Vol. 413 No. 2
13 Mr. Nealon asked the Minister for Energy if his attention has been drawn to the fact that the pricing proposals by Bord Gáis Éireann threaten to underline any future for combined heat and power projects, especially in view of the total absence of grant aid.
Bord Gáis Éireann have promoted combined heat and power (CHP) projects since their inception in this country and the board have agreed pricing proposals on all projects that have been completed. I am aware of problems in regard to gas supply negotiations which arose in connection with one current CHP project. I understand, however, that those problems are now very close to resolution.
With regard to general pricing policy for CHP projects, it must be borne in mind that Bord Gáis have a statutory obligation to earn a reasonable return on capital employed. They cannot, therefore, price gas provided for CHP at a discount below alternative uses for natural gas. Gas provided for CHP is, however, priced competitively in relation to alternative fuels for co-generation.
As regards grant aid for CHP related projects, I might mention that demonstration projects in this area may compete for grant aid under the European Community's THERMIE programme for the promotion of energy technologies in Europe, and several Irish projects have benefited from this programme.
In view of the fact that measures of this kind often require substantial capital imputs and that heat and power combination schemes have been identified as one of the major areas of possible contribution to the reduction of emissions referred to earlier, does the Minister anticipate that he will be in a position to provide grants in the years ahead to give an impetus to these desirable developments?
No, in the present financial situation I cannot see how I would be in a position to introduce grants to support CHP projects. I have indicated that there is finance available for certain projects which qualify under the THERMIE programme. Of the six Irish projects approved from the first call to tender for the THERMIE programme in 1990 one was a gas fired CHP project involving a hotel group. In the second round announced recently seven Irish proposals were approved, including two CHP projects, one of which involved a gas turbine. Prior to the introduction of the THERMIE programme, Bord Gáis were involved in the installation of two CHP projects in the Cork area. Both of these received EC assistance under an earlier programme.
