Vol. 451 No. 3
6 Mr. N. Treacy asked the Minister for Transport, Energy and Communications the reason the £15 million grant aid allocated for the AER Programme was not allocated in the recent decision; the proposals, if any, he has to allocate this money in a future round; and if he will make a statement on the matter. [6320/95]
The alternative energy requirement scheme was designed to achieve a target of 75 megawatts of electricity generating capacity from alternative energy sources by 1997. In order to do so, an enhanced price structure for purchases of electricity by the ESB was devised. In addition it was arranged that up to £15 million would be made available by the ESB in the form of grants for which proposers could bid in order to give them a return on investment. As it turned out, the target of 75 megawatts was exceeded without the need for grants and the ESB was authorised to offer power purchase agreements only to projects which did not bid for a grant; this amounted to 111 megawatts. This is an indication of the promising potential for economically competitive supplies of energy from alternative sources.
I have ordered a review of strategy in relation to the development of alternative energy sources in the light of the experience of the scheme which is now under way. It is intended that this review will result in the setting of new targets for the various alternative energy technologies, including biomass, and the formulation of schemes for the achievement of such targets.
Provision has been made in the Economic Infrastructure Operational Programme 1994-1999 for European Regional Development Fund support, amounting to £15 million over that period, for alternative energy development. This is separate from the ESB's £15 million. It is proposed to make available the European Regional Development Fund support in the context of these new schemes.
I am very pleased and indeed surprised at the high level of interest and the high level of applications for the scheme. We have exceeded our target without the need to use either the ESB grants or the European Regional Development Fund funding. I want to acknowledge the work of Deputy Noel Treacy on this project when Minister of State in this Department.
I am grateful for the Minister's acknowledgment of my work on the project. Will the Minister agree that few Irish companies qualified under this programme and that for many years the bid of many pioneering enthusiasts involved in alternative energy in Ireland were not successful? At the outset I felt we could exceed the target of 75 megawatts of electricity generating capacity from alternative energy sources and I congratulate all involved in exceeding the target. Will the Minister agree that in order to meet our national and international commitments to alternative energy and to environmental management that those who bid unsuccessfully and who are now prepared to supply energy to the ESB should receive power purchase agreements immediately?
The Deputy will be aware that the Government is bound by EU competition rules and that we have no alternative but to operate within those guidelines. While the Deputy is right in saying that many of the companies who were successful were not necessarily Irish based, they were entitled to bid and have their applications and tenders examined on an equal basis with Irish based companies. I recognise that many Irish companies who have done much pioneering work in this area were not successful in this round. As I said I have ordered a review of strategy with a view to having a new round within a year and a special round for biomass. I have asked my officials to bring it forward and within the next two months I hope to make an announcement on the biomass round.
I accept the Minister has to operate within EU competition rules pertaining to energy and environmental policies. Will the Minister agree that Irish energy pioneers have spent up to £100,000 on projects, and that at least one was sanctioned previously for a THERMIE grant by the EU? That project is now available at the bid price. Is it unfair that the people who are making a major contribution to fulfilling our national alternative energy and environmental requirements should not be allowed to supply energy to the ESB and thus expand the base which has begun?
The Deputy will be aware that the target of 75 megawatts of electricity generating capacity was agreed by him when he was in office. I have exceeded that target within this round and have brought it up to 111 megawatts of production which is considerable increase on the target set by the Deputy.
I agree.
That is the reality. The bid price which is subsidised will cost the Irish consumer, over the 15-year period of the scheme, in excess of £70 million. We could have easily used up the £15 million grants available and we would have 200 megawatts of alternative energy available to us, but the costs would be out of balance with what we are trying to do. We are trying to achieve the lowest price possible for alternative energy so that the consumer is not burdened with it, while at the same time being conscious of the environmental targets we have to reach. I am confident we will exceed the targets from an environmental point of view and on the exclusion of CO 2 into the atmosphere.
By his own admission the Minister has exceeded the original target of 75 megawatts up to 111 megawatts. Surely there is a duty on us and the Minister of State to acknowledge the contribution of the people who pioneered this effort for many years and have spent huge sums of money on projects. We should ensure we fulfil our energy and environmental commitments.
I cannot reopen the alternative energy requirement scheme at this stage. We are reviewing the system arising from our experience with a view to allowing another round of applications. It will not be possible within that scheme either to give a local Irish weighting because EU competition rules do not allow it. Regardless of whether Irish companies have expended moneys on research and development in advance, that will not allow me and it would not have allowed the Deputy when he was Minister, to give preference to Irish companies.
That is correct.
That is what the Deputy is asking me to do. That may be desirable but it is no longer possible because we are members of the EU and we are using EU money on this scheme. There was much interest in the biomass area but the applicants were not successful. I have asked my Department to bring forward a special scheme for biomass on which I hope to make an announcement within two months.
Will the Minister indicate the price per unit of electricity paid to the alternative energy producers by the ESB?
There are two prices: the price for combined heat and power is 3p and the price for all the other technologies, wind, hydro and others is 4p.
Is the Minister of State aware that I and the people in my constituency have reason to be aggrieved about the 34 who were successful when we take into account that the Teagasc waste study carried out in Monaghan in 1993, at a cost to INTERREG of £100,000, identified a serious pollution problem in the county which would restrict production in one of the best agricultural areas in the Twenty-Six Counties, not to mention proceeding with a proposed extension to the agri business for mushrooms and poultry? We went to England to examine the generating systems there and on our return tried to get clearance for the manufacturing tax, tried to secure sites but at the end of the day we got a list indicating that more was thought of companies like Wimpey and Guinness's than of the people of Monaghan who are enterprising. Our application was rejected.
I am aware of the case Deputy Leonard brought to my attention. Indeed, his constituency colleague, Deputy Crawford and my colleague, Senator Gallagher, also brought the matter to my attention.
Unity of purpose.
The Minister and I met the people involved in the project.
That is excellent.
I will travel to England to see the plant. Without favouring any particular project, I was impressed by the proposal from that company. That is one of the reasons I am bringing forward another round for biomass. I accept the very positive part of that proposal which would deal with the widespread pollution that now exists in the Deputy's constituency, in the neighbouring constituency and, possibly, across the Border. Eliminating that pollution would allow further development of the agricultural enterprises in the Deputy's constituency. I am giving the Deputy very good news.
I welcome the Minister's decision to visit the plant. I assure him that having seen the project he will want to put a similar one into operation here. The plant I examined was in the middle of an industrial estate beside food industries where there was no contamination.
I am sure the Deputy heard what I said. I am giving him very good news which I am sure he is able to interpret.
Will the Minister give an assurance that biomass will be included in the next round? It needs an acknowledgment by the Government that it supports it. It is vital that it is included in the next round. I too was disappointed it was not included in the last round. We are not expecting preferential treatment for Irish bidders, we only want fair opportunities for them. The competition is over. The Minister has exceeded the target. Those who pioneered it, who spent money on it are prepared to supply the energy at the same price as those who were successful. The Minister should allow them do so. Will the Minister assure the House that he will direct the ESB to allow them enter into the supply of energy immediately?
I thought I had made it clear that biomass will be exclusively in the next round, and none of the other technologies will be included. There will be a special round for biomass.
That is excellent.
That recognises the special proposals we had in the last competition. I stress that it was a competition. If I were to allow somebody who did not win the competition in now I would effectively be saying to people who did not win, "I will let you in anyway".
At no cost?
There is a cost.
No grant aid?
All the applicants who did not win applied for grants. Is the Deputy asking me to tell them to change their tender documents at this stage?
No.
Does the Deputy think that is legally possible? What would happen to the other applicants who did not succeed?
We are supposed to be asking the questions.
Are we to let all of them in and provide 320 megawatts of electricity under the scheme? If that is what the Deputy is suggesting it is not possible.
The Minister has exceeded the target and if he was to restrict people he should not have done this. Those who have spent the money and are prepared to make a bid at the standard price available to others should be given an opportunity to continue with the good work.
They will get that opportunity in the next round.
They will not be allowed into the next round if they are not allowed into this one.
The Minister without interruption, please.
It is not possible for me to intervene and change the consultant's report which was presented to me.
