Wednesday, 11 October 2006
Seanad Eireann Debate
welcomes the publication of the Government’s Energy Green Paper entitled Towards A Sustainable Energy Future For Ireland, which sets out policy proposals for Ireland out to 2020 to transform our national energy landscape;
I welcome the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy John Browne. I read previously that at the rate of current usage, the world’s stock of oil is expected to run out in approximately 50 years. However, usage will increase, particularly in the emerging economies of China and India, and the 50-year period could be reduced considerably. This is the challenge facing the world and it is imperative that we develop alternative energy sources. Now is the time to do so instead of waiting until it is too late. For this reason, the publication of the Government’s Green Paper, Towards a Sustainable Energy Future for Ireland, is timely and has generated much needed discussion in this area.
“An Inconvenient Truth” is the name of a new movie released in cinemas last week. In it, Al Gore engages the audience on something that affects us all, namely, global warming. However, it does not take Al Gore, his book or a movie to highlight the effects of global warming. We witness the consequences every day in rising sea levels, melting icecaps, negative agricultural effects and changing weather conditions. Greenhouse gases in the atmosphere maintain a habitual temperature on Earth, but practices such as burning fossil fuels and using CFCs increase greenhouse gases at a rapid rate, resulting in Earth becoming drastically warmer. This has a negative effect on nature, as it pollutes the world and puts considerable pressure on our environment.
A strong economy and a developing population in Ireland means that there is a greater demand for energy, the main source of which is fossil fuels, including oil and natural gas. Not only are these sources unhealthy for the environment and increase carbon emissions, but they are running low in supply. Due to the Irish electricity market structure, there is little competition and the cost of this energy is high. It is essential to find a balance between development and conservation and to address the issues with the supply and cost of energy. The Government has developed a new policy to face these challenges in the form of the Green Paper, which examines the security, competitiveness and sustainability of Ireland’s energy supply.
Climate change is a major negative result of energy-related greenhouse gas emissions and, therefore, these emissions need to be reduced. This paper sets out the methods and incentives to stimulate the development of renewable energy sources, which reduce the negative impact of greenhouse gas emissions. A contribution is to be made to the National Climate Change Strategy 2006 review and under the EU review of the energy crops scheme, a ministerial task force on bio-energy will be established, the national bio-energy action plan will be finalised and an action plan is to be developed in respect of energy efficiency by the end of 2006 to deliver a 20% improvement by 2020.
An all-island research and development programme will be developed in co-operation with international researchers, including the EU and the International Energy Agency, to support technology breakthroughs. An all-island renewable target is to be set. Some 15% of electricity is to be of a renewable source by 2010 and 30% by 2020. By 2010, 5% of fuel used for heat purchases should be from renewable sources and bio-fuel is to be researched and its penetration increased, the aims being a 2% increase by 2008 and 5.75% by 2010. The Department of Agriculture and Food is also to consider stimulating increased interest in energy crops. The all-island target will encourage a diversity of fuels to help to ensure that supply meets demand. There is also an aim to reduce dependence on natural gas and oil by 2020.
The Joint Committee on Communications, Marine and Natural Resources produced a report last June entitled Review of Energy. Mr. Bernard Rice from Teagasc told the committee that it “should be possible to get 5,000 miles per acre of rapeseed, roughly 100 gallons at 50 miles to the gallon”. In terms of using bio-fuels, it will take upwards of two acres per car to continue driving the average distance of 10,000 miles per annum. Growing bio-fuels to continue to give every Irish motorist that 10,000-mile experience will take up a large part of the stock of arable land in Ireland. This must be a wake-up call and it clearly shows that Ireland needs policies to address the changes the future will bring.
In a further attempt to increase supply, an all-island energy market will be developed and European regional energy markets will be helped to develop. Gas and electricity supplies will be secured, ensuring an adequate and safe delivery to Ireland at all times. A network development programme in electricity and gas is to be set up and the South-North gas pipeline and the electricity network renewal programme are to be completed. Gas sources will also be diversified, gas storage facilities developed, and a European gas market supported.
Ireland uses gas to generate over 50% of all its electricity. Security of supply is, therefore, of major national importance, and more so the longer it takes to get the Corrib gas field into production. It is estimated this source will be able to supply a large segment of the indigenous gas market in the short term — approximately 30% of peak supply rising to 60% over a period. It is vital that this supply is brought on stream without further delay and in a safe manner. The Corrib gas pipeline is an opportunity to extend the gas pipeline to the previously unserviced areas of the west, north west and midlands. From the map on page 37 of the Green Paper, it is quite obvious that a large part of the country does not enjoy the benefits of natural gas. I am sure this is something my colleague, Senator MacSharry, will allude to in his contribution as he has raised this on many occasions at the Joint Committee on Communications, Marine and Natural Resources.
Renewable energy sources constitute a potential replacement for vulnerable fossil fuel imports, which are most certainly subject to continuing price increases. Therefore, renewable and sustainable energy sources are most important. The essential elements are wind, biomass, bio-fuels and wave energy.
Wind energy is already a well established component of the national electricity generation programme. There is a limit to the size of the fraction of total electricity that wind can contribute. The size of this contribution is a matter of continuing debate. For instance, Denmark produces 20% of its electricity from wind and this percentage is planned to increase in the coming years. There are many who object to wind farms in their areas, but they are becoming a necessity and it is something on which we will have to bite the bullet or suffer the consequences.
Wave energy is largely under-utilised in Ireland at present. It has an advantage over wind in that wave energy is more predictable. In this country we are well situated for wave power. However, there is a limiting factor caused by Ireland’s grid configuration — transmission and distribution. The grid is at its weakest where the resource is at its greatest. Therefore, the wave power industry requires special treatment to get started and derive the benefit of developing a new industry. The Joint Committee on Communications, Marine and Natural Resources, in its report, suggested measures such as generous payments per unit of electricity delivered together with an upfront capital grant. By leading this development of wave energy technology Ireland could benefit in the way the Danish benefited from wind technology.
Biomass has the potential to replace peat and is already in use through pelletised fuels, which are growing in competitiveness and are becoming more widely available. Biomass is part of but not the entire solution. Bio-fuels offer a new and alternative fuel source and I referred previously in this House to Cork City Council, which initiated some projects on bio-fuels. This initially involved 17 vehicles which ran on rapeseed oil.
The energy policy encourages investments in hydrocarbon resources by promoting Ireland as an attractive location for oil and gas exploration. This is done through revising regulations and licences and establishing a framework for major projects. The National Oil Reserves Agency, NORA, is to be set up as an independent statutory body, and existing bilateral oil stockholding agreements in the EU will be reviewed.
The structure of the market is to be reformed. The ESB and State-owned electricity assets will be retained. The power held by any one strong player in the market will be reduced. A State-owned land bank of current and potential generating sites will also be considered.
Global warming will be the greatest environmental challenge in the 21st century. In the Green Paper, Towards a Sustainable Energy Future for Ireland, the Government attempts to face this challenge by developing energy efficiency strategies, maximising indigenous energy resources, investing in energy infrastructure, research, development, technology and innovation, and increasing competition. These efforts will reduce carbon emissions in the atmosphere, reduce the negative effects of global warming, reduce the costs of energy, and reduce the difficulties with supply. This will result in a better quality of life for Irish people, Europe and the world. I commend the motion to the House.
Mr. MacSharry: I second the motion. I welcome the Minister of State, Deputy Browne, to the House and congratulate him, the Minister, Deputy Noel Dempsey, their officials and all the stakeholders on putting together the Green Paper. Having had an opportunity to look over the debate which took place in the other House yesterday, I will not say it is long overdue. We all obviously know that, as the Taoiseach stated, there is almost no other policy area which is so basic and fundamental to our success in terms of sustainable growth.
I do want to be repetitive either. Many Senators will go through the various aspects of the Green Paper. It is a significantly aspirational document and I assume the reason for that is to stimulate debate over the next two months to get in the widest range of innovative and productive ideas so that the Government can put together the White Paper and come up with the appropriate actions which will make the difference.
In the context of this issue, there can be no truer statement. As long as one can say that it will never happen to us or it will happen to everybody else, that it will happen so far in the future, or that it will not affect me, my children, grandchildren or great grandchildren, one is likely to suggest not dealing with it and to hope someone is looking into it. Unfortunately, nobody has looked into it and now we need to do so quickly.
The most important part of that statement is that it strongly suggests we must ensure that people profit from it in the shorter term, and there is nothing wrong with that. Let us call it incentivisation. In the smallest possible way, we have made some slight inroads in that regard through the greener homes scheme. We need to start looking at the greener homes scheme to the power of infinity and over a much wider range of activities. The scheme is good in terms of the wood pellets, solar panelling, etc., but it is not essential anywhere. Let us make it easier for people. Let us provide the scheme through tax credits or through cash payments by which we can get people to engage actively in this. Let us come up with a cross-departmental approach so that we can legislate in the building regulations, for example, to provide that houses contain all these.
The area of transport is the one where we could take steps quickly. As the House will be aware, since 1990 there has been an increase of approximately 65% in car ownership. I gather from a recent press release of Sustainable Energy Ireland that transport is responsible for 41% of our primary energy demand and for 33% of our CO2 emissions. While one third of our CO2 emissions are in this area, in real terms we can take action through providing incentives for the likes of hybrid cars. I note that the car of the Minister for the Environment, Heritage and Local Government, Deputy Roche, is a hybrid that operates with diesel and battery power. Four cars in the ministerial fleet are hybrids. They all should be. Let us provide an incentive to the public, whether through road tax reductions or otherwise, so that they are proactive in this area.
I am indifferent as to the fuel on which my car runs and, of course, I need my car. I would be delighted to make such a move. If these were more readily available and if there were an incentive, perhaps we could get members of the public to change over quickly. Given that cars are responsible for one third of our emissions and 41% of primary fuel demand relates to transport, substantial gains could be made if the focus was put on this issue.
It is clear, whatever strategy emerges in the White Paper in two months, the Government will have to be radical in its approach. The bar needs to be set higher than 30% of energy to come from alternative sources by 2020. If we dream, let us dream that little bit bigger and push the boat out a little bit more. Last Saturday, as I was driving and burning fuel, I listened to Marian Finucane’s interview with Richard Branson on radio. He is investing €1.5 billion of his resources in the research and development of alternative fuel technologies. I browsed the Internet earlier regarding his proposals but I could not obtain much detail.
However, the Government should look into this. Richard Branson is meeting airline representatives and so on. I laughed when I heard his proposal to tow aircraft from the terminal to the runway to save fuel and to have airplanes begin their descent into airports 15 minutes earlier. Similarly, we all would have laughed 20 years ago at proposals for tidal or wind energy.
I would not be true to Tipp O’Neill’s maxim that all politics is local and fail to mention the gas network. I have a diagram of the gas network and the north west is highlighted in yellow because there is no gas provision in the region. Under the Gas Acts, Bord Gáis has no intention of bringing gas to this area.
Mr. MacSharry: I am all in favour of an extension of the gas network to Wexford. My colleagues in the west will do everything to support him in this regard. However, north of a line between Dublin and Galway and west of Mullingar, there is no gas provision. Even if the Corrib gas pipeline comes to fruition, there will not be much provision for the people of Mayo, Sligo, Leitrim and Donegal. The Minister of State kindly contacted me previously to outline the research being conducted on this issue and the appointment of consultants. Where is that at? I hope the full energies of the Department have been brought to bear on BGE to ensure it will expedite this issue as quickly as possible, to determine the subvention that will be required to extend the gas network to the north west and to build it as quickly as possible.
“notes that according to the Environmental Protection Agency’s latest report, Ireland is now 23.1% above its 1990 Greenhouse Gas Emission levels, 10% above our obligations under the Kyoto protocol and that average temperatures are likely to rise by 0.6% in the coming decades;
condemns the Government’s Green Paper on Energy for failing to address Ireland’s key energy challenges and calls for a cross-departmental approach to the issue, coordinating the activities of the Departments of Communications, Marine and Natural Resources, Environment, Heritage and Local Government, Agriculture and Food and Transport in order to reduce our reliance on imported fuels, reduce our carbon emissions and drive down the cost of energy; and
investment and commitment to wind energy to be predicated on the putting in place of the necessary interconnecting infrastructure that can ensure continuity of supply in the event of a reduction in supply from wind;
creation of a market for bio-fuels by legislating that all motor fuels must include a blend of fuel from renewable sources. All petrol sold will include a 5% bioethanol mix and all diesels would contain a 2% bio-diesel mix;
reform of the Vehicle Registration Tax system, through the establishment of energy efficient labelling for motor vehicles with lower and higher rates of VRT for fuel efficient and inefficient vehicles respectively;
The energy debate is interesting. Last week the main players in the gas and electricity industries, including the regulator, appeared before the Oireachtas Joint Committee on Communications, Marine and Natural Resources to discuss concerns in the marketplace about the escalating cost of gas and electricity. The backdrop to the debate is a 34% increase in gas bills with an increase of 20% in electricity prices due on 1 January next. Competition in the electricity sector has totally failed the household consumer and it has made no difference. These people are captives of their ESB bills, which, aside from electricity charges, also includes VAT, a publish service obligation levy and standing charges amounting to in excess of 20% of the cost of the bill. When the proposed increase kicks in, electricity prices will have increased by 60% between 2002 and 1 January 2007. If we are the captives of carbon fuels, how will competition be created in the marketplace?
Last night in the Lower House, the Minister for Communications, Marine and Natural Resources stated the ESB will maintain its generating capacity because to do otherwise would lead to increased costs and less competition. I am not sure about his logic and perhaps if the Government opened the marketplace, competition might be stimulated to reduce costs for the consumers and give them freedom of choice. However, that will not happen in the short or long term.
The joint committee conducted a great deal of research and launched its own energy document recently, which received a favourable reception. I asked the Minister to release the report to the committee compiled by Deloitte & Touche consultants, who were paid more than €1 million, which he received in September 2005. If the committee members had been given access to that documentation, it may have enhanced their deliberations before producing their document. However, everybody was bound to secrecy regarding its contents only for it to be published on the same day as the Green Paper on Energy.
I queried the Minister regarding the public service obligation levy in ESB bills at another meeting, which the regulator stated is anti-competitive, but he jumped down my throat and asked whether I wanted to close peat fired power stations in the midlands. That was a trivial reaction by him to a serious issue. The same Minister takes a dividend of almost €80 million from the ESB annually. I would not mind if the money was ploughed back into improving the ESB’s infrastructure but it goes into the Government’s coffers. It was an arrogant cheek of him to label something constructive that I put forward as anti-competitive.
However, I welcome the opportunity to discuss the Green Paper. While it is not a good enough response to the energy crisis facing the country, nobody doubts the scale of the economic and environmental difficulties that lie ahead if Ireland does not address the energy crisis. To neutralise the effect of global warming on the world’s population, it is generally agreed that the level of global greenhouse gas emissions will need to be reduced by 70% by 2100. As a first step, the 1997 Kyoto agreement was drawn up with the aim of reducing global emissions of greenhouse gases by 2012 by 5.2% based on 1990 levels. Under the agreement, to which Ireland is a signatory, we undertook to limit the increase of such emissions between 2008 and 2012 to only 13% based on 1990 levels. Without any action, it is estimated our emissions will have increased by 37%, almost three times the permissible level. We are currently 25% above our 1990 level.
Fine Gael has seriously criticised the Government’s Green Paper on Energy for containing little more than aspirational proposals and for a complete lack of costings. The Green Paper can be contrasted with Fine Gael’s comprehensive policy document, Energy for the Future, which was launched six months ago and which contains a set of revolutionary but workable proposals involving several Departments, costed at €488 million. The Green Paper should have contained wide ranging, feasible solutions to Ireland’s energy problems but the Minister has presented the public with a hotch potch of half measures, which are aspirational in character and which have not been costed.
The dearth of specifics in the Government’s plan is clearly evidenced by its target to reduce electricity usage by 20% through unspecified conservation measures. Such nonsense is not good enough. It is not credible for the Minister to claim he will reduce energy usage and then refuse to specify how he will do so. The refusal to cost any proposals and the lack of emphasis on critical issues such as bio-fuels further characterise this phenomenally disappointing document. A lack of innovation and vision is at the heart of the Government and consumers are losing out.
The Government has failed to create positive competition in the industry that will benefit the consumer, particularly when there is an emphasis on driving energy prices upwards to the detriment of the consumer and the wider economy. This is clearly seen in the unjustifiable 34% hike in gas prices. It is worth considering that the Government took in €223 million last year in VAT from energy bills. At the launch of the Green Paper, the Taoiseach stated there is no other policy area that is so basic and fundamental to our success than energy, yet it has taken the Government over nine years to produce a Green Paper.
Although I am short of time, I wish to detail some of Fine Gael’s policies. These include the removal of all excise duties on bio-fuels produced from renewable energy crops; targeted grants to encourage householders to convert to renewable energy for home heating; reform of the vehicle registration tax system through the establishment of energy efficient labelling for motor vehicles, with lower and higher rates of VRT for fuel efficient and inefficient vehicles, respectively; the creation of a market for bio-fuels by legislating that all motor fuels must include a blend of fuel from renewable sources, that all petrol sold will include a 5% bioethanol mix and that all diesel will contain a 2% bio-diesel mix; the requirement for all public transport vehicles and public service vehicles to convert, where practicable and feasible, to forms of bio-fuel; the establishment of a centre of excellence for alternative energy which will be charged with ensuring Ireland develops a world-class alternative energy sector; and the amending of the national spatial strategy, including with regard to major renewable energy infrastructure projects.
Mr. U. Burke: I second the amendment. I welcome the Minister of State to the House. The Green Paper is aspirational and vague, and no costings are indicated, as Senator Finucane noted. While everybody understands the importance of the maintenance of security of supply, we must realise the crisis in Ireland with regard to future development. A few days before Christmas last year, we were in the amber light section. It was only then we realised the seriousness of our situation with regard to our overdependence on imported fossil fuels. However, there was no clear indication from the Minister, the Government or the Commission for Energy Regulation, CER, that they are serious about moving forward at an accelerated rate.
We have had ample opportunity in the past five years to bring on-stream many wind energy projects but they have been stifled. Perhaps, in the first instance, this was not the fault of the Government but of the local authorities and the planning procedures. Many wonderful projects are ready to proceed, and are supported by communities, private investors and companies. However, the major stalling point for these projects, despite them having gone through the planning process, which was difficult in many cases, is access to the national grid. Whatever the Government must do, they must free up the logjam that in the national grid if we are to release the potential in wind energy.
Many suggest there is a grand plan to stifle access to the grid so the ESB can move in at a crisis point, when those who have invested heavily in planning and development of sites are over a barrel economically, and purchase access to the grid. It is unfair but nothing the Government has done in the past nine years indicates it is committed to freeing up access to the grid.
Many projects were supposedly given clearance for access to the national grid under the Gate 2 process. However, the reality is that since last August, the CER has not moved forward with projects that were ready to proceed. Somebody must knock heads in this regard. The commission must take responsibility because it delayed for six months prior to August on deciding who would and would not get in. Having made the decision, it has stalled the Gate 2 process and nothing has happened.
I would be glad to accept the situation is not as I have set out. I know of a particular project which has been ready to proceed for four years but cannot do so, first and foremost because the commission held it back. Before that, it was held back due to planning issues. Those involved are now in a situation where the planning permission is due to run out but they have not yet received confirmation that they can begin development. This is unacceptable. If the Green Paper were serious about energy requirements and contained a commitment on action, it would be important.
The Green Paper is long on style but short on substance. Two factors are referred to repeatedly in the Green Paper, namely, competition and transparency. However, despite my efforts to get information, I have failed to get details from the Minister, the Department or the CER about a particular case. A modern gas-fired electricity producing power station has been built in Tynagh, County Galway. I do not know who owns the station — nobody seems to own it. GAMA, the builder of the station, was the first owner but it sold out at a huge profit. Who are the investors in Tynagh Energy? I cannot find out.
A more serious problem concerns the terms of contract for Tynagh Energy, although I am open to contradiction in this regard. It is my understanding there is a 15-year contract for the supply of electricity and the producers are guaranteed payment for 100% capacity production despite the fact there has never been much more than 50% utilisation of the station’s capacity since it was commissioned. How can we call this competition given that we are being charged 100% for electricity but are utilising only 50% on average? Is it competition?
I challenge the Minister of State to explain why electricity customers are facing increases of 19% or 20% when there is such a farce in regard to Tynagh. Must we provide 50% incentives to guarantee reliability of supply for the future? Why must the customer pay for this? Will the Minister of State indicate whether these are the terms of the Tynagh Energy contract for the next 15 years? If so, how can we claim to be serious about regulating energy costs? We are not. We are handing control to unidentifed people.
Projections have been made about changing over to bio-fuels. The target exists and we would have a tremendous response from bio-fuels if we had a doubling of the tillage area for this purpose. The Minister of State comes from a tillage county but can he truthfully support the idea that it is possible to double the amount of tillage in order to provide the requirement for bio-fuels? It is not on. We are talking about an aspirational situation with no account being taken of the consequences of what is involved, including costings. The Green Paper is vague in this respect and I am not too sure if everything in it was not a rushed job.
As regards the break-up of the ESB, we are talking about competition on the one hand and reliability of supply on the other. It is a thin line between both aspects, however. The Minister of State should tell the House clearly whether or not the ESB is to be broken up. If not, how can we correlate that with future energy costs? Most people would say that over the years the ESB has been particularly good with regard to reliability of supply and repairs. If we are going to privatise the ESB, will it turn out, as we have today, that somebody is lurking in the long grass, waiting to snipe at certain aspects of the company, thus crippling it later on?
Dr. Mansergh: I am probably the only Member of the House who was involved in the preparation of the last Green Paper on energy policy, which was produced in 1978 under the aegis of the Department of Industry, Commerce and Energy. Outside Departments had an advisory role. At that stage it was thought that nuclear and coal were the routes to take but subsequent events proved otherwise.
I agree with the Green Paper’s exclusion of nuclear energy — on pragmatic economic grounds as much as any others — in that it would not fit the current system. However, we should not treat nuclear power as if it were a moral issue. I have no objections to importing electricity from countries where nuclear power plays a considerable role.
The most immediate issues the public will be concerned about are the steep price rises in gas and electricity, and whether those are justified given the rapid and unexpected rise in the price of oil to approximately $60 a barrel. The Government should review that situation as well as reviewing whether setting these prices annually is at too long an interval. Realistically and pragmatically, the ESB is vital to our future and, moreover, in State ownership. More so than price, security of supply is critical to hi-tech industry. We have seen the disruption caused in the state of California by serious interruptions in power supplies. That is not to say, however, that all competition should be excluded.
I would caution against adopting a gung-ho attitude to wind power, which does have a role to play. We need to be careful about it, however, as other countries are. Our tourism industry, which is hugely valuable economically, depends on our landscape. I would not like to see wind turbines in every other field, as happens, for example, in parts of eastern Germany. Areas of heritage and high amenity where there are human settlements should be avoided for this purpose. Wind energy has a role to play but that role should not be exaggerated. Connection difficulties were referred to in the debate and the fact is that wind power is very unstable. Winds can be strong or weak and there is no method of storing that resource. Even large countries such as Germany, which has invested hugely in wind power, have found their electricity systems in danger of being destabilised simply because of the variability in wind strengths.
While I take Senator Ulick Burke’s point that its potential should not be exaggerated, I have a much stronger preference for biomass, which has few downsides. Many groups are currently working on such projects and I would like to see the Government encouraging the development of bio-energy.
A topical issue at present concerns the ongoing protests at Rossport. In the beginning, I had quite a strong sympathy with the particular local community affected. It seemed to me that they had been treated in a fairly careless and haphazard manner, and that the project had not been fully thought through. There comes a point, however, when realism and pragmatism come into play. Changes are going to be made to the project and that fact must be recognised. I do not think it is possible for a small community group to force a multinational to put its plant out to sea——
Dr. Mansergh: It would do huge damage to the reputation of this country. There is a national interest involved in this, so it is time for some realism and accommodation. I accept Senator MacSharry’s point that if there had been more plans to supply the north-west and more benefit for the area concerned, perhaps the opposition would not have arisen to the extent that it has. It is striking that there are five Deputies representing the Mayo constituency, one of whom is the Leader of the Opposition. Yet only one of them, an Independent Deputy, actually supports the Rossport campaign. If there was huge support in County Mayo for the protest it would be reflected in what the local Deputies are saying.
The Green Paper also places some emphasis on energy conservation and greater fuel efficiency. I wish to register my unhappiness at the effective phasing out of rail freight transport. There is much unused capacity which is energy efficient. That is a case where one area of public policy is going in the opposite direction to the Green Paper.
Mr. O’Toole: I wish to make some straightforward points. On the issue of wind energy, I want to clarify a number of issues. I agree that wind farms might despoil the landscape but we might have to make a choice some time between that and the possibility of sea water encroaching on some of the beautiful parts of the Minister of State’s county, among other areas. That is a choice we must make.
I want to deal firmly with Senator Mansergh’s point about the instability of wind energy. As the Senator correctly stated, wind energy blows hot and cold, weak and strong. The reality is that wind energy throughout the country needs to be connected to the one grid because for 90% of the time, wind is blowing somewhere on the island. That is the correct figure. Airtricity put forward a proposal to the European Union to have a bank of wind farms interlinked from Scandinavia to the Mediterranean. There would always be wind blowing, as we can see from normal weather movements. That is the way forward.
I strongly agree with the point made by Senator Finucane on microgeneration. A new report on this area has been published, which I have not read yet as I only received it two days ago. Connecting to the grid is a crucially important part of that, but we heard over a year ago that the connections to the grid are to be suspended. I do not know the reason for that. We did not get an explanation despite the fact that Senator Finucane, myself and a number of other Members raised it in the House.
Senator Mansergh mentioned biomass. I presume in its usable form that is a reference to wood pellets. About three weeks ago I inquired about buying wood pellets in the State, but I could not find a company that sold them. They must be imported from the North. What is the reason for that? Why can we not produce wood pellets here? What is the problem in that regard?
More importantly, and this is where this country always goes wrong, I am aware that one can get a grant for installing a wood pellet burning stove but one cannot get a grant for installing solar panels or a geothermal heating system. Where is the balance in that policy? What are we doing in that regard? Why can we not adopt the same approach to both options of the availability of a grant?
In terms of bio-fuel, we cannot create an industry for the agricultural community, many of whom the Minister of State represents, while there is a cap on the amount that can be produced under the excise limit. We cannot ask farmers to consider growing a new crop if there is not continuity and certainty of a market and we cannot ask industrialists or other people to develop that industry if they cannot be sure of it either. Currently, the cost of a barrel of crude oil or diesel is approximately $60, although the price fluctuates and was $70 a barrel at one stage. The cost of producing bio-fuel is almost double that at more than $100 a barrel.
The way some countries, such as Germany, have dealt with the difference in cost, and I am not suggesting this measure but outlining it for the information of the House, is to increase the excise on diesel to make bio-fuel more competitive, although that is perverting the market and I am not attracted to the idea. The head of Airtricity made a statement last week indicating that he expected the price of crude oil to be more than $100 a barrel by the end of next year. If that is the case, bio-fuel would be viable because that price will not increase. We need to be ready to catch that market and encourage such production now. That is what I ask the Minister of State to do.
I would like to there to be a move forward on the following issues. We should remove the cap on production and consider other ways of making the product more efficient. The Minister of State should also explain the reason renewable energy generation projects are not grant aided in the same way as are wood pellet burning installations. Solar energy appears to be going a-begging. It is almost winter and harnessing the solar energy that is currently outside would heat water to almost 20 degrees, which is enough to knock the sting out of cold water and to reduce many of our energy costs. Will the Minister of State consider those issues? I look forward to hearing his response to them.
Mr. Norris: I thank my colleague, Senator O’Toole, for sharing his time with me and allowing me to take part in this debate, which is timely because it reflects not only our energy needs but the impact of energy generation upon the global climate. I am very concerned about this issue. I have a motion on the Order Paper about it because I believe that what we are witnessing is perhaps the beginning of the destruction of the earth as a habitable planet. It is that serious.
In August, I took up an open invitation from the Norwegian Minister for Foreign Affairs to travel to Svalbard and Spitsbergen to see for myself the impact of climate change on marine and mammal life, the ice floes and the glaciers in those regions. What I saw there was very worrying. We also know that in Switzerland, for example, closer to home, the Eiger, one of the most famous mountains, is changing shape because the ice is melting and loosening. Massive rock falls have occurred. The rock face is exposed and is crumbling. Boulders are crashing down on villages. The heart of Europe is already experiencing the effects of climate change.
In Siberia, near Cherski, the permafrost has started to melt, new lakes are appearing, gases are bubbling up from the bottom of these lakes to the surface and they are having a further impact on global warming. Holes are appearing in the roads all around Cherski and buildings are starting to collapse. This is not some kind of science fiction account; this is what is already happening and, as Senator O’Toole said, it may well impact on us.
In the Arctic, the sea ice is decreasing in summer year by year and over the past 30 years, there has been a 15% to 20% decrease in it. I have seen the effect of climate change and one needs to experience it, to go to these places to get a firm hold on the level of the impact and to see what is happening.
We are not spending enough. I heard on the BBC World Service some weeks ago Professor John Holdren of the American Association for the Advancement of Science indicate that our spending rate on a global level in terms of renewing our energy stations and so on is flat whereas even to stand still it ought to be three times what it is currently. Some $12 trillion is needed to rebuild power plants, transmission lines and generating stations. That would have an impact over 30 to 40 years but we are not prepared to do it.
I never thought I would say this but thank God for Arnold Schwarzenegger and the introduction of fuel conservation measures which are being made mandatory throughout the state of California. The situation is now so serious that even the US Congress which, under the Bush Administration, had played ball with the energy and oil industries in particular, recently passed an emergency motion calling for an immediate approach to restrict greenhouse gas emissions. That shows that even within that most conservative group of people there is a recognition that something serious must be done.
With regard to energy, thank God for the people who are protesting in Rossport. Let us consider the way President Putin dealt with Shell. It is one of the most disreputable companies on the face of this planet and it is dishonestly buying its way into publications like National Geographic to pretend it is ecologically friendly. It is not. President Putin knew how to deal with it. If there is something in it for Shell, it will come back. It is disgraceful that the Irish State should be used by a multinational to crush a local population, so to speak.
I am glad there is use of interconnectors and that this will expand not only through Northern Ireland but also through Europe. That links in with what Senator O’Toole said about a bank of wind farms along the coast.
I turn now to the question of wind farms and put on record the benefit of them. For every megawatt of Irish wind energy that displaces fossil fuel power production each year, the environmental, economic and social benefits include the following: clean electricity to meet the electricity needs of 650 homes — that is per megawatt; the removal of the need to import 6,450 barrels of oil; the avoidance of 2,700 tonnes of CO2; the avoidance of 49 tonnes of SO2; the avoidance of 5.5 tonnes of NOX; and the avoidance of 175 tonnes of slag and ash for landfill. I know there has been some complaint about the environmental impact of wind farms but these things can be concentrated. In my opinion, they do less damage than people. There are some problems for migrating birds but only a small fraction of these birds will be damaged. They are much more likely to be damaged by a degrading of the environment than by wind farms.
The Government’s website still has out-of-date material on the previous Green Paper which dealt with increasing the percentage of total primary energy requirements to be derived from renewable sources to 3.75% by 2005 from 2% in 2000. Have these targets been achieved and, if not, why are we bleating about further targets when we have not reached the initial ones?
Minister of State at the Department of Communications, Marine and Natural Resources (Mr. J. Browne): I welcome the opportunity to address the House in support of the motion about the recently published energy Green Paper, Towards a Sustainable Energy Future for Ireland. In particular, I welcome the terms of the motion which recognise the social and economic importance of energy policy. This motion puts energy policy in its rightful place, at the forefront of our development as an economy and as a society up to 2020.
This is the first comprehensive Green Paper published by Government since the mid-1970s, and it covers all aspects of energy. The paper sets out the policy directions, targets and actions proposed out to 2020 for security of supply, sustainability, and competitiveness, as the three main pillars of energy policy.
The Green Paper has been published with a two-month period for consultation, and a vigorous and robust debate about the issues and policy directions has already commenced. I am glad that the Oireachtas has shown a strong lead in this regard. The paper has already been the subject of an in-depth discussion by the joint committee as well as statements in the Dáil last night and now in this House this evening where we have already had some excellent contributions.
While many elements make up our overall strategy, we need to keep our eye on the bigger picture in terms of where we want Ireland to be in energy terms in 2020. A clear vision of the 2020 energy landscape will help shape and inform the debate about strategies to get there. I note that the motion quite explicitly acknowledges our responsibility to the next generation. I will sketch out some of the features of the energy landscape we intend that generation to experience. However, for us to bequeath that reality to them, we will require delivery on challenging and far-sighted targets from us all.
The motion places particular emphasis on renewable energy, bio-fuels and energy efficiency. Attaining world-class performance in terms of the sustainability of our energy production and use will be the key to ensuring a secure energy future for Ireland. Accordingly, I wish to focus especially on these elements and set out how success in sustainability will support both security of supply and competitiveness, illustrating the coherence of the policy directions set out in the Green Paper. Delivering the vision set out in the Green Paper depends on the strong leadership of Government and on the response of the stakeholders in the energy industry as well as energy consumers.
A broad range of factors influence world energy trends such as volatility in oil and gas prices, prediction and forecasts of peak oil, the need to reduce greenhouse gas emissions significantly, exponential demand growth from China, India and other dynamically growing economies, and a national economy with an import dependence of around 90% to meet its energy needs. When we view our circumstances in this context, there is no doubt that harnessing our indigenous renewable energy resources must be central to energy policy not just in the electricity market but across the energy markets, including heat and transport. At the same time, we must make every effort to reduce energy demand through energy efficiency and demand management strategies.
The Green Paper envisages an ambitious target of 30% of electricity produced by renewable energy by 2020. This is a doubling of the 15% target by 2010 and an example of a challenging target as referred to in the motion. Inevitably, there will be debate whether this new target is too much or too little. Stakeholders can muster arguments about technical difficulties as well as others who may see the target as too conservative. Ambitious targets provide the challenge for world-class performance from all areas of the energy industry. This approach will be brought to bear when definitive targets for renewable energy are set in the White Paper following the consultation period.
To ensure the revised target can be delivered under realistic assumptions, the historical support offered to this market segment was changed earlier this year. The new support programme, the renewable energy feed in tariff, REFIT, programme, moves the emphasis away from competitive tendering to a fixed price type support mechanism which has been received positively in the market. This scheme, worth €119 million, will support 55 new renewable electricity generating plants with a combined capacity of more than 600 MW, predominantly wind powered. This increase in capacity will bring our renewable energy electricity capacity to the point where it can power 1 million homes, increasing capacity from 860 MW to 1,469 MW and preventing the emission of 2 million tonnes of greenhouse gases annually.
In addition to the support targeted directly at electricity production, a series of practical supports have been put in place to encourage domestic and commercial electricity consumers to change towards renewable energy technologies. This year saw the introduction of a five- year €27 million greener homes programme which provides grants for domestic renewable heat technologies; a five-year €22 million bio-heat programme, providing grants for commercial investments in wood pellet and wood chip boilers; an €11 million grant programme for combined heat and power to encourage industry and commercial users to generate their own electricity and heat; and a new excise relief programme for bio-fuels valued at more than €200 million to commence the development of sustainable fuels in the transport sector. These are the support systems for the here and now, evidence of the importance the Government attaches to the development of renewable energy, and a strong indicator of where the focus of our attention must be over the coming years.
Advancing the sustainability agenda runs much further than protecting the environment. Increased use of renewable energy is central to security of supply, providing diversity in our fuel mix and reducing our dependence on fossil fuels. This is the great strength of the policy paths set out in the Green Paper, that the policies and actions in it are designed to interact and reinforce one another in a coherent way. We have one of the richest potential renewable energy resources in Europe — wind, ocean and bio-energy. In addition to sponsoring and advancing the existing technologies, we must also look to the future and develop further renewable sources and technologies with an eye on 2020.
Earlier this year, the new Irish Energy Research Council was established. The council, which includes leading academics and prominent industry figures, will co-ordinate energy research in Ireland. It will advise not only on the development of policy for energy research but also on priorities for Irish energy research and on integrating energy research policy with policies for the transport, environment, agriculture, enterprise, science and education sectors.
By 2020, Ireland should be the world leader in ocean energy technology, which is a challenging target. The hydraulics and maritime research centre in UCC has been upgraded and an ocean energy test site has been established off the coast of Spiddal, County Galway, to test prototype ocean powered devices.
Bio-energy is another renewable area where we have the potential to make a significant difference to our energy mix. Bio-energy is energy from crops, trees, sawdust, and by-products such as tallow, farm wastes and waste vegetable oil. These can be converted to produce electricity, transport fuels or heating fuels. In the case of heating fuels, biomass energy can be considerably less expensive than conventional fuels such as oil or electricity. As a clean fuel, it reduces harmful CO2 emissions, thereby protecting the environment and helping Ireland meet its Kyoto obligations.
The development of bio-energy resources impacts on our energy security in terms of the development of an indigenous energy resource as well as contributing to competitiveness by creating employment opportunities and, in some cases, lowering energy costs to industry and domestic users. It also has a wider impact by facilitating rural development by providing new opportunities for farmers and foresters to diversify into the growing of energy crops or plantations.
A bio-energy ministerial task force, chaired by the Minister, Deputy Noel Dempsey, has been established to develop a national bio-fuels strategy. The task force members include the Tánaiste, and the Ministers for Finance, Agriculture and Food, Environment, Heritage and Local Government, Transport and Enterprise, Trade and Employment. The Taoiseach’s office is also represented on the task force. The task force has agreed to draw up a comprehensive national bio-energy action plan by the end of the year, which will set ambitious targets for deployment of bio-energy, identify priority areas for development and the necessary support measures to encourage supply and demand. This strategy will be formulated in the light of EU developments and will take account of the Green Paper on energy consultation process.
Energy efficiency is a key part of the Government’s energy policy and a crucial element of a sustainable energy policy which has direct impacts on the challenges of security of supply and competitiveness. It is also a major priority on both EU and international agendas. The national Power of One campaign, launched last month, has been created with one single overriding objective: to achieve real and measurable change in consumer awareness and behaviour towards energy efficiency.
Meaningful improvements in levels of energy efficiency will help consumers and the economy to control the costs of energy. That is good for the consumer and business and makes profound sense for the economy. That is why the Government is intent on engaging with and motivating individual citizens to take action and reduce the impacts of energy consumption. With strong leadership the public attitude to wasting energy can be changed, much the same as attitudes have been dramatically changed in recent times with regard to smoking in the workplace or the use of plastic bags.
The Green Paper suggests a quantifiable target of a 20% reduction in energy demand by 2020. Achieving this will mean a change in behaviour and attitudes right across wider society. The Power of One campaign will run for an initial two-year period and involves a major advertising and media campaign supported by an extensive communications programme. The concept of Power of One is that the sum of individual effort by consumers as well as enterprise can and will make a substantial difference.
The publication of the Green Paper on energy commenced a two-month period of debate and consultation, a phase of the policymaking process which is very important. This presents a unique opportunity for the stakeholders at every level in the industry and right across wider society to comment and make an input into the development of an energy strategy which will deliver for the future. The Green Paper sets out a range of questions on which we are especially interested in hearing the views of stakeholders, but we will welcome all and any comments offered.
Consultation and discussion in the Oireachtas is an integral part of this phase. I therefore again welcome the input from parliamentary colleagues, in particular the support set out in the motion before the House. I appreciate Members’ interest in debating the Green Paper so soon after publication. This helps all of us to highlight the importance of energy policy to the public and to bring the consultation process into public view.
The policy choices and targets set out in the Green Paper are designed to combine in a coherent way to shape the future of the energy sector positively and improve its contribution to competitiveness and well-being. In 2020 Ireland will be a fully sustainable, secure, efficient, affordable and competitive all-island energy market, supporting environmental, economic and social policy objectives. The market will have secure and reliable energy supplies, competitive prices and cleaner and more diverse energy sources underpinned by robust interconnection, optimum infrastructure and ambitious technology investment.
The Green Paper is the blueprint for creating an energy sector which will deliver for consumers, the economy and all our citizens. We must move from proposed directions to a definitive policy framework. More importantly, we must identify and put in place the practical actions and targets that will enable Ireland to achieve a sustainable energy future. Consultation is a key part of this process and this evening the Senate is making a key contribution to the necessary public debate. I commend the motion to the House.
Mr. Ryan: One could not be against the motion in a deeply felt way because, given the way it normally does business, it is good the Government is doing something. However, one would love to get to the stage of having some sense of the sights being raised to a real vision of the future.
I concede that the target of 30% of electricity generation from renewable sources by 2020 is a serious and demanding target. However, this is only because of the enormous shock of the past six months which caused those in Government to think again about what was obviously going to happen sooner or later — a sudden, perhaps irreversible, rise in the price of oil. It is not that long ago that oil sold on the international market for $15 to $20 a barrel. This was spectacularly cheaper than it was before the first oil crisis in 1973.
It appears that public policy in Ireland was based on the assumption that these conditions would continue and that oil prices were not an issue. I do not know how that policy emerged, because there were significant indicators that this could not be the case. Kyoto alone suggested that our view of energy consumption, based on an eternal supply of cheap oil and gas, was not a viable option. We ignored that. Therefore, because we are late, the 30% target by 2020 is demanding, given the lead time needed to improve technology, plan, raise capital, design and build etc. Despite what has been written about the ESB, there is probably no agency in this country — or perhaps in the world — that can do this job better than it.
According to the National Competitiveness Council’s reports, in terms of peer group comparisons the ESB does not do a bad job, one of the reasons being that electricity generation is an enormously capital intensive operation. This means labour costs are significant but not central to it. Therefore, the fact the ESB is more heavily manned than some believe it should be does not have a critical determination. The availability of capital and the capacity to work within budget and deliver within previously estimated capital costs is a characteristic of the ESB which is not shared by public procurement generally. It has long been my view that the ESB should take over project management for the entire public capital programme because it is good at this. We would then see serious value for money.
We are a strange country and the Government is, perhaps, a strange manifestation of this strange country because we develop high-flown hissy fits of environmental sanctimony. We had ourselves convinced for years that we were environmentally unique in Europe — the cleanest, greenest, freshest country. However, it turns out we have significant dirty water. The reason we are not worse is that we were latecomers to industrialisation. Our capacity to manage sewerage alone would disgrace us.
The same is true with regard to energy. We created energy by very dirty processes and let the ESB — which I have said I admire — away with murder in places like Moneypoint for years. Our great good fortune was that the prevailing south-westerly winds blew everything away and we did not have to worry. The resulting pollution did damage in western Europe, but fortunately for us our neighbouring island got all the blame on account of being responsible for 90% of it while we were only responsible for 10%. We were able to continue to talk about our beautiful clean island. However, we were not very clean; we were fortunate through luck and by accident.
Some of our sins and omissions are now coming back to haunt us via the Kyoto Agreement and the need for us to meet some target. What I find hair-raising and what disturbs and distresses me is that we are close to second last in the EU 15 league in terms of supply of energy from renewable sources, with only the British at a lower level. Sweden has an advantage because it has significant hydro resources. In 2004, Denmark was at 15% while Ireland was at approximately 2%. Denmark has no mountains to speak of and therefore does not have great hydro resources but it used the resource it had and is now a world leader in wind energy. Ireland was so busy pretending that the oil would always be there in vast quantities that we took no steps to encourage investment in research in wind energy. Denmark is now making huge sums of money out of the international sales of wind generation equipment. We decided we were far too rich to be concerned about these things and now we are caught.
Some of this information comes from the National Competitiveness Council. Transport is very energy intensive and it consumes as much energy as domestic heating. The proportion of our population which travels by road is very high, as is the proportion of our freight travelling by road which is very high by European standards. The consequence of high intensity road travel and road freight is high volumes of emissions and high volumes of energy use.
I am in complete agreement with Senator Mansergh. The idea that we would have a public policy focused on the reduction in the use of energy, diversification of energy resources and a reduction in the environmental impact of energy transformation while at the same time allowing our national rail services to divest themselves entirely of freight is a contradiction.
I referred this morning to contradictions in public policy, with the idea of An Post deciding that it would ignore toll roads and go around them. I condemn the idea of Iarnród Éireann opting out of the use of renewable energy and of transporting freight because it does not want it while our roads are clogged and overloaded with excessive numbers of trucks.
The Green Paper is welcome but outside the area of energy generation, it is quite limited, almost pathetically so, in the targets and aspirations. This suggests to me that somebody knew something about the ESB and beyond that, they could only think up a few hopeful targets and go on from there. I regard the Fine Gael amendment to the motion as being much more welcome.
Ms Ormonde: I welcome the Minister of State to the House for this debate and congratulate him and his Department on this impressive, wide-ranging Green Paper on energy. This is an issue that has many different facets and has serious implications for the future of the country and the economy.
Energy policy strikes at the heart of practically every activity undertaken in the State. It has implications for businesses of all shapes and sizes, for companies considering locating in Ireland, for meeting our Kyoto obligations and for the level of inflation. With this in mind, it is vital to have an energy policy that embraces all these distinct aspects and the Minister has managed to achieve this with the Green Paper.
It is obvious that the energy outlook is going to change considerably in the medium to long-term future. Over the next 25 years, it is expected that global energy needs will grow by approximately 50% because of economic growth and population increases. This growth, added to a continuing decline in fossil fuel supplies, will create obvious energy problems and possibly as soon as the next decade. Energy demand is expected to grow by 2% to 3% every year until 2020 and most of that demand will need to be met by imported fossil fuels. Ireland is almost completely reliant on outside factors for our fossil fuel needs. If shipments of oil and the piping of gas into Ireland were stopped in the morning, our economy would grind to a halt. It would not take much longer before large tracts of the population would have to make do without their heating and lighting.
This is not a situation we should dismiss lightly, especially in light of what happened earlier this year in Russia and Ukraine and the subsequent stand-off over gas prices. That incident created major fears throughout western Europe about gas supply. If Russia decided to stop supplying the West tomorrow, there would be considerable strain on gas supplies throughout the EU.
I was encouraged to read that large parts of the Green Paper focused on developing renewable energy sources. It is true the current technology does not allow for the widespread use of renewable energy sources. Wind energy offers great promise but the change in wind velocity in any location means that it would result in an inconsistent wind supply. Wave energy offers a more consistent source, but the technology in this area still needs further development. This will not continue to be the case. The technology will improve, especially if there is a desire to use it.
By setting an ambitious target of having 30% of all energy coming from renewable sources by 2020, the Government is helping to generate that desire. As well as protecting our environment and reducing our carbon emissions, the added benefit of renewable energy sources is that they are secure. If we rely on the wind or the waves for our energy, we will not be dependent on other countries continuing to send supplies to us. However, we will also need to improve our level of energy efficiency, which is an area that needs radical improvement.
I suggest the introduction of energy saving bulbs as the standard throughout the country and the possible phasing out of the existing bulb types. I suggest greater clarity in energy bills by the indication of the cost of unit per time of day. This would help to further promote efficient energy use. The reduction of carbon emissions is another area of concern. I would like to see more of our electricity generating plants moving to a cleaner standard and reducing their emissions.
I was concerned about the reports of an upcoming rise in ESB and Bord Gáis prices. While I accept that the regulator felt the need to ensure these semi-State companies continued to be financially self-sufficient, an increase of about 20% or more is a little excessive, given the recent drop in international oil and gas prices. I ask the Minister of State to ask the regulator to take another look at this price increase in the new year if oil and gas prices continue to drop. There is no point in the ESB or Bord Gáis generating huge profits if this is coming out of the pockets of the public.
I am delighted the Government has taken the lead in this issue. The Green Paper is a brainstorming exercise. I have an interest in the area of bio-energy which means using crops, trees and farm waste as a source of energy, even though I know very little about bio-energy. Consumer awareness needs to be created. I welcome the establishment of a task force. The Green Paper will be the basis for consultations. Young people and those interested in studying science should be given an opportunity to debate this issue. The Green Paper has stimulated my interest in examining how best we can move forward and try to bring about better efficiency in the energy area.
Mr. Bradford: I wish to make a few comments on the motion and to refer to the possibility of bio-fuel production in the former sugar factory in Mallow. On the broader issue of alternative energy, I welcome the Government’s timely Green Paper on energy. From a public policy point of view, there is possibly no greater issue facing the country than that of energy. Virtually every country in the European Union faces the same challenges we face and we must ensure that our support for and development of alternative energy matches the best in Europe. Through the use of wind, wave, geothermal and solar power, we must seek to become the leading exponent of alternative energy. We have the natural resources if we can put them to correct use. Significant investment will be needed by the Government and the first step must be taken in the forthcoming budget.
I acknowledge some progress was made in last year’s budget by providing tax incentives and the energy grants announced some time later gave further incentive. I congratulate the Minister on the energy grants scheme operated by Sustainable Energy Ireland. I, along with many others, had demanded such a scheme. There has been significant uptake of the alternative energy grants. I hope that once the initial €20 million has been allocated, the fund will be topped up. Moving householders to alternative energy systems, including wood pellet, geothermal and solar, is good for the economy.
I wish to speak about alternative fuels and, in particular, ethanol production. The Minister of State, Deputy Killeen, who has responsibility for labour, is aware of the difficulty we have had in Mallow following closure of the sugar factory and Greencore’s failure to resolve the redundancy issue. We have an unused sugar factory in Mallow, thousands of farmers affected to some degree, hundreds of redundant workers and an industry that has disappeared, namely, the sugar beet industry. However, we have an opportunity to turn disaster into progress and to produce ethanol in Mallow. Obviously, there were doubts over whether it was purely aspirational to do so. Fortunately, our colleagues in Cork County Council, with full cross-party support, commissioned an independent consultant’s report on the viability of producing ethanol at the former sugar factory in Mallow.
Cooley Clearpower Research submitted its report to the council three weeks ago. The report clearly shows it would be possible to produce ethanol in Mallow from sugar beet, wheat and other crops. Equally importantly, it also showed that it can be economically viable to do so. We are all aware that sugar beet, wheat and other crops being produced in Ireland can be used to produce ethanol. However, we must ensure that it is financially viable for the farmers to grow the crops and for a producer to take over the plant and process the crop into ethanol. The study contains very interesting statistics and I hope the relevant Departments are studying the report. The report shows that with modest excise duty reductions, even below the levels available in the rest of Europe now, it would be possible to pay the farmers a viable price for sugar beet to be processed into ethanol in Mallow. We have both European obligations and obligations under the Kyoto Protocol to ensure that a certain percentage of our fuel supply will come from the use of ethanol or bio-diesel and Mallow offers a solution.
The Irish tillage industry is at the point of crisis and collapse as a result of the ending of sugar beet production. Unless we can find a use for sugar beet and farmers can continue to grow it for financial reasons and for crop rotation, the entire tillage industry could shut down and thousands of jobs could disappear with it. In preparing his budget, I hope the Minister for Finance, in consultation with the Ministers for Agriculture and Food, and Communications, Marine and Natural Resources, will study in great detail the consultant’s report on the possible use of the sugar factory at Mallow for ethanol production and give the financial incentives, which are modest by international standards and modest by the standard of the incentives announced in last year’s budget.
If the Government is willing to have the plant converted into a bio-fuel production facility, it can happen. By doing so, we can ensure that sugar beet continues to be grown, crop rotation can be maintained, thousands of spin-off jobs from the tillage industry can be maintained and, from the broader view of the economy, we can produce a crop for fuel purposes. We need to be as ambitious as countries such as Sweden which has declared that within ten to 15 years, it will be entirely free of a dependency on foreign fuels, oil in particular. We must have a similar aspiration. We must aim to be the best in Europe in the area of alternative fuel. I know that Senator Callanan, who is also interested in the subject, will confirm that we can do the business in Mallow. We can turn sugar beet into a valuable fuel commodity. I hope the Minister for Finance will use December’s budget to introduce the tax incentives which could make that project a reality.
Mr. Kitt: I welcome the Minister of State to the House. I very much welcome the publication of this Green Paper, Towards a Sustainable Energy Future for Ireland. I strongly support the grants and incentives for alternative and renewable energy. Senator O’Toole asked about the availability of wood pellets and wood chips. I know they are available in north Galway and I hope they are available throughout the country. The grants for alternative energy should be made available for other projects, for example, windmills and heat pumps. It is important to consider such areas.
Controversy has arisen with regard to wind farms. I do not think they destroy the environment but believe they can be very effective when located in isolated areas. Some years ago, an attempt to construct a wind farm on Inis Meáin was opposed, but when I visited the island last year, I saw that the wind farm had been developed in an environmentally friendly manner. If wind farms can be successful on a small island, they can also be built in other parts of the country.
There have been well publicised reports on the dangers of constructing wind farms close to houses. People have described the sound from the turbines as being similar to an aircraft hovering overhead. Wind farms are obviously located too close to houses when they affect television reception, but similar concerns were expressed about mobile telephone masts. Proper development and planning should require that any such installations are located away from houses.
The Minister of State referred to volatility in oil and gas prices which is a significant obstacle to devising sustainable policies and predicting world energy trends. In recent months, we have seen the way in which energy prices first rose, then fell. The Government has set a commendable target of producing 30% of Ireland’s electricity from renewable energy sources by 2020, which represents a doubling of the 2010 target. I welcome that target and hope we will be able to achieve it. The other target of achieving a 20% reduction in energy demand by 2020 is also important. The Power of One campaign has been successful in publicising this issue. I hope we will be able to build an interconnector with other countries to ensure electricity supplies. With regard to housing, the greener homes campaign has been very effective in encouraging people to switch to energy efficient options such as insulation and low wattage bulbs.
I welcome the reference in the Green Paper to the three pillars, namely, security of supply, sustainability and competitiveness. With regard to security of supply, I hope we will be able to bring gas ashore to supply the entire country. The north west felt excluded in the past and that is one of the reasons for the protests against the Corrib project. It will be important for us to address greenhouse gas emissions and I hope we can provide incentives to do so while remaining conscious of the Kyoto Protocol. It is also important that we implement mechanisms which provide for competition and a liberalised regime for gas and electricity. I welcome the Green Paper because it will provide the path towards Ireland’s sustainable energy future.
Mr. Leyden: I welcome the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, to the House. It is appropriate that he is here because alternative energy is closely associated with the use of agricultural land to produce fuel. At the Fianna Fáil seminar in Westport this summer, an eminent expert in this field said that as long as the sun shines, we will be able to produce sufficient energy to sustain the economy. All energy, whether oil, gas, turf or coal, originally came from the energy produced by the sun. It was encouraging to consider the various options for energy production.
The policy brought forward by the Government is worthwhile in terms of planning for the future. Bord na Móna also has an important role to play by making use of the extensive resources contained in our cutaway bogs. Research is being conducted with a view to situating wind farms in the middle of bogs. Elephant grass could also be grown on some cutaway bogs, as well as on the land formerly used to grow sugar beet. More research should be conducted with regard to producing tidal energy. French researchers have undertaken several successful projects in that regard and Ireland has massive potential for harnessing tidal power, especially along the west coast. I welcome the Green Paper and commend the Government on producing it.
Mr. J. Phelan: I am glad of the opportunity to discuss the Green Paper on energy and to support the Fine Gael amendment to the Government’s motion. The Green Paper is a case of too little, too late and we will not know for some time whether it will bring any changes to our energy supplies. The policies it proposes should have been introduced a number of years ago because we are now faced with continual energy price increases. I do not want to be overly critical because there have been some positive developments, such as the energy grants announced by the Government several months ago. However, the paper is heavy on aspirations and low on detailed policies. It is disappointing that we were not given much by way of detailed costings or concrete information.
It is not often I agree with Senator Leyden, but he made some valid comments about the potential for renewable energy supplies. I have been a vocal advocate for developing wind energy and have spoken several times in this House about the difficulties faced in terms of connecting wind farms to the electricity grid. These difficulties continue to arise throughout the country. While wind farms need to be strategically positioned, they should be developed where a suitable location is available. For wind energy to become a viable option, we need to build a direct interconnector between the east coast of Ireland and the island of Britain. That should be done sooner rather than later because, while wind energy makes up approximately 8% of energy supplies, another source of energy will be needed when the wind does not blow enough to meet requirements. That is why the interconnector is essential.
It is another example of where the Government is sadly lagging behind. It set up a process a number of year ago whereby tenders were sought for the construction of an interconnector between Wicklow and Wales, but nobody from the private sector seemed to be interested at the time. It is essential the Government builds that interconnector as part of the State’s infrastructure sooner rather than later. If we are serious about providing alternative energy sources, then wind and tide energy will be part of it. Those energy sources are not 100% reliable and we need an interconnector to ensure that if there are periods in which those sources of energy are low, external sources are available to fill the gap. The interconnector is, therefore, more necessary now than ever. Whatever about the interconnector being operated and managed by a private company, its construction should be part of public infrastructure. We should grasp that nettle sooner rather than later.
It is important we promote and support those trying to advance alternative energy sources. Previous speakers spoke about bio-fuels, an area on which I have spoken several times in the House. We saw the closure of the sugar plants in my area of Carlow and in Cork and the demise of that industry. A detailed report has been carried out by Cork County Council in conjunction with others into the viability of an ethanol production plant on the site of the old sugar factory in Mallow. As Senator Bradford said, that report warrants analysis and I hope that in the run up to the budget, it is thoroughly examined to see if there are any supports which the Government could provide to ensure bio-fuel production takes off.
Until now, we have not seen much take-up and that is largely due to the fact there is no incentive for producers. I am sure the Minister of State, Deputy Brendan Smith, will agree with me that from an agriculture point of view, we need to ensure we provide for alternative enterprises among those involved in farming and those who we wish to become involved in it in the future.
Bio-fuel is an area which has not been sufficiently developed and there is still great potential. The budget will provide the Government with an opportunity to encourage more people to go down that route in future. There is a strong case to be made for the complete exemption of bio-fuels from excise duty. I have not made up my mind on that but I urge the Government to examine all options in the run-up to the budget because the only way we will get sufficient numbers to become involved and to build up a viable bio-fuels industry is if there is a monetary incentive for them to become involved in that sector.
It is important we become more reliant on indigenous sources of energy. In that regard, it is essential bio-fuels, wind energy and all other energy options which we can produce are thoroughly pursued and supported by the Government when it comes to drafting the budget which will take place in the coming weeks. We are too reliant on fossil fuels and we need to develop all other options. In terms of the supply and cost of energy in future, we must ensure we have a viable domestic energy sector.
Mr. Callanan: I welcome the Minister of State. I support the motion and welcome the Green Paper which lays downs all the road markings we require to follow for the White Paper. It is a pity the House may divide on the motion. The three pillars listed in the Green Paper are security of supply, environmental sustainability and economic competitiveness. We talk about the all-Ireland approach which is essential in this area.
The Cathaoirleach might remember that some time ago, I called for a debate on alternative land use. This is it whether we like it or not. On a number of occasions, I have referred to land for food and land for energy. Whatever route we go down in future, it will be based on what land can produce and what we can do with land. We can have wind energy and the sea can be used for wave energy. I congratulate University College Cork on the studies and research it has carried out and I hope it will bring them to a successful and speedy conclusion.
Since I have spoken about land use for food and energy, I wish to say the EU is wrong in regard to food and is also wrong in regard to energy. There is a total dependence on nuclear energy or gas from Russia. We are at that end of the line, so it is essential we establish a sustainable supply.
I welcome the fact anaerobic digestion has been mentioned in the Green Paper. I have referred to it over recent years with little or no support. People have done studies on it, including John Curtis of the Environmental Protection Agency in Wexford. He has conducted a detailed study on it and has referred to the benefits of it relative to the environment as well as agriculture.
I refer to miscanthus and short rotation coppice. That is a very good idea but it will need to be grant aided. I am somewhat doubtful about miscanthus and the amount of aid of it will require. However, if aid is provided, the best of luck to it. I call for the removal of excise duties on what we produce from the land.
Mr. Daly: I welcome the Green Paper and the Government’s commitment that there will not be a break-up of the ESB which has been indicated by commentators for some time. This has confirmed that the ESB will remain the dominant force in the energy area for the foreseeable future. I also welcome the decision to press ahead with renewables, especially ocean energy.
I express our appreciation for the work the ESB has done at Moneypoint where more than 300 people are employed. The station is worth €25 million per annum to the local economy and we would like to see it develop. I compliment the people working there on cleaning up the coal technology to ensure the station complies with environmental requirements.
Mr. Kenneally: I thank the Minister of State and Members who contributed to the debate. By and large, most of the contributions were constructive. I was a little surprised an amendment was tabled because the objective of the motion was to generate debate on energy. One theme ran through everybody’s contribution, namely, the need for incentives to encourage new participants into the field of renewable energy. The Minister of State outlined what is being done at present. The clear message is that we need to do more to encourage development in renewable energy.
Some Fine Gael Members referred to costings. I am open to correction but I do not remember costings ever appearing in a Green Paper. Another Member also referred to policy. A Green Paper is not a policy document. Its purpose is to generate a consultation process which will continue for another two months, after which a White Paper will be produced.
References were made to energy cost increases. This may be a little outside the scope of what we are discussing but it is important to note that energy costs are largely guided by outside factors. We import most of our gas from the UK, which is itself a net importer of gas. At this stage 90% of our energy requirements is imported.
We are exposed to an increasing number of challenges. The Irish Wind Energy Association has outlined that Ireland is facing faster energy growth than other EU countries due to the growth in population, economic output from the industrial and agricultural sectors and dependence on fossil fuels. As a result, Ireland faces a rise in greenhouse gas emissions beyond the EU agreed limit of 13%.
The Green Paper does not fail to address Ireland’s key energy challenges. The same study to which Fine Gael Members referred, that of Friends of the Earth Europe, identified some of the key energy challenges. One challenge is to reduce emissions in industry. The Green Paper proposes how Ireland will contribute to the national climate change strategy. A ministerial task force on bio-energy is to be established. The national bio-energy plan will be finalised and an all-Ireland research and development programme will be developed to increase efficiency and thereby to reduce energy costs from pollution.
It is also outlined in the Green Paper that an action plan is to be developed on energy efficiency, that gas and electricity supply will be secured and that competiveness is to be increased. To increase the rate of renewable energy, the Green Paper outlines the efforts to be made in research and development of bio-energy. The Green Paper policy would reduce our reliance on imported fuels and drive down the cost of energy by, for example, developing an all-Ireland energy market and opening up the market, diversifying gas sources and setting up the national oil reserve agency.
The Government is setting objectives to increase the conversion of bio-fuels in public transport. In April 2005 a scheme of excise reliefs on bio-fuel projects was announced by the Department of Communications, Marine and Natural Resources and the Department of Finance. Pilot projects proposed as part of Transport 21 will complement this strategy. The Government welcomes suggestions to improve the paper on sustainable energies such as some of those made by Fine Gael. It is clear that through discussing the policies outlined in this paper, Ireland’s national energy landscape can be transformed.
The Green Paper proposes to secure and control energy in Ireland through sustainability, competitiveness and supply. Consequently, this would help us meet the targeted greenhouse gas emissions level and put Ireland on the international map in terms of its efforts against global warming. I look forward to future discussions in the House on this matter. I thank everybody who contributed to the debate. I commend the motion to the House.
|Bradford, Paul.||Browne, Fergal.|
|Burke, Paddy.||Burke, Ulick.|
|Coghlan, Paul.||Coonan, Noel.|
|Cummins, Maurice.||Feighan, Frank.|
|Finucane, Michael.||Hayes, Brian.|
|McHugh, Joe.||Norris, David.|
|Phelan, John.||Ryan, Brendan.|
|Brady, Cyprian.||Brennan, Michael.|
|Callanan, Peter.||Cox, Margaret.|
|Daly, Brendan.||Dardis, John.|
|Dooley, Timmy.||Feeney, Geraldine.|
|Fitzgerald, Liam.||Glynn, Camillus.|
|Hanafin, John.||Hayes, Maurice.|
|Kenneally, Brendan.||Kitt, Michael P.|
|Leyden, Terry.||Lydon, Donal J.|
|Mansergh, Martin.||Minihan, John.|
|Mooney, Pascal C.||Morrissey, Tom.|
|Moylan, Pat.||Ó Murchú, Labhrás.|
|O’Brien, Francis.||O’Rourke, Mary.|
|Ormonde, Ann.||Phelan, Kieran.|
|Scanlon, Eamon.||White, Mary M.|
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