Interview: Denis O’Sullivan, managing director, Gas Networks Ireland

Greenhouse gas emissions can be converted to gas to generate electricity, power businesses, heat homes and run transport

Denis O’Sullivan managing director of Gas Networks Ireland. “We connect between 13,000 and 14,000 new customers a year, and we operate one of the safest and most reliable networks in Europe.” Photograph:  Shane O’Neill

Denis O’Sullivan managing director of Gas Networks Ireland. “We connect between 13,000 and 14,000 new customers a year, and we operate one of the safest and most reliable networks in Europe.” Photograph: Shane O’Neill

 

Denis O’Sullivan may have an answer to a quandary facing Irish agriculture. Our beef and dairy industries have drawn flak as a source of greenhouse gas emissions. Yet given that they supply much of the food we need and are amongst our biggest home-grown businesses, we can hardly shut them down.

The flip side is that the emissions can be converted to gas to generate electricity, power businesses, heat homes and run transport. Both the EU and the State agency the Sustainable Energy Authority of Ireland have found that thanks to the cattle the Republic is sitting on a potentially large renewable gas industry.

O’Sullivan, the managing director of State company Gas Networks Ireland, the company that operates the network transmitting natural gas to homes and businesses across Ireland, sees it as a “hugely important” development.

He says the Republic will have to keep burning gas to generate energy past 2050. “The challenge for us is to lower carbon concentration of that supply as much as possible.”

In some ways the wags who blame agriculture emissions on farting cows are not a million miles off. One by-product of our dairy and beef herds, and the grass they eat, is slurry, which farmers store and spread on their land. O’Sullivan says it is one of the main “culprits” for greenhouse gas emissions. Yet by mixing this with grass in a specialised processor – called an anaerobic digester – it breaks it down into gas and material that can be used as fertiliser.

“Our proposal is that you take that slurry, mix it with grass, you produce renewable gas, and you produce residual fertiliser, which you return to the land, and you produce more of the grass again.

“Not alone do you get renewable gas out of it, which you can produce in a very sustainable way, but you also address some of the emission issues that the agriculture sector has.”

‘Green’ energy

Gas Networks Ireland wants renewable gas to account for 20 per cent of the fuel passing through its network by 2030. Experiences in countries such as Germany, Denmark, France and Italy show this is feasible.

Renewable gas has advantages over other “green” energy. It is consistent – it does not depend on wind speeds or other variables – and it can be used for heating, transport and power generation.

To make it work Gas Networks Ireland needs to build injection facilities that will feed gas produced on farms into the system. The State company would like to see farms build their own digesters, which would allow farmers themselves reap the benefit.

O’Sullivan does not believe every farm will need one. A farm in a given area could install a processor and take slurry and grass from neighbours to produce the gas, before getting it shipped to an injection point on the network.

“We will invest up to half a billion euro in the logistics and the development of the grid infrastructure to support that,” he say. “We would very much see ourselves as enablers for the development of renewable gas and getting that gas on to the network and distributing it to customers.”

Gas Networks Ireland has been talking to farmers along with businesses interested in supplying the hardware and the cash needed to get this project off the ground. The company’s plans have also piqued financiers’ interest.

“In terms of funders, interest has been expressed from both Irish and foreign investors and funds to get involved in this space. Because it’s a well-proven technology and is already operating well in other European countries it’s a relatively low-risk enterprise.”

Rural economy

O’Sullivan says the benefits are threefold. “One, it’s seen as a new source of renewable energy. Secondly, as a way of reducing emissions in the agricultural sector, but also it’s hugely beneficial in terms of the rural economy. We believe there is a very strong model there for it.”

But he warns that “ultimately it will need Government support to make it happen”.

And what’s in it for Gas Networks Ireland? The gas network operator gains by securing a new source of supply and cutting emissions.

The company owns and operates the system that takes natural gas from sources including the Corrib gas field, Kinsale and the UK, and distributes it to homes and businesses. The network itself starts in Twinholm in Scotland, where the fuel arrives from the North Sea. This connects to Ireland via two sub-sea pipes called interconnectors. These bring gas to the Republic, Northern Ireland and the Isle of Man.

“It’s the supply infrastructure, everything from collecting the gas from Scotland, the Corrib and Kinsale, and distributing that around the country through the transmission network and the distribution network that feeds into the majority of businesses and homes connected to gas.”

Given that the network embraces the Republic, Scotland, Northern Ireland and Isle of Man, does Gas Networks Ireland fear any consequences from Brexit?

O’Sullivan says governments, operators and regulators are working to avoid this. He believes the UK’s exit from the EU will not affect security of supplies. “The existing collaboration with the UK, which has been in place since the gas interconnector to Scotland was built in the 1990s, will continue post-Brexit.”

Go-to fuel

Gas isn’t just an important fuel to the homes and businesses that use it directly. It’s the fuel for generating more than half the electricity used in the Republic. That is twice the 27 per cent or so produced from wind power. Coal and peat account for much of the remaining 20 per cent.

The summer just gone helped drive home how much the Republic needs gas. For much of the season there was not enough wind to drive turbines to generate electricity. Without them gas was the go-to fuel. “We hit peaks of over 90 per cent [reliance on gas] on a couple of occasions during that period.”

In a normal June or July, O’Sullivan says, gas provides around 70 per cent of electricity. “When we don’t have wind we need to have our gas plants to make up the deficit. During the summer we saw times when wind generation was as low as 0.5 per cent of total electricity production. So the gas plants are extremely important in that regard given the level of flexibility they have been able to put on to the system at a moment’s notice.”

The system was able to cope because the Republic has several recently-built gas-fired generators that can handle sharp ups and downs in demand. These include the Whitegate plant in Cork, built by Gas Networks Ireland’s former sister company Bord Gáis, the SSE Airtricity plant at Great Island in Wexford, and Tynagh Energy in Galway.

In light of the need for these modern gas plants, O’Sullivan is concerned at a recent row that saw energy supplier Viridian threaten to close two gas-fired generators in Huntstown, Co Dublin, after it failed to secure a contract from electricity grid operator Eirgrid in an auction overseen by the Commission for Regulation of Utilities. Viridian successfully appealed the decision.

That could have led to the loss of modern gas plants at a time when we continue to operate less efficient coal and peat generators, with potential consequences for the system’s flexibility. “While we have sufficient capacity in gas generation at the moment it’s important that we maintain that in the future,” O’Sullivan says.

He agrees that the auction was the best way to get value for money. “We also need to factor into the mix the flexibility that’s needed. The loss of flexibility that’s provided by gas can’t be provided by coal or peat. So that’s a consideration that needs to come into the discussion.”

Future sources of gas

Economic expansion along with increased use of electricity for heating and transport means demand for energy is growing all the time. O’Sullivan says that the Republic may yet need at least one more power plant in the medium term, particularly as the days of coal and peat are numbered.

More pertinently, Gas Networks Ireland is looking at future sources of gas. As things stand Corrib supplies 60 per cent of what we use, Kinsale 6 per cent to 7 per cent, and around 30 per cent comes via Britain. Kinsale will be empty in 2020 or 2021, while Corrib will begin dwindling midway through the next decade.

“We are potentially facing into a time when all of our gas comes from the UK. That’s not ideal. The more diversity of supply you have, the more security of supply you have. So we would be in favour of seeing additional sources of supply coming on to our system.”

Renewable gas will contribute, but it is just part of the answer. One option is to find a second Corrib field; another is liquid natural gas (LNG). This is gas that has been cooled to liquid form to allow it to be transported by ship. Once the liquid arrives at its destination it is heated to convert it back to gas, and pumped into a distribution network. The US and the Middle East, particularly Qatar, are big suppliers.

Several businesses interested in building a LNG plant – one that converts liquid to gas – have approached Gas Networks Ireland. There are two front-runners. One is a floating facility in Cork Harbour proposed by Texas-based Next Decade. The second is a revived version of an earlier plan for the Shannon Estuary at Ballylongford in Co Kerry, now backed by another US player New Fortress.

O’Sullivan says that Gas Networks Ireland’s job will be to make sure that any LNG plant can connect to its system. “We would welcome both or either of those two, or any of the other potential [projects]. We’d welcome the additional security of supply and the commercial competitiveness that they would bring to the market.”

Both [proposals] are still at an early stage, and face a long complicated planning and licensing procedures. They will also cost hundreds of millions of euro to build. Ballylongford, the bigger of the two, could cost €500 million. However, reports last month indicated that it could qualify for some EU cash.

Heat and power plant

A native of Lissarda in mid-Cork, O’Sullivan graduated as a mechanical engineer from what is now Cork Institute of Technology. He went to work for Grainger Sawmills in Enniskeane, near Bandon. Working there he oversaw the construction of Ireland’s first biomass combined heat and power plant, a joint venture between his employer and SWS Energy.

He went on to head up SWS’s waste and bio-energy business, and then joined Bord Gáis Energy, where he ran its wind development arm. He went from there to Brookfield, which bought Bord Gáis Energy’s wind farms at the time when parts of the overall Bord Gáis group, which included Gas Networks Ireland, were sold. He joined the networks operator as head of commercial in 2014, before becoming managing director in April.

Gas Networks Ireland is part of Ervia, a State utility holding company whose other main element is Irish Water. However, both are very much separate.

O’Sullivan’s job involves running a company that earns profits of €150 million a year on revenues of €500 million. It invests around €150 million annually on extending its network and replacing parts that have reached the end of their lives.

It sounds like a lot of money.

“It is a lot of money, but over the last three years we have expanded the network into Wexford, into Nenagh and down into Listowel. We are currently building a connection up into Ballymahon in Longford to facilitate Center Parcs.

“We connect between 13,000 and 14,000 new customers a year, and we operate one of the safest and most reliable networks in Europe. ”

CV

Name: Denis O’Sullivan

Age: 45

Post: Managing director, Gas Networks Ireland.

Why is he in the news? Gas Networks Ireland, the State company that runs Ireland’s natural gas network, plans to spend €500 million to support the arrival of renewable gas on the system.

Family: Married to Jennifer with two teenagers Mark and Kate.

Interests: Kayaking, Munster rugby and GAA.

Something that won’t surprise: He’s been working in the energy industry for close to 20 years.

Something that might surprise: He enjoys kayaking on the Lee reservoir near his home in Lissarda, Co Cork.

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