Speaking with Paddy Hayes, the CEO of ESB, the topic of decarbonisation is just as pertinent as that of electrical power. Hayes aspires for a future where the electrical system is entirely devoid of carbon, allowing anybody who wishes to establish a connection for social, commercial or other valid reasons to achieve this in an economical and prompt manner. This, he maintains, is the ideal situation.
Although decarbonisation is the main goal for the upcoming years, Hayes is mindful of the difficulties the energy crisis posed for ESB clients. The company successfully lowered prices in November and again in March, providing some relief in a highly competitive retail market. ESB also chose to waive its residential profits for 2022, a total of €55 million, to provide assistance to those having difficulty covering their bills.
Hayes, who has been at the helm of the nation’s largest utility company since June 2021, exudes a reflective demeanour and demonstrates a solid engineering mindset; driven by progress rather than recognition and devoid of overblown ego. In 2022, ESB directly or indirectly bolstered 10,400 jobs, amounting to around 0.5% of Ireland’s total employment, according to an independent assessment by Frontier Economics. From 2006 to 2022, the company made investments of €14 billion across Ireland in its energy and other sectors.
ESB is now in the throes of its biggest transition ever, aiming to decarbonise the electrical sector by 2040. According to Hayes, this crucial for other sectors to access clean energy and attain climate neutrality by 2050. Although this presents numerous challenges, Hayes believes all can be overcome in due time, conceding that no single company can fulfill these demands alone.
The most recent review by the Climate Change Advisory Committee noted that last year, emissions from electricity hit their lowest point since record keeping began in 1990. The entire electrical sector has come together to make this happen, notes Hayes, against a backdrop of escalating demand.
Hayes reflects on a past seminar with former colleague Pat O’Doherty, where they dissected the facets of climate change. This was a turning point for him, grasping the significant role electricity could serve in mitigating this global issue. He came to understand that lowering the amount of carbon in electricity could massively impact other sectors such as heat, transport and the broader economy.
However, Hayes doesn’t agree with the criticisms that it took ESB too long to switch to decarbonisation. He highlights the progress made in creating renewable energy sources, whilst phasing out more carbon-dense power generation, including ceasing peat generation. His confidence in a positive future is anchored by the fact that during a period of substantial growth, ESB has successfully managed to halve electricity’s carbon intensity.
Hayes outlines the inconspicuous rise of solar power, with 1,000MW now linked to the grid, which constitutes around 16% of the system peak. He mentions the significant public involvement in microgeneration, with over 90,000 individuals paired with ESB Networks. He finds it extremely encouraging to see customers taking part in the energy transition.
ESB is presently collaborating with Bord na Móna on a 70MW solar farm located in Timahoe North, Co Kildare. Additionally, six more solar projects with a combined power of 300MW are under construction. Hayes is optimistic about addressing the climate crisis given the tremendous technological advancements.
Moreover, he predicts a similar progression with grid-scale battery storage, with ESB having about 750MW on the system. It has storage projects operating in Dublin and Aghada, Co Cork. The ability to charge storage during the low-demand nighttime, predominantly from clean electricity, and then supplement the grid during periods of high demand, is an added advantage.
Half a century ago, the only electric storage available was at Turlough Hill in Co Wicklow, notes Hayes. Its continuous contribution in handling system peaks is a commendable testament to ESB’s foresight, especially as the company now opts for lower carbon electricity over high carbon sources.
As Hayes mentions, last year saw a significant reduction in power sourced from Moneypoint, a long-standing anchor of fossil fuel generation in Co Clare since 1985 and this contributed to the decrease in emissions.
Moneypoint is committed to ending its use of coal by 2025 and in its final full year of operation, it will make its capacity of 900MW available for the subsequent four years as a contingency measure for energy security, according to an agreement with the Government. Moneypoint is transitioning towards sustainable energy, starting with the installation of a wind farm on-site and a synchronous compensator that enables the grid to accommodate more renewable energy. Proposals for the Shannon estuary site, incorporating plans to build two offshore wind farms at Loop Head with partner Ørsted, will be presented to Clare Co Council and An Bord Pleanála in the forthcoming year.
The site will also be equipped to manufacture and assemble turbines along with backup open cycle turbines, designed for potential adaptation to hydrogen or biofuels use. Hayes maintains that despite the complexity of infrastructure development, repurposing existing sites where there is an established impact is often well-received by local communities. A newly built energy hub at Poolbeg in Dublin, for instance, now houses a €300 million power-storage facility, as well as aeroderivative and gas turbines, with the site’s two towering chimneys set for a makeover.
While controversy has emerged surrounding green hydrogen’s effectiveness, Hayes firmly believes in its potential as a storage solution primarily. ESB is in collaboration with Bord Gáis Energy and dCarbonX on Project Kestrel, a scheme aimed at transforming decommissioned gas reserves at Kinsale Head field into green hydrogen storage facilities.
Offshore wind power is anticipated to contribute up to 80% of renewable electricity, with long-term energy storage forming the final piece of the puzzle towards complete decarbonisation. Hayes suggests that finding ways to convert surplus electricity into a different form, such as hydrogen, ammonia, or biomethane, is crucial, before it is reintroduced into the system as clean electricity. To this end, ESB is considering various alternatives and has obtained a fuel cell and hydrogen electrolyser in Aghada with the intention of evaluating the potential of these technologies.
With criticisms in the past for reluctance in adopting wind energy, there have been lessons learned, according to the head of ESB. This has enabled the successful installation of cost-effective turbines. Its offshore investments are on the rise, notably on Scotland’s east coast where the Neart na Gaoithe setup, a joint venture with EDF, has progressed halfway, and negotiations for Inch Cape, a 1,100 MW wind farm with Red Rock Power, are nearing completion to become Scotland’s major source of renewable energy.
Meanwhile, planning permission for the 375MW Oriel offshore wind farm, a collaborative initiative with Parkwind along the Louth coast, has been filed. Missing out on the ORESS-1 auction forced the project to seek alternative market accessibility, however, hopes remain high for finding a buyer interested in its green energy.
The ESB executive stresses the significance of continuing onshore wind development advancements. ESB is partnering with Coillte, via a joint venture, Future Energy Ireland, and onshore schemes in Northern Ireland and other sectors of the UK are underway.
Hayes applauds government measures to exploit offshore wind potential by allotting specific sectors through DMAPs, arranging fixed-bottom turbines on the east and south coastlines, with floating prototypes destined for the west coast. Off the west coast, with its potential capabilities, there is optimism for its successful exploitation once a western DMAP is promptly implemented.
He anticipates a varied green energy mix because individual technologies prove profitable in distinct environments, which could possibly incorporate wave energy. For Ireland, nuclear energy is an unlikely addition, given that energy storage best complements the imminent offshore wind resource buildup.
Remaining alert to energy security is critical, with temporary generation projects emerging in North Wall, Dublin, and Shanonbridge, Co Offaly.
At ESB’s main office on Fitzwilliam Street in Dublin, the power company’s control centre is preparing aeroderivative gas turbines, similar to rapidly igniting jet engines, for deployment. Alongside, a contract for a 300MW open cycle gas turbine for Poolbeg is also being inked, serving as a contingency investment meant to only be operational when the system is strained.
Simultaneously, ESB Networks is making substantial investments to integrate solar and storage systems, with 34,000 homes and 5,000 businesses recently connected. The company now hosts more renewable connections than the nation’s current peak energy demand. However, the simultaneous availability of these renewable sources isn’t always guaranteed.
Technological evolution is fuelling the uptake of electric vehicles, with improved charging speeds and vehicle range becoming key factors. However, the infrastructure necessary to accommodate a large fleet of electric cars doesn’t grow overnight, and must develop hand-in-hand with the escalating demand.
ESB’s ‘ecars’ initiative is dedicated to expanding the prevalence of rapid charging stations, in line with the Zero Emission Vehicle Initiative’s aim of simplifying ‘destination charging’. Although overall EV sales have hit a slowdown, it’s worth noting that nearly half the new cars bought in Dublin were EVs last year.
According to him, procuring a grid connection is now a relatively simple process for common people and businesses, although some areas offer more capacity than others. Nevertheless, massive investments will be central to expanding capacity to accommodate various types of distributed energy sources. Developing grid capacity efficiently to meet the surging demand for renewable energy is an ongoing challenge.
EirGrid, the state-owned grid operator, is thanked for creating a world-class technical environment which allows the grid to handle more renewables than any other system. Its solid track record makes it a reliable partner to proceed with.
Regarding decarbonisation, he mentioned that past climate targets, initially deemed unattainable, were accomplished and exceeded, as evidenced by the fact that renewables made up 40 per cent of electricity in 2020.
Investment in clean energy has seen an upward trend, with a staggering €2 billion injected this year. Meanwhile, ESB Networks is eagerly collaborating with regulators on its prospective five-year plan, which will likely see a considerable increase in funding. This organization strategically operates its three primary divisions – the generation business, ESB Networks, and Electric Ireland – independently and under regulation.
To manage expansion, the company is bolstering its workforce and establishing supply chains. The enterprise has grown by a thousand employees since the pandemic started, and it now boasts a multicultural workforce with 76 nationalities. Seeing a high demand for network technicians, the company’s apprenticeship programme brings in around 100 new members annually, including 26 women this year.
Moreover, there’s an increasing requirement for professionals like engineers, scientists, and individuals possessing digital and mathematical skills, Hayes noted.
Hayes also acknowledged the infrastructure delays spanning across Europe and the US, compounded by the challenges in manufacturing and supply chains. These issues underscore the importance of engagement with local communities and authorities, ensuring transparency and understanding about the infrastructure placement and its significance.
In recent years, projects have grappled with issues such as fixed prices but fluctuating input costs, leading to increased costs and delays. Hayes states these issues are on the verge of being resolved, emphasising continued project delivery, long-standing relationships, and consistency.
Even as Ireland strives to reach its target of 1,600MW a year for renewable projects, its results are falling short. Nevertheless, the implementation of new planning legislation and improvements in the planning system resource were noted as beneficial.
In response to queries about potential derailment due to factors like infrastructure delays, planning issues, and grid matters, Hayes responds with certainty based on the progress made so far and absolute commitment. Despite a predicated doubling of demand, Hayes remains optimistic about the potential of smart technology in enhancing efficiency and maximizing renewable usage.
With regards to the belief that Ireland will soon be a major exporter of energy, he is of the opinion that the primary focus should be on decarbonisation and supplying clean electricity across the economy, a goal he estimates will take until 2040 to achieve.
He insists that ESB will contribute its share to maintaining economic growth that aligns with predictions, by ensuring it provides the required capacity expediently and effectively, despite the lengthy supply chains and time-consuming building of infrastructure. While he admits that challenges may arise occasionally and from one location to another, he remains confident that the electricity sector will rise to the occasion.
For Hayes, meticulous planning is crucial in what he describes as “a really long-term business”, and every investment considered by the ESB board assesses its effects on emissions, affirming their unwavering commitment to deliver by 2040.
From a personal perspective, he sees the value in fostering in his staff a clear comprehension of their role, guiding them to understand how they can add value and make a significant contribution to the organisation, to counteracting climate change and for the benefit of their customers.
He adds, amidst the complex tasks, a hint of optimism is required. Acknowledging the difficulties, he asserts there is a challenging yet achievable road ahead.