On inquiry to the ESB it appears that the level of commitment is so high that 90 per cent of the money will have to be spent anyway. This is an old gambit of semi-State bodies when they want to do something. They tell the Government of the day that they have got into a position where they cannot back away because the level of commitment is too high. When I sought to inquire what the penalty would be if they did not go ahead I was told that the figure would probably be £30 million. The amount which will be spent will, however, be substantially greater than that. This is at a time when an inquiry has been set up by the present Minister to look into the cost of electricity.
One of the most obvious reasons for the abnormally high cost of electricity here is the amount of capital investment particularly during the past five or six years. There was enormous investment, some of which many people would question and some of which was unavoidable. One would question the spending of £50 million since 1979 on the building of ESB offices.
It is somewhat disturbing to look at the breakdown of ESB borrowings and to find that 75 per cent of borrowings are made abroad. The devaluation of the IR£ which took place in March this year with the encouragement and full approval of the Government has cost the ESB about £100 million in extra repayments because most of their borrowings are in US dollars, Swiss/Deutschemarks, sterling and Japanese yen. The devaluation of the IR£ against these currencies has not been the 8.5 per cent average as against the EMS currencies but has been very substantially higher and in the case of the US dollar has been approaching 25 per cent over the past 12 months. More than a quarter of the ESB's borrowings are in US dollars. People ask plaintively why our electricity charges are so high and this one of the reasons which is not often adverted to. Further heavy investment will be funded primarily from foreign borrowing in non-EMS currencies where the rate of devaluation of the IR£ is extremely high.
It is worth contrasting the attitude of the authorities to the utilisation of indigenous energy resources with that of authorities in other countries. One country I visited recently for the purpose of looking at energy activities was Finland, a country not unlike ours in many ways, having a population roughly the same size and somewhat less well endowed with indigenous resources. It is a well-run and very successful country which is a leader in many aspects of energy technology and energy use and the electricity price to the consumer is substantially lower than here, in spite of their unfavourable climate.
On 24 February this year Finland published a White Paper on energy and I should like to quote two passages from this report which show the attitude in that country to their domestic or indigenous fuel resources and to contrast it with the attitude here which is to close down things which come from Ireland and to put all our eggs into the imported basket, adding further to the import bill. The White Paper states:
Finland's main energy policy objectives continue to lie within a relevant frame of reference from the point of view of the national economy:
— ensuring a secure supply of energy in accordance with the objectives established for national security and domestic economic activity.
— the economic use of energy, i.e. efficient, economic uses of energy that avoid waste
— increasing the share of domestic energy sources in the total supply by increasing the use of domestic sources and the share of other domestic production inputs in the energy economy.
Part of the White Paper deals with peat. Many of us may never have thought in terms of Finland having any peat and we may have regarded ourselves as the principal producers of peat. There are quite substantial reserves of peat in Finland, mainly in the northern part of the country around and inside the Arctic Circle. It is difficult to produce and the quality of the peat is poor. It is very fibrous and has nothing like the thermal efficiency of our peat. Notwithstanding that, the official policy of the Finnish Government as approved by the Finnish Parliament in February this year is as follows:
The production and use of peat as a fuel have grown rapidly in recent years. The experience gained has been encouraging. A distinct increase from the 1982 level of c. 17 million m³ is feasible both in terms of peat resources and of its potential level of consumption.
In order to ensure increased production of fuel peat, attempts will be made to secure in advance the availability of sufficient peatland for the producers. Possibilities for the acquisition of peatland by municipal and private peat producers and processing plants will be improved.
Sufficient peat production potential will be created by setting aside production areas in case of long-term interruptions in the availability of imported fuels. The readiness of consumers to use peat will be increased by installing stand-by equipment suitable for using peat, particularly in peat production, already at the construction stage. Sufficient availability of peat resources will be secured to meet the needs of possible new, peat-fired condensation power plants and chemical processing plants.
That gives an idea of the attitude of the government and the people in Finland today. They used to lag very far behind us, have nothing like the value of our resources in peat and would gladly use our peat if they could. They are using inferior peat that can only be recovered in difficult areas, some of it close to the Arctic Circle, and here we are with one of the mildest climates in the world and with the best quality peat in the world proposing to close down stations so that we can use coal from the United States which we will pay for in dollars, from Poland which we will pay for in sterling and from Australia which we will also pay for in US dollars.
Finland would regard us as mad to be doing what we are doing. If we have the opportunity to debate this programme properly, this House will be convinced also that we are mad to be doing what the ESB are now trying to do in this silly, surreptitious way. Are they ashamed to publish what they want to do? One of the reasons that the ESB have been given an excuse to stop using peat is because of the pricing policy in relation to peat that has been adopted here in recent years. There has been a major price jump — I could not lay my hands on the exact figures — of something in the region of 115 per cent in the last few years. The ambition, as I well remember, of Bord na Móna when I was dealing with them and when I said no to them every time, was to get the price of peat up to an oil-related level. I ask the House to consider why should we, as a sovereign nation, able to make our own decisions, choose to price an indigenous resource at an arbitrary figure that is dependent on things like revolutions in Iran, the blocking of the Straits of Hormuz, the Arab-Israeli conflict and other factors which over the last decade have led to or can potentially lead to increases in the price of oil? This is our resource which we should use for the benefit of our people.
After I left the Depatment of Energy, Bord na Móna got a major price increase but the very thing I said would happen has happened, the ESB are given an excuse not to use it. Our trouble in energy as in so many other things is that every body likes to see themselves as independent and autonomous and there is no drawing together of all these bodies to make their policies coherent and cohesive in the national interest. Each one is allowed to bang and hammer off the other. That is the function of the Department and the function of a Minister and I invite him, in this case in particular, instead of letting them bang against one another, contrary to the national interest, to bang their heads together and put some sense into them. Unless they are treated that way they will develop a form of arrogant autonomy which puts their body before the national interest. That cannot be tolerated and this House should not tolerate it.
At present the delivered price of milled peat to ESB power stations is IR£15.90. The FOB ex-bog price is hard to calculate because it is never given but since the transport distances are only a few kilometres at most, it is probably somewhere in the region of £14 to £15 ex-bog. It is interesting to compare the fact that the ex-bog price in Finland of similar milled peat is £9. If Bord na Móna, instead of striving for an enormously healthy profit and loss account and balance sheet, were to reduce the price of milled peat to their only customer, the ESB, by £5 per ton and bring it down to say, £11 or thereabouts, the ESB would have no excuse for not using a lot of it. It would be in the national interest, both economically and socially, to do that and it should certainly be done because it is the only solution I see to this situation.
It is projected that this year Bord na Móna will make a profit of £15 million on a relatively small turnover. They are not in the same league as the ESB. What is the point of Bord na Móna making a profit of £15 million? The previous chief executive, now retired and I wish him well in his retirement, told me that unless they could make good profits of that kind they would not be able to build various major capital projects which they planned to do such as the Ballyforan briquette plant. We know that Ballyforan is now off the map but they are still holding on to their £15 million profit. What is the point of this kind of activity? Why should a semi-State body unnecessarily generate profit of that kind? If there has to be some external level to which the price of peat must be fixed, the obvious thing on which to peg it is the price of coal because it is much closer to coal both in thermal value and in the nature of the product. The price of coal in comparison with oil is about two-thirds or a little less. If you had, therefore, a one-third reduction to the ESB in the price of milled peat, the ESB would have no reason not to continue to burn peat for electricity generation and not to do the very same things as Finland are doing, because I have seen them building peat burning stations in many parts of that country. The economics of it are all against them because milled peat has to be transported long distances in that country. It has only to be transported very short distances here and we are fortunate that most of our best milled peat reserves are in the centre of the country. We have tremendous potential and we are throwing it away and going into enormous capital expenditure, most of which is imported and has to be paid for in foreign currencies and tremendous loss to our economy, unemployment in the ESB and, more particularly, in Bord na Móna. The ESB at least have some scope to offer to unemployed staff as they may be able to redeploy them elsewhere. The people who are disemployed in Bord na Móna have no prospect whatever of employment in any other sphere of activity in that company. I wish to conclude by asking the House to pass this motion:
That Dáil Éireann rejects the proposal to close in whole or in part 14 power stations and calls on the Government to give priority to indigenous fuel in its national energy policy and in particular because of the employment they provide in the midlands and the west, to ensure that the ESB's peat fuel stations are kept fully operative.
and to reject this amendment which we got in the last hour. I do not know whether it was in order or not because I understood some notice has to be given with amendments.