Extension to Natural Gas Infrastructure could make savings of €20.6 million in the North West

Government investment in natural gas infrastructure could bring significant economic benefits to businesses and households in the Western Region. By extending and upgrading the grid infrastructure in the North West, competitiveness for key industry sectors could be enhanced. Businesses are currently paying an estimated €16m more each year for fuel than they would be if they could use natural gas. Annual energy prices for newly connected households could be reduced by up to €485 per household and almost 61 tonnes of savings in CO2 emissions could be secured. Businesses and households would also pay to lower rates of carbon charges (carbon tax). That is according to a Policy Briefing published today by the Western Development Commission (WDC), ‘Why Invest in Gas? Benefits of natural gas infrastructure for the North West’

Helen Rochford Brennan, Chair of WDC said, ‘Balanced regional development is an important Government objective and a key focus of our work. We identified, in a previous WDC policy briefing, that quality infrastructure is one of the necessary conditions for regional development and we are now calling on Government to commit to investing in natural gas infrastructure in the North West. While we are fully aware of the current financial strains on the public purse, we would urge Government to explore alternative funding sources to ensure the required investment can be made so that regional and national economic benefits can be secured for the future.

“Such sources could include the European Regional Development Fund (ERDF), Interreg or other cross border funding or a loan from the European Investment Bank. We also believe that funding for investment in natural gas infrastructure could be provided for by Government retaining a portion of the Bord Gáis Éireann (BGÉ) dividends or by reinvesting profits accrued from any sell-off of the company”, added Ms Rochford Brennan.

Natural gas is widely available throughout Ireland and most larger towns and cities are connected to the natural gas grid. Demand for natural gas has grown rapidly since Kinsale gas was brought ashore in the 1970s and as the grid infrastructure expanded, there has been major industrial uptake wherever gas is available. However, significant parts of the North West have no natural gas supply.

Dr Helen McHenry, WDC Policy Analyst said, “This WDC Policy Briefing focuses on eleven towns in counties Donegal, Sligo, Leitrim and Roscommon which were recently found to be ineligible for connection to the national grid. We estimate that that every year industrial and commercial users in these towns are spending €16.2 million more on fuel than they would need to if they had access to natural gas. Research shows that where natural gas has become available in the Region, large users are quick to switch to the gas option.

“Domestic users are also paying more than they need and we have calculated that newly connecting households in the eleven towns could save up to €4.4 million on their annual fuel consumption. This represents a combined fuel cost saving of over €20 million each year at a time when we strive to improve competitiveness in the Region and indeed in the country as a whole”.

Policy for natural gas infrastructure is outlined in the White Paper ‘Delivering a Sustainable Energy Future for Ireland’ and it recognises the role of energy infrastructure in regional development.

“The White Paper is expected to be reviewed in 2012 and we believe that this presents an ideal opportunity to give more consideration to the expansion of natural gas infrastructure”, said Dr McHenry.

“The WDC believes that Government investment in natural gas infrastructure will bring regional and national benefits as has been the experience in other countries where investments have been made in remote localities. Without public investment there is a significant risk that the necessary infrastructure will never be put in place.

“Not having the option to choose natural gas means that businesses and householders in the North West will continue to face higher energy costs, have fewer choices in terms of the fuel they use and face higher carbon charges”, Dr McHenry concluded.

Ends

For further information please contact:
Dr Helen McHenry, Western Development Commission, 086 061 7565
or
Bernadette Mullarkey, Bane Mullarkey, 086 806 2540

Attached: Bord Gáis Pipeline Map. Source: Bord Gáis Networks – http://www.bordgais.ie/networks/index.jsp?p=104&n=141

Note on WDC Policy Briefings:
This policy briefing ‘‘Why Invest in Gas? Benefits of natural gas infrastructure for the North West’ is the fifth in a series of WDC Policy Briefings to highlight and provide discussion and analysis of key regional policy issues. It is an objective statistical resource for people and organisations who are interested in the Western Region’s future.

The WDC will be publishing further policy briefings throughout 2012 on a range of critical policy issues.

The full report may be accessed on http://www.wdc.ie/publications/reports-and-papers/reports-2011/