Adjournment Debate Matters. - Electricity Regulation Bill, 1998: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Western society is plagued by a series of addictions but the one which affects us all, whether we are allowed to live among the wealth of the rich countries or in the developing world, is our addiction to finite resources. Nowhere is this more true as in our obsessive use of electricity. We live in a society which craves electricity. Even the offices which many of us occupy in Kildare House depend on air conditioning as the windows are sealed. We see our children turning from traditional toys to computer games and battery powered Furbies. Electricity seems to underpin these trends.

We must think seriously about how we can provide most efficiently the cleanest energy to the most consumers be it to industry or our homes. The Minister said this Bill will take into account environmental concerns. I am not sure whether she is referring to a gesture in the direction of environmental issues while concentrating on profits which private companies will be anxious to glean from this development and liberalisation or whether she has in mind sustainability and the activities in which the electricity industry would involve itself in being sustainable. Somehow I believe it is the former.

This Bill will enable the liberalisation of the national utilities. We saw this happen in other places. We probably know most about Margaret Thatcher's Britain and the mixed results there. In Margaret Thatcher's heyday we saw water, train services, electricity and mines fall into the hands of the highest bidders. Inevitably, it is harder to control a private company operating with a strict profit motive rather than those which operate with the public good in mind. In Britain this is evident in the privatised sector where the quality of water supply is dangerously unpredictable. Indeed, English horticulture suffers from droughts almost every summer and the trains are equally unpredictable.

The efficiency envisaged through privatisation has not always manifested itself regardless of what the mantra of the free marketeers might say. It has also had enormous human costs in redundancies and job losses. By letting foreign companies into the Irish market, we and the workers in the ESB need assurances that their jobs will be secure. If these assurances cannot be given, we must ask who is being served by this Government. The workers are not being served if that assurance is not given nor is the environment because the free market will not put it at the top of its priority list.

We have seen the dedication of workers in the ESB, especially when the Christmas storms forced them from their Christmas break to provide the valuable service for those who were without power. It is also important that the individual consumers are protected when such a fundamental amenity is privatised. The most vulnerable in this situation are those who live in remote areas. If it is no longer financially viable to supply a service to a local area, there is an imperative need for the State to ensure that everyone is provided with a high quality service. We must not see a situation where people living in remote areas are forced to pay huge amounts for a basic and necessary service compared to those living in urban areas where competition is thriving and proportionately costs can be lower.

On the other hand, deregulating the markets can have some positive effects. Examples may be seen in Britain where the market has been opened up and power producers may supply renewable energy to individual consumers. This Bill, however, shows the Government has rowed back on a number of positive assurances given by the previous Government in relation to renewable energy and that is of concern to that industry, as the Minister may know. These are tentative steps but they send the right signal to individual customers who want to make up their own minds about from where the electricity they use comes.

In Northern Ireland, individual households are allowed to choose what type of electricity they desire and are given the option of choosing energy from renewable sources. In this sense, deregulation can open up markets to those willing to supply energy from renewable and sustainable sources. Why has that not been followed in this jurisdiction? I will table a number of amendments to the Bill to ensure we do not slip and fail the renewable energy industry at this time.

The sections which call for firm targets on how much energy must come from renewable sources are weak and inadequate. Giving the customer the choice creates the impetus for the electricity companies to buy electricity from independent green producers or to provide the renewable sus tainable energy themselves. This country has for too long relied on brown energy from burning of fossil fuels.

The Government has, in accordance with the Kyoto protocol, committed itself to a reduction of the harmful greenhouse gases which are beginning to wreak havoc across the world. Ireland was given strict limits on its emission of greenhouses gases but already we have reached the target of 13 per cent over the 1990 levels. These levels were supposed to cover this country until the year 2012 and yet we have already broken that limit. We are seriously at odds with the commitments we gave. If Ireland does not put in place a proper greenhouse abatement strategy, we will exceed the 1990 levels by between 30 per cent and 50 per cent and will face the prospect of enormous costs in penalties.

There are a number of causes for the emissions of greenhouse gases. Many of these greenhouse gases stem from energy sectors reliant on fossil fuels. As we heard at the electricity directive forum on 22 January of last year, the ESB is by far the largest contributor of CO2 and that imposes a huge responsibility on this legislation and the energy sector. Ireland's failure to reduce CO2 and the emissions of other greenhouse gases will be deadly for future generations both here and elsewhere. Already, the issue of rising sea levels is having an impact on our coast. I have just come off the telephone having spoken to people in Malahide who have noticed damage to the coast which was not there before. Higher sea levels are obvious when the weather turns bad, and that is another aspect of global warming which is not being sufficiently acknowledged.

The Chernobyl disaster showed us how air emissions and environmental destruction knows no national borders. In that regard, we have an international as well as a national obligation in terms of this legislation. The price will not only be the environmental effects of such depletion of the ozone layer and the greenhouse effect. It will also prove costly to the taxpayer when Ireland has to buy greenhouse gas credits to allow us continue to spew out toxic gases. To stop this nightmare scenario we need firm action from a number of Departments, not least from the Department in charge of controlling the electricity markets. By inviting large companies into Ireland to pursue big business with the promise of cheap energy, we are stepping away from the energy conservation goals we set.

I met with the management of the ESB and a number of those at the meeting expressed concern as to who will continue carrying the responsibility for energy conservation when deregulation has brought about a liberalised market. The answer given by people in Government is the Irish Energy Centre, and that is supposed to be sufficient. I can tell the House, however, that the activities of the ESB in the area of energy conservation, from what I have seen, are much greater than any the Irish Energy Centre could hope to match. When I ask about legislation on the Irish Energy Centre I am told by the Taoiseach that it has been put on the long finger – perhaps to the end of the year 2000 – but we have heard those types of promises in relation to other legislation. There is a lack of seriousness when it comes to making provision for our huge obligations in relation to energy conservation.

Any marketing strategy by a new competitor in the electricity market will use the supply of cheap electricity to attract new customers, but there is no such thing as cheap electricity since the devastating effects on the environment must be taken into account. There is always a price to pay in relation to the destruction of finite resources.

Power producers hoping to gain a large market share in the deregulated marketplace will not tell the large companies that they can buy electricity from them at a cheap price and advise that they should try to use as little as possible. The ESB has had to promote energy awareness, not only to benefit customers financially but also to take responsible steps in relation to our environment. As a State body, the ESB has carried out this responsibility but with a number of interested companies the responsible attitude towards energy conservation may fall by the wayside in an effort to maximise profits.

The Irish Energy Centre is still waiting for the necessary legislation to set it up on a statutory basis. Now, more than ever, there is a need for a body which will advise on and campaign for energy conservation and achieve the kinds of targets we promised would be achieved. In Scotland, a percentage of each electricity bill is set aside, with the customer's knowledge, for energy conservation. Groups like Energy Action, operating on a voluntary charitable basis for many years, need the necessary funding to make a realistic difference in our energy consumption.

We must impress the importance of energy conservation on industry, which is the largest user of electricity in the State. As the Bill will open up the electricity market to the 300 largest users of power, this deregulation will benefit large companies that use vast amounts of power. On the other hand, the private customer is not given the right to buy green energy and is being asked to subsidise the ESB which will lose out on the deregulation. In California, where retail competition was introduced last March, competition transition charges account for nearly 30 per cent of residential bills. Should the individual customer be forced to subsidise over-use by the large energy users?

Irish people rightly have a negative view of nuclear power. By opening up the European electricity market we may be supplied by French or British companies which draw their energy from nuclear sources. This opens up new markets to the nuclear industries and removes the pressure to reduce and decommission nuclear power plants throughout the European Union. It is vitally important that there are strong rules which make it clear that we do not want to import electricity produced in such a hazardous manner. I urge the Minister to ensure this policy is continued.

It is vitally important also that when the household markets are opened up to competition there is proper legislation to enforce source labelling so that the consumer is aware at all times where and how the electricity has been generated. We know what it is like to live near nuclear installations without having a say as to how they are run or when they will be shut down.

In increasing the number of electricity generators and distributors in Ireland there may also be a doubling or tripling of pylons and substations. We have seen community protests at the siting of communication masts. Bearing in mind the environmental and visual impacts of pylons and sub-stations, there should be strong legislation forcing new companies to co-locate their transmission equipment.

In relation to section 27 to which Deputy Yates referred earlier, the Green Party agrees that this section restricts the possibilities of introducing green energy on a large scale. The Green Party will table amendments to the effect that the definition of "final customer" in section 27 should be changed. There are many instances where we have found that people want to purchase renewable electricity but do not conform to the criteria of the final customer. If a customer has any number of premises, he or she may not be seen as an eligible customer. This provision needs to be amended so that bodies such as health boards, banks and credit unions can buy together in order to give a large cash boost to renewable energy producers. If we are providing for liberalisation and increased consumer choice, it is crucially important that this applies to the individual customer or groups of customers who want to buy green electricity.

Increased competition is the mantra of the neo-liberals who want to increase the choice of the customer. This is said to lead to a healthy marketplace. It is blatantly obvious that what might seem to be healthy to that unknown beast, the free market, is often destructive to the earth in general, its tenants and the future generations who will inhabit the planet. The Government should do everything in its power, through legislation and policy, to encourage the production and use of energy from renewable sources as well as maximum conservation of energy.

It is instructive to note that an electricity generator supplying wind energy could supply a customer approximately 40 per cent of the time. Similar or lower figures apply in the case of hydro, wave and tidal energy.

In order to supply the customer who has opted for energy from renewable sources, there is a need for the traditional and dominant brown energy suppliers to be compelled to make up the balance that cannot be supplied by the green energy producer. A customer who decides to opt for green energy will be billed with two invoices at the end of the month. The technology is readily available to allow for this switch from traditional brown energy to green energy.

Renewable energies come in a random arrival pattern. The main positive aspects of renewable energy, however, is that the source is free. There is no ownership of the wind or the waves whereas oilfields are so heavily restricted they are a cause of military action. The exploitation of Irish boglands has destroyed over 80 per cent of a natural heritage unique to this country, a subject dealt with earlier by the Minister for Arts, Heritage, Gaeltacht and the Islands.

It makes sense to generate electricity in a way that is free and causes little or no pollution and health risks. Through the Bill the Government needs to strengthen its commitment to green energy by allowing for an amendment to compel traditional energy producers to supply the top-up electricity not supplied by the green energy producer. Unless the Bill takes into account the way the traditional brown energy suppliers will interact with the providers of renewable energy, the brown energy supplier can simply refuse to co-operate with the renewable energy supplier, and the latter will be left high and dry.

If a customer decides to buy green electricity there must be regulation so that the traditional supplier does not simply cut off that user. Allowances must be made for the use of more than one source of electricity since the renewable energy sector will not be able to provide 100 per cent of electricity from the outset. It is important that legislation introduced to liberalise or deregulate the electricity market in Ireland should take into account the enormous impact of electricity generation on the environment. We must ensure that in opening up the markets we do not open the floodgates to nuclear power and the careless over-use of power by large companies. That places a huge responsibility on the Minister of State to ensure the Opposition amendments are carefully considered so that the future of the electricity industry in Ireland will help and not hinder our international obligations and our progress towards a sustainable future.

This legislation is among the most important to have come before the House for some time. The issue of electricity provision, generation and distribution affects every individual in the State on an hourly and daily basis. Consequently, any proposed changes have a clear implication for the population at large. This legislation implements the EU directive on the deregulation and liberalisation of the electricity market.

The ESB has been a significant employer in my constituency. There are also significant and voluminous users of electricity in industries there. Most people in the House have memories of the introduction of rural electrification and the great social and economic change which it brought for many families in rural Ireland. It commenced in the latter half of the 1940s, continued through the 1950s and 1960s and was completed some time in the 1970s. This legislation will end the monopoly of the ESB in the power market in Ireland.

It must be borne in mind that the Bill is the first of a series of amendments to other legislation needed to give full effect to what is proposed. Nonetheless, we all hope these changes will lead eventually to a reduction in overall charges, both to industry and households. Electricity costs are a significant element for many people, for example, dairy farmers, who milk cows and store the milk. This is only one small example of the daily use and total dependence on electricity. We only have to think back a few weeks to the Christmas period when, because of severe storms, large pockets of the country were without power for days and, in some cases in the north-east, for weeks. Our total dependence on electricity was graphically illustrated then. I pay tribute to ESB staff for their tremendous work in difficult weather conditions in getting power restored to many areas.

While we can debate legislation to provide for new commissions and arrangements, we only get to the heart of the issue when we deal with the practical implementation of the Bill's objectives. The area of transmission and distribution will be very important as far as the new changes are concerned. There are groupings with economic clout or financial power interested in developing new generating stations. Clearly, they will not invest large sums of money in new generating stations unless there is a market which will provide an economic return for that investment. The Bill provides for public service obligations in those circumstances and that is important. There are large segments of the country where the provision of electricity is marginally economical at best and, in many cases, uneconomical. However, that is the position with the population and it is important that we make provision in the new arrangement to ensure power is continued to be supplied to them.

The legislation has significant implications for the concept of regional development in Ireland. We take for granted the availability of power when we step into a room, turn on a switch or plug in a machine and have immediate power. If in a competitive market electricity providers find it is more economical to provide for specific areas and there is no attraction in providing power to sparsely populated regions, something which may well be the case with market forces of supply and demand, I would be concerned that that would militate against the concept of regional development and decentralisation of industry and the population.

Regarding the mechanics of the new arrangement, in particular the provision of an appeal mechanism and the procedures to be put in place in those circumstances, individuals who put together a proposal and submit it to the commission for consideration only to become disappointed will naturally want to know why it was rejected, especially if they have spent a considerable amount of money putting the plan together and testing its viability in advance. If plans are submitted to the commission and they are refused for some reason, it is important that by way of the appeals procedure or whatever mechanism is in place for disappointed applicants the plans are reviewed in a meaningful way. If the recommendations of the review are that the plan should have been accepted in the first place, what obligation would there be on the commission in those circumstances?

Another factor is small third parties who find they have a renewable energy source. What provision will there be for them if they want to feed into the national grid? There are examples of people being involved in hydro or wind power linking into the national grid, and their bargaining position is very limited. It is important, if the concept of renewable energy is to be encouraged, that their bargaining position in that context be examined and some safeguards built in, if necessary.

We should welcome the Bill, which gives effect to an EU directive. The EU has directed that there must be liberalisation in certain areas and this is the most recent area affected by such directives. It is good to see this happening because it will lead to a reduction, or will help cap the overall increase, in electricity charges, which are significant for substantial users. Large users of electricity will have a bargaining power with providers, be they the ESB or other independent providers in the business of generating and providing electricity. I am always afraid in such circumstances that those whose need for electricity is less than the larger users may lose out because their ability to negotiate in an open market will be limited. I do not know if it is possible to deal with this under public service obligations or in an open market, but it may well be necessary to examine it and build in some safeguards.

The Minister in her speech dealt briefly with the early days of the development of hydroelectricity in Ardnacrusha when people of enterprise developed what was a modern concept for the time. Given the considerable mileage of rivers I wonder why there has not been more development in the hydro area. It may be that the speed and flow of water is not sufficient or that there are not suitable sites. Some years ago the ESB carried out a survey of hydro sites. It appears there has been a limited identification of potential sites. When rivers are in full flow in the wintertime this is an area that could be revisited with some profit. From an environmental point of view, there is no more satisfactory way of generating electricity than through the hydro system. The initial capital investment in such plants is a major undertaking but the subsequent running costs are relatively low and more environmentally attractive than some of the ways of fuelling other generating stations.

I congratulate the Minister on introducing the Bill. It is worthwhile and will have far reaching consequences for the economy. I hope it will lead to reduced costs of electricity and will play its part in ensuring the momentum of industrial development continues. It is important that the end-of-the-day arrangement will not have any discouraging effect on regional development. I have no doubt all these areas were considered before the Bill was introduced. It will make a significant contribution to the well being of the economy in the years ahead.

I did not hear all of the speeches today but in some, including the Minister's speech, I detected a certain nostalgia, especially when she referred to the days before rural electrification.

History never did anyone any harm.

I am not blaming anyone for it. In the Minister's speech there was that nostalgia. Deputy Stagg was nostalgic about those days also. Those speeches started me thinking. I remember when I visited the Ulster-American Folk Park between Omagh and Strabane in my county. I do not know whether the Minister has been there.

It is on the right hand side of the road.

A few years ago I took my children to visit it. This is a very interesting historical exercise. It traces the history of emigration between northern Ulster and North America in particular from the 17th century up to comparatively recently. As you walk around you will see the houses they left and the houses they went to on reaching the New World. I began to look at such things as old oil lamps, tilly lamps, the open hearth and the cooking utensils. I remembered such things in my own house and in the houses of my neighbours. One of my daughters, facetious as always, said she knew I was old but did not think I was ancient. I explained to her that electricity, and particularly the provision of rural electricity, created a revolution. In many respects it was a greater revolution than the more recent revolutions that the young people in the Gallery will be aware of, such as the communications explosion. Electricity revolutionised rural life. For many centuries things had not changed. The lamps which many Members remember from their youth had been the same for generations. The availability of electricity in nearly all our houses created not only changes in lifestyle but changes in attitude. The changes, North and South, in the past 20 or so years, owe much to electricity and the fact that it made television possible. We were told on television that we did not have sex in Ireland before television. It made other changes as well. Given that television was an alternative, I wonder why it should have had this effect in relation to the subject I have mentioned but on which I will not elaborate. It revolutionised the country and the attitudes of the people.

I pay tribute, as many others have done, to the ESB for what it has achieved over the years, particularly in relation to rural electrification. As one who looked at it from outside, we in the North were envious of what the ESB had achieved. In 1961 we got the electricity at home. This was only 40 miles from Belfast and between reasonable towns and only half a mile from the main road. In my forays over the Border and into your constituency, a Leas-Cheann Comhairle, and particularly to Donegal we were envious that there seemed to be electricity everywhere. That the ESB has received much consultancy work in Africa and all over the world indicates that its work has been recognised internationally.

I congratulate the ESB for the work it did at Christmas in the most severe weather conditions. It is worth reminding ourselves that it is only in the worst weather conditions that those men have to go out and do the work they did at Christmas. I draw a comparison between the ESB and what it did and the criticism directed at its Northern colleagues, well deserved in many instances, not of the workmen but of the management.

Our principal spokesperson, Deputy Yates, has outlined the Fine Gael attitude to the Bill. I do not propose to repeat it. We support the Bill but with reservations which will be expressed more fully in our amendments on Committee Stage.

The Minister apologised for her temporary absence because of a meeting with the Secretary of State for Northern Ireland. I did not think the apology was necessary because I understood her position and that she had expected the timetable would have been different. It is important for the Minister to be in this House. It is also important that the Minister be available to meet the Secretary of State for Northern Ireland. Presumably those discussions on North-South matters were sufficiently important for the Minister to absent herself. It occurred to me that if the meeting with the Secretary of State was so important and the subjects being discussed were so important, why was there not a single reference to co-operation on energy matters, North and South, in her speech?

That is what we were discussing today.

And rightly so. The fact that the Minister was discussing it shows how important and essential it is. However, there was no reference in the Minister's speech to that matter, which the Minister has admitted was sufficiently important for her to absent herself from the House. In terms of what is happening between North and South in the aftermath of the British-Irish Agreement, the bodies North and South and the new responsibilities which Ministers now have in relation to Northern Ireland, it seems strange that there is no reference in the Minister's speech to that important meeting.

I hope the deficiency was remedied at the meeting. I hope the Minister had a fruitful meeting and that she and Secretary of State Mowlam discussed these matters in-depth and agreed on implementation. I look forward to a report from the Minister and I will facilitate her in making a report to this House. If she has not given one before she next answers questions in the House, I will ensure that it will be a priority question. Perhaps I will get an opportunity to raise the issue before that.

There were always major advantages in cross-Border co-operation in energy matters and I and others have made many speeches on that subject over the years, but since the British-Irish Agreement the argument is unanswerable. We require an agreed energy policy for the island. I hope that was the subject of the Minister's meeting with the Secretary of State today. A common energy policy for the island should be recognised in this or other legislation. Provision should be made, for example, for a single regulatory authority for the island. There is a regulatory authority in Northern Ireland. I am lucky enough to know Mr. Douglas McIldoon who is responsible for implementing it. He and I were students together. He is doing a good job in the North. A single regulatory authority for the island is what we ought to be aiming for, maybe not immediately, although I would like it immediately, but down the road. There should not be one in the North and another in the South; there should be one for the island. I hope the Minister is working in that direction.

Co-operation between North and South will be a challenge. There was difficulty in this respect in the discussions which took place at Stormont. There were proposals on energy co-operation North and South which were jettisoned in the last day or so of the discussions. It is of mutual interest to everybody, North and South, that these matters be reintroduced at some stage. I think that will happen because many of them are practical matters. They will return to the agenda and the quicker it happens, the better.

Part of the reason for this legislation is to increase or, as some might say, introduce competition. Competition between North and South will be a challenge also. The Northern Ireland electricity service is currently looking for a site for a power station on this part of the island and that will create a challenge for the ESB which is welcome. The chief executive of NIE, Dr. Patrick Haren, stated that the ESB would have to invest £1 billion over the next five years and this would force it to raise prices. He said that NIE would need to offer a price reduction of 5 per cent to large companies in the Republic for them to switch to NIE, and that is his company's plan.

I met him.

Dr. Haren of course knows about conditions in this part of the island. NIE will have to pay the ESB for use of its distribution system and the company is waiting to see the cost of this when the market is fully liberalised. I am not sure that this Bill will give it much help in deciding what would be its bid.

This is about setting up the regulator but the next Bill will do so.

That is what I was going to say, that under the next Bill assistance will be provided in this matter. I look forward to that co-operation and competition.

There are some other matters which I want to raise briefly in the limited time available to me. I like to listen to the Sinn Féin Deputy, Deputy Ó Caoláin, who, together with you, a Leas-Cheann Comhairle, represents Cavan-Monaghan, talking about North-South co-operation. I am sorry he did not contribute to this debate. I have always wanted to know how the blowing up of the electricity connector between North and South contributed to forwarding unity on the island. I have always wanted to ask a member of that party that question face to face in the hope that they would not be able to dodge the answer. I am glad that nonsense has stopped.

Our increasing dependence on gas seems to be a matter of some security concern.

The gas interconnector is what we spoke about today.

It is a pity this debate did not take place tomorrow. The Minister could have told us about the discussions she had with Secretary of State Mowlam.

I will later.

I am concerned not only in the context of this island, I am concerned about the gas supplies from Russia because, as I understand it, much of the gas being imported to Britain, Scotland and Ireland comes from the Ukraine. I cast my mind back to what happened in 1973 and the extent to which we were dependent on oil supplies from the Middle East. This was first brought to my attention by a paper I read in which some considerable concern was expressed about the security aspects, particularly in circumstances where our gas reserves at Kinsale are about to expire. If we are to be totally dependent on imported gas through Scotland, we ought to give some consideration to the security aspects. Maybe we will discover gas off County Mayo. We live in hope of that and I look forward to it.

I share in the criticism which was voiced by Deputy Sargent and others of the progress being made in the provision of alternative energy. We are not doing enough, particularly in the case of wind energy. There are problems in that regard. People do not want masts etc., but if there is a form of energy to which we ought to pay attention, it is wind energy. It is a dereliction of duty and irresponsible that we have not done more. Greater emphasis should be placed on this area.

The independence of the commission on the one hand and accountability to the House on the other has been raised. That is a source of concern. The Minister informed us that there will be accountability to the Comptroller and Auditor General and the joint Oireachtas committee, of which I am a member. Certain public service obligations have been specified. The proper balance has to be struck. We know from experience in the telecommunications area that this is a sensitive matter.

The legislation was introduced by the Government of which the Deputy's party was part.

There is a problem which we have to consider. For good reasons persons are appointed who are independent in the exercise of their functions but power should reside with the House, the Members of which are elected by the people. We should not transfer our responsibilities to anyone else. It is a matter of getting the balance right. We are not unique. Other parliamentary democracies have encountered this problem but they have found ways to deal with it. I hope we will do the same.

I commend Deputy Currie for raising the issue of North-South co-operation, particularly in terms of electricity generation and the sharing of infrastructure. The peace process has resulted in the reopening of the interconnector between North and South. The provision of a North-South electricity link would be of huge symbolic importance, as was the reopening of the Lough Erne-Ballyconnell Canal. It would also make economic sense. Once the regulators are in place they should commence discussions on the issue. The Minister should discuss the matter with her opposite number.

Prior to being elected I worked as an executive with Esat Digifone and I have been retained as an adviser. Previously I worked as a broadcaster in the commercial broadcasting sector. The great age of monopolies, be they in the banking, utilities or public sector, is at an end. Despite this, because of its size, the ESB has a major role to play in what is a small market. The question is whether the market is of sufficient size to be an ideal candidate for full deregulation. Deregulation in the telecommunications sector has been spectacularly successful. There has been downward pressure on the fixed line prices charged by Telecom Éireann. This is an indication that competition benefits ordinary consumers and industry and makes the economy more competitive.

We are painfully aware from the difficult negotiations in Brussels that Structural Funds are running out. It is imperative, therefore, that we get the fundamentals right in terms of electricity generation and telecommunications infrastructure to maintain a competitive edge. Electricity and tele communications services ought to be regarded as commodities. A significant statistic is that we export moreper capita than Japan. To remain competitive we must reduce costs well below those of our competitors which service large domestic markets.

The Minister should reassure the staff of the ESB that they will not be placed at a disadvantage following the introduction of competition. Competition opens up a new vista for companies subjected to it. This is a good Bill in the sense that we are not running ahead of ourselves in terms of our obligations under the EU directives, although there was a case for doing so in the telecommunications sector. The matter can be reviewed at the turn of the century.

It is my experience that the ESB is one of our best run State companies. It has a proud record and a good relationship with its customers. From time to time members of staff will carp that new competitors are being allowed to cherry-pick the heavy users of electricity. That is true but the ESB has developed a successful consultancy division which is able to compete for sizeable and lucrative contracts abroad. It is a company with international trading experience which can compete in the global market and which has already done so. It is also a company which has served the country well by rolling out major infrastructure. One could argue that the ESB is the only really big company Ireland has produced which has provided major infrastructure, has a large domestic customer base and has remained profitable.

In its early years the company was run by engineers which was a source of tension within the company. I suspect that as competition arrives on the doorstep of the ESB, the company will be forced more and more to look not just at the engineering issues which bring it into the marketplace but also at the marketing skills which are necessary to sell the product both to the big users and to ordinary consumers.

I hope the Minister can give us some reassurance that the 28 or 32 per cent of top users will not be the only ones to benefit from the downward pressure on price. The downward pressure will obviously be experienced by corporate, large volume users but I would like some reassurance that the ordinary consumer will also see the benefits. This is a difficult issue to regulate or influence. In the past we have seen that a danger of limited deregulation is the creation of a cosy duopoly. We need to build in some protection for the ordinary customer.

Some earlier speakers referred to the danger of overloading our electrical infrastructure because of our booming economy. This is not unlike the situation confronting the Minister in relation to traffic and road use. Our infrastructure is fully stretched. ESB staff will attest to that. We may be heading into a relatively dangerous situation where even though the company is working at full throttle, blackouts are frequently experienced. In my own area of Newcastle, County Dublin, we have experienced occasional electricity blackouts.

The Minister will have to look at this problem in terms of expansion of the ESB network. The problem is not the fault of the Minister or the ESB. The best economists, demographers and statisticians could not have foretold the enormous economic success and growth that has been achieved. No one planned for it but it is now time to plan how we are going to solve this problem because the system is at overload. Investment is needed in order to upgrade the service and one hopes the arrival of private operators will lead to greater investment and the expansion of capacity. All statistics point to the fact that our population is growing and that the State will have a population of approximately five million by 2026. This is a huge challenge for electricity and for our infrastructure generally.

The creation of the Department of Public Enterprise by the Government was very timely. The clustering of these areas of State and semi-State activity under the same Ministry is very appropriate. Similar issues arise in the areas of aviation, telecommunications, electricity generation and so on. I congratulate the Minister and the Taoiseach for the leadership they are showing not only in relation to electricity but also in relation to harnessing the benefits which will come from the Internet and from electronic commerce. That area is also of huge importance and is not unrelated to the area of electricity in that the basic product which drives much economic activity will depend on our electricity infrastructure.

I congratulate the staff of the ESB for their performance during the Christmas period. I congratulate the company and its staff for the wonderful work they have done to date and which I am sure they will continue to do in the future. The ESB is a great Irish company and I know it will not only survive the winds of competition but will thrive, precisely because the company has been given a five or six year period in which to tool-up for a fresh wave of liberalisation and competition. We must deal with this matter gently. There is no point rushing our fences in relation to electricity generation. The ESB is one of those Irish companies which can withstand the challenge of competition.

I am glad to have the opportunity to contribute to this debate on important legislation. I do so from a midlands perspective as the Minister is very much aware. Peat-fired electricity generation is very important in our part of the country and in the overall economy. This is the most important legislation brought before the House this year and it will affect the economy for years to come.

I pay tribute to the ESB workers who, over the years, have built up the company to its present level of success. People often quibble about public sector workers but we see their value both in their expertise and in their readiness to respond to crises, often in hazardous conditions, as they did during the past two Christmas periods. We should appreciate them for their work in extremely hazardous conditions to ensure that we enjoy comfort in our homes. We must never ignore that and we must approach a Bill such as this with an awareness of what has been achieved.

The essence of what is proposed is that the Government will open the Electricity Supply Board, which up to now has solely controlled the generation and distribution of electricity, to free market forces. In carrying out its task the ESB has been a major force for economic and social development both nationally and regionally.

It is important that we remind ourselves of the role the Government has played in the past in regulating and deciding policy in the electricity industry. It must now put in place a structure that will serve equally well the continuing development of the country both economically and socially.

We are a member of the European club and, under this directive, we must accept that our markets for all services, commodities and products are open to be supplied by other players in European industry. We must contribute to sharing the burden of coping with greenhouse gas emissions in the same way as other countries. We must preserve our interests at national and regional level despite the desire of Brussels to impose conditions or directives which cut across the foundations of our current economic prosperity.

The thrust of this Bill is to establish a select group, be it a small commission or single individual, to act as a regulator, a king over the fundamental lifeblood of industrial and social progress, that is the electricity supply. I see this, in the first place, as an enormous ceding of the power and role of the Government. I can offer the responsible Minister in future a comfortable hiding place when things go wrong. Like the Attorney General, I have asked the question, who regulates the regulators? That is a very important question. This House has given up much power and in relation to the principles of democracy and political accountability it is important that such people be answerable to this House and to the Minister. In this way the public demand for accountability is satisfied. I agree with the view echoed by the Attorney General in UCD in November 1998. It was a pertinent debate held by the UCD law society and one to which we should devote more time and consideration. It was extremely pertinent to this legislation. I hope its passage through the House will be slow and that some of the worthwhile amendments that will be tabled on Committee Stage will be accepted.

The fundamentals of the electricity industry and its impact on the national economy are centred on three issues: do we have control over primary energy supply for electricity; do we have national policy on the diversity of primary energy supply; and do we have policy on indigenous sources of primary energy or on our ability to generate our electricity from our own resources. I conclude from my reading of this Bill that the answer to these questions is no. This important Bill does not address any of these issues. The danger is that we could become a subservient economy where our worst fears could be realised.

Deputy Stagg referred to some of those earlier. A small group or individual, while well meaning, might be unable or unwilling to take account of the wider social and economic driving forces here. Their primary influence would be short-term expediency which appeases various pressure groups, such as industrialists who will get their way. Deputy Conor Lenihan made an important point about who will be the major beneficiaries of the cheap electricity that will come on stream? Will the benefit be held at a certain level or will it permeate down to consumers in rural areas? That is an important question. The primary influence of such people will also appease the Brussels command centre. A fundamental flaw of this proposed legislation is that it does not impose a duty on the regulatory body to take into account such issues of national interest and self-reliance. Sometimes I am under the impression that successive Governments have lost their ability to assert themselves in many areas that are dominated by Brussels. I hold that view and held it when my party was in Government.

At last we have a Euro sceptic.

It is not the first time I said that.

Michael Portillo will be glad to hear that.

The Deputy is coming at it from a different angle.

We have ceded authority at certain levels to Brussels, which we should not have done. I have deep concerns about the way we are proceeding in relation to essential public service obligations which have served this country well. I accept there are impositions and directives that are directly applicable and I have dealt with those previously, but we should be careful about what we cede to Brussels.

Brussels will not even reply to letters.

We should not have to be forever trying to balance the equation of money in terms of money or sovereignty lost. Our history merits us a different equation. Apart from that, we must deal with some imminent realities. By 2006, on the assumption that the demand for electricity grows at 4 per cent per annum, and some commentators say that percentage is conservative—

It is estimated it will grow at 6 per cent per annum.

That is a 50 per cent increase on the rate I predicted. Based on a growth in demand of 4 per cent per annum, by 2006 Ireland will import more than 90 per cent of the fuels needed for electricity generation. By then, Ireland's dependency on external energy resources will be the second highest of the 15 EU member states, second only to Portugal. If the Minister's figure of 6 per cent is correct, and I have no reason to doubt her, Ireland could be the most dependent EU member state on external fuels required to generate electricity.

The likelihood is that the major developments in electricity generation will be from imported natural gas as Ireland's known gas resources will be exhausted in three years' time. We will be highly dependent on imported natural gas. Our dependency on imported gas and oil-fired generation will reach about 70 per cent of the total capacity and will put the country in a more strategically vulnerable position than it was at the time of the first oil crisis in the early 1970s.

My interest is to protect our indigenous sources of raw materials for the generation of electricity. Peat-fired electricity generation has made a social and economic contribution to our economy, particularly to the economy of the midlands. It has generated direct employment and ancillary activities in rural areas. Once constructed for gas or oil, these plants cannot be converted to use another fuel type in circumstances of an interruption in supply. Ireland's economic lifeline will be literally a series of interconnected pipelines spreading under water into Europe and across to the Middle East, north Africa and Russia. While there seems little choice in this unless there is a major natural gas find, it is imperative that the country maintains as much supply of indigenous energy within reasonable costs to limit the disastrous effects of a failure in the supply lines for whatever reason. It may result from technical or human failure or political instability as a result of which our economy could be crippled. For this reason the policies of past Governments in support of an indigenous energy industry is of even greater importance today.

The Minister spoke about converting peat to electricity and she and my colleague, Deputy Stagg, have played a role in bringing that about.

The Deputy is referring to the IVO.

I will comment on that. I presume the Minister knows where I will land.

In north-west Meath.

We should each know where the other is going because we share the same constituency. Technology for converting peat to electricity has been developed over the past ten to 15 years to the extent that new power plants are generating 37 per cent more electricity from one tonne of peat than those installed in the ESB system. The effect of this was seen when the Europeat Generation Competition was won by the IVO at 3.5p per kilowatt. This amounts to about 1p extra or 12.5 per cent on the domestic electricity tariff compared with the cheapest which would be a combined cycle gas-fired generating plant.

Under the EU Electricity Directive 96/92 EC, Ireland is permitted to use peat for 15 per cent of the fuel needed for electricity generation. That was the clear understanding we had when we agreed to open up the market for electricity. That is a critical point. Even when the Europeat station, which will generate 120 megawatts of electricity, is fully operational – there may be some closures of small stations – Ireland can use an additional 800,000 tonnes of peat per year for electricity generation and still comply with the terms of this directive. That is important. In the Minister's Department there may be people who may not want to push peat-fired generation stations.

Those who are anti-bogs.

I do not believe the Minister will be found wanting, but I back her on this and give her moral support because it is important that those people's views should be placed in context. We should not be found wanting because we are permitted to use peat for 15 per cent of the fuel needed for electricity generation. We can also use an additional 800,000 tonnes of peat per year and there is plenty of peat in the midlands.

Many will put forward the argument about CO2 emissions and Ireland's problems in complying with the target set for the country to limit its CO2 emission levels.

That is required under the Kyoto Protocol.

Recent reports suggest that a solution could be found by converting all electricity to gas and effectively closing down ESB powered stations and Bord na Móna. Those who put forward that solution are ivory tower economists living in cuckooland. If we were to follow that route, the economy of the midlands would be closed down. The warning from the midlands is that nobody had better contemplate going down that route.

The cause of Ireland's CO2 emissions has been due to the economic boom we are enjoying. We all fight our corner as best we can, but much of these emissions are generated on the east coast. The midlands is seeking to attract more industrial investment and we are trying to play a part in securing that. It would be ironic if the people of the midlands were deprived of one of the greatest industries that has sustained them there for 40 years and which can continue to play an important national role for another 25 years. I accept that the CO2 issue must be addressed. However, I am critical of the manner in which targets were agreed for Ireland. We now find we have to shoehorn the solution into the economy of the midlands. I am aware that improved technology and the potential of the bogs to grow forestry and lock carbon emissions provide peat with a good ticket to continue to supply electricity from the limited remaining resources.

I will now discuss some aspects of the Bill in the light of this perspective, while at the same time dealing with some of the issues which need Government commitment. I will deal with the duty and role of the regulator, in regard to the promotion of indigenous primary energy, which very soon will be limited to our peat and bog resources.

The Government seems to have set itself a limited retrenchment policy in the use of these resources. This is a most disappointing aspect of energy and regional development policy. When natural gas is finished in 2002, the only indigenous resource we will have is peat. There are about 120 million tonnes of industrial peat available throughout the midlands, which is not an insignificant amount.

Bord na Móna owns about 12,000 acres of bogs, evenly divided into two groups in Westmeath. The Minister is extremely aware of this proposal and I am sure she will make an all-out effort to get it included in the national plan. One group is centred in north Westmeath in the area of Coole. The second area is near Ballivor and Ratharney, on the Westmeath-Meath border. There are sufficient peat reserves there, amounting to 14 million tonnes, which can supply a 60 megawatt peat-fired power station for 25 years, at a consumption rate of half a tonne per annum. In addition, the area can supply horticultural peat from some of these bogs which have suitable material for that use. All these bogs have been previously worked for sod turf and horticultural peat and are not areas designated as having any conservation status.

Unless an integrated plan for the use of these bogs is drawn up and implemented, this resource will lie wasted and a major industrial opportunity will be lost in the region. This proposal is backed 100 per cent by Bord na Móna and Westmeath County Council. The Minister is also extremely familiar with the proposal and she is committed to the utilisation of our peat resources. I would support 100 per cent, as would our spokesperson, Deputy Stagg, the bringing forward of a plan for this area, which is extremely important.

The areas in question are in the midlands region, which the Government acknowledges merits Objective One status in the next round of EU Structural and Cohesion Funds for Ireland. There is a compelling case for this project to be included in Ireland's programme for EU assistance in the development of the region.

In common with the Minister, I represent a rural constituency in a region which, as a whole, has 66 per cent of averageper capita income. There are pockets within this region where this falls below 60 per cent. We all know about drystock farmers' incomes at present. I want the few opportunities available in this region to explore a natural asset to be fully exploited. The natural resources available in this area can provide 140 permanent and 70 seasonal good quality jobs for 25 years. That area includes Coole, Rathowen, Castlepollard and Ratharney and it would benefit greatly if the Minister ensures this proposal is included in the national plan. It has widespread support in the area.

It would also benefit the Deputy and me.

Exactly. However, even if it were not in our area it would be an extremely important proposal.

In the course of the passage of this Bill I will be seeking to ensure that the duties and functions of the regulator and the commission are clearly and satisfactorily spelled out in regard to a policy for the continued use of all the remaining commercial peat available for power generation. That is extremely important. If we do not do that, as my colleague, Deputy Stagg, spelled out this morning, despite us having a temporary reprieve through the public service obligation, our peat-fired stations could be under threat. That is a consequence of opening up and liberating the electricity generation market.

However, if we take a positive decision in this Bill to ensure that the duties and functions of the regulator are fully spelled out and the commission is clearly aware of the policy direction in which we want to go in regard to the remaining commercial peat, we can make a contribution which people will say in 20 or 30 years' time was informed by foresight and intelligence.

I compliment the Minister on the speedy way in which she has dealt with this legislation. I urge her to continue with the efficiency with which she is handling the ESB and the other agencies for which she has responsibility. This Bill is a follow-up to the telecommunications and aviation reorganisations she has undertaken and it is very welcome.

Since its establishment, the ESB has been fundamental in the development of our economy. Over the past 70 years, it has been a very strong engine for economic and social development. The ESB never lost sight of the important social dimension, which is borne out very effectively in the efficient way in which it dealt with the rural electrification scheme over the years and the policies it followed in that regard.

The ESB staff magazine,The Electric Mail, described this legislation as the beginning of the end and the start of a new beginning. This is the start of a new and exciting beginning for the ESB, and one which will present many challenges and opportunities.

I was involved with the ESB for 25 years – I dealt with it in the old ESB fisheries division when I worked for Shannon fisheries before I became a Member of the House.

The Deputy should return to them and put some smacht on them.

It has had a very progressive outlook in dealing with some of these matters.

It does not now.

While we could ring-fence the ESB fisheries division and what has been taking place in the Shannon fisheries, the ESB has been innovative and expert in dealing with the development of some of its power stations. The Moneypoint station was a feat of both marine and electricity generating engineering skills. The skill and dedication applied to the building of Moneypoint was an example of what Irish technicians and engineers can achieve. Electricity unit costs in Moneypoint are much lower than the national average. The Minister will be aware that on successive occasions I made representations that the fourth phase of Moneypoint should be completed. This would not only meet some of the electricity demand, it would also provide electricity at a very competitive price.

The one difficulty concerning the development of the fourth phase at Moneypoint is that emissions from the plant would increase, which might bring them above the level laid down in the guidelines. This can be effectively dealt with by the ESB. It is essential that pollution controlling equipment be installed in the chimneys at Moneypoint. This equipment should have been installed when the station was being constructed, but it was not. The work needs to be undertaken now.

Hear, hear.

The fact that it will cost some money is relevant but it should not be a reason for the development not to be undertaken.

I have studied this matter carefully and have discussed it with those concerned. It is possible to fit pollution control systems into the chimneys at Moneypoint and that would reduce emissions. New developments have taken place in energy generation and innovative ideas from Finland, Sweden and elsewhere can be applied to Moneypoint whose fourth phase should be completed. This would greatly enhance the ESB's ability to meet demand as well as ensuring that additional electricity would be generated at rock bottom prices. It would be far cheaper than any new proposals that have been mentioned.

In anticipation of the new legislation an application for a new station has already been lodged with Fingal County Council by a company from Northern Ireland and the ESB is planning its own developments. In light of these, it is imperative that the ESB should press ahead with the development of the fourth phase unit at Moneypoint, as I have suggested. The main infrastructural work was put in at the construction stage during the late 1970s and early 1980s. There is no reason this cannot be done in tandem with the pollution control system. It would certainly meet some of the pressures on electricity generation at present.

The ESB has been described as a national institution. It has been part and parcel of the country's overall economic development. If the same level of economic development is to continue and accelerate, it is essential to have the most modern system of electricity generation in place to meet demand.

Some time ago research studies were carried out along the west Clare coastline on electricity generation by wave power. As the Minister is aware, there has been some discussion in the House at Question Time about a current proposal to develop a wave powered station on the west Clare coast, not far from Kilkee. This would fit into the ESB's national grid. A Scottish company put forward that proposal and a contract for the purchase of electricity had been offered by the ESB.

The ESB should accelerate its research work in that area. The research that has been carried out has clearly indicated opportunities for the generation of substantial units of electricity from wave power along the west coast which is ideally suited to this type of activity. It is essential for the ESB, the new commission and the regulator to identify areas where it will be possible to generate electricity from wave power and to feed it into the national grid. It is important to examine such natural resource areas that, while available, are not being developed or exploited. With some innovation and investment they could provide a lucrative opportunity. I urge the ESB to undertake such research.

I want to put on record our appreciation of the magnificent achievement of the ordinary rank and file staff in the ESB who have gone out in all weather conditions to maintain the electricity supply. We saw that during the winter when ESB personnel carried out repair work in appalling conditions to maintain supplies, especially in isolated areas.

Deputy Conor Lenihan mentioned the concerns in the agricultural community about the lack of continuity of supply in some rural areas. I want to acknowledge that there has been heavy investment by the ESB. Nevertheless, there has been criticism of that investment in improving new transformers and lines because there have been successive breakdowns in particular areas. There has been criticism that, to some extent, the new system which has been funded and put in place is not adequate to meet current demand.

I am not an expert in that area, but over the years we did not have a mechanism or facility for raising individual issues or problems such as those. On numerous occasions I endeavoured to ask parliamentary questions about the day to day activities of the ESB, but was prohibited from doing so because of the legislation in place. We need to change that in the new regulations and we want to be in such a position when the new legislation is finally completed. I appreciate that this is part of a tripartite legislative proposal by the Minister, which may all be put into one Bill. Nevertheless, whatever new arrangements are put in place, we want to be in a position to raise issues in the House which are of importance to our constituents. We do not want to be ruled out of order because they are matters for the regulator, the commission or some individual to whom we cannot have access. In the formulation and tidying up of the legislation I will support some mechanism whereby individual problems that may arise and which are brought to our attention can be raised by Members in the House.

I intervened in the debate first to compliment the Minister on the way in which she has dealt with this process and has speeded it up. Second, I intervened to urge the ESB to go ahead with the fourth phase at Moneypoint and not to be deterred by problems with pollution control which can be dealt with anyway, as they must be. Even if the fourth phase of Moneypoint was never developed the ESB should install the necessary equipment to deal with pollution control.

I compliment especially the many people with ESB International for the work they are doing on overseas projects. For a short period I was Minister of State with responsibility for overseas development aid. I saw at first hand the invaluable work that was being done in underdeveloped countries by ESB personnel who provided essential water supplies through the generation of electricity. They applied their expertise to solve problems for the poorest people in Tanzania and other African countries. These people are to be complimented. Many of them have returned home and are involved in consultancy work. They have recognised that innovative changes are taking place in the generation and transmission of electricity and they are anxious that such changes should be applied here at home to make the service more efficient and less expensive. This approach will generally help to deliver a better service throughout the country, both for industry and private consumers.

Given the new changes that will come about it is essential that care be taken to ensure that, in the transition period from the old arrangements to the new ones, conditions of employment and other matters are dealt with. These matters can be dealt with on Committee Stage.

However, I hope that before the debate on the Bill concludes the ESB will indicate the position regarding the important and valuable Shannon fisheries under the new regulations. These fisheries have not been fully developed or utilised. The unique eel fishery on the Shannon is underdeveloped in comparison to the position in Lough Neagh. It is in the shade in terms of what can be done through the proper utilisation of a valuable national resource. I hope there will be an indication of how these matters will be dealt with in the future.

Unfortunately, loose ends were created during the reorganisation of Departments and admin istration in the past. This caused problems later and it is important that issues such as the eel and Shannon fisheries and other social matters handled by the ESB in the past are addressed under this important Bill. An indication of how these matters will be dealt with under the new regime is necessary. I welcome this great Bill and I compliment the Minister on introducing it.

I wish to share my time with Deputy Stanton.

Is that agreed? Agreed.

I welcome the Bill and congratulate the Minister on introducing it. The Bill is an important step along the way for the ESB. The members of the Government who introduced the Electricity Supply Act in 1927 were men of vision. They saw the need for electricity and they went about introducing it. The main driving force at the time was the late Minister for Industry and Commerce, Paddy McGilligan. Enormous credit is due to him, the then Government and all those associated with that Act and developments which took place subsequently for their foresight.

The ESB is an excellent firm. Regarding its record in the recent past, the company had profits after tax in 1997 of £160 million. It is generally believed that its profits for 1998 will be in excess of £200 million. This is a sizeable amount of money and I will deal later with how it should be spent.

I welcome the Bill, the intention of which is to restructure the main components of the energy industry in Ireland. The Bill proposes that the regulator will take over the role previously held by the Minister, her Department and the ESB. It will also impact heavily on Bord na Móna. Therefore, it is important, given that these major powers are about to be vested in one office or individual, that all the implications for the national energy policy are considered.

Up to now the role the ESB and Bord na Móna played in providing the necessary electricity requirements for Ireland and the regional development associated with Bord na Móna's and the ESB's activities have been the cause of the success of regional economic development. They have been of major importance, particularly in the midlands and the west. My constituency and neighbouring counties have all benefited considerably. They were a major boost to the economy of the midlands and the constituency I represent. While there have been job losses in the area, I hope that in the future the ESB and Bord na Móna will consider how they can develop other ancillary industries and help to provide alternative employment. I am sure the Minister agrees. They have also been a great factor in economic development at national level.

I wish to deal with the degree to which Ireland is dependent on energy from imported sources. This matter is of concern and the point has even greater significance because, as an island nation, we are dependent on imports. Although Ireland is a member of the European Union, a properly developed mechanism whereby the energy resources and systems which operate in Europe can be evenly and adequately shared by Ireland does not exist. The high level of dependency on imports of primary energy, which will be even greater in the next five or six years, frightens me.

My information is that Ireland will depend on sources outside the European Union for over 90 per cent of its primary energy. Ireland is the most dependent country in the EU in terms of its level of energy imports. Consequently, in the context of the Bill I want to ensure that the Minister takes full account and makes provision for the maximum use of indigenous energy resources.

Our gas reserves are being rapidly depleted and we are dependent for supply on two major aspects associated with gas. Much of the gas we use is from the North Sea and Norway, which is stable at present. However, in six or seven years, many of these resources will be considerably depleted and we will be heavily reliant on Russia, the Middle East, Algeria and other such countries which are highly unstable. They are high risk sources. The gas we will use will come from sources outside the European Union. Some of these areas are politically and economically unstable and that is likely to remain the case.

The second aspect of our gas supplies with which I am uncomfortable is that Ireland is equally dependent on transport systems which are outside our control. We depend on the British transmission system and there is only one interconnecting pipeline. If Ireland's current economic growth continues, we will be dependent on gas for over 60 per cent of our primary energy by 2010, 11 years from now. Our other primary sources of energy will be oil and coal, all of which is currently imported. This will also be the case in the future. Our only major indigenous source of energy is peat. It is essential to assist Bord na Móna in every way possible in the maximum and most efficient use of peat. Finland is the only other European country which uses a similar amount of peat.

The purpose of the Bill is the regulation of the electricity industry and all associated aspects. My biggest concern is that the Bill does not provide sufficient support for the future of the peat industry. In terms of the role set out for the regulator, the directions on how this valuable national asset should be used in the future are totally inadequate. My fear is that the peat industry and the portion of the electricity industry which depends on peat is not provided for in the functions and duties of the regulator. I ask the Minister to address this aspect on later Stages of the Bill.

Aside from the simple economics of electricity generation based on different types of fuel, the regulator should take account of the broader issues regarding dependency on external sources of energy and the regional, economic and social impact which the peat industry has on the midlands and the west. The Bill should make specific provision in regard to the role of the regulator on this matter.

I welcome the construction of the new modern peat-fired power station at Clonbullogue in County Offaly at a cost of over £100 million. I am pleased that the European Union is contributing £21 million to the cost. This power station will demonstrate what the application of high technology and commitment by the workforce of Bord na Móna can do to keep the cost of peat fired electricity generation at an acceptable level compared to other fuels. It also has the benefit of reducing the amount of gas emissions for each unit of electricity generated. The remaining resources in the midlands could support another electricity generation plant using similar technology.

I urge the Minister to ensure that the regulator is obliged, as part of his or her function, to ensure that peat is utilised in the future by the best technology available. There should also be a strong provision in the Bill where the Minister of the day will be compelled to intervene to ensure that such a policy of peat utilisation is implemented. I am not satisfied that there are sufficient safeguards in the Bill as it stands. The Bill should reflect our capacity to determine our own policy in areas of strategic importance such as energy and electricity generation.

I want to address the situation in regard to Ferbane power station. I would like the Minister to state clearly and unequivocally that the refurbishment of the station will proceed. I believe the level of worker participation is satisfactory there and hope the ESB will seek to allow contracts to go to tender in February or March. I would also like the Minister and the regulator to ensure that while work is proceeding on unit 4 in Ferbane, units 1 and 2 will remain open. That is essential. Similarly, the units in Rhode and Shannonbridge power stations should also remain open.

I referred to the fact that the ESB has made profits in excess of £200 million this year. I would like to see some of that money spent on power stations in which employees are working in unsatisfactory conditions. The stations should be upgraded. Mr. Ken O'Hara has stated that there is a danger of power cuts unless the ESB receives sanction to proceed with building a new power station. I would welcome the development of a new station but I hope that the existing stations are improved.

I congratulate Deputy Daly on a point he made in regard to Moneypoint. I am unhappy with the level of pollution control at the station. There is a need to install cleaners for the chimneys in the station. I urge the Minister to take my comments in regard to Ferbane, Rhode and Shannonbridge into account, even though the stations are not specifically referred to in the Bill.

I welcome the Bill. Competition is good; we have seen it in the telecommunications industry in which it seems to be working well. The main purpose of this Bill is to provide for a regulatory framework for the introduction of competition in the generation and supply of electricity. An independent commission is to be established to license and regulate the generation and supply of electricity and authorise the construction of new generating plants.

The Minister seemed to express some concern in her speech yesterday about the role of the Oireachtas and elected representatives in regulating the regulators.

I wanted them to do that.

I welcome that. It is important that we do not give all our power away to these people. I am not casting aspersions on such boards which, in the main, do good work. Some authorities are totally independent of the Oireachtas. Some of us, in our role as elected representatives, write letters to these boards but often do not receive a reply. That is not good enough. I would welcome the Minister's introduction of a certain amount of accountability into the process.

Demand for electricity has increased by 6 per cent per annum in recent years. This has led to a problem in the Cobh area which I represent. The Minister is already familiar with the problem which relates to electricity pylons. I am aware of people who are physically sick and under their doctors' care as a result of worrying about this issue. The ESB wants to construct yet another set of pylons – of which there are already seven – across the island.

The impending enactment of this legislation changes everything. The Minister officiated at the opening of the new Guinness power station and was fulsome in her praise of the savings which would accrue as a result of its opening. A number of companies in the Cork region are pursuing a similar policy. The line of pylons which the ESB plans to build in Cobh might no longer be necessary if these other companies are considering following the Minister's advice. Many of their plans are well advanced. Perhaps the Minister might ask the ESB to hold off on the construction of these pylons, at least until the independent commission is in place. The regulator and the commission should be given time to examine the overall situation in light of the changed circumstances which this Bill will allow. Quite a number of companies in the Cork region where the power is required are seriously considering the provision of their own heat and power and their plans to do so are well advanced. All sides could save face if this were possible. If the ESB proceeds with the construction of the pylons in Cobh, people will be very upset. Perhaps the Minister could use her good offices to intervene in this matter. The regulator and the commission should examine the situation. The ESB has waited this long – a few more months should not make a huge difference.

I want to refer to the issue of safety. Wiring installations in houses must be examined and certified before connections are put in place. RECI was established some years ago on the advice of the Minister's Department. There is also another organisation which issues certificates in this regard. Many people, including the ESB, are concerned that nobody is supervising the regulators. This Bill provides an opportunity to give the regulator the authority to supervise the other regulatory bodies which are in place and any others which might be established in order to ensure the safety of consumers.

Section 3(8)(d) refers to the promotion of safety and efficiency in regard to electricity. There seems to be something of a grey area here. In 1996, there were 385 electrical fires, 476 fires occurred as a result of electrical wiring installation and 497 fires as a result of cooking incidents. In total, 1,300 fires occurred as a result of electrical problems in 1996. One fire is one too many. It is of paramount importance that somebody supervises the regulatory bodies to ensure everything is carried out in the proper manner. I am not alleging that anything wrong is being done at the moment but there is some unease and concern about the situation. The Department of Enterprise, Trade and Employment seems to be of the opinion that this issue is not its concern. The Departments of Public Enterprise and the Environment and Local Government appear to think likewise. Perhaps the Minister would give the issue some consideration. Monopolies can be problematic. Given that the cost of connecting electricity to houses is quite high, has the Minister plans for deregulation in that area so that the consumer can have a choice here also?

I thank the Chair for the opportunity to speak on this matter. Although the Minister did not mention the word "privatisation", this is the first step – not that I am objecting. She referred to the introduction of competition in the aviation and telecommunications areas. It has been a tremendous success in both areas, particularly in the aviation industry where it has meant that tourism here has multiplied in the past ten or 12 years since the independent airlines came in here. It is gratifiying to see competition, because competition leads to thriving business, and those two sectors proved that.

Some 28 per cent of the electricity sector must be open to competition by February 2000 – that is the minimum required by the EU – and 32 per cent of the sector must be open to competition by 2003. This again is a minimum. The Minister referred to the fact that some countries will achieve 100 per cent open competition and privatisation.

In this country the word "privatisation" is, for some peculiar reason, a dirty word.

No, I use it all the time.

I do too, and I am glad the Minister does. Competition is the life of trade. Without it our economy would stagnate.

It would be interesting to know how many alternative sources of electricity generation can be practically brought into operation. The burning of coal, oil, gas and turf leads to the emission of carbon gases into the atmosphere, resulting in the depletion of the ozone layer. Such depletion means that we are automatically exposed to much more radiation from the sun, which we did not have to endure years ago. Depletion of the ozone layer is extraordinarily serious. Has the Minister definite plans to reduce the amount of carbon gases, carbon monoxide and carbon dioxide which is going into the atmosphere? This is produced not just from the exhausts of cars but from power generating stations which use carboniferous fuels. What plans has the Minister to reduce them? As there is a very strong link between radiation and cancerous diseases, it is a very serious matter. I would like to know the Minister's plans in that regard.

There are alternative sources of generating electricity. Nuclear energy is taboo. I remember when Deputy O'Malley as Minister for Industry and Commerce floated the idea of erecting a nuclear power station at Carnsore Point, County Wexford, he was nearly run out of the country. The advent of Sellafield created a huge scare here where nuclear power is concerned, so that is not an alternative. The real alternatives are hydro-electric schemes, which are limited because the country is not that mountainous, and wind power. Solar energy does not enter the equation – a few people tried to use solar energy for summer houses but it was a disaster, so we can forget about it. Wave power is another likely source. There is quite a bit of work to be done on that, but it would be a viable option in time to come. Wind farms are the immediate option. Perhaps the Minister would give us an estimate of the proportion of electricity that will be produced from viable alternative sources which are acceptable to the public in five to ten years' time.

Has the Department of Public Enterprise done a study of the potential for alternative sources of energy here? The issue of wind farms is one on which people feel very strongly, and there is a need for education about them. The alternative is to continue to burn gas, oil, coal and turf, contributing to the depletion of the ozone layer. We cannot retain that option. The sooner we have alternatives the better. I do not know what the Minister's advice in this area is, but it would be good if she and the Minister for Health and Children got together with a team of experts and worked it out because we might be unknowingly promoting cancerous diseases, such as leukaemia. It is all very well to open peat-powered, gas-powered and turf-powered stations, but might we not be injuring people's health and doing much more harm than we are complaining about in regard to Sellafield? We probably are, but we will not admit it, and as far as I know, we are not carrying out studies to evaluate the situation as we should. We have a responsibility to do that.

As to alternative sources of energy, I propose to dwell on the matter of wind farms. In my own county there is massive opposition to them. Two sites close to Tramore town were pinpointed by private individuals who wanted to set up a wind farm, generate electricity and sell it off. One was shot down by the planning authority after the county manager initially said he would allow it and then changed his mind, and the other is in abeyance. I cannot blame the local people. The thought of something new and large overshadowing their dwellings or nearby is pretty obnoxious and unwelcome. They would prefer if it were on somebody else's patch. People need to be educated as to whether wind farms generate excessive noise. The wind farm concept has been brought to a point of perfection where it is a real alternative and much of our energy could be generated through their use.

A couple of years ago I went to Cornwall in the south-west of England. It is a very scenic county with a large tourism industry. On the side of the main road I came across two wind farms which I found rather extraordinary. I have driven around Ireland quite a bit over the years and have yet to see a full scale wind farm in operation. When one flies over certain European countries, particularly western Germany, one will see dozens of wind farms on a clear day. It is a similar story in Denmark and I am sure it is the same in Belgium, the Netherlands and France. I would like to see what percentage of their energy needs or electricity generation is being achieved through wind farms. Why are we being so defensive in regard to the generation of electricity by wind? I would like to see a greater public debate on the matter. My gut instinct as to why they are not being successfully proceeded with is that local residents do not want them in their area.

I would like to see county councils identifying areas which are not of extraordinary scenic beauty but which are capable of catching enough of the flow of air coming in from the Atlantic to generate significant power. If they can do it in Germany we should be able to do it here on a multiple of what is being generated there from wind farms. This winter there was hardly a day when there was not a storm. In the west even in the summer there is hardly a day when there is not a storm. All one has to do is try to play golf in places such as Ballybunion or Lahinch and if one hooks or slices one's shot one may never see the ball again. Therefore, the potential exists because of our very windy climate. I do not think sufficient public relations exercises or research has gone into the matter. We should ask each planning authority in the country to identify suitable sites.

They would have to seek planning permission.

Then people could apply for wind farms in those locations and take their chances with the planning authority. Everybody is entitled to apply and to face objections. The process should be allowed go through the proper channels. No concerted effort is being made to do it in an organised, co-ordinated manner. Rather, the current situation is one of hit and miss. Today somebody told me there is a wind farm in the general area of Carrick-on-Suir. I have not seen it – perhaps it is only being proposed. How many wind farms are there in the country and what is the potential in this area?

We will be very remiss if we stay with the generating methods which have proved to be very, very dangerous. I am surprised more research has not been carried out. We are always inclined to blame somebody else. We blame the British for Sellafield and its other nuclear installations. If there is a leak at such an installation on the far side of Scotland we kick up about it. We are probably doing much more damage and I would like to see some experts tell us the truth.

I wish to mention another source of dangerous omissions which I do not think is mentioned often enough. I do not like to see telecommunications masts on hillsides as they affect the visual amenity. The one outside Dungarvan is a monstrosity which should never have been given planning permission. However, while I am not expert in physics, those antenna or masts pose no radiation hazard. There is a much greater hazard posed by sitting in front of the television—

Or blow drying your hair.

—or maybe from a mobile phone. Somebody told me it is possible to fry an egg between two mobile phones. Some of these things give off extraordinary radiation and people seem to be indifferent to them. One can feel the radiation from a television when one sits close to it.

I have no doubt there is a real and major health risk from the electro-magnetic fields which are created in the vicinity of high tension power wires and I am surprised people do not more strongly object to them rather than to the antennae, the danger from which is negligible. I am not here to chide the Minister or to be awkward, but her officials should be in consultation with the experts in the Department of Health and Children to determine the dangers I referred to in the context of the ozone layer and electro-magnetic fields.

Following discussions with the ESB and other interested parties the Minister should be able to tell us the potential for the alternatives I have mentioned. None of us likes to admit we can remember a time prior to the rural electrification scheme. I admit it, but I know others would not do so too freely. I remember when the scheme started in my area in 1947. Prior to that we were dependent on Aladdin and tilly lamps. Here and there the fortunate person had a wind charger which used wind power, so the wind farm is only an elaboration of that concept. We have come a long way since.

I have made a few pertinent points. I do not expect the Minister to have answers here and now, but I would appreciate if she would examine what I have said.

(Dublin West): I am totally opposed to the Bill which uses the word “competition” in regard to one third of the production and supply of electricity by 2002. Of course there can be no question but that competition is a code word for the beginning of privatisation. However, it is very fashionable for Governments and various interest groups not to use the straight word but rather words which in reality cover the intention. There is no question but that privatisation of the ESB is the end product of this Bill. This is becoming the norm in terms of Government policies. The Government has already privatised TEAM Aer Lingus, which was sold to a multinational company, and it is well on the way to dealing with Telecom Éireann. In this the Government is being supported by the main Opposition party while the Labour Party does not know where it stands – sometimes it is opposed to the process and other times it is not. It is a total U-turn in comparison to the position taken in the past by the Labour Party in particular, but also by Fianna Fáil, which at least in words stated its complete opposition to privatisation.

What is envisaged is a betrayal of the people and the ESB in terms of its staff, tradition and history. How was our tremendous electricity generating system established? It was not the publicans and gombeen men who dominated our society in the 1920s and 1930s who got risk capital and ventured it on risky schemes to build the electricity generating capacity, but rather the State in the name of the people and using the resources generated by the people. The State provided the capacity to generate electricity and was responsible for what was, by any standards, a huge achievement in terms of the necessary infrastructure and the huge input which was demanded at that time.

What we have now is a proposal which will see up to one third of that generating capacity sold off to private concerns. No doubt multinational companies will feature along with the home grown variety. That, in itself, is equivalent to the privatisation of one third of the generating capacity that exits.

It is an EU directive and the Deputy is running for Europe.

(Dublin West): When I get sufficient support from the people of Dublin to have voice in Europe as well as in the Dáil, I will make my views clearly known there. We fall in front of every EU directive, if it suits us, as a cover for everything.

What is envisaged down the line is privatisation of the ESB. The criteria will be profit for private concerns which raises many serious questions, particularly in relation to the environment. Will we have the spectacle of companies vying with each other to win customers and, therefore, to generate more electricity needs, thereby using up more resources to generate electricity rather than a rational approach of generating what is needed while taking environmental concerns into consideration? Will there be a totallaissez-faire approach where companies will push to burn as much oil or whatever they are using to generate electricity with no thought to the environment because profit comes first?

What about the social needs of customers when electricity is supplied privately to households if, as I have no doubt, the Government and the main Opposition party have their way? What about social needs in areas of deprivation where people run into difficulties? What will happen to those people when the bottom line is the only consideration?

It is provided for under the public service obligation.

They will get cheaper electricity; it will benefit them.

(Dublin West): I will come to that. Alternative routes could be taken to provide electricity more efficiently than by privatisation. The lesson of privatisation of the water supply in Britain, for example, has not been a happy one. I urge the Minister to study that example. Britain privatised water and other essential commodities in 1989 and there were huge price rises for the domestic customer as a result.

I have no notion of privatising the water system.

We heard enough about that.

(Dublin West): I am using it as a parallel. If electricity is privatised, why not water? It will be on the agenda, I have no doubt about that.

In Britain, the pre-tax profits and the profits generally of the companies which benefited from the privatisation increased massively in the course of the 1990s. The number of defaulters, people who could not afford to pay their bills, rose dramatically because of the new procedures and the water supply of thousands of customers was cut off. That is the unhappy experience of people in Britain and it is inevitable under a privatised system.

The profits from a semi-State company which went to the State or, in other words, to benefit the common good of the people will now go to private shareholders with no accountability to the people as to where those profits are invested, whether in this country or in off-shore accounts. That is a blow to the taxpayer and to the services which have benefited from the surplus generated by State owned and semi-State bodies.

I have no doubt cartels will move into this area further down the line. Oil and gas producing companies, for example, will join with others to produce electricity and to carve a huge sector of the market for themselves. We have, for example, the spectacle of Enterprise Oil with the huge rights which the Government gave it to explore gas and oil off the Mayo and Galway coasts. Reports of massive deposits of oil and gas are being talked down by this company. Extremely generous regimes for these companies as regards a return to the people have been agreed by Government. Companies enjoying a particular tax regime and paying no royalties, which is considerably more favourable than that demanded by Norway which has much experience in generating oil and gas, will join with others in an attempt to produce electricity more cheaply than others, including perhaps the ESB, because of the unfair advantage they have.

I remind the Minister of what the Government Chief Whip said as regards this regime on 10 April. He said that Ireland operates a generous regime for search and discovery of oil and gas and that of 110 countries surveyed by an international group, Ireland offered the lowest corporation tax and royalty rates in the world with all drilling, labour, research, production, goods and construction costs deductible against tax. Companies availing of that type of regime will undoubtedly move into a privatised electricity market and will, therefore, undercut others until they have control of the market. This is a total sell out as regards the interests of the people.

There is no doubt that the question of alternative methods of electricity supply should be developed enthusiastically and actively and should be promoted and encouraged by the Government. There are problems with the generation of electricity by wind and wave power and there are environmental concerns, etc. There are, however, huge benefits and we should move along those lines and actively pursue a policy in that regard.

I read the Minister's speech in detail but saw no reference to the effect this Bill will have on staff and staff levels in the ESB. Many people were quick and quite correct to praise the role of ESB workers during the terrible storms at Christmas time. They were heroes, about that there is no question, but I am afraid they have been sadly forgotten as regards this matter. Will the Minister outline the implications for staff or employment levels among all categories of workers in the ESB when one third of the capacity is farmed out?

The Deputy is incorrect. I spoke at length about the CCR and the workers' participation in the tripartite agreement.

(Dublin West): I read the Minister's speech. Did she spell out that jobs could be lost as a result of this?

I have had many meetings with the unions.

(Dublin West): It should be a prime concern because that is no benefit to working people. I did not notice a provision in the Bill relating to the huge indebtedness of the ESB. As a semi-State company it carries a very large debt. Is there any provision for farming out the debt? Will these companies which are so anxious to come into the national grid which was built by the taxes of the Irish people be willing to take over some of the debt? I would think not. The banks, which made a fortune from the interest on the debts of semi-State companies, including the ESB, will be anxious to finance these companies to make a killing, but will provision be made to carry debt burdens? The Irish people will be left to carry those burdens in the form of the semi-State company that will remain.

There are better alternatives to this mania for privatisation and selling off that which is in the ownership of the people, but they do not suit the vested interests that currently dominate our society and the European Union. They are the private national and multinational companies which are setting the pace in this privatisation. The alternative is to democratise State and semi-State companies and operate them in an entirely different way to that which currently obtains.

The generation of electricity is an important activity which is in the interest of everybody on the island and a board, democratically made up of workers, consumers, Government, environmentalists and other interests, should be established so that we can have open and transparent accounts in electricity generation and distribution. We should have a debate on the cleanest ways electricity can be produced, and the costs involved, while keeping it in the ownership of the Irish people rather than letting it out to multinational companies and those for whom a profit is the prime objective.

There are serious environmental considerations in this. The ESB has acted very arrogantly towards communities. Pylons and heavy duty cables were laid through the very heart of housing estates. That was not just arrogant but extremely reckless. People feel aggrieved and nervous as a result and I have no doubt it has caused serious health problems and will continue to cause them in the future. We must put in place a programme to relocate those pylons and heavy duty voltage lines, but all these issues could be addressed within public ownership and subject to democratic accountability. That would be the alternative to wholesale privatisation and a total sell-off which is the agenda of the dominant forces in the EU as well as powerful interests in our society.

It is to those interests that Fianna Fáil and Fine Gael largely dance and, unfortunately, there has been no reaction from the Opposition party – Labour.

Who is the Deputy's partner?

I welcome the Bill and the opportunity to contribute to the debate. It is as a result of the EU directives that we have to allow for competition in the production of 25 per cent or more electricity in the future. I agree with Deputy Higgins that there are unforeseen problems in the area of competition for the production of electricity. Previous speakers talked about alternative methods of production. I want to highlight a problem that is developing in many rural communities, particularly along the western seaboard. We all agree that if there are alternatives to the production of electricity other than the traditional ways of peat, coal, oil and gas, we should utilise them. However, it is difficult to reconcile the establishment by new companies of wind farms in certain high amenity areas in the west. I refer in particular to the serious objections of a small rural community in Derrybrien, between Gort and Loughrea in County Galway. It may have come to the Minister's notice.

I read about it in the newspaper.

I am delighted it has come to the Minister's notice. Two companies, Saorgus and B9, which are based in Northern Ireland, propose to establish 69 turbines in a high amenity rural community. Peculiarly, the local authority saw fit to grant these companies permission for the erection of such high density and obtrusive structures.

Is that Galway County Council?

That is right.

Is the Deputy a member of the council?

No, not yet.

Did the council grant permission?

That was democratic.

It was, but the matter was appealed to An Bord Pleanála and upheld. I have no doubt those companies will make another application. It is difficult for a local community to reconcile the fact that if one of their friends or relations made an application to build a house in this area, we know what the answer would be.

They would be turned down.

They would, but that is wrong. I realise wind farming would be a blessing in disguise for the environment and for those who have strong views on the protection of the environment and the air we breathe, but it will not be a success if these companies locate in isolated communities which do not have the power to oppose such developments. If that element creeps into what is a good suggestion for the alternative production of electricity, we will not move forward in that respect. This small rural community vehemently opposed the efforts to locate those turbines in their area, although they were not completely negative about the proposal. They suggested that the companies should erect these constructions off-shore where they would not affect the people living in the community.

We must remember that these isolated high amenity areas will require a network of power lines to transfer the electricity to the national grid. It will probably be necessary to have a transformer station in the locality. Traditionally, the ESB has been remiss in the location of transformer stations, even in urban areas where there is a high concentration of people. The company plants these ugly structures without landscaping the environment in which they are located.

Debate adjourned.