ECONOMIC DEVELOPMENT FORUM: INFRASTRUCTURE SUB-GROUP

Meeting held on Tuesday 13 June at 2.30pm in Clarence Court

Present: Jim McCusker (Chairman)

Peter McNaney

Janice Treacy

Doreen Brown

In attendance: Jenny Pyper, DETI

Apologies: Mike Brennan

John Gilliland

Janice Treacy would be attending all sub-group meetings in place of Ann-Marie Slavin.

1.0 Energy

1.1 The sub-group had indicated its wish to explore a number of issues related to Energy arising from its consideration of the energy-related elements of ISNI; recent substantial increases in energy costs; differential costs as between NI and GB; and North/South developments. Jenny Pyper had been invited to the meeting to cover the key issues.

1.2 Jenny Pyper gave an overview of energy matters affecting Northern Ireland, covering the following points:

· The key objective of security and diversity of supply;

· The nature of the key electricity infrastructure assets (the three power stations);

· The supply of gas from the Scottish/NI pipeline (bringing gas from Russia/Sweden) and the future supply through the ROI/NI pipeline;

· The potential (at present limited) supply from the West of Ireland;

· The facilities required to store liquid gas;

· The contribution of wind farms in the context of government’s policy to maximise the use of renewables;

· The present input of 5% of energy from renewables against a target of 12% by 2010;

· The impact of the legacy contracts (from the time of electricity privatisation) keeping electricity prices higher in Northern Ireland;

· The price gap had closed to some extent – but were 15–20% higher for industry and 10% higher for domestic consumers than in GB; ROI prices, compared to NI prices, were currently higher for business and the same for domestic consumers;

· A proposal to close the gap (by 5-7%) was being considered by the EC but could be deemed to constitute unlawful State Aid;

· A single energy market for the island of Ireland could achieve economies of scale. A joint working group was looking at this in relation to electricity in particular; a joint market would be created in July 2007;

· The two regulatory authorities would be building a strategy;

· The second interconnector would allow electricity to flow both from north to south and south to north;

· The cost of the interconnector would be recovered from consumers over a 40 year period.

· An all-island renewables policy was being considered.

· £60m would be put into the renewable energy found over the next two years.

1.3 The sub-group agreed to provide feedback to EDF on the main energy issues, and to advise that EDF should keep a matching brief. EDF should also be asked to encourage speedy progress on key developments, ensuring that momentum was maintained in creating a single market in July 2007. EDF should also monitor the position in relation to the structure and regulation of the industry as the all-island market develops.

2.0 Sub-group membership

2.1 A further response was awaited from John Keanie to identify an appropriate person from the Advisory Council on Infrastructure Investment to become a member of the sub-group.

2.2 Once a member had been identified from the Advisory Council, members would be sought from the NI Sustainable Development Stakeholder Group.

3.0 Future work

3.1 The sub-group would be dealing with a number of pieces of work:

· Revisiting the question of private sector capacity to deliver the Investment Strategy for Northern Ireland;

· Considering the public sector capacity to deliver ISNI once the current SIB – commissioned study had been completed;

· Revisiting the Infrastructure elements of the Regional Economic Strategy;

· Examining the contents of ISNI in two sections:

- years 1-3

- years 4-10, to consider the most appropriate order of priority (DFP hoped to produce a measure of the rate of return of various projects).

· Considering the purpose of the RES and its relationship to RDS.

4.0 Next Meeting

4.1 The sub-group would meet again on Monday 14 August at 2.30pm in Room 6-05, Clarence Court.