Vol. 656 No. 1
6 Deputy Dinny McGinley asked the Minister for Communications, Energy and Natural Resources if he plans to issue policy directions to ComReg to reduce high mobile termination charges here; and if he will make a statement on the matter. [21482/08]
I have no plans to issue a policy direction to the Commission for Communications Regulation, ComReg, on mobile termination charges.
The regulation of telecommunications operators, including regulatory issues surrounding telephony charges, is the statutory responsibility of ComReg in accordance with the requirements of the Communications Regulation Act 2002 and the regulations transposing the EU regulatory framework for electronic communications networks and services.
As Minister for Communications, Energy and Natural Resources, I have responsibility for overall telecoms policy. My main goal in this policy is to create conditions for sustainable growth and competition that will benefit the economic and social development of Ireland and facilitate competitive services.
It is my belief that improving the market conditions to enhance competition is the best way to drive down mobile telephone charges to the end user. The more competitive telecoms services that are on offer, the better in the long run for consumers, the sector and the economy.
The European Commission has signalled an intention to review mobile termination rates, MTRs, this year. Commissioner Reding has proposed to launch a public consultation, working with the European Regulators Group, ERG, on the harmonisation of MTRs within the EU for all calls. My Department and ComReg will be actively working with the EU Commission and ERG on this recommendation.
The EU Commission is also preparing a communication to the European Parliament and the Council on the review of the functioning of the roaming regulation and its possible extension to cover SMS and data roaming, which is due before the end of 2008. Commissioner Reding has given the mobile industry until 1 July 2008 to cut the price for sending a text message or surfing the web on a laptop when roaming in the EU. Commissioner Reding has raised the prospect of setting caps on text messages and international data services if her calls to cut costs are not answered.
I am disappointed that the Minister will not use his influence to change the policy. I accept that ComReg may fear a legal challenge. Nevertheless, the Minister is the man in charge. We are talking about a potential 20% reduction in charges to the retailer. The Minister has a responsibility to act on this matter, rather than wait for the EU to take action.
The Minister referred to roaming charges. Without crossing the political border, a mobile telephone user can incur roaming charges. If one drives between Greencastle and Muff in east Inishowen, one will receive a text message welcoming one to the United Kingdom. Some years ago, the O2 network introduced a zero roaming charge for the whole of Ireland. However, this only applies to users going from one O2 network to another. Customers who, when near the Border, do not re-set their telephones to O2 find themselves in the Orange or Vodafone network and liable to roaming charges. Does the Minister have plans to get rid of roaming charges for cross-Border users if we are to comply with the legal requirements of the Good Friday Agreement?
One does not always need to issue policy directions to give one's views. There are three policy requirements in the development of our mobile networks. One needs an environment which helps companies invest. One needs innovation and services which facilitate the development of new innovative digital services that help the people. Deputy McHugh is right that we need services that are cheap, available everywhere and of higher speeds in the data end. We must push those requirements and make sure that our regulator and the industry are providing a proper service.
Commissioner Reding's proposals are not insignificant. It is right to work with the Commission as it goes to the European framework. Commissioner Reding's proposals are radical, particularly in the area of data roaming, where there is a real issue as we move towards mobile broadband services. I support the radical reduction regarding data services, which she is now talking about.
In opening our mobile networks to new data digital applications, we can make a commercial case for such networks. They will benefit in the long run. Those companies which are ahead of the game in providing digital services and mobile data networks will have a real commercial advantage and will make profits from the services they deliver to the customer.
This is a risky business for those companies. They have been engaged in what has been a profitable voice mobile business, particularly when it involves roaming. We must change the nature of that business. We need to make it more innovative which, in particular, means bringing data costs down. At the same time, we must be aware of the companies' needs to have an investment environment that facilitates the development of those innovations. It is a complex and crucial area at the centre of our telecommunications market.
7 Deputy Martin Ferris asked the Minister for Communications, Energy and Natural Resources his views on whether private companies will be able to ensure that all parts of rural Ireland receive broadband. [21352/08]
20 Deputy Joanna Tuffy asked the Minister for Communications, Energy and Natural Resources the measures taken to ensure there is not an increase in the digital divide; the proposals for an increase in support for information and communication technology in disadvantaged communities; and if he will make a statement on the matter. [21376/08]
I propose to take Questions Nos. 7 and 20 together.
The provision of broadband services is, in the first instance, a matter for the private sector. Broadband service providers operate in a fully liberalised market, regulated, where appropriate, by the independent Commission for Communications Regulation, ComReg. The role of the Government is to formulate regulatory and infrastructure policies to facilitate the provision of high quality telecommunications services by competing private sector service providers.
The widespread provision of broadband services continues to be a priority for the Government. In that regard the Department of Communications, Energy and Natural Resources has undertaken initiatives to address the gaps in broadband coverage. These included providing grant aid under the group broadband scheme and ongoing investment in metropolitan area networks.
Although broadband is now widely available, there are still some parts of the country where the private sector will be unable to justify the commercial provision of broadband services. These areas are being addressed by the national broadband scheme, NBS, which will provide broadband services to areas currently not served and will ensure all reasonable requests for broadband are met.
The first phase of the NBS procurement process, the pre-qualification questionnaire, is now complete. Four candidates pre-qualified to enter the next phase of the procurement process. Following the withdrawal of the IFA-Motorola consortium as a candidate, the remaining three candidates commenced competitive dialogue with the Department and are developing their proposed solutions to meet the Department's requirements for the delivery of broadband to the unserved areas of the country.
The Department recently received notice of judicial review proceedings regarding certain elements of the NBS mapping process. These proceedings are before the Commercial Court and due for hearing on 10 and 11 June 2008. A speedy conclusion of the matter has been requested to advance the NBS as quickly as possible. It is anticipated that a preferred bidder will be selected in August 2008, with the roll-out to commence as soon as possible thereafter.
Up to €970,000 will be distributed by Pobal this year to support ICT initiatives aimed at disadvantaged communities. Almost 1,500 public access Internet PCs are available in public libraries across the country. I welcome the roll-out of all electronic communication infrastructure by service providers, which increases competition in the market. Increased competition gives rise to better quality services, increased choice and more competitive prices, all of which enhance connectivity for the consumer.
Is the Minister aware of a recent report that, despite improvements in broadband roll-out, placed Ireland 12 out of 15 in a survey on EU broadband penetration? Despite the third highest growth rate of broadband services, penetration remains well below the EU average.
What is particularly striking is the low level of broadband accessibility in rural areas. There are still large areas of the State with no access to broadband. A year ago while Dún Laoghaire had penetration levels of 40%, the rate in Leitrim was 7% and Sligo, 10% and Leinster counties such as Wexford and Longford had similar levels. Does the Minister understand this is a serious problem for the rural economy? It has been cited as one of the main barriers to job creation in rural areas. Will the Minister agree it is, therefore, too important an area to be left to private providers and the State must play a greater role in ensuring broadband access is available throughout the State?
Will the Minister agree a universal service obligation, similar to that which applies to the telephone network and the postal services, ought to be applied to broadband services? If the market remains in private hands, private companies should be obliged to provide services even in areas where they claim no profit can be made.
The Minister's party was correct in opposing the privatisation of Eircom in 1999. The deficiencies I have highlighted are a direct consequence of this. Two years ago, the Minister supported the retaining of Eircom as a natural State monopoly to ensure access to broadband in every part of the State. Does he still hold that view?
The events since privatisation in 1999 have been unsatisfactory. The change of ownership of Eircom on a regular basis and the lack of investment, particularly between 2002 and 2004, are the reasons we are playing catch-up. It was the failure then to invest in broadband that put us down the league table. I said at the time that this was a bad business mistake because broadband will deliver key services in society.
The State plays a role and will continue to do so with the NBS. When the market claims it does not have a commercial case for providing broadband services in certain areas, the State will provide them through the NBS. That is the State funding the roll-out of broadband through private providers.
The State has other roles in, for example, the management of the wireless spectrum. It is now a key component in the delivery of a range of mobile broadband services. This asset, I believe, should be used in an innovative and flexible way to promote the development of new services. That is an area where the State is involved.
The State is involved in the use of existing State assets to support broadband access. This is done through the metropolitan area networks and, for example, in Dublin through the QBCs. New QBCs are fitted with ducting to facilitate broadband development. The State has a key role in assisting the development of broadband services through the provision and delivery of health, social welfare, education and other services.
That was such a panoramic view of public policy, I was disappointed the Minister had to stop. Last Friday the Minister stated he would not give €150 million in finance for Eircom's proposal, Fibre Ireland. Yesterday industry representatives attended the Joint Committee on Communications, Energy and Natural Resources and their understanding is that there is engagement between the Department and Eircom and that the story is not over. Will the Minister tell us what exactly is going on?
It is right for us to engage with all companies in the market. I have ongoing meetings with Eircom as well as BT and others.
Is the proposal dead?
No, I certainly hope it is not. We want to create an environment that supports investment in new networks. I would very much like to see such investment proposals progressed. However, I had to make a policy decision as to whether it is right for the State to make a direct investment in any one platform or technology. My assessment is that it is not right to do so. It is better to clarify this early so other investment decisions are not disrupted.
The Telecommunications and Internet Federation estimated that €700 million is invested each year by a plethora of telecommunications companies. It is important this delivers new services for the people. I support Eircom's investment plan to deliver broadband across the country. However, it does not need specific State investment in any one platform or technology.
What is the Minister talking about then?
It is about all telecommunications companies and how we develop our broadband system.
The Minister is saying the Eircom Fibre Ireland proposal is over and not over.
No, I am not, I am saying that the State will not invest in one particular technology. As this is such a fast-changing technological area, it is better for the market to invest in particular technologies. The State must create the proper regulatory environment to support that but it is not appropriate for the State to become involved directly.
The Jesuits reared the Minister well.
Can the Minister convince this side of the House that he will not be subject to the diktat from the Taoiseach that there will be a pull-back in some national development plan projects? As Deputy McManus said, the Minister described in panoramic terms the roll-out of next generation broadband. Will he be curtailed in his spending by this new directive on a reduction in expenditure on the national development programme?
Far from issuing a diktat, I find the Taoiseach's approach to be one of strategic thinking, good consideration and attention to detail and to the long-term interests of the Irish people.
These broadband technologies are crucial to the economic and social development of our country. The recent ESRI medium-term review report shows that one of the main areas of growth will be in the development of international traded services. These will be traded digitally so we will need a good digital infrastructure to become a knowledge economy. Both the Taoiseach and the Minister for Finance are aware of this. It is a case for detailed consideration as to how we invest the money to ensure we spend it well on behalf of the people.
No pull back.
Why were provincial towns such as Thurles not included in any phase of the metropolitan area networks? What will happen to towns like Thurles now? What is happening in the case where MANs have been put into towns but there is no connection to the outside world? When will they be connected?
I will check my information but I understand Thurles is included in the third phase of the MAN scheme. At the same time as it is intended to publish our next generation broadband report, I intend publishing the value for money report on the metropolitan area networks which assesses exactly the question asked by the Deputy. We must decide how these metropolitan area networks are used where there is not strong connectivity between the town and the network and the crucial issue of how to connect those fibre-optic rings into the house or into the business. This is a real expense. It costs approximately €10,000 at least for any short connection from a fibre-optic ring into a house and this cost makes the development of fibre broadband connection prohibitive except for a very large business.
Is this not a case of going for value for money first? Should it not be the case of putting the horse before the cart?
I refer the Deputy to the period 2002 to 2004 when the real failure happened. The development of the metropolitan area network concept came when there was clear market failure, when Eircom at the time was not investing in broadband connections. It was decided — with Fine Gael agreement — that an effort should be made to kick-start the market.
The Minister was working closely with us at that time.
I was indeed. We co-wrote a report in Opposition. One of the points we made in the report was that the networks should be operated on an open access basis, which they are, but also they should be a collaborative development with existing fibre. We continue to review it and this is the reason the value for money report is crucial and will be published at the same time.
8 Deputy Noel J. Coonan asked the Minister for Communications, Energy and Natural Resources the progress he has made on a national bio-fuels obligation scheme; and if he will make a statement on the matter. [21442/08]
27 Deputy Joanna Tuffy asked the Minister for Communications, Energy and Natural Resources if his Department has a policy on the promotion of bio-fuels; and if this policy takes account of the impact of bio-fuels on the environment. [20778/08]
54 Deputy Seán Sherlock asked the Minister for Communications, Energy and Natural Resources if the targets for bio-fuels still stand; if he will review these targets in view of growing concern regarding food prices and supplies worldwide; the percentage he estimates will be imported from developing countries in order to reach Ireland’s target on bio-fuels; the amount of bio-fuels produced here; and if he will make a statement on the matter. [21374/08]
I propose to take Questions Nos. 8, 27 and 54 together.
I will shortly launch the public consultation on the proposed bio-fuels obligation. The consultation process will enable all interested stakeholders to submit their views on the proposal. In that context, EU developments on bio-fuels policy in light of the emerging concerns in relation to sustainability will be fully factored in and will be publicly debated. Specific details of the obligation will be finalised on foot of the consultation process. The intention is to have the bio-fuels obligation in place next year in line with the programme for Government.
We are currently working to deliver the EU indicative target of 5.75% penetration of bio-fuels by 2010. Under the excise relief schemes over 50 million litres of bio-fuels are being deployed in Ireland, of which in the region of 25 million litres are produced in this country. The EU Commission's proposed renewable energy directive sets a minimum mandatory target of 10% market penetration of bio-fuels in transport in all member states by 2020. The proposal also includes an explicit framework for sustainability criteria in relation to bio-fuels. These criteria are designed to ensure that bio-fuels deployed by member states are produced sustainably and do not contribute towards the degradation of the natural environment, including the destruction of forests, wetlands or long-established grassland. The criteria will also set strict targets for bio-fuels in terms of the greenhouse gas emissions they must save before they can be considered eligible as counting towards national targets. My Department is actively engaged in the EU Council working group which is working to agree the sustainability criteria.
Currently, the feed stocks used for bio-fuels production are generally sourced on the open internationally traded commodities market with little or no information attached to these with regard to their origins. It is only through setting stringent sustainability criteria that Ireland and other member states will be able to trace the source of these fuels and obviate the cumulative effect of unsustainable practices on developing countries. I wholeheartedly support the Commission's commitment to ensuring that rigorous sustainability criteria are put in place and complied with under the new directive.
The Minister says the EU target of 10% must be met by 2020, yet there are only 16 companies in the country who have permits. A company in my area, Centenary co-op, is looking for a permit. It has planning permission and a building ready to go but it has not been granted a permit. This means the company will have to pay the full rate of 37 cent per litre if it is to go into production. The Minister has said a lot but he has said nothing really; he has just talked about consultation processes. Has he any concrete, positive or imaginative proposals for a strategy to reach that target?
The Minister earlier referred to a Fine Gael proposal as "gimmicks". This is the height of the production season for agriculture and an important time for the hauliers who must transport that produce to mainland Europe, yet they are being ripped off by the price of diesel. What the Minister did not say was that the higher the price of diesel on the international market, the more revenue this Government is receiving. The Minister is doing nothing for those people. It is no gimmick. Seven farmers a week are going out of business and the cost of production this summer will crucify them and put many more of them out of business. It is time the Minister took this issue seriously and addressed the problem for producers and hauliers.
I fully sympathise with and understand the difficulties faced by people, particularly in the haulage industry and elsewhere, because of increasing diesel prices. However, providing a short-term solution that ignores the fundamental long-term problem is not doing them or anyone else a favour.
If the Minister does not come up with a solution, those farmers are gone.
I am talking about the haulage people. We have the eighth cheapest priced diesel in the European Union. We will not serve those people well by addressing a long-term problem with a short-term solution which will not have any material effect in the long run. We are far better investing any resources we have in providing a long-term solution to what is a long-term problem.
I return to what I said earlier. The crucial issue is that we identify to the Irish people and provide real clarity as to the scale of the challenge and problem we face. A total of 60% of our energy comes from imported oil. We do not have any oil ourselves and we are not likely to have any in the next 20 years. The majority of our oil will come from the Middle East where we do not have a secure future supply. We are exposed. The response to that exposure cannot be to pretend that it is just a short-term problem and that if we reduced our tax by 1%, which would probably be gobbled up by the market anyway, we would solve the problem. We would not. We need to make fundamental changes in everything we do to address that long-term fundamental problem.
Bio-fuels represent one of the answers. One of the greatest frustrations for companies who want to get into this area has been that the tax-exempt scheme was a competitive scheme which left a lot of companies — of the kind the Deputy referred to — outside the process. They did not win in the competition, therefore they could not develop anything. They could not get the excise duty exemption. The key attraction of an obligation scheme is that it does not provide such a restriction; it is an open door to anyone who can make an economic and, crucially, a sustainable case for their production. Then there is no impediment to them in developing fuels.
On the last point, I support the Minister in his call for honesty. I do not have a problem with that and I know it is difficult but I ask the Minister to consider that it is not honesty that the poor and the elderly of this country need but rather support. The Minister cannot expect them to bear the burden he is asking of them this coming winter. It has to be a fair burden and we all must share the burden fairly. What the Minister is doing by refusing to recognise that there is a need for a fuel poverty strategy is expecting the poor to pay an undue price, which is unacceptable.
Is the Minister aware that while he is expecting the consumer to pay increased prices, he must also accept that the Government is making an absolute killing out of increased fuel prices? Is he aware that in 2007, the return from VAT to the Government coffers was €970 million and this year it will be well over €1,000 million? Is he willing to accept that this money should be ring-fenced and put to good use in terms of ensuring that we have a good bio-fuels strategy and a good meeting of that requirement?
I return to the issue of bio-fuel traceability. If I buy a steak in a supermarket I can see the farmer's name and a picture of the farm where the animal was reared, yet the Minister cannot tell me how much of our imported bio-fuel comes from the developing world. Unless that issue is addressed, all the fine words about protecting against world hunger are meaningless.
I share the Deputy's concern for those suffering from hunger and poverty, which is a crucial aspect of this matter. That is why the Department of Social and Family Affairs is spending €158 million this year on natural gas and electricity allowances. That is why my colleague, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, introduced a new scheme involving a €10,500 grant for people to upgrade their properties.
Putting in oil-fired central heating.
That is why we have practically doubled the budget for the warmer home scheme to assist people in low-income housing to cut back on the use of fuel, which is the best long-term solution, rather than trying to reduce tax which is a short-term solution.
The Deputy is correct in saying that at present it is impossible under World Trade Organisation rules to differentiate between various bio-fuels. They are sold globally and purchased on spot markets, so one does not have ultimate traceability. That is why it is important to support, as I have done, Commissioner Piebalgs and Commissioner Dimas in their attempts to establish a new system to ensure full traceability on the energy efficiency of bio-fuel crops. There are concerns that one might use as much energy in creating certain bio-fuels as one would obtain from them. The new EU system will also determine whether the bio-fuel is from a sustainable resource. It is important to support that EU initiative. It is the only way of achieving such traceability and obtaining a secure supply of bio-fuels, which we use not only to reduce our emissions but also, crucially, as a back-up stock in case of future oil supply difficulties, while helping Irish agriculture in the process.
Food imports and exports are completely reliant on the haulage industry. Excluding excise duties, there has been a 360% increase in fuel prices over the past five years. Fishermen say that 70% of their turnover is being spent on diesel for their boats, while the corresponding figure for the haulage industry is 50%. Many haulage operators have bought new lorries that are economically efficient and are adding blue liquid solutions to be environmentally compliant. Does the Minister think there is an opportunity to incentivise the haulage industry in some way, perhaps by discounting motor tax? In his response, the Minister will say that we must look at the long-term position but, as Deputies McManus and Coonan have said, there is a short-term crisis because lorry drivers are going out of business every day. What measures can the Minister take to ensure the future of the haulage industry? They will go out of business in the short term, not to mention the long term.
We are not talking about a long-term issue because it has arrived. Oil at $135 a barrel is a signal that, increasingly, supply cannot meet growing international demand.
The Minister should answer the question.
We must prepare people for the medium term.
Does the Minister have any incentives for the haulage industry?
We must prepare for a time when supplies contract.
The Minister cannot answer if the Deputy is interrupting him.
He is rambling.
Please allow the Minister to answer the question.
The State is spending significant resources on road networks to facilitate the haulage industry. We have developed this country's economy on the basis of supporting such a freight system.
What short-term incentives does the Minister have to prevent haulage operators going out of business?
Rather than offering a short-term tax break to try to solve a long-term problem, it would be better to use any resources to make a fundamental shift in how Ireland works and to prepare the country for a fossil fuel future that is very different from the one we have had over the past 20 years.
That is not an answer.
I disagree fundamentally with the Deputy's approach in that regard and do not believe it is the right solution.
They are going to be out of business.
The Minister referred to world hunger. The farming community is very resilient, resourceful and resolute, but what incentives does the Minister have for that sector? Farmers will produce the necessary bio-fuels provided they can make a living by getting a return. What action do the Minister and the Minister of State, Deputy Seán Power, propose to take on behalf of the farming community to counteract these spiralling prices which are driving up the cost of production for everything and are likely to put farmers out of business?
The Deputy is correct in saying that farmers are also exposed. There are myriad reasons why world food prices have gone up. One such reason is that climate change has affected crops in Australia and elsewhere.
The other reason is that they are not allowed to produce.
Another reason is that diets are changing in Asia. The consumption of meat has doubled in the last five years in China, which has changed the agricultural model because it takes a lot more food grain to produce a pound of meat than a pound of grain. In addition, certain food crops have gone into bio-fuels rather than the food chain and while that is not the main reason for rising food prices, it is one of them. Another reason for higher food prices is that globally farmers are finding it difficult to survive or succeed because of increasing oil prices. That affects the cost of fuel for tractors, as well as pesticides and fertilisers which are oil-based. Irish farmers are also exposed and the agricultural community must consider how it can develop in future.
What is the Minister doing for them?
The Department of Agriculture, Fisheries and Food is engaged, via Teagasc, on a number of support schemes and a range of different biomass projects. The Committee on Climate Change and Energy Security is working collectively with my Department and the Department of Agriculture, Fisheries and Food to see what solutions we can deliver to cut our emissions and oil use. It is a win-win situation and the way for our economy to go. We are only starting but we have a radical shift to make.
9 Deputy Phil Hogan asked the Minister for Communications, Energy and Natural Resources the guaranteed price support under the GATE Three scheme; and if he will make a statement on the matter. [21471/08]
The GATE Three process has recently been the subject of public consultation by the Commission for Energy Regulation, CER. I am advised that no decision has yet been made on the scale or timeframe of GATE Three.
Projects under the GATE Two process with grid connection offers and planning permission can access the renewable energy feed-in tariff, REFIT, support scheme, which is operated by my Department. The REFIT scheme supports the construction of new renewable energy powered electricity generating plants. The support programme delivers fixed purchase-prices to project developers.
The guaranteed prices remove a price uncertainty for developers arising with pool market prices in the single electricity market and the associated revenue earning uncertainty. This certainty on prices increases the predictability of future cash flows which is crucial for renewable energy investors at this time. The REFIT guaranteed prices are indexed to the annual change in the consumer price index and are capable therefore of absorbing increases in investment costs and operating costs in that range.
The public consultation process on processing GATE Three applications and the settling of any disputes on connection requests generally are matters for the Commission for Energy Regulation. I have no statutory function in the matter. However, my Department is monitoring developments closely and is liaising with the renewable energy sector, the CER and all relevant agencies through the renewable energy development group. A fully cohesive approach by all stakeholders is critical to delivery on the complex challenges inherent in achieving our ambitious targets for renewable energy.
Offshore energy projects currently get a set figure of €140 per megawatt hour, but will there be parity between offshore and onshore projects? If so, what will the rate be, assuming it will not be exactly the same? When will it be announced and what confidence can the Minister instil for the project investors? We are not talking about the super-rich, but about small farmers who got together and built their own projects. They want a timeframe for access to the grid. Can the Minister shed some light on the matter?
I do not believe that in the immediate future there will be parity between support measures for offshore and onshore for the simple reason that the environment and the capital costs of offshore are in excess of anything on onshore. It is still an evolving technology and is not yet on a commercial scale. I made a strategic decision that it was right for us as a country to seek to develop our offshore potential. If we were not, at this stage, giving a signal that we wanted to get into that business we would see investment concentrating in Germany, England, France, Portugal and elsewhere where they have given similar support prices to the one we have outlined as our support price. Failure to give a price in that range would have meant that investment would have gone to other countries. I still think, even with that support price, there is no guarantee of the transfer of capital resources and other engineering expertise into the offshore area because it is expensive and there are certain constraints in terms of shipping and grid access that make it difficult to develop the offshore.
In the future, we will develop our onshore potential first — something of the order of 4,000 MW was set out in our all island grid study as our onshore capability between now and 2020. We will then develop our offshore in tandem. It is probably an additional 2,000 MW first. The advantage of offshore, if we crack it and if we get the economies of scale down, is that it can be scaled up to a very large scale and the wind is more consistent.
The onshore business has also experienced difficulties, largely because of turbine availability, increasing turbine costs and operational and maintenance costs. We have reviewed and kept in mind our support price system. I outlined a series of changes in that regard at the recent Irish wind energy conference, including changes we would allow, such as contestable construction of the grid connection which is a major benefit for smaller developers. We retrospectively increased the price to take into account an earlier year's inflation increase. We have been working to determine a market price floor that gives some certainty to financers in the area. We are working to fine tune our support price system which is necessary because of the new single electricity market in which we operate. I believe we are getting that right. We are starting to see investment in onshore wind on the scale needed but that is only the start. We will then move on to offshore and a number of other sources.
Has the Minister done everything he was supposed to have done in regard to offshore wind? I think it was last year he announced the tariff scheme for offshore. I welcomed it at the time and I thought the industry indicated that there was the possibility of an investment of €4 billion in offshore, but we have seen no developments. When I raised this matter with the industry at a committee meeting, the response was that the scheme had not actually been introduced by way of a statutory instrument. Perhaps the Minister will comment as I was surprised to hear that.
I am sure the Minister would congratulate, as I do, the tidal energy company that has successfully connected the Irish energy company that is successfully connecting to the British grid. Would he not consider it is something of an indictment that this is an Irish company, which has successfully innovated abroad and is getting contracts abroad, yet it is not happening in Ireland? Surely that is a disappointment.
It was in January that we announced that scheme. These are projects that require very large capital investment and they take time.
I am only asking about the Minister's role.
My role is to obtain European state aids clearance, which I have not yet got, prior to the issue of a statutory instrument.
Why did the Minister announce it then if he had not got clearance?
We announced that was what we were seeking in Europe.
Has the Minister not got it yet?
I do not foresee a difficulty with it, but one must have it prior to being able to——
This is the month of May. The industry thinks it is a problem.
I do not believe it is a problem.
That is very worrying. When does the Minister expect to get it?
As soon as the European Commission comes back. We are working. Subsequent to that meeting in January, we established a renewable energy development group which is the focal point for setting out the terms and details that underpin that support price mechanism.
On the second issue, I also welcome the success of the Irish company in developing tidal technology which it is deploying to a grid connector site in the UK. As I understand it, the technology is being built in Ireland so it is delivering jobs in the Irish economy. It is an example of the type of projects we are supporting. We set out a €25 million support package to grant aid prototypes, to build a grid connection in Belmullet, County Mayo, which we are progressing, to provide a wave and marine testing facility in Cork——
When was a grid connection in Belmullet agreed?
According to the Order of Business we must conclude.
It has been set out as our policy.
The Minister is looking to the developers to agree and they are not agreed on it.
It is a site we have selected following detailed analysis as the focal site.
Is the Minister saying it has not been agreed?
Written Answers follow Adjournment Debate.
