Dáil Éireann debate -
Thursday, 13 Dec 2001

Vol. 546 No. 5

Adjournment Debate. - Energy Generation.

Mr. McGrath

I thank the Leas Cheann Comhairle for allowing Deputy Penrose and me to raise this important issue. The closure of the peat generating power stations has resulted in the loss of 214 jobs in the ESB since 1986. Rhode power station will close in the next four years with the loss of a further 101 jobs. Bord na Móna has lost more than 1,000 jobs since 1986 giving total job losses of 1,326 in that period. Most of these job losses have been in the midlands, in towns such as Rochfordbridge, Milltownpass, Tyrellspass, Kilbeggan, Tullamore and Edenderry, which have all suffered badly, both economically and socially, due to the losses. This loss of work opportunities in areas so dependent on Bord na Móna and the ESB has contributed to a reducing population, migration of young workers and a lower average income base, as defined by the CSO statistics.

The Rhode power station, with its 101 jobs, could have an extension of its generating life. When we consider the cost of paying wages and partially refurbishing the plant, and contrast this with the cost of redundancy payments, public service obligation payments, plant wind-down costs and rehabilitation costs, as well as possible unemployment costs, it may well be economically viable to keep the plant generating into the electricity grid for a further three or four years. If we consider the social obligations of those two large semi-State companies, then the project is certainly viable for a further short number of years.

I call on the Minister of State to intercede with her senior colleague, the Minister for Public Enterprise, to ask the boards of ESB and Bord na Móna to urgently consider proposals put forward from the Rhode action group and to give these proposals special consideration. Indeed, the midlands area has taken a substantial hit from job losses in these two State companies and it is incumbent on this Government and Minister to endeavour to find new jobs. Here is an opportunity to postpone the possible loss of 101 permanent jobs and stop the haemorrhage of job losses in the midlands area.

Mr. Penrose

I thank Deputy McGrath for sharing his time. The existing ESB station at Rhode, which employs 101 people currently, is designated to close in the next four years. This, in itself, will be a big blow to the economy of the midlands as many of the workers involved are drawn from the north Offaly and mid and south Westmeath areas. Indeed, when this station closes eventually, it will represent a loss of income of about £3.5 million for the towns and villages where these workers live and spend their income. It will represent a significant blow to the areas involved. The State will also lose significant payments in terms of PAYE, PRSI and payments of the statutory redundancy associated with such closure. Furthermore, there will be the additional costs associated with the payment of unemployment benefit, as Deputy McGrath said, so the immediate closure of the station will have significant cost implications for the Exchequer. Those costs must also be considered in the overall calculation as to why it makes good, sound, prudent and, indeed, economic sense for ESB to give a commitment that it will reopen the station as soon as possible.

Under the tripartite agreement between the Government, management and unions, it was agreed that the public service obligation would be paid for a period of five years from February 2000 and, therefore, this makes it possible for the station to run until 2005. The agreement also facilitates a situation whereby the closure of the Rhode station would dovetail with the opening of the two new stations in Lanesborough and Shannonbridge. Indeed, the question arises as to whether these two stations will be completed within a particular time period.

The Minister will be aware of the need for the emergency generation of electricity which has been the subject of much discussion in the past few years and which this year is costing £26 million in order to generate 160 megawatts of electricity. I understand Rhode power station could be repaired at a cost of about £3 million and this would generate about 40 megawatts of electricity for the national grid. The estimated cost of repairing unit three at Rhode includes a yearly maintenance cost of £400,000. The repair of the fans would cost £0.5 million which would have to be spent anyway. There is also the cost of removal of asbestos from the boiler. When added together, the total cost of repair following the accident is probably less than half the proposed figure. These costs in comparison with the cost of mobile generators to replace 40 megawatts are up to £4 million cheaper. What must also be included in a cost calculation is the necessity of having to import alternative sources of energy which will occur if we write a generating station such as Rhode out of the national network.

The premature closure of Rhode power station would also have serious consequences for Bord na Móna and the staff of Derrygreenagh works, as Deputy McGrath said. It will also have significant impacts on communities and business at Rochfordbridge, Tyrrellspass, Kinnegad, Kilbeggan, Milltownpass, etc. In relation to Derrygreenagh, a significant number of seasonal workers have already been laid off a lot earlier than usual – up to 100 have gone. When Rhode closes down, there will be a further loss of 30 permanent employees and 50 to 60 seasonal employees. Bord na Móna has invested heavily in bog development, infrastructure and plant and machinery to ensure peat is supplied to the Edenderry station concurrent with supplying a significant amount to Rhode power station. It will incur significant losses.

There has been enough prevarication and side-stepping. The board of the ESB has had the external energy report, which was furnished to the Health and Safety Authority in November, and which should now be back with the ESB. The ESB must make a positive decision to reopen this unit three station at Rhode at its January 2002 board meeting. A failure to do so will spell a gloomy economic message for this part of the midlands.

Ms Hanafin

I thank Deputies McGrath and Penrose for raising this matter. They will be aware that the operation of ESB power generating stations, including Rhode, is a day to day operational matter for the board and management of the ESB. It is expected that the board will be in a position to take a decision regarding Rhode early in the new year.

The situation in relation to the power station is that a tube failure occurred in the boiler on 12 May 2001 while returning to service from a seven week outage. There was significant consequential damage, including the rupturing of a number of additional tubes and a breach of the brickwork on the furnace wall.

Immediately after the incident, the ESB set up its own internal investigation team and notified the Health and Safety Authority. Given the seriousness of the incident, three sets of investigations were put in place. External experts have carried out a review of the plant and reported their findings. The ESB has made this report available to the Health and Safety Authority as that authority is currently carrying out its own review. The authority report is expected later this month. In addition, ESB engineers and local station staff are examining all options to facilitate a safe return to service. As I am sure the Deputies will appreciate, it is crucial for the board of the ESB to fully investigate the causes of this incident and to give full consideration to all the options regarding the future operation of the station.

I assure the Deputies that ESB board decision will take full account of all the particular aspects of this case, including the provision of electricity generating capacity and employment consequences in the midlands region.

On a wider level, the job losses from Bord na Móna and ESB have been addressed by a number of local bodies coming together with representatives of Offaly County Council, Offaly County Enterprise Board, Bord na Móna, ESB, North Offaly-Oak Partnership Task Force and West Offaly Partnership-Task Force. A county enterprise board fund is being established to address the issue of attracting investment and employment opportunities into the areas affected. The Department of Enterprise, Trade and Employment has approved a special allocation of £100,000 to the Offaly County Enterprise Board towards the setting up of this fund which will be augmented by contributions from the other parties mentioned above. This initiative is at an early stage and confirmation-negotiations on funding from other bodies is currently taking place.

The Government, through the enterprise development agencies, is committed to ensuring the most equitable distribution of job opportunities and to encouraging the establishment of industry in the regions. A key factor in the achievement of this objective, and a primary objective of this Government, is the creation of a business environment in which job opportunities continue to flourish and, equally, in which job applicants have the requisite skills requirements. In line with commitments contained in the national development plan, the enterprise development agencies are strongly focused on achieving this aim and resources are being deployed to reflect this new focus. The 12.5% corporation tax rate and initiatives on matters such as education, physical infrastructure and technology under the national development plan, allow Ireland to remain competitive both in developing indigenous industry and securing inward investment projects.

To ensure that the objective of balanced regional development will be achieved, IDA Ireland has, over the past two years, radically changed its policy with a commitment to delivering half of all new greenfield jobs into the Objective One regions, of which Offaly is a part, in the coming years.

The results for the year 2000 showed that there were 589 new jobs created in IDA Ireland client companies in the midlands region, resulting in a net gain of 105 jobs, which reflects how the agency's strategy is beginning to show results. In the past 18 months, the agency has succeeded in attracting a number of companies to the county, including Sanirish, Continental AG, Flextronics and Grafica Zannini, which between them employed over 330 people at the end of November 2001. Grafica Zannini has completed the construction of its building and recruitment has now started.

The Tánaiste and Minister for Enterprise, Trade and Employment announced in May 2001 that GeneMedix would establish its European manufacturing centre, incorporating development and technical support capability, in the 21,313 square foot advance facility on IDA Ireland's Srah Business Park in Tullamore. The project will involve investment of 7.2 million and is expected to create up to 55 jobs during the initial start up phase. IDA Ireland continues to market Tullamore, Birr and Edenderry in County Offaly for suitable inward investment projects. In the past year, there have been 21 site visits by IDA Ireland clients to Tullamore and ten site visits to Birr. IDA Ireland is represented on the Tullamore inter-agency task force which was set up and it is also a member of the Offaly County Development Board. IDA Ireland transferred additional posts to the regions and the staff complement in Athlone has gone up.

Enterprise Ireland and the Offaly County Enterprise Board are also actively promoting the development of indigenous enterprises. Enterprise Ireland supports 28 client companies in the east Offaly area alone, excluding Tullamore, employing almost 650 people at the end of 2000.

It also recognises that some communities require specific assistance to develop and fulfil their potential. The agency highlights the strengths of the midlands region. The area has the benefit of the Athlone Institute of Technology and of improved access to attract new overseas investment into the area. It has the benefit of being recognised in the NDP with its roads, railway and air services, etc. The IDA will keep in close contact with the relevant infrastructure providers to ensure the midlands area continues to be developed.

The Tánaiste is confident that the ongoing co-ordinated job creation efforts by the industrial development agencies in County Offaly will bring positive results to the area and help to offset any effects on the region due to the current difficulties being experienced by the Rhode power station.