Wednesday, 1 February 2012
Seanad Éireann Debate
The population of the nine counties along the western seaboard and the Shannon Estuary, from County Donegal to County Cork, is approximately 1.6 million. They cover an area of 38,450 sq. km., or over 50% of the country, and there are not enough people to fill it, as for decades emigration was a fact of life for young people until the Celtic tiger arrived. However, we are still losing people to emigration because there are not enough jobs available for them here and we are caught in a downward spiral of financial difficulties and media-driven doom and depression. This has everything to do with the motion.
We have the potential in that part of the country to reverse the scourge of emigration and bring back the brightest people this country has ever produced to live, work and pay taxes here and rebuild the country. Renewable energy projects are part of the answer. With some of the best natural resources in the world, namely, wind, wave, tidal, hydroelectric and biomass energy, we can reduce our dependence on imported fossil fuels. We import approximately €6 billion worth of various fuels every year; therefore, by switching over more and more to renewables, we can save vast amounts in our balance of payments and create jobs in Ireland.
We cannot afford to be held to ransom by political events outside Ireland. The upheaval in the Middle East and north Africa as a result of the Arab Spring has resulted in higher prices for imported oil and gas which are having a major effect on our competitiveness as a country. Industry is being hit with increased costs for electricity, transport or raw materials that are oil based. Domestic consumers are also feeling these when they look at their electricity, heating, petrol or diesel bills.
The share of electricity consumption from renewable energy sources jumped between 2000 and 2010 from 5.5% to 14.8%. This is above the EU target for 2010 of 13.2% as per the renewable energy source directive, RES. This is happening because Ireland has some of the best wind energy sources in Europe, with the wind blowing in from the Atlantic. At the end of 2011 we had a connected energy supply of some 1,500 MW from wind farms and expect to have further capacity of 5,000 MW by 2020. We have, therefore, much to do in the next eight years.
In its 2011-50 wind energy road map report the Sustainable Energy Authority of Ireland estimates that we have “the potential to create 20,000 jobs in the installation, operation and maintenance of onshore and offshore wind farms in Ireland by 2040”. Furthermore, the “potential economic value of electricity generated from wind could reach €15 billion by 2050”. We could, therefore, have between 11 GW and 16 GW from onshore wind farms and up to 30 GW from offshore wind farms by 2050. These figures are significant and emphasize the massive potential of the sector, as well as the number of wind farms that need to be brought online. The European Wind Energy Association has indicated that for every megawatt provided, 15.1 jobs are created in the European Union. There were 154,000 employed in the wind energy sector in 2007 and this figure is forecast to rise to 325,000 by 2020. As Ireland lies on the edge of the Atlantic Ocean, tidal and wave energy must be harnessed. In SEAI’s, Ocean Energy Roadmap 2010 — 2050, it proposes that up to 29 GW of ocean energy capacity can be installed without significant environmental impact and up to 70,000 jobs with up to €12 billion in cumulative economic benefit by 2030 and €120 billion by 2050. All of that will put huge strains on the national grid and thus EirGrid is in the process of upgrading and strengthening the grid with its Grid 25 programme. This involves the investment of up to €4 billion. We must ensure that this programme is rolled out with the utmost speed. As we are in a downturn in our economic cycle this is the time projects should be fast-tracked as construction costs have fallen. In addition, our demands from industry for energy are lower at the moment and that must be viewed as an opportunity. The seeds of recovery planted today will bear fruit in the near future.
I have spoken previously on the grid and the issues relating to the Gate 3 process. We should be looking at a new Gate 4 process that will be directed at the export of excess energy to the UK and Europe. As part of the programme for Government we stated, “We will ensure that future wind farms are built in locations where wind regime is best and that they are built in large numbers or in clusters to reduce the cost of connection to the grid under new plan led Gate 4 process as opposed to the existing developer led system”. The developer-led system is the cause of the current problem. If we implement this process we can let EirGrid target those projects that have the necessary permissions and finance in place to proceed much quicker. There is no point in running a new line 50 to 80 miles to connect to a tiny wind farm just because the Gate 3 process allows for it, when one could have many projects far closer to the existing grid connected in a shorter time, that are ready to proceed now but have been told that it could be up to ten years before they get a connection. In such a situation, there is a case for the Government to consider the construction of privately-owned grids serving specific customers or locations. There is nothing like a bit of competition to get people focused and creative.
The east-west interconnector will be a huge boost to our ability to export energy. When it goes live this 500 MW interconnector will enable trade from the single electricity market, SEM, on the island of Ireland to the British electricity trading and transmission arrangements market, BETTA. Cost-benefit analysis studies should be carried out by EirGrid into the viability of connecting with France. Both Britain and France have ageing nuclear power generating stations. Britain has said that it is willing to invest up to £5 billion to ensure that its energy requirements are achieved. The British-Irish Council is the forum that may allow us to benefit from this. The French Court of Audit stated in a report covered in yesterday’s New York Post that 22 of France’s nuclear power stations will reach their expected 40 year lifespan by 2022. They will either have to extend their lifespan or else sharply increase investment in electricity production. That would be equivalent to building 11 next generation nuclear power plants. The French have already spent €188 billion on their existing plants.
Meanwhile, Germany has said all of its nuclear power plants will be shut by 2022. It would be far cheaper for these countries to import electricity from locations such as Ireland. If we can open up further interconnectors, vast markets for clean carbon-free energy are there for the taking. If we do not, then some other country will fill those needs even though they do not have the wind or wave capacity we have.
We could also use the new interconnector projects to lay high-speed fibre optic cables to enable fast data transfer between North America, Ireland and Europe. Pumped hydro is another feature of the renewable mix that we should be investigating. At present we have the Turlough Hill pumped hydro facility in County Wicklow which can store approximately 1.5 GW per hour of electricity. EirGrid should look further at this option in locations that have been identified by such groups as Spirit of Ireland and others. There are other potential add-on benefits of such facilities. Electric Mountain in Snowdonia in Wales, which attracts more than 300,000 paying visitors per year, is such an example. We have locations around the country that may be suitable for this, such as corrie lakes formed during the previous ice age in areas such as Kerry, Donegal, Galway and Mayo. Local authorities could identify where such renewable projects could be feasible and county development plans are now taking a proactive approach in setting targets for renewable projects.
Data storage is another add-on to the mix of renewable energy projects. Many of the major Internet search companies such as Google and Adobe and social media companies such as Facebook are looking for locations to store vast amounts of data. They use huge amounts of energy keeping their servers from over-heating. It does not matter where they are situated and if the climatic conditions are cool then they will use less energy. Ireland offers such a location. With high speed fibre optic links such as the North-South Kelvin direct international connectivity project which was completed in late 2010, direct international connectivity between the north-west and Border regions with North America and Britain can now be provided. Further links will now be achieved through the east-west interconnector — a 7,000 GB fibre optic link to Britain.
With these strategic pieces of infrastructure we can tap into the data storage market. Google has spent €200 million on such a facility in Finland to serve the Nordic market. It is based in a former paper mill which closed in January 2008 but has been given a new lease of life following a refit by the company that bought it in 2009. The facility will be serviced by a 12 MW wind farm nearby. If we could tap into the next fibre optic project from North America to Europe which will be laid off the south coast, we could open up the counties of Kerry, Cork and Waterford to this market. Big international companies want to be associated with clean energy and clean technology.
Large industrial bases such as Shannon Free Zone have the potential to brand themselves as carbon-free zones. Situated between the airport and the town with a population in excess of 10,000, we could copy the Swedish model of building combined heat and power plants which would use carbon reducing biomass fuel sources such as locally grown willow, miscanthus and pine wood pulp which would support farmers and forestry growers along the western seaboard and the midlands. The power generated could be used to power the industrial estate and the airport. The heat generated could be used to heat the town by piping hot water to the houses, thus creating one giant central heating system. This would off-set the importation of fossil fuels to produce electricity and oil to heat houses. Such an approach could be replicated in many locations throughout the country. These projects could be rolled out all over the country where there are population centres and industry in close proximity. If the Minister so wishes I will forward him a briefing on the issue although I am sure he has it already. For such projects to locate in this country we must examine how we allocate the REFIT tariff to such producers.
We must also examine the reason it takes so long in this country for large projects to get off the ground. We must look at the criteria used in how objections to large-scale projects in this country are lodged and dealt with. It is a citizen’s right to object but there have been situations where renewable projects have been objected to by individuals and entities that do not live in close proximity to the proposed project but dozens of miles away and in some cases more than 100 miles away. There have been cases where the same individual objectors pop up, such as local government, the SEAI and the EPA. The Department of Communications, Energy and Natural Resources and the Department of the Environment, Community and Local Government must examine the issue and at the same time seek to protect the environment. We can create jobs in this country with a little help in planning and a lot of common sense, which I am sure the Minister will bring to the Department. The biggest issue is the EirGrid interconnector and how we bring to fruition the shovel-ready projects that are waiting to commence.
Senator Cáit Keane: I welcome the Minister to the House. This is an important subject. It is World Energy Day. There is a display in Leinster House on what the Oireachtas has done for the heating system and the renewable energy used in the Houses. I commend all involved in that regard.
Awareness about renewable energy has grown significantly in recent years and it is now universally recognised as being paramount to future environmental conservation, economic growth and job creation. The three fundamental pillars that our energy policy rests upon are competitiveness, security of supply and environmental sustainability. Renewable energy is fundamental to our energy policy as it plays a key role in shaping this country’s future and is critical to delivering the policy goals of clean, secure and affordable energy supplies.
This country has more than three times its total energy requirements available from readily accessible renewable energy sources on its own doorstep which would enable us to move away from an over-reliance on imported fossil fuels, yet despite access to such vast and plentiful clean energy resources, this country is still heavily dependent on volatile foreign fossil fuel, importing almost 86% of its energy needs. As Senator Mulcahy indicated, this country has the best wind resource, as it is the first landmass for several thousand miles to intercept the prevailing westerly winds. Apart from a small area in the south of France, only Ireland, Denmark and a small part of Scotland have substantial areas of land where wind speeds at 50 m above ground level on open plains meet the 7.5 metres per second requirement. In the whole of Europe we are the ones with that advantage.
As conventional energy resources run out, Ireland has an extraordinary opportunity to use its natural resources in a cost competitive way to achieve energy independence and become a world leader in the use of clean energy. This key message was delivered recently at NovaUCD by Mr. John Travers, author and CEO of Alternative Energy Resources, AER, at the launch of his new book, Green & Gold — Ireland a Clean Energy World Leader? It is claimed in the conclusions that 20% of total Irish energy needs can be met from renewable energy sources within the next ten years and 80% by 2050, while 20% of Irish GDP can be derived from clean energy exports.
I will skip the figures for wind energy production, as Senator Mulcahy has already supplied them. The wind energy resource in Ireland is four times that of the European average and we must exploit it. The Minister is doing so and I commend his Department for the recent publication of the first progress report on the national renewable energy action plan, submitted under Article 22 of the EU directive.
We must also look to our European counterparts, in particular, Denmark and Sweden, both of which are planning to meet 35% of their energy needs through wind energy productin by 2020, which is higher than the European target of 20%. Given our capability, we should strive to do likewise and also aim for a figure of 35%.
Biomass is another source within the renewables spectrum where there is good potential for growth in an Irish context. The supply of energy crops such as pulpwood and wood industry residues is set to increase by more than 30% in the period to 2016 and the demand for these products could feasibly increase by more than 70% in the same period. Wood fuel can gradually displace oil. As such, policy measures to encourage the use of biomass energy sources are necessary.
I have followed with interest the development of tidal energy projects, particularly on the west coast where I am from originally and Wavebob was developed. That work has received some help, but the industry remains three years away from being commercial. There is a lead-in time for putting in place the infrastructure needed for wave farms. This involves the permit and planning processes, environmental impact assessments and regulatory issues, all of which are major considerations for many companies. The Minister should keep this in mind.
Wave-generated electricity projects offer consistency in power generation not found with wind-powered devices. The combination of sustainability and consistency makes the generation of electricity by means of wave power such a vital cog in the wheel of renewable energy projects.
Senator Mulcahy referred to the issue of planning, but I will remind the Minister about a related matter. We do not get much sun, but solar panels that do not require light from the sun are being developed. In the United Kingdom planning permission for the installation of solar panels is only required in the case of listed buildings. Will the Minister consider adopting this approach?
Perhaps the Minister might review the fuel subsidy systems? In Pittsburgh in 2009 the G20 leaders committed to phasing out in the medium term inefficient fossil fuel subsidies that encouraged wasteful consumption. Eradicating fossil fuel subsidies would boost the global economy, the environment and energy security. This is according to the International Energy Agency which was referring to the pledge made by G20 countries.
To ensure security of supply, different methodologies of fuel supply are vital. We must ensure the new interconnector does not disadvantage the funding of alternative sources of supply and that there is a competitive balance in the Irish gas and electricity markets.
Only 18% of Iran’s oil supplies go to the European Union. Its principal customers are China and Russia which oppose sanctions. How influential will the sanctions be? Would the use of the diplomatic route instead of sanctions have been better? EU decisions are not always right.
The Minister must be commended for announcing the renewable energy feed in tariff, REFIT 3, scheme in November which will pave the way for the connection of an additional amount of renewable energy, a matter Senator Mulcahy dealt with in detail.
I welcome the planned publication of the Government’s new energy policy framework this year and hope it will be ambitious enough to meet and exceed Ireland’s needs in terms of job creation and energy supply. The Government has committed to meeting 16% of our energy needs from renewable energy sources. Are each sector’s targets up to speed or is any sector falling behind?
With the production of wind energy, ensuring storage capacity is a necessity. Senator Mulcahy mentioned a few storage methods. Without storage capacity we will not have a convenient and steady supply of energy. As such, a storage system needs to be invented to ensure a steady energy supply. In the case of renewables, sometimes there is too much energy for the grid to handle. Wind energy projects especially present a problem in this regard, in that it is usually windier at night. Is research being conducted on various renewable energy storage methods? An innovative way of storing renewable energy resources is being tested in the United Kingdom by a cryogenic company, Highview Power Storage. It uses the excess capacity at times of low demand to power refrigeration units to cool air to approximately -190° Celsius, to turn it into liquid nitrogen for cryogenic energy storage purposes. We should consider using a similar system. Last Sunday the Minister announced the provision of €1 million for UCD or every university. Will any of this money be used to conduct research on storage methods? It is a significant element.
The potential for job creation has been mentioned. Mr. Travers has stated there is a potential to create almost 100,000 jobs in harnessing energy from renewables and engaging in energy efficiency activities. He has also stated clean energy projects could help to rescue Ireland from its current economic and energy challenges. In achieving energy independence Ireland could become an outstanding world leader and a global beacon for the use of clean energy. The Minister’s stewardship will help this to come about.
Senator Mark Daly: I welcome the Minister. What is his opinion on the recent retirement of the chairman of the ESB and his sizable pension, an issue that is of concern to us all? The wages paid within the ESB account for the significant increases in electricity bills. I am sure the Minister is well aware of the figures for energy costs, but one in four people claim they cannot cope with the increases, 15% have needed to dip into their savings to pay their energy bills and 8% have stated they are unable to cover household bills. These figures show that people are unable to cope with price increases, some of which have been in the range of 21%. For example, Airtricity which controls 17% of the domestic market and 15% of the electricity market has applied significant increases, thus increasing a household’s annual bill of €720 by €160. Bord Gáis has done likewise, in that a household’s annual bill has increased from €720 to €900. As we all know, wages represent the greatest cost in any company. In the ESB’s case, that cost is considerable. The production of energy is not cheap and there is an oil supply issue, but even during our time in government, increments, pay increases and significant pensions were awarded time and again. Does the Government plan to tackle this issue?
We know about the better energy scheme because we introduced it. Although the Government is discussing increasing its use, there has been a 35% reduction in the grants available. The Sustainable Energy Authority of Ireland, SEAI, takes up to six months to process grant applications. We have all dealt with constituents who have had work done, yet they are unable to have their grant applications processed.
We take issue with the Government’s motion because of the extraordinary position on privately run grids. The Fianna Fáil Party is of the view that the grid system should remain in State ownership. What is proposed in the Government motion, namely, privately run grids, would lead to protests on a monumental scale. The ESB has the right to install grid infrastructure across private lands for the greater good of the community. However, if private companies are given the right to go through people’s land we will have Shell to Sea times 100. Will the Minister clarify the reference to private grids?
The Minister for Finance, Deputy Michael Noonan, said in the House on 8 October last that neither the EU nor the IMF is forcing the Government to dispose of State assets. It is a Government initiative, we were told, with the revenues that are generated to be put into a jobs initiative. We all know what happened when the levy was imposed on pension funds for the apparent purpose of creating jobs. Nobody can say whether a single job was created as a result of that money being taken out of pensions. The only clear result is that people are now afraid to put money into pensions for fear of being taxed. Will the Minister clarify the job creation proposals? The troika has indicated that it will consider the Government’s proposal in this regard but that there can be no question of simply selling State assets and putting the revenues into a jobs fund without there being a proper plan and targets in place.
Members opposite referred to wind farm subsidies. A great deal of money is required to put that infrastructure in place. Thus far there has been an unco-ordinated approach, with large tracts of land designated for wind farms at various locations throughout the State but little or no progress thereafter. The hen harrier seems to be the most endangered and protected species on God’s green earth. It is certainly the most famous bird in Ireland and seems to have visited every place where a planning application for a wind farm has been submitted. Another problem is that while we have zoning for wind farms, we do not have the facilities and infrastructure to get the electricity out of the farms. In other words, they are essentially non-viable. Will the Minister comment on this?
The motion calls to mind some of the more striking — I will not use the word “outrageous” because nothing is outrageous when it comes to five-point plans and so on — commitments given by the Fine Gael Party before the election. For example, the Minister for Health, Deputy James Reilly, made many promises about the rerouting of the North-South gas pipeline away from his own constituency. That is now going full steam ahead.
The wind farm and wave energy proposals are very welcome. However, what is of greatest concern to people is the rising cost of energy. As my colleague from County Clare has pointed out, there is great potential for wind and wave energy in this State, but it is too far down the line to be of any help to the person whose electricity or gas bill was €720 last year and will be €900 this year. Many people are dipping into their savings in order to meet their bills, with one in four unable to afford to keep even a few rooms in their home warm.
Senator Mark Daly: The motion clearly proposes that the Minister “consult with CER, EirGrid and ESB Networks as well as all stakeholders, on the potential for the development of privately owned grid solutions”.
Senator Thomas Byrne: I second the amendment. We have reached an extraordinary juncture when both the Government and Sinn Féin, because it has not amended the particular part of the motion, support the development of privately owned grids.
Senator Thomas Byrne: I do not know who wrote the motion. It cannot have been a Fine Gael Party activist because it does not refer to that party’s commitment to the North-South power line going underground but merely calls for it to be built as soon as possible. How does that correspond with the view expressed by the Fine Gael Party before and after the election that the North-South pylon system should go underground? The Sinn Féin amendment does not deal with this part of the motion; it simply adds on something about Shell to Sea. That party is obsessed with Shell to Sea.
Senator Thomas Byrne: There is no mention in the Senator’s amendment of the North-South power line. The Fine Gael Party gave an unequivocal undertaking not only to place it under ground but also to pay the North East Pylon Pressure Campaign €500,000 in respect of costs incurred.
In regard to the east-west connector, it seems nobody spoke to the Minister for Health, Deputy James Reilly, who promised to reroute it away from his constituency. The motion could not have been written by a Fine Gael person, who would surely have known about the Minister’s solemn pledge to the people of north Dublin. We are left to wonder who wrote the motion. Senator Mark Daly suggested it may have been a lobbyist; I hope that is not the case.
The Government proposal refers to the “potential for the development of privately owned grid solutions”. The Fianna Fáil Party does not support a private grid, as we were accused of doing in the early days of the pylon controversy. A huge mistake was made in the case of Eircom and it is about time the lessons were learned from that.
The motion calls for a review of the criteria for “individuals and entities lodging objections or submissions to planning applications”. It also calls for a greater alignment of the “range of permissions and authorisations required for renewable energy projects”. This could be interpreted in two ways, first, as an undertaking to make it easier for people to object, even though it is already relatively easy to do so, or, alternatively, as a statement of intent by the Government to make it more difficult.
Senator Thomas Byrne: The Fianna Fáil Party in government had a very successful policy on renewable energy and a very successful fuel poverty scheme in the form of the warmer homes scheme. The Government is continuing the latter and, although I accept there is less money for it, it is the best way to tackle fuel poverty. We heard a great deal about fuel poverty from the Labour Party in opposition, and I commended and supported it at the time. The Minister of State, Deputy Róisín Shortall, did a great deal of good work as an Opposition member of the Joint Committee on Social Protection. The findings and research she brought forward were unanswerable. Fuel poverty was an issue in respect of which I acknowledge we did not do enough in government, apart from the warmer homes scheme. Very little has been heard from this Government on the matter since the election, other than its reduction in the fuel allowance while simultaneously claiming there were no reductions in social welfare rates.
My party colleagues and I will reject the privatisation of the grid or any private grid solutions. We will call on the Fine Gael Party to implement its pre-election promises and commitments in regard to the North-South infrastructure. I acknowledge that the international commission set up by the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, did a good job of listening to people and produced a fairly comprehensible report — in so far as it is possible to do so — on the subject of interconnection. However, this is the seventh or eighth such report by various parties. It is probably the most clearly written but it is not a novel venture.
We also intend to hold the Government accountable, although the horse has long bolted, on the issue of the east-west interconnector at Rush, which the Minister for Health promised would be rerouted in the interests of his electorate. While like the Minister I, too, welcome that proposal, nothing has as yet happened in that regard. There should be accountability in politics. It is time motions put forward in the Seanad reflected the political position. This is a political motion which does not, to say the least, reflect the policies and politics of the Fine Gael Party.
We all agree that energy is a basic component of modern society and that its availability and cost play a critical role in the quality of our lives and in facilitating our economic development. Our energy policy is based on ensuring a secure, clean and affordable energy supply for Ireland. Renewable energy will play a key role in shaping Ireland’s energy future and will, in turn, contribute to each of our policy goals of secure, clean and affordable energy supplies. As argued by Senator Mulcahy, as a society we need to develop our indigenous renewable energy sources if we are to move away from imported fuel sources. In doing so, we not only improve our balance of payments position and reduce economic exposure to the volatile global fuel prices about which Senator Keane spoke but we reduce our overall level of carbon emissions. Upwardly, spiralling global oil prices, driven by robust demand in the emerging economies and ongoing geopolitical turmoil in the Middle East and North African regions pose risks for our future cost of energy and, potentially, our security of energy supply.
Deputy Pat Rabbitte: That is a matter beyond which we have control. Other key energy policy drivers include the fundamental changes in the global gas supply market, pressures on the availability and cost of capital for the capital intensive energy sector, whether State owned or private sector and changes in energy technology. As a country that imports almost 90% of our energy requirements, we are acutely aware of these challenges and the real opportunity that developing our indigenous energy resources provides. Given the dramatic change to our own and, Europe’s, economic fortunes, now is a good time to evaluate our energy policy directions.
Towards the end of 2011, the international energy agency carried out its four-yearly review of Irish energy policy. The review includes a detailed assessment of the efficiency of the Irish electricity and gas sectors, taking full account of the EU regulatory context for these sectors. I look forward to receiving its assessment of our energy policy in a few months. This analysis will feed into a review of the existing 2007 energy White Paper that my Department will carry out over the coming months in consultation with stakeholders and with a view to publishing during this year a new energy policy framework for 2012-30.
As part of our energy and climate change 2020 European commitments, Ireland has been set a legally binding target of 16% of all energy consumed to be from renewable sources by 2020. At national level, we achieved this target by delivering 40% in the electricity sector, 12% in the heat sector and 10% in the transport sector. In response to Senator Keane’s question, we are reasonably comfortable that we will achieve the target for the electricity sector but there will be difficulties achieving the targets for the heat and transport sectors. The combined delivery across these three sectors is consistent with delivering our European target of 16% of all energy from renewable sources.
In the electricity sector, while we have seen good progress in recent years, moving from 5% renewable electricity in 2005 to around 15% renewable electricity now, we still have a long way to go to ensure that we reach our 2020 target of 40% renewable electricity. The achievements in this area to date are reflected in the significant reduction in emission levels from electricity between 1990 and 2009. While earlier improvements in this area were primarily due to replacing older, less efficient generating plant on the system, it is clear that in later years the growing deployment of renewable energy has increasingly contributed to the overall emissions reduction. I am confident that Ireland has the capability to achieve its domestic renewable electricity targets from the onshore wind projects already in the existing Gate processes, despite the many difficulties being encountered and the undoubted challenges which remain for a number of projects, including Senator Daly’s harrier hen.
Deputy Pat Rabbitte: This requires the ongoing roll out of the Grid 25 investment programme, together with delivery of the essential North-South transmission reinforcements and completion of the east-west interconnector. Senator Byrne expressed concern about the North-South transmission. I agree with him that it is an essential reinforcement of the all-Ireland electricity system. The Government’s commitment to commission international experts to assess the case for undergrounding of whole or part has been completed. No one questioned the credentials of the three international experts from Sweden, Norway and Belgium. As stated by Senator Byrne, the report is accessible. I published the report immediately on bringing it to Government. A copy of it has also been sent to the Chairman of the Select sub-Committee on Communications, Energy and Natural Resources, Deputy Andrew Doyle. It is open to anyone, including the anti-pylon group, EirGrid, ESB networks and so on, to make submissions on the report to that committee. We must get on with making the decision thereafter. I have not heard anyone, even those most vehemently opposed to it, question the necessity for strengthening the grid in that regard.
The Government, together with the UK Government, Northern Ireland, Scottish and Welsh administrations, working under the auspices of the British-Irish Council, is firmly committed to developing the renewable energy resources of these islands with a view to developing cross border trade in renewable energy, where appropriate, across our jurisdictions. This can create a major renewable energy export opportunity for Ireland. Ireland has some of the best wind and wave resources by international standards. We intend to develop our renewable energy export potential in a way that can provide a real return to the State and to do so in a way that does not expose the Irish business or domestic electricity consumer to additional costs.
We are also working with our neighbouring countries to see how best we can co-operate to better plan and build our future energy infrastructure. In combining our efforts, we can find ways to reduce the overall amount of infrastructure required and to ensure the optimal use of the infrastructure that is built. In this way, all electricity consumers will be better off in the long run. Ireland is also working in Europe with the UK and eight other Governments, under the North Sea offshore grid initiative, to create a planning, market and regulatory framework to support offshore infrastructure development and facilitate cross border renewable energy trading in north-west Europe.
In terms of infrastructure capacity, the delivery by EirGrid of new grid and grid upgrades is critical to ensuring that Ireland can meet its renewable energy target. New grid and grid upgrades not only facilitate renewable energy but serve to enhance the economic opportunities available in rural parts of the country. I fully support and underline the importance and urgency of Grid 25 implementation, including the North-South interconnector.
During the past year, 150 km of new transmission lines were completed, along with upgrades to 300 km of existing lines. This new build and upgrading is essential if we are to connect 200MW of new renewable generation annually, commensurate with delivery of our target. The delivery of the east-west interconnector later in 2012 will be an important milestone, ending our electricity grid isolation and permitting trade with Britain, in line with the EU’s goal of regional energy markets. A great deal can be done at local level in meeting these challenges. In that context, I welcome the Sustainable Energy Authority of Ireland, SEAI, initiative to develop a methodology that can be used by local authorities in compiling local and regional renewable energy strategies. An increasing number of counties are developing renewable energy deployment plans. These, combined with the development by the SEAI of geographic information systems for wind, bio-energy and geothermal resource assessment, can assist local authorities in developing their own comprehensive GIS maps of the renewable energy resources potentially available for development in their geographic areas.
The Minister for the Environment, Community and Local Government, Deputy Hogan, is finalising a foreshore and marine area development Bill, the purpose of which is to integrate “the foreshore consent process under the Foreshore Acts 1933 with the existing on-land planning system”. Specifically, this Bill will seek to do the following: integrate the foreshore consent process for major strategic infrastructure projects within the strategic consent process operated by An Bord Pleanála — Senator Mulcahy made a point in respect of such infrastructure; integrate the foreshore consent process for non-strategic infrastructure projects within the wider planning system operated by the local authorities; and provide for a plan-led approach for future foreshore development.
In the heat sector, last month the Government approved a new REFIT scheme for biomass technologies, including those involving combined heat and power and anaerobic digestion. The scheme aims to incentivise the addition of 310MW of renewable electricity biomass capacity to the Irish grid and will have the benefit of diversifying the range of energy sources from which our electricity is generated. As well as contributing to the targets for renewable electricity, the combined heat and power projects supported under the scheme will have the added benefit of contributing to our renewable heat targets, including the potential to be utilised for district heating programmes or as heat load for manufacturing processes. By using materials such as farm wastes — materials from forestry or energy crops — electricity generated from biomass gives rise to high local economic benefits and also to positive environmental and social impacts. The scheme will also underpin the energy crops grant programme operated by the Department of Agriculture, Food and the Marine. The scheme will also provide a stable market for developing the domestic biomass sector and the co-firing project, in particular, will present a new market for private and public forests for their product.
Ireland’s target for energy in the transport sector coming from renewable sources by 2020 is 10%. This target will be achieved through the dual approach of deploying sustainably acceptable bio-fuels into our fossil fuel road transport fleet and by expanding the early electric vehicle market. We will increase the amount of sustainable bio-fuels used in the transport fuel mix to 10% by 2020. The bio-fuel obligation scheme introduced in 2010 currently obliges suppliers of road transport fuels to ensure that at least 4% of such fuels placed on the Irish market are biofuels. This level will be incrementally increased in the coming years to 10% by 2020. In addition, the Government has set a target to the effect that 10% of all vehicles should be powered or partially powered by electricity by 2020. This equates to a market size of around 220,000 vehicles. Senators may consider that this is an ambitious target. In April 2011, I launched the electric vehicle grants scheme to assist people in the purchase of battery electric vehicles and plug-in hybrid electric vehicles. The grants relating to this scheme, which are additional to the VRT reliefs that currently apply, are available towards the purchase of electric vehicles.
At European level, my Department is working to ensure that new cross-border trading rules that will facilitate increased energy trading will be developed and that the new market arrangements that are being drawn up will facilitate the development of more renewable energy. Late last year, the European Commission published an energy infrastructure package which highlighted the need for greater interconnectivity between markets and the need to build infrastructure to help harness more renewable energy technologies. The European Union already has ambitious renewable energy, energy efficiency and climate change targets and the Commission is now setting longer-term ambitions in its roadmaps for low carbon economy and low carbon energy systems for 2050. Ireland must be part of those ambitions. Some contributors to the debate on this matter are of the view that the targets established by the European Union in respect of renewables are in some way optional, although no Senator has yet made this point. Regardless of whether one agrees with the levels of use of renewables that have been set down, the targets to which I refer are, in effect, mandatory in nature.
The Government is fully committed to achieving its EU and international climate change targets. The energy sector will play a key role in underpinning this by assisting in the achievement of our renewable energy and energy efficiency targets. We are clearly moving from an island-based energy system into a more interconnected and joined-up European energy market. As that market develops in the coming years, it will provide new and bigger market opportunities of which our renewable energy sector can avail. With our proven natural resources in this area, we are well placed to become a key renewable energy trading country.
I have, for some time, been committed to attend an important meeting in respect of this matter at another forum at 5 p.m. I, therefore, apologise for the fact that I will not be present for the remainder of the Seanad’s debate on it. Before I leave, however, I wish to respond to some of the points raised by Senators.
I dealt with the issue of running cables underground and hope that we can conclude the process in this regard in six weeks. I see no point in procrastinating. We should allow the relevant committee of the Oireachtas to proceed with its deliberations in order that everyone who wants to put forward his or her point of view might do so. It is necessary, however, to do the business. I hope I will be able to return to Government in respect of this matter within six weeks. After that, the planning process will take its course.
I agree with Senator Byrne in respect of one matter. He stated that what happened with Eircom was a mistake; it was a disaster. That matter is the source of some discussion in the financial pages of the newspapers. Those who helped themselves, quite liberally, to the profits of Eircom rather than reinvesting them in broadband and other necessary infrastructure have a great deal for which to answer.
Deputy Pat Rabbitte: I am merely highlighting the fact that what happened has left us at our current pass. There is a lesson here which we must take on board. The only decision the Government has taken in this regard is to the effect that it would agree to the disposal of a minority stake in a vertically integrated ESB Electric Ireland, subject to due diligence. I have accepted possession of the relevant report and of a less forensic and separate report, namely, a survey of the assets in the State’s cupboard, but this has not yet come to the Government. Neither the Government nor I want to dispose of State assets but, under the terms of the memorandum of understanding with the troika, we are required to do so.
Deputy Pat Rabbitte: The quantum is not fixed in this regard. It was something of a welcome breakthrough that in the most recent engagement the troika agreed that a proportion of the proceeds may be used for investment purposes in the economy. That is a significant development. As stated, however, a quantum has not been agreed and we must still bring matters to a point where the position in that regard will be defined. To some extent I get the impression that it is as a result of the agreements imposed on Greece and Portugal that Ireland will be made to comply. That is not, perhaps, the best basis for forcing the sale of State assets.
Deputy Pat Rabbitte: I refer to the publication of the Government’s affordable energy strategy in November. It is available in the Oireachtas Library for anybody who wants to pursue it. I agree with Senator Byrne that energy efficiency is the most effective way of spending money to address the issue of fuel poverty. I commend the work in this regard of my predecessor, Mr. Eamon Ryan, and hope notwithstanding the strapped circumstances in which we find ourselves that we can build on it.
I am glad to see this motion brought to the House on an issue which is not as tempting for the media as other areas in politics but is a very critical area for the consumer, business and economic development. I look forward to reading the remainder of the House’s consideration.
The Taoiseach, in the competitiveness challenge report for 2011, stated that renewed international competitiveness is central to any Irish economic recovery. This is the problem I have with the Irish energy sector. It is not competitive and it is not thoroughly enough regulated by the Commission for Energy Regulation. This is a sizeable obstacle in the economic development of the country.
The Forfás report on energy competitiveness found that in the first half of 2011 Ireland was the sixth most expensive country in the EU for electricity prices for small and medium-sized enterprises. The reason I feel the Commission for Energy Regulation has not been active enough is that we know the ESB in particular is a low productivity and extremely high wage company, witnessed only last Saturday. This was pointed out in the McCarthy report on the disposal and performance of State assets published in April last year. Regulation which does not go into the high cost base of the ESB and extract these monopoly rents and pass them on to consumers in the form of lower prices does not serve the Irish economic recovery. A shoal of countries including Finland, France, Sweden and the United Kingdom have cheaper energy and electricity costs than we do for small and medium size enterprises.
To quote a phrase of the Minister, Deputy Howlin, this is an area where policy is captured by producers and the costs are borne by the rest of the economy. If we go too far in the direction of very high cost renewable energy sources — some of them are extremely high cost — we will damage the competitiveness of the overall economy because people must buy this electricity at inflated prices.
In its review of the economy the OECD recommended that we phase out supports for offshore wave and tidal energy because they are not commercially viable. They are financed through a public service obligation payment which costs €118 million. Of this the direct subsidy to peat is €40 million, with €36.5 million going to renewable energy generation and the remainder accounted for by administration and capacity related expenditure. We are rigging the market in favour of some of the renewable sources which the OECD states are not competitive.
There are also great doubts about electric cars, which were mentioned by the Minister. If one takes what a normal car puts into the Exchequer one can put a minus sign with regard to the same car if it is electric. It would require a subsidy equal to the tax payment so one loses on the double. Looking through the report there are also great doubts about biomass, which is an activity completely dependent on subsidies, and with regard to combined heat and power schemes.
Much of the debate has been dominated by things that are possible in engineering terms but not affordable in terms of what this economy is trying to achieve. I welcome the Minister’s statement that the International Energy Agency would report on energy policy. I look forward to reading the report soon. There is a belief that wave energy in Ireland is free or low-cost but it is not. It is more expensive than the alternatives and this is why we must subsidise it through the backdoor mechanism of the public service obligation which is borne by consumers. Many of the other energy options which must be stood up by the Minister and the Department in the face of economic analysis are likely to increase the cost base of the economy rather than reducing it.
Moving the renewable energy sources target to 40% in electricity has been estimated by the National Competitiveness Council to add approximately 10% to electricity bills because the more expensive options are being chosen all the time. A proposal was made, which is commented on by the McCarthy review, to raise this 40% to 42% but each time it is raised high cost options are brought into play and it damages the competitiveness of Irish industry.
I welcome the prospect of the gas find in Leitrim and Fermanagh and the bringing on shore of the Corrib gas. This could change our position with regard to being dependent on imports. For each of these changes we must recalculate the numbers on whether these renewable projects are worthwhile. There has been an almost religious zeal that these are meritorious projects which are so obviously better than importing lower cost fuels from world markets. This must be stood up with better numbers than those with which we have been supplied.
There is fear among economists that the Department is captured by the producers of energy and the promoters of various expensive schemes and that the consumer does not get sufficient attention. In this case, the consumer is Irish industry, which must compete worldwide. The cost base of the ESB, not only with regard to the chief executive being paid more than twice what the Taoiseach earns but the average cost base, includes numbers reported in 2006 of €142,000 being the average wage in the Poolbeg power station.
If we are to become competitive again on the international stage we must look at these burdens on Ireland’s competitiveness even if they have a certain trendy association, such as alternative energy, because they damage our international competitiveness. I look forward to the upcoming review the Minister mentioned. I am grateful to the Senators opposite for tabling the motion because we need to discuss why many of our competing countries have lower energy costs than ours.
Senator John Whelan: I commend the Fine Gael Senators for tabling this positive and progressive motion which gives us an opportunity to air our concerns on these issues. Anyone who takes from it a proposal to privatise the national grid is bending it like Beckham. It is unfortunate that some people are throwing everything bar the kitchen sink into the equation. The only thing Senator Byrne did not mention was stag hunting.
Senator John Whelan: With his background and qualifications in this area I take seriously and am very interested in everything Senator Barrett says, and it is something we should take into account. There are those who believe that while renewables are the way forward and are commendable, there is a fear that it could be the next bubble, so to speak, that might not be sustainable in the long term. That is something we must examine. This issue is not just about economics but the need to strike a delicate balance in terms of economics, the environment, the carbon footprint issue and our high dependency on imported oil. We must factor all those aspects into the equation when we come to make decisions.
In terms of best practice, I return to my well rehearsed view — I am like an old record on this one — that the more renewables we have in terms of wind and wave energy the greater the burden on the national grid and the greater the pressure on the roll-out of GRID 25, which will come through the heart of the country because it must transfer from the west to the east coast where the demand is greatest and will leave us with a virtual spider’s web of power lines, cables and pylons. The reality, unfortunately, is that it will drive through the midlands and my constituency. I call on the Minister to use his good sense and influence to call on EirGrid to change its tack in terms of its corporate culture and approach this issue with transparency and in a fashion of co-operation and consultation with rural communities. Most of the people in those communities believe in and support the roll-out of the grid but they are being criminalised, a phrase used earlier, turned into protesters and Ché Guevara types in that every time EirGrid encounters any sort of obstacle, its first recourse is to the courts. That is unfortunate and unnecessary because it is the taxpayer who is picking up the tab for that. If EirGrid does not change its tune and embrace a constructive and co-operative approach, I am fearful that the roll-out of the grid will grind to a halt, something none of us can afford because our economic recovery is contingent on this grid being expedited, but only if EirGrid changes its tune.
Senator John Kelly: The Minister of State is welcome. I support the motion but will make some brief comments on the issue of wind energy. We are all supportive of the notion of wind energy and I have always promoted the offshore wind energy option as it is twice as productive, although it might be twice as expensive. That said, I have a problem with the distance between wind farms and private residences. There is no protection for people who must live beside wind farms. If one asks people who are not forced to live beside wind farms what they think of them, they will say they are beautiful to see as they drive around the country. That may be true but not for those who have to live beside them.
The Wind Turbines (Minimum Distances from Residential Premises) Bill is currently before the House of Lords in the United Kingdom. It has passed Second Stage and Committee Stage will be taken soon. The Bill was mooted by Lord Reay who stated:
In her book on wind turbine syndrome, Dr. Nina Pierpont recorded and analysed the symptoms of a number of families in different parts of the world who were driven out of their homes by their sufferings from wind farms. Dr. Pierpont concluded that a minimum setback distance of 2 km should be required and also that developers should be obliged to buy out affected families at the pre-turbine value of their homes, if that is feasible.
I do not necessarily agree that we should publish a Bill that proposes turbines should be located 2 km away from homes but it should be done based on their scale. The higher they are, the farther away they should be from homes. I have mentioned that to the Minister, Deputy Rabbitte, and I propose to initiate a Bill in this House along those lines which I hope will be supported because there is no protection for local people when it comes to wind turbines. They are lovely but when developers decide they want to put a wind farm in a particular area, the only protection for families is that they are supposed to involve the local community. However, they do not do that. The developer identifies the location, talks to the farmer and signs him or her up to a sweet deal in which he or she will get €20,000 or €30,000 a year for leasing the land, and once that deal is done, there is no going back on it. The developer then tells the local community what he or she proposes to do, at which time it is too late for the community to do anything about it. That is not protection for people given the health risks attached to these wind turbines. I hope the Minister of State will be supportive of the Bill when we bring it before the House.
Acting Chairman (Senator Diarmuid Wilson): Before I call Senator Ó Clochartaigh to speak, the Sinn Féin amendment cannot be moved until the Fianna Fáil amendment has been voted on. Only one amendment can be before the House at any one time. The Senator can refer to his amendment during the debate. The Senator has six minutes.
Senator Trevor Ó Clochartaigh: Cuirim céad fáilte roimh an Aire. Is deas an rud é a fheiceáil ar ais sa Teach. Tá go leor rudaí dearfacha faoin rún seo a mbeadh muid ag tacú leo, ach tá sé cineál aisteach go bhfuil an Rialtas ag glaoch air féin le rud éigin a dhéanamh.
There are many positive elements to this motion but I note that, curiously, much of it relates to the Government calling on itself to act and that is the reason we brought forward our amendment. Our amendment concerns the establishment of a full review of licensing terms governing oil and gas exploration promised by the Minister during a debate on a Sinn Féin Private Members’ motion in the Dáil last April. I raised it with the Minister in this House previously. He undertook, in response to the motion and a specific proposal from Fianna Fáil, to establish such a review through the committee. So far he has done nothing to bring that about and our amendment is by way of reminding him of his promise.
Not only is such a review important in terms of the Corrib gas field and other offshore deposits, but also yesterday we had a major announcement on the gas in the Lough Allen basin. While most of the attention regarding that has been focused on the use of the controversial method of extraction, there is also the major issue of who will benefit from the gas brought on stream. I remind Senator Byrne that it was Deputy Eamon Ó Cuív, on his last day in office as Minister for the Environment, Heritage and Local Government, who signed the license for that extraction process.
Our argument regarding who should benefit is that unless there is a proper national stake in natural mineral resources and the State takes a much higher revenue share than at present, the people will not benefit as they ought to from the exploitation of our natural resources. We are also opposed to any method of extraction that poses a threat to the health and safety of the local population or threatens serious environmental damage.
I welcome the fact that a Sinn Féin motion blocking the use of fracking — hydraulic fracturing — pending an environmental impact assessment was recently passed by the Assembly in the North and that various county councils in Leitrim and Clare have voted to block fracking. I understand the EPA is conducting a study of the method in question. I would be anxious to see a comprehensive study being done that does not take in corporate spin and places the welfare, health and safety of the Irish people above corporate wealth.
I wish to address some of the environmental concerns regarding the siting of the refinery at Bellanaboy, County Mayo. An Taisce argued against the siting of the refinery at Bellanaboy because it locates a gas processing terminal within the catchment of a major water supply. In many countries oil and gas reserves are not used to the benefit of the people. Energy multinationals operate as if they are above the law. Shell operates on that basis in Rossport, and the State actively facilitates it in doing so. Ireland should take a different approach. We should take ownership of our own natural resources and they should be used for the benefit of the Irish people as a whole.
The great gas giveaway is an embarrassment to us and may well be spoken of in years to come, as is the loss of our fisheries now, as a huge missed opportunity. The Government should do as we have proposed and seek a complete review of licensing and revenue terms and the immediate revoking of the consents given to the Corrib consortium and the licence for Lough Allen pending such a review. The licensing regime should include elements regarding job creation in the Republic of Ireland, the recognition of unions on oil rigs and a clause which would ensure that the companies in question have to supply the Irish market. Currently, there is potential for oil and gas to come onshore but no guarantee that the Irish market would be supplied. Furthermore, the Government should seek the imposition of a 50% tax on oil and gas profits and a 7.5% royalty.
The motion also refers to the pressing need to reduce our dependency on imported fossil fuels. One of the means of doing that is to develop our own renewable sources. We need to push ahead with the means of otherwise reducing the economic burden of energy costs, which are a significant and growing component of household and business costs.
Many constituents have raised with me the SEAI programme of grants which have been discontinued. They had been able to get grants for attic insulation and cavity wall insulation but SEAI policy has changed and now a home owner can only apply for a grant for one or the other.
There are also issues regarding the capability of the grid to connect to wind farms. A major consideration in this respect, which I have mentioned previously, is that we should examine a co-operative model of developing any of these renewable sources. I was in Canada recently and there is a tidal wave project in Nova Scotia where the state provides a facility where one can test technology. The Canadians have also developed turbine energy, which is beneath the waves, in a co-operative style whereby a local co-operative in a local community can buy a turbine for a reasonable sum of money and the electricity is bought back at a preferential rate. The subsidy in that respect means that the money can be reinvested in the local community. We should also examine that model.
Senator Kathryn Reilly: The Minister, Deputy Rabbitte, said that we need to make a decision on the North-South interconnector and to proceed with doing the business. We must do that with due regard to current best European practice and the emerging technologies. We need to take account of the expert commission report published only a few weeks ago by the Minister’s Department. It found that the undergrounding of the interconnector was a realistic solution, not that it was impossible or that it would cost 20 times the cost of overgrounding, as had been promoted by EirGrid for so long. That finding is primarily driven by significant technical developments and a commercial breakthrough of the most recently developed VSC HVDC technology. That needs to be taken into account when doing the business in that respect.
I heard it said a number of times in this debate that the Government has committed, but that means nothing. As was said, the larger Government party, Fine Gael, made substantial commitments, especially in respect of the North-South interconnector. It said it would halt all activity in respect of the interconnector until a report was commissioned but while the report was being produced, EirGrid engaged in its first round of non-statutory consultation. Fine Gael also said that it would instruct EirGrid to reimburse the groups and communities involved with the costs associated with participation in the oral hearing in 2010, but that has not happened. That needs to be done and I encourage the Minister to take that on board.
Senator Deirdre Clune: This is an important debate. We look forward to the Minister’s production of his energy policy in 2012. That will be important. The International Energy Agency is carrying out an in-depth analysis of our energy policy in line with the IMF agreement. We look forward to that and to what it will mean for us in terms of efficiencies in the electricity and gas markets, which the Minister mentioned. It is important to review energy policy every so often in light of changing international circumstances and changes in engineering and technological advancements.
We are heavily reliant on fossil fuels. Imported fossil fuels accounts for 90% of our energy requirements. In 2010 oil accounted for 55% of our energy needs and gas accounted for 33%, yet 61% of our electricity came from gas. We are almost totally reliant on oil for transport bar a few exceptions.
I refer to the Forfás report, mentioned by Senator Barrett, which was produced at the end of last year. The cost of energy for commercial enterprises is extremely important. At the stage we are in our economic history, we have to support business and enterprise and reduce costs, where possible, for enterprises. It was recommended that research and development in wave, tidal and offshore wind energy development should be funded from the private sector rather than from Government grants. The OECD report, which was mentioned, recommended a complete discontinuation of support for offshore wave and tidal energy, although it did not mention wind energy. Offshore wave energy development is very expensive. From an engineering point of view, of which I would be very supportive, it is possible but it is expensive and the question arises as to whether we can afford it in our current economic circumstances. It recommended that the full cost of grid connections from offshore wind projects should be charged directly to the project. The public service obligation levy must be examined in terms of our overall energy policy. The levy is being borne by enterprise and it is a major concern for that sector. Nonetheless, the renewable energy sector is important to encourage from a security point of view. Currently, only 6% of our energy comes from renewables. All these questions should be up for discussion.
I recommend that the Minister reads a report from the Irish Academy of Engineering, produced this time last year, which examined the economic decline since 2007. We do not need to produce as much energy as we did. The rate of use of our energy is declining and it probably will remain relatively stagnant over the coming years. A question raised in that report is whether it is feasible to invest €10 billion in the next ten years in wind energy when what we should be doing is looking after what we have, introducing efficiencies in our production. That would include in the ESB, as was mentioned. Wind farms were also mentioned The best place to site wind farms is next to the grid, to reduce the connection costs. We all know that will not be possible but that is the most efficient place to site them.
Gas is extremely important. There have been many changes internationally in technology which have made it cheaper to access gas and to find more gas reserves. There is the controversy over fracking, over which I have great concerns. Internationally, gas is more available. We have invested in gas generating capacity on this island in recent years. The use of natural gas should remain a major plank of our energy policy. We should not go down the road of focusing entirely on renewables and neglecting investment in the infrastructure we have built up in recent years. It is important that the Corrib gas would be brought onshore as soon as possible. That is essential for our security of supply. Technically, natural gas will be more available. We need to ensure that we have adequate storage facility for natural gas on this island. We need to develop LPG storage facilities.
The North-South and east-west interconnectors are extremely important and we should also look to France. The Minister spoke about working with other countries to develop energy policies. We should have a broader approach. We are committed under EU agreements to reducing our energy usage and greenhouse gas emissions but could we not examine working with a group of countries and tying in with them in terms of our interconnection? There are many questions on energy policy. The most important point to make is that in light of the current economic circumstances and the cost of energy to industry and to small and medium enterprises it is extremely important that our energy policy must be practical and pragmatic as we approach developing energy policy this year.
Senator Darragh O’Brien: I welcome the Minister of State, Deputy Fergus O’Dowd, to the House. I refer to a couple of items in the motion, which is interesting for what it says and what it does not say. I am surprised that the main Government party would table such a Private Members’ motion without any reference to climate change. A climate change Bill was an important pre-election promise, by the Labour Party in particular, and it was very active in the stop climate chaos campaign. That has now gone down the list of priorities. It has pretty much gone from the Government’s agenda.
I welcome a number of things. I watched the contribution of the Minister, Deputy Rabbitte, on the monitor. We all agree that energy security is crucially important. I note with interest a couple of references to the east-west interconnector, which comes into my area at Rush, and to EirGrid. A general point on future developments for which the Minister of State will be responsible under NewERA relates to consultation. Currently, when anything that comes under the Planning and Development (Strategic Infrastructure) Act is introduced local authorities are supposed to act on behalf of their citizens. I put it to the Minister of State that in many instances they do not do that as well as they should and sometimes they fail miserably. I use the example of the east-west interconnector which caused great consternation in my area, in particular in the town of Rush, which has a population of more than 8,000 people. The precautionary principle was not followed by An Bord Pleanála, but worse than that Fingal County Council did not even request re-routing underground, as it is around the populated areas, but Meath County Council did at Ratoath and it was granted there.
Every citizen understands the importance of energy security and increasing the links between Ireland and Britain and mainland Europe. However, the Minister of State will have a great deal of influence on this with the local authorities and within the Department. A high level of consistency is required in the context of interconnectors that will run through several counties. It should not just be left to each local authority. Some officials are good and others may not be as up to speed with various matters. That drives people nuts. In Rush in north Dublin the Fine Gael deputy leader and Minister for Health gave a commitment at a public meeting three weeks before the election that if he was elected and became a member of Cabinet he would ensure that the interconnector in Rush would be re-routed. I knew that could not happen but, unfortunately, he said it. That is similar to commitments that were given to the north east pylon pressure group.
When we are talking about energy we must be honest. I have heard many people talk about wind energy. People said, “This is fantastic and we need to do this, but”. “Yes, we need to increase our gas output, but.”. Let us look at what happened off Mayo. Why would a company in its right mind try to extract oil or gas anywhere off the Irish coast if it is going to take it 15 years to get it to land? It is insane. It is crazy. Senator Clune is correct. She said that more than 90% of our energy is imported fossil fuel. We have a target set down that 40% of energy will be generated by wind power by 2020. We will not reach that in a million years. If someone tries to put up even a single wind turbine somewhere there will be objections to it. We must have an honest debate on the issue. Unfortunately, the honest debate will only take place when an event occurs such as Russia switching off the gas to western Europe. When politicians are talking about the issue we should not make promises. When my party was in opposition previously it made promises. Energy, if Members will excuse the pun, is the oil that greases the wheels of this country. Elected representatives must be able to tell their communities the truth about the noise of turbines in the context of wind energy. In Denmark today a law has been passed to reduce the noise emissions. People have valid criticisms. We need a full policy on producing energy.
It is necessary for people to lead their communities. In Dalkey there is concern about an exploration licence for six miles off the town. I do not say that people are not genuinely concerned. I am sure they are, but I have not heard a proper debate on the issue of a company seeking an exploration licence for six miles off the Irish coast, yet hundreds of people met in Dalkey on a Sunday afternoon to say they are against that type of thing. I do not say they are not entitled to be concerned but the problem I have is that the second that happened the elected Members in that constituency, including the Tánaiste, went to the meeting and said they understood the concerns and that perhaps they have to do this, that and the other. One could ask where is our energy policy. I blame the previous Government in this respect also. I am serious about that aspect of the matter because it is an important issue for an island nation that is on the geographic periphery of Europe. Every comment on renewable energy, gas or oil is always preceded by a “but”. I have heard it in this Chamber all day. That must stop. We must be honest with ourselves.
I ask the Minister of State to urge the Cabinet to examine the warmer homes scheme. It has been successful through the SEAI. Between 3,800 and 6,000 jobs have been created through the scheme, in particular for the external insulation of homes. As he is aware, the funding, which was enhanced by the Minister, Deputy Rabbitte, by up to €99 million has been reduced in the budget to €64.6 million. People have come to me who are most concerned. Because the grants for external insulation in particular have been reduced to €1,800 and it is on the basis of the type of house, people are not taking up the scheme. Worse than that, what is happening is that we are seeing this area go into the black market where substandard materials are being brought in from continental Europe and jobs are being done for cash on houses that are not properly certified. I fully support the Minister of State’s position on major infrastructural investment but given that up to 6,000 jobs have been created in the sector, which are badly needed because of the fall in construction work, it is a retrograde step to take a third off the budget. We could lose up to 2,000 jobs in the sector in the course of the year.
Coming from a farming background I wish to speak on renewable energy and land use. The primary purpose of land should be for food production. I would welcome the comments and views of the Minister on the matter. I will focus later on the number of mills, including disused mills, around the country. Food security was an extremely urgent issue in Europe at the end of the Second World War. People in this House are too young to remember rationing here. I doubt if any of us experienced the starvation endured by fellow Europeans on the Continent. At the end of two world wars European agriculture was in serious trouble. That was a precursor to the introduction of the Common Agricultural Policy, CAP, under the Treaty of Rome of 1957. The CAP’s main objective was to increase agricultural production to help farmers attain a fair standard of living, stabilise markets and ensure a secure supply of affordable food. The CAP has been so successful that food security almost seems redundant to today’s western European citizens. However, in recent years, as global events have shown, catastrophic crises can develop almost instantaneously. We can never rest on our laurels. We must prioritise food security in Europe and here.
In that context I am concerned about the use of agricultural land for energy purposes. I am a strong supporter of alternative energy and the importance of being able to produce our own energy. That stems from the same root as the rationale of being able to produce our own food. However, where possible we should look to our vast sea and ocean capacity as a primary means of delivering alternative energy. Previous speakers referred to wind farms and wave energy. I would like to see more offshore wind and wave farms. It is important that we rapidly get to a stage where such investments pay for themselves. We need a serious public debate about alternative energy and, indeed, energy in general. The public has serious concerns about attempts to extract fossil fuels from within the State and its territorial waters. This has been made clear in recent debates about fracking and possible oil and gas exploration off the coast of Dublin and in the north east of the country. There is an obvious need for an informed public debate on how we can ensure we are able to meet our energy needs in the most self-sufficient way possible.
In south Leinster, where I live, there are three rivers. If Senators remember their school geography, they will know them — the Nore, the Suir and the Barrow — as the three sisters. There are approximately 60 mills, either used or disused, on those rivers. Very few of those mills are in flour production but some have been put to alternative uses. In my own village of Bennettsbridge, Nicholas Mosse has his famous pottery in the old mill and he generates his own electricity through the mill wheel.
Our rivers have vast potential. The people who built these mills got the best possible engineering results. They built the mills in the locations of greatest potential. At present, anyone who wants to generate electricity from an old disused mill must go through the planning process. There is nothing wrong with the planning process, but each individual applicant must commission an environmental impact study, EIS, which costs approximately €10,000. These mills were put in place with great thought and I cannot see how they could now have an environmental impact. A one-size-fits-all planning system should be put in place.
Microgeneration gives rise to another problem. A producer who generates less than 3 kW will not get onto the grid. If a producer generates less than 6 kW, it is supplied free of charge to the grid. That is a big problem. Some microgenerators could produce 2 kW or 3 kW of electricity, which would keep the generator’s business running, with a surplus which is then given to the grid for free. In the United Kingdom meters are used which go backwards. Producers who over-produce for their own needs are credited on their electricity bill for the excess amount. This cannot happen in Ireland. The tariff in Ireland is 6 cent for a unit of electricity produced. In the United Kingdom it is 16 pence and in Germany it is 20 cent. In those countries people are rewarded for generating electricity through renewable sources. The set-up costs of a microgenerator can be considerable. A tariff of 6 cent per unit does not justify those costs. Will the Minister ask purchasers of microgenerated electricity to front-load payments for a few years? This would make microgeneration economically viable. The tariff could then be reduced after five or six years when the set-up costs have been covered. These mills can produce clean energy. They were put in place by people who ran businesses. Developments in flour production caused those businesses to collapse. We should look at this alternative. These mills have mill races and mill runs. The infrastructure is already in place and could be used.
The Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, is the right man to look at this situation and I commend him on his work to date. I look forward to the publication of the Government’s new energy policy framework.
Senator Feargal Quinn: I will be as short as I can. I think everything has been said. I welcome the debate. This topic needs to be debated and this is a good opportunity to do so. We have not debated things in this way on all occasions in the past. We have closed our minds on many occasions. There has not been a debate about nuclear energy and we should have that debate before we make decisions. There should be a debate about fracking before we make decisions. There is enough evidence to be considered rather than close our minds to it.
In the 1950s, when I was very young, I remember an objection being raised to fluorescent lights because they would make one go bald. It seems funny now, but there was a huge outcry against fluorescent lights. However, I think we are safe enough. The same sort of thing is happening with genetically modified foods. There is an automatic reaction to any change and sometimes we listen to it too easily and too readily. In Germany, where nuclear stations were closed following a campaign by the green movement, the resulting cost has been huge. No reason was found for the closures except for an inbuilt belief that nuclear generation was not the right thing to do. The same thing applied in Britain.
About six years ago, I was asked on a television programme what business would I go into if I was going into business now. I said I would go into renewable energy. It seemed the in-thing to do back in 2005 and 2006. A number of people got in touch with me to say they had a wonderful idea for wave, tidal, solar or whatever energy. Clearly, many people are thinking that way and believe in what they can do.
That said, there are some things we jump into which are not right. I will touch on one of these. Biomass is mentioned in the Fine Gael motion and Senator Barrett has spoken about it. When I was in Brazil a few years ago, I could not get over the amount of biomass being used in place of petrol. Now it turns out that biomass is doing considerable harm to the environment, but at that time we thought we should be growing biomass products instead of food.
I accept entirely what has been said by Senator O’Neill and others about the need for food. The Minister spoke about the amount of food we waste. Wearing my supermarket hat, I know that 30% of the food people buy is thrown out and not used. That can be recycled and used to create energy.
Senator John Crown: I thank Senator Quinn, first for sharing his time with me, and second for making such a sensible, well informed, non-hysterical, non-headline seeking, non-populism tickling set of recommendations for what we need to do. I mean no disrespect to the Minister of State, Deputy O’Dowd, when I say I regret that the Minister, Deputy Rabbitte, has left. I know the Minister of State will convey our opinions to him. On a previous occasion, I told the Minister he occupied the most important Ministry in the Government. He was flattered and surprised to hear that, but I believe he does.
I oppose the motion and the amendments because none of them goes far enough. We can forget all about political points scoring, procedural matters and constituency boundaries. There is no doubt in my mind that the three existential crises that will face our society and our civilisation in the years to come will be food, water and energy. It is that simple. The imperative to do something fundamental about energy policy is overawing on a global as well as a local basis. Our world population recently hit 7 billion and there is every prospect that it will continue to rise, with an ever-increasing percentage of that population employed in industries that are intensely carbon fuel dependent. There is no doubt, therefore, that we will see a massive and accelerated demand worldwide for carbon-based and other energy sources in the years to come.
We need to do something about this. We need to decrease the amount of carbon we burn. Even if one is sceptical about global warming — while I am not sceptical, I have some spurts of agnosticism about some aspects of it — the arguments for decreasing our dependence on carbon-based fuels are utterly overwhelming. In the first case, the stuff is running out. By definition, these are non-renewable fuel sources. They are all located within a relatively superficial distance of the surface of the earth and we are running out of them all. Even if we have a windfall of gas in Leitrim or oil in the Arctic or the Antarctic, they cannot last forever. At some stage this bank account will run dry, these family jewels will have to be sold and we will have to have other energy sources. It is critically important, if for no other reason, that we have a long-term policy to find those other sources.
The second issue is geopolitical. We are not blessed with the provenance of the oil and gas to which we have access. Consider the levels of civic government that exist in many of the places that produce most of the oil and gas. Most of our oil reserves are held by feudal theocrats, partially reconstructed Stalinist dictators and various unsavoury types. It is a very vulnerable supply.
The third issue is pure economics. For us to continue importing the bulk of our energy makes no sense because we cannot afford it. At this stage we do not have that many products to exchange for the energy we require. The change in energy policy has to be seismic and therefore, I oppose all these motions because none of them go anywhere near such a change. We need to be open-minded about all sources of energy and I am delighted that my colleague has broken the taboo of mentioning the N-word. I ask the Minister to please bring this suggestion to the Cabinet. It must be recognised that after the Chernobyl disaster there was not a 1% increase in congenital malformations anywhere in the world, including Belarus. A total of 2% of all pregnancies result in a congenital malformation world-wide and this statistic stayed at 2% in Belarus. These are not crazy, right-wing, nuclear energy figures but rather these are WHO figures. The incidence of all cancers stayed the same, with the exception of one rare kind of cancer called thyroid cancer which was substantially increased, but rare, in children in the immediate region because of an uptake in the thyroid of radioactive isotopes.
A great deal of energy policy is being driven by scientifically ill-informed hysteria. As Senator Quinn said, we need to have a serious debate about all energy sources, including renewable sources, on our dependence on carbon and on the N-word — nuclear energy. The choice facing us is not between having a highly dangerous nuclear energy and an utterly safe alternative. I ask the Members to think for a second about all the people who, every day in the world, are blown up, burned, boiled, run down by trucks that are either carting oil, in the process of refining oil and I ask them to think for a second about the potential loss of life which will occur if we find ourselves geopolitically vulnerable to countries where warfare may break out because of oil supplies. We need to have a very serious, very mature, very rational, fact-based, non-emotional, scientific debate on all forms of energy, including nuclear energy. I cannot recommend any of these motions or amendments because they all skip and dance around the issue which is the need to seismically change the way we deal with energy policy.
Senator Susan O’Keeffe: I thank the Minister for attending the House for this debate. I commend my colleagues for this important topic for debate. As Senator Crown has rightly pointed out, this debate will continue in this House and in the other House for quite a long time because energy is at the core of everything. One of the exciting aspects of renewable energy is that we might have finally found a way of doing something useful with all that wind and rain and waves. In many ways, people in Ireland have engaged with renewable energy in a very popular way, in the pub, in the taxi, in the shop. People want to talk about renewable energy and everybody wants to do something about it. There was a great rush of enthusiasm when the expression first came into use. However, this must be balanced with the need for energy security, the need to develop the industry and the concerns about the impact on the environment. My colleague, Senator Kelly, has rightly pointed out the problem of the proximity of wind farms to ordinary houses and the issue of fracking, not least because it is in my constituency but it is a broader issue. There is a point at which those things become very close, the need to have energy security and the need to acknowledge people’s concerns and the need to create jobs. Fracking encompasses these issues in a very formidable way and makes for a very interesting and difficult topic for debate.
I commend two projects, the Tipperary Energy Agency, which is doing an excellent job in heightening public awareness of the need for renewable energy and the need for sources of sustainable energy. Today the agency launched its green business network in an effort to engage with as many people as possible. The agency is trying to join the dots, so to speak, and to work locally. I also commend the Western Development Commission for its work on biomass and specifically its work on wood. I acknowledge the earlier comments about the problems with biomass in South America in particular. The Western Development Commission’s projects are funded by the European Union and they aim to examine how the woodchip and boiler installation sectors can be used to stimulate job creation and to encourage forestry which would result in jobs in the haulage industry and would encourage the move from agricultural work into related areas associated with wood energy and woodchip. The commission is doing very good local work with community enterprise boards and with local authorities to achieve a concerted plan to create jobs in the west particularly in the areas of biomass and wood fuels.
While I welcome this debate and the motion, I have concerns regarding the difficulties arising for those who are investing in wind farms and find themselves obstructed from making progress. The Minister of State will be far more familiar with the expression, Gate 1, Gate 2 and Gate 3, than I am. In simple terms, if a community comes together and is developing a wind turbine project for the local community, they are now falling foul of the energy regulator. The regulator made his decision in December to curtail most of the Gate 3 projects because of the technical difficulties with the national grid. Projects were commenced in 2003 and 2004 and it takes significant effort to put a wind project together. The Western Development Commission did a project on the Killala wind farm to see where the snags arise when constructing a wind farm. One of the snags discovered — not least the problems with community relations, as mentioned by Senator Kelly — was the length of time of the project and the need to sustain the interest and capacity of the local people to cope with a project that takes a long time to develop. It is now the case that the regulator’s office is pushing out these projects resulting in a significant problem with many projects which simply cannot get any commitment to go for an agreement to supply energy to the national grid. This is the very option desired from community level and from bigger companies. The projects are completely stymied by the regulator’s decision. I acknowledge that the regulator did not act in bad faith but there is a serious concern that a number of these projects may not get off the ground in the years to come.
The notion of aspiring to use wind energy becomes somewhat ludicrous when one sees the detail of the reality. We need to hear from the Minister and from the regulator as to how this issue of the curtailment will be addressed. The other issue that goes with sustaining projects over a long period is the issue of funding. The banks are now backing away, big time, because there is not a firm commitment from the grid to take the energy. The projects cannot have a commitment from the grid because this cannot be given. Therefore, instead of encouraging the banks to lend to a sector which could then go forward and build on that enthusiasm and create those jobs, there will be a log-jam that will last at a minimum five to eight years and in reality will probably be 20 years. I do not have the answer to the problem, unfortunately, but we need to hear from the Minister and the regulator. Building wind energy in a realistic way is vital for this country.
The Western Development Commission also found in its research on the Killala Bay company that what was needed was what it describes as an impartial adviser to support communities to work with private developers or private wind operators so that they could speak to one another. The commission fulfilled that role with the Killala Bay project but there is nobody to do this work as it stands now. This is a point to be considered if we are to build sustainable energy. This is a very exciting time but it is also a time for urgent action.
The opportunities for wind and wave energy in an island nation like ours are enormous. We have to meet EU regulations on emissions and so on, but other Senators have mentioned that the job opportunities would be tremendous. There will always be wind, tide and wave energy and costs should not fluctuate, as they will be free. There are different types of generators, including those which work over or under the sea and on land. Wind energy provides a clean and sustainable solution to energy problems and can be used as an alternative to fossil fuels in generating electricity, without the direct emission of greenhouse gases. Wind will always be there, as it is inexhaustible, renewable and free. It would not have to be imported.
It is envisaged that wind power will make the most significant contribution to the achievement of national and international targets for green electricity due to its environmental benefits, technological maturity and competitiveness. Attitudes towards wind farms in Ireland have changed. In 2008, Fáilte Ireland carried out a survey of visitor attitudes to wind energy and found that the vast majority of visitors saw it as a positive development for Ireland and the way forward.
There are opportunities but we are awaiting a decision on the North-South and east-west interconnectors, as well as an underground supply linking Ireland, England and France on the Continent. In that way we can join the European grid, which will create greater opportunities for sustainable energy and help competitiveness. Since the first wind farm project was realised in 1992 at Bellacorick in County Mayo, 1,379 MW of wind capacity has been installed up to the end of June 2010. To achieve national targets for renewable energy, by 2020, an estimated 5,500 to 6,000 MW of wind generated energy is required. Wind energy contributions to Ireland’s electricity supply continues to rise with additional capacity and by June 2010, a total of 110 wind farms were metered, bringing the total installed capacity for wind to 1,379 MW. In 2009, wind power displaced approximately 1.28 million metric tonnes of carbon dioxide emissions.
Senator Terry Brennan: We are making these turbines here. There is Openhydro in my parish at Greenore, which the Minister of State has visited. There is increasing job capacity, with the constructions at Greenore being distributed to Scotland, Nova Scotia and the rest of the world. There is much opportunity to use this technology around our own coast.
Senator Tony Mulcahy: I will respond to some of the issues raised. The part of the motion referring to the North-South interconnector indicates that it should be delivered in a cost-effective and sustainable manner.
Senator Tony Mulcahy: I will discuss the potential for development of privately owned grid solutions. That would be an option for those building wind farms or hydro-pump storage facilities, as they could bring their line to the grid. The grid consists of infrastructure like pylons and cabling, and that may reduce the cost in having to meet targets as there may be quicker delivery. We must consider alternative solutions.
If we had a heat recovery system here while we were discussing septic tanks, we would have had much gas, heat and wind around. There would be no shortage of energy recovery. I would welcome a debate on the fracking mining technology and nuclear energy. I do not have any issue with such a debate. We should research all the available options. If such technology damages the environment we could not use it but there should be a proper informed debate on the issues before making a decision. I do not know the figures for electric cars but I assume we can look to the future and see that the cost of diesel and petrol ten or 20 years from now will mean there must be an alternative. Those fuels will run out at some stage, without doubt.
|Barrett, Sean D.||Byrne, Thomas.|
|Daly, Mark.||Leyden, Terry.|
|Ó Domhnaill, Brian.||Ó Murchú, Labhrás.|
|O’Brien, Darragh.||Power, Averil.|
|Walsh, Jim.||White, Mary M.|
|Bacik, Ivana.||Bradford, Paul.|
|Brennan, Terry.||Burke, Colm.|
|Clune, Deirdre.||Coghlan, Paul.|
|Conway, Martin.||Cullinane, David.|
|Cummins, Maurice.||D’Arcy, Jim.|
|D’Arcy, Michael.||Gilroy, John.|
|Harte, Jimmy.||Hayden, Aideen.|
|Healy Eames, Fidelma.||Heffernan, James.|
|Henry, Imelda.||Higgins, Lorraine.|
|Keane, Cáit.||Kelly, John.|
|Landy, Denis.||Moloney, Marie.|
|Moran, Mary.||Mulcahy, Tony.|
|Mullins, Michael.||Noone, Catherine.|
|Ó Clochartaigh, Trevor.||O’Keeffe, Susan.|
|O’Neill, Pat.||Reilly, Kathryn.|
|Sheahan, Tom.||Whelan, John.|
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