THE ESB HAS moved to reassure its staff amid allegations made in the Dáil this week that the semi-state may have “orchestrated” the current energy crisis for its own benefit. 

Fianna Fáil TD Barry Cowen also alleged in the Dáil that EirGrid made a €10 million initial payment to the semi-State firm on a €110 million contract. He claimed the contract did not transpire following a court challenge, and he asked if the money had been repaid.

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

Speaking in the Dáil chamber on 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.

Cowen told the Dáil:

I am led to believe that the amount paid by EirGrid to ESB, approved with the sanction of the Minister [Eamon Ryan], was €10 million and that that €10 million was a down payment on a €110 million contract. That is highly unusual, I would say.

“It was sanctioned and paid in the midst of a process that could not subsequently be defended in the courts and was, therefore, withdrawn.

Cowen said: 

I do not enjoy exposing these matters. I am a Government Deputy. I am intent on playing my part in implementing the programme for Government, especially having worked hard on behalf of my party to present it to our members and to the Dáil.

“However, when I see and recognise wrongdoing, and I see lethargy at this level and to this extent, it is my duty to highlight it. The Minister for the Environment, Climate and Communications, Deputy Ryan, is accountable in relation to this issue. He must quickly respond to the issues I have raised.”

‘Serious allegations’

Minister of State Ossian Smyth said the allegations that Cowen was placing on the record of the Dáil were “serious things to say” and invited the Deputy to substantiate them with more information.

The Irish Times reported in August on the court case Cowen was referring, stating that the electricity plant owner EP UK Investments had challenged Eirgrid’s award of an emergency power supply contract to a rival.

The company called on the High Court to review the award of an emergency standby electricity supply contract by Eirgrid to the ESB.

In an email to staff this week, the company reiterated its statement that the ESB “wholly rejects” Cowen’s assertions.

The correspondence sent to staff noted that the recent energy crisis has attracted a lot of media interest of late.

It said the capacity issues are driven by a number of factors such as the demand on the grid as well as the Huntstown power station in Dublin, along with Whitegate in Cork being out of action for a period of time. 

The two stations combined account for 15% of the country’s generation capacity, the email explained. 

“The ESB has made every effort to ensure its generation capacity will be available for the winter ahead – this includes ensuring that plants that are not contracted to the TSO will be available,” it said.

EirGrid is the Transmission System Operator (TSO) and ESB Networks is the Distribution System Operator (DSO).

The statement went on to clarify the issues raised in the Dail by Cowen, stating that one of the issues relates to “a formal tender process undertaken by Eirgrid earlier this year to secure emergency generation for winter 2021/22″. 

It added that another issue related to the Capacity Competition in 2019 in which ESB secured nine contracts for a new plant in winter 2022/23. The company also denied to staff that it has abandoned the Midlands, as was asserted in the Dáil by Cowen this week. 

The Journal contacted the Department of the Environment, Climate and Communications for a statement on the issues raised in the Dáil and was assured a lengthy statement providing context and explanation on the matters raised including the €10 million payment would be forthcoming.

Role of Commission for Regulation of Utilities

However, subsequently a spokesperson said in a statement: 

“Minister of State Smyth attended a Topical Issues Debate in the Dail on Wednesday, 3 November. A number of issues were raised by Deputy Cowan. Minister of State Smyth made Minister Ryan aware of the issues raised.

“As Minister of State Smyth set out in the Dail, if Deputy Cowan has any further information on any of the points raised he will be happy to communicate this to Minister Ryan. He has also noted that the Minister would consider any such information.  

“It is the Commission for Regulation of Utilities (the CRU) that has statutory responsibility to monitor and take measures necessary to ensure the security of electricity supply in Ireland.

“The CRU is an independent statutory body and is solely accountable to a committee of the Oireachtas.”

Speaking to The Journal, Cowen said Minister Eamon Ryan must answer questions on the matter stating that “Eirgrid were not within their rights to issue €10 million. The minister should’ve known that and shouldn’t have sanctioned the payment by Eirgrid”.

Other questions remain, he said, such as did ESB accept the money in the full knowledge that the procurement process was incomplete after a court challenge by a competitor?

Cowen said information must be supplied as to whether ESB returned the money after the contract collapsed, and whether Eirgrid sought the return of the funds.