I apologise to the Minister for not being here yesterday when the Bill was introduced. I am glad to be able to contribute to a Bill that is in need of support from this side of the House; we will facilitate the speedy passage of a piece of legislation which does a straightforward and simple thing, namely raise the borrowing capacity of Bord Gáis. The Minister will have the support of Fine Gael in passing this Bill through Second Stage and further Stages. To impose a time limit of 18 December, the last day we sit before the Dáil breaks up for the year, is not the ideal way to pass legislation.
From the point of view of Bord Gáis and the Government there should have been sufficient notice that Bord Gáis was running out of money in terms of borrowing capacity. I am not sure to whom we should apportion blame, neither am I sure it is relevant who is at fault. We need to increase the borrowing capacity of Bord Gáis from €1.7 billion to €3 billion.
When one looks at its capital investment plans for the next four or five years, there is clearly a need to dramatically increase the statutory borrowing capacity for Bord Gáis for a series of reasons. Perhaps that should have been done before now and not have to be facilitated in what could be a rushed manner. If we had a whole raft of emergency legislation to pass in the next month then this Bill would come under time pressure when going through the House and committees, and that would deal with legislation in an ill prepared way.
I want to outline why I think this legislation is worth supporting. We need to support Bord Gáis as a company that has the capacity to grow, as a well run and profitable company that can make a major contribution to supporting the Government strategy to create a more sustainable energy future for Ireland. The Minister has hope and determination to try to create a new energy future for Ireland and Bord Gáis, as a State-owned company, can play a vital role in achieving that.
We should not only facilitate that in terms of borrowing capacity but also by talking to it about its ambitions and the future ambitions of the State on the need for investment in renewable technologies, more sustainable forms of energy generation and the continued roll-out of a gas network as a piece of vital State infrastructure to every town in Ireland where it is feasible to do so. For that to happen Bord Gáis needs to borrow more money; it is as simple as that.
If one looks at how it spent its money since 2002, when the last increase was given to it, it can be been seen that with the exception of one area where criticism could be targeted it has spent money rolling out a gas pipeline across the country. This has been from Mayo to Galway, a North-South pipeline between Dublin and Belfast and a pipeline between Belfast and Derry. One interesting element of Bord Gáis is its ambitions north of the Border. It genuinely aspires to be an all-island gas supply and energy company and that should be encouraged. The Dublin-Galway-Limerick pipeline which cost €400 million should also be welcomed.
It is easier in hindsight to question the wisdom of spending more than €300 million on a second gas interconnector. That has been done and paid for and we should look for positives in that, particularly in view of our security of supply should anything happen to the other gas interconnector connecting Ireland to Britain. We are facilitating the future today and it is what we should be talking about.
Bord Gáis wants to be a dual fuel provider in the energy market and is making the transition now from a supplier and transporter of gas to domestic and commercial users to an energy company that has a significant energy generation ambition. It is also moving aggressively into the renewable energy sector, whether that is potential investment in wave energy projects off the west coast or purchasing and supporting wind energy projects in a range of areas around Ireland. That is important because for far too long we have tried to facilitate competition in the Irish market to compete with the ESB in energy or electricity generation. We have spent a lot of time, effort and State resources to try to create a competitive marketplace for energy generation and supply and we have not reaped the benefits in pricing, product or service choice of that effort for consumers.
The ESB now provides only 50% of electricity generation in Ireland and we have not seen the benefits one would expect to see from a competitive marketplace in terms of pricing. One effective way to provide that future competition produces results for the consumer is to ensure that State-owned companies compete with each other aggressively in the energy marketplace. That means a proactive role for Bord Gáis, Bord na Móna and Coillte to ensure they are competing and have the borrowing capacity to compete with the ESB in terms of producing power efficiently, sustainably and at the lowest cost they can achieve. Unfortunately, despite the competitive marketplace we supposedly have created through regulation, we have not seen its benefits.
There is an obvious role for Bord Gáis in terms of contributing to security of supply. Its plans for gas storage are exciting and ambitious but will require significant investment for which it will require borrowing. Projected capital expenditure by Bord Gáis is €15 million for this year, €80 million for 2009, €194 million for 2010 and €120 million for 2011. These moneys are allocated for capital expenditure in renewable and gas storage projects. It is most important for security of gas supply to ensure we can exploit the country's offshore natural resources. We must bring that gas ashore in a way acceptable to the local populations. More importantly, we must ensure we bring it ashore in a way that can supply consistent and attractively priced gas to our networks.
We must also consider gas storage capacity here. Currently, if the interconnectors between Ireland and Britain were to shut down in the morning, Ireland would only have approximately six days of gas supply. Our economy would grind to a halt after that. We need to consider the political stability of the areas from where our gas comes and the expected lifespan of the gas fields and should take a serious look at security of supply issues and give serious consideration to exploiting domestic resources and increasing our gas storage facilities. We have large empty gas fields off the coast of Kinsale that could be used for storage. They are currently used by Bord Gáis on a temporary basis to store gas and build up pressure within small gas fields and supply gas to the market in a way that supports the security of supply objectives of the Government.
My colleague Deputy Bannon will talk about the need to roll out gas pipelines into new parts of the country, rural areas in particular, to ensure everyone, where possible, can benefit from attractive gas prices for home heating and, possibly, electricity generation through small combined heat and power micro-generation. People should also be able to benefit from the convenience offered by gas.
I will speak about the issue of pricing before I conclude my contribution, but I would like to focus on an area in which the Minister is interested, namely, the contribution Bord Gáis can make towards reducing our emissions and ensuring we fulfil our commitments and achieve our targets for the reduction of our greenhouse gas emissions. Last Friday, I and the Minister's colleague spoke at a conference in Cork organised by an organisation called Partnership for Change. The topic of discussion was climate change and the challenge Ireland faces. We face an awesome challenge.
Currently, the State does not invest enough capital in driving changes in consumer behaviour so that we move away from a carbon economy towards a more sustainable one. The reason for this is that we do not have the money to do this. We have some projects, for example, the warmer homes and greener homes schemes and energy schemes for homes and businesses. We are also changing building regulations. While all of these projects are welcome, we need to ensure there is significant investment in driving change in consumer behaviour and in the way we enjoy power and electricity. We must also invest in the linkage between power generation and the transport sector, which is the problem sector with regard to growth in emissions over the past ten years.
The reason the issue of transport emissions is relevant to this Bill is that Bord Gáis has the capacity to make a positive contribution in that sector if is allowed borrow money to do that. When the State does not have the money to invest in the area — unlike the position for the past ten or 15 years before we got to where we are now — we must facilitate successful, efficient and ambitious State-owned companies, particularly those with CEOs like the CEO of Bord Gáis who understands the principles of sustainable energy, and encourage them to borrow responsibly to drive this issue and support the policies being brought forward by the Minister, but which he does not have the capacity to drive with his Department's budget or that of the Department of the Environment, Heritage and Local Government.
Bord Gáis needs to and will compete with the ESB, not only in power generation with a conventional plant, like that being built in Whitegate which is a new power plant that will be driven by gas, but also in the renewable sector. The projected capital expenditure of Bord Gáis up to 2011 demonstrates this is an area Bord Gáis is taking seriously. It must be encouraged to continue along this line.
The role of Bord Gáis may expand even further. I would like to explore with the Minister the need to try and link the energy and transport sectors. The Minister will need to work with the Minister for Transport on this. I am aware the Minister has been speaking to companies like Better Place and others in order to try and promote electric vehicles. He should take an ambitious approach towards making a seismic shift in the way our transport system works. We should move away from petrol and diesel as our main fuels towards electricity, gas, bio-diesel and ethanol, but the bio-fuels are small players in comparison to what could be achieved by the shift to electricity and gas.
The models exist for us to make this shift. If we could make this change successfully, we could shift the emissions obligation from the non-traded sector for which the State has responsibility into the traded sector where energy generators will trade in an emissions trading scheme with other large emitting companies across Europe. This kind of radical thinking is needed if we are to meet the targets set out for us.
Bord Gáis can play a significant role in providing the power, gas or electricity that will be required to power up to 50% of our car fleet over the next ten years and to make the shift from diesel and petrol engines to electric engines. It can achieve this shift in a convenient way for consumers. This would be preferable to messing around with small pilot projects such as free parking for small electric vehicles or recharge points at St. Stephen's Green or wherever.
This must happen on a massive scale to make the kind of impact that is possible regarding Ireland's emissions. The Minister has considered the models that are being proposed in Israel, Denmark and certain regions of Australia. I refer to the Better Place model which, while it is not the only model extant, constitutes a good starting point. The management of Bord Gáis, who can see the potential in this field, should be encouraged by the Department to consider such options aggressively and ambitiously, as well as the borrowing that would be required to facilitate it.
Moreover, engines in the transport sector that are driven by gas alone should be considered. For example, why not set a target whereby, from the start of 2010 onwards, all our public transport vehicles would be operated in a carbon-neutral manner either by gas or electricity? Bus Éireann or Iarnród Éireann should then be told to make this happen. They should ensure the buses they buy thereafter all were carbon-neutral in respect of emissions. The State companies, such as Dublin Bus and Bus Éireann, should lead by example and work with Bord Gáis to try to facilitate this and make it happen.
As for gas pricing, the decision on whether gas prices will increase further in January should rule this out. I believe that before the end of this month, Bord Gáis will request that there be no increase. If this is the case, one could argue that domestic gas prices should be reduced from January onwards. I encourage the Department of Communications, Energy and Natural Resources to discuss the matter with the regulator in an attempt to facilitate such a reduction. The Commission for Energy Regulation has a responsibility to Bord Gáis and the ESB to ensure fair pricing to enable those companies to survive, prosper and make necessary investments. Equally however, it also has a responsibility to consumers and businesses to ensure energy and gas is as cheap as possible to enable Ireland to remain competitive. I am unsure the commission is taking this responsibility as seriously as it should.