The net Energy Estimate for 1990 amounts to just over £7.2 million. While the amount is small in the context of overall Exchequer expenditure, nobody could dispute the fundamental role which energy must play in securing the economic and social wellbeing of this country. In a speech such as this, it is appropriate that I should immediately outline to the House, on behalf of my colleague, the Minister for Energy, the overriding policy objective of this Government in relation to energy. Put simply, it is to facilitate the provision of energy at competitive cost with every possible regard and attention being paid to the security of supply, environmental and safety issues that go hand-in-hand with the whole energy business.
At the beginning of Ireland's Presidency of the EC, the Minister for Energy indicated that, as incoming President of the Energy Council, he would strive to achieve substantial progress on those measures proposed for completion of the single energy market. He also wished to move the debate on the energy-environment relationship to the top of the agenda. I know that he has been very encouraged by the positive and constructive way in which the Council of Energy Ministers have progressed this vital debate in the past few months. Conclusions were agreed which set the stage for the main objectives to be pursued in the energy area.
He was also pleased that the Energy Ministers' Council, at its meeting in May, took decisions which made very significant progress towards the development of the single energy market. Agreement was reached on a directive on Transparency of Gas and Electricity Prices and on a directive on Electricity Transit. Both of these proposals had been under discussion for some time and it is always a welcome development to bring the talking to an end and put agreements in their place.
An EC energy technology programme — THERMIE — was also agreed. This will provide financial assistance for the promotion of energy technology in the rational use of energy, renewable energy sources, solid fuels and in the hydrocarbons sector. It will play a key role in contributing towards the ecological challenge during its five year duration. Furthermore, for the first time a Council of Energy Ministers has agreed to a discussion on nuclear issues. The discussion will cover all aspects of nuclear safety, transport and waste, including waste from the decommissioning process. Overall the Presidency has been a successful one; a lot of progress was achieved.
At this point I would like to dwell a little further on the energy-environmental relationship and focus on the domestic measures which the Government have taken. It is of course a subject in which I have a particular interest myself. In recognition of the importance of the environmental dimension in energy matters, the Department of Energy will ensure that energy policy will be kept in line with the Government's environmental policy which is stated in the documentAn Environment Action Programme published last January.
Getting the fuel mix right from an environmental point of view will carry a price tag. There can be no element of luxury about paying this price. It will have to be paid.
The Government's announcement of a ban on the sale and distribution of bituminous coal in the Dublin area from the coming autumn will have direct repercussions for the energy sector. Given that the Minister for Energy has responsibility for energy supplies, I am aware that he is endeavouring to ensure that there will be adequate supplies of smokeless and low smoke fuels in Dublin this winter to meet demand. To this end he has invited the main coal importing companies to discuss their plans with him for supplying the market.
The ban has also provided Bord na Móna with the opportunity to expand their briquette sales in the Dublin area. The board succeeded in increasing their market share significantly last winter and, with the improved marketing surveying now being employed, further increases in market share in coming years can reasonably be anticipated.
Natural gas has been recognised as the least harmful of all the fossil fuels and will play a major role, domestically and internationally, in efforts to combat atmospheric pollution and to reduce the greenhouse effect. Bord Gáis will no doubt capitalise on this in their efforts to develop the natural gas industry in Ireland, as this decade progresses.
Energy conservation is acknowledged as a potentially significant contributor to redressing environmental damage as well as reducing costs to energy users. As part of the National Environment Action Programme, an additional £500,000 has been allocated to the Energy Vote in 1990 to launch new initiatives in the energy conservation area. In May an announcement was made on the projects to be funded from these extra resources. These include the installation of energy management systems in the Children's Hospital in Crumlin and in University College Hospital, Galway, a contribution to Energy Action, a charitable group engaged in draught-proofing the houses of the needy and elderly, the establishment of a conservation advisory group to make recommendations on energy conservation matters and a number of other miscellaneous projects.
Energy conservation helps the environment and it saves money too. It is a very simple message. Opportunities exist right throughout the economy to save energy and to save money, and our programmes are geared towards getting that message across.
I will turn now to the specific energy suppliers. The ESB are unlikely to require new generating capacity until after the middle of the nineties. This respite from large-scale investment affords the ESB an opportunity to improve their financial position. Comparisons with electricity prices in other EC countries have shown that both Irish domestic and industrial prices are now below the EC average. Since 1985 prices to industrial customers have dropped on average by nearly 19 per cent, commercial prices by 15 per cent and domestic electricity prices by 12 per cent. Furthermore, the ESB intend to hold prices at their present level until 1992 at least.
Too high a growth rate in electricity sales could, if sustained, have the undesirable effect of drawing closer the time when extra generating capacity will be required and also exacerbate the environmental problems that go with it. A major factor in curtailing this will be to maintain an electricity demand growth rate of 3 per cent per annum on average over the coming decade while at the same time not constraining national economic growth. It is the ESB's intention, as indicated in their latest strategic plan, to place demand management at the centre of their operational strategies.
Deputies may also be aware that on Friday last the Minister for Energy announced that the Government have taken steps to ensure that the western package electrification grants would be replaced despite the fact that the EC funds available for this scheme have now been fully taken up. This scheme, which provides 80 per cent grants, has proved its worth since its commencement back in 1981, and I have no doubt but that the new replacement scheme announced by the Minister, Deputy Molloy, will continue to improve the quality of living in rural communities. In 1990, a sum of over £2 million is being made available for these grants, an increase of nearly £1 million over last year's outturn. This increase takes account of the impact of increased demand for grants arising from a broadening of eligibility in 1988.
The discovery of natural gas off the coast of Kinsale in 1971 has necessitated extensive planning and investment by successive Governments to maximise its economic benefit to Ireland. Over 500 km of pipelines have been constructed since gas was first brought onshore in 1978, thereby extending the availability of this valuable natural resource to most major population centres and many industries throughout Ireland.
The Government are, however, conscious that our own natural gas reserves, though ample for our current needs, are finite. Since coming into office the Minister for Energy has given top priority to securing long-term supplies of natural gas. Such a high priority rating lead to his decision to investigate the possibility of strengthening our security of supply by interconnection.
The Government have decided that now would be the most opportune time to undertake the extensive planning which must precede a project of such a scale. A considerable amount of research and fact-finding has already been undertaken by the Department of Energy and Bord Gais Éireann. Meetings have taken place with British and continental interests and it is intended that we will shortly be in a position to enter into negotiations for supply and construction contracts with a view to having imported gas on stream during the winter of 1993-94.
The European Commission recently announced its decision to set aside a special allocation of 300 million ECU for specific energy projects, including a gas interconnecter between Ireland and Britain. This announcement is very welcome and, while it is too early to say what the precise EC contribution will be, this decision allows ample scope for substantial Commission support.
The current Minister for Energy is no less committed than his predecessors to ensuring that the drive towards improved safety in the natural gas industry will continue to be vigorously pursued. The Dublin Gas response time to publicly reported gas leaks has improved to 100 per cent on site within the hour compared to 70 per cent in 1987. On average, calls are now responded to in 30 minutes, and such standards are improving all the time.
Turning now, to Bord na Móna, the Government are anxious to ensure that Bord na Móna will provide viable and sustainable employment in the long term and will continue as a significant producer of indigenous energy. The House should be well aware of the board's crucial, economic and social role in the midlands and the mid-west regions. In this regard the question of the financial position of Bord na Móna is being comprehensively reviewed at present and the matter will be put before the Government in the near future.
The main feature of the world oil scene so far this year has been the weakening of international crude oil prices. Market commentators are projecting a strengthening of crude and product prices in the coming months.