process of securing temporary generation for this coming winter was instigated by EirGrid earlier this year on the instruction of the Commission for Regulation of Utilities (CRU).

“This additional generation was one of a number of contingency measures being examined by EirGrid in order to maintain security of electricity supply in Ireland.

“This was an open and transparent procurement undertaken using the negotiated procedure under Regulation 49 of European Union (Award of Contracts by Utility Undertakings) Regulations 2016.

“This allows EirGrid to utilise emergency provisions and not follow the Official Journal of the European Union (OJEU) process under which tenders valued above a certain financial threshold must be published.

“With the outlook for the return of the Huntstown and Whitegate generators much improved, the need for this temporary generation was reduced.”

Huntstown and Whitegate were two generators that were out of action for a period of time.

Eirgrid said it was also always recognised that the provision of this generation, within such a timeframe, was challenging.

“In this context, EirGrid decided to end the procurement process,” it added. 

EirGrid said it has subsequently identified the need for an additional 200 megawatts (MW) of temporary generation by the end of 2022 and a further requirement of 100 MW of additional temporary emergency generation from quarter three 2023/24 onwards.

“It is expected that the temporary generation will be called upon if we enter a System Alert where the margin between supply and demand is very limited or a System Emergency where there is a high risk that demand for electricity will outstrip the available supply,” said Eirgrid. 

“A procurement competition has now started to fulfil the 200 MW requirement.  A separate competition will be run to procure the 100 MW Requirement early in the new year. 

“This will allow for the initial process to the expedited, given the tight timelines and will ensure that a standard planning process can be used,” it said.

The CRU was also asked for comment, but said it was not in a position to comment on the matter this week. 

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