Vol. 682 No. 2
60 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources his view on the impact that a decision of a company (details supplied) not to proceed with commercial digital terrestrial television will have on the roll-out of both commercial and free to air DTT services; and if he will make a statement on the matter. [19119/09]
61 Deputy Liz McManus asked the Minister for Communications, Energy and Natural Resources the way he will meet his commitment to be on target to launch digital terrestrial television services to 85% of the population, including the south east, by autumn 2009 in view of the collapse of the deal (details supplied) for DTT; his plans to respond to the analogue switch off in Wales 2009 which will impact immediately on viewers in the south east of the country who currently receive overspill British television channels; and if he will make a statement on the matter. [18994/09]
I propose to take Questions Nos. 60 and 61 together.
The Broadcasting (Amendment) Act 2007 puts in place a flexible framework for the licensing of digital terrestrial television, DTT, into the future. The Act provides for the establishment of a free to air DTT service to replace the existing analogue terrestrial services offered by RTE, TG4 and TV3. The analogue network is nearing obsolescence, is expensive to operate and results in an inefficient use of spectrum. Analogue availability will cease in 2012. The resultant availability of additional spectrum will yield a digital dividend which will give us economic and social benefits, such as the development of wireless broadband.
The roll-out of DTT infrastructure is well advanced and RTE Networks Limited has built a network which includes the main transmitter sites in Ireland. This represents the most difficult and costly part of the build plan. The remaining building work will largely involve upgrading the country's minor transmitter sites to provide infill coverage and to ensure outlying areas in the west, north, north west and south, areas most reliant on the analogue terrestrial service, are also served by DTT, digital terrestrial television.
The 2007 Act also provides for the development of commercial DTT services, which are anticipated to provide further choice to those who wish to avail of channels additional to the Irish free-to-air channels. The Act provides for the Broadcasting Commission of Ireland to licence commercial DTT operators, as a matter of priority. In this regard, the BCI ran a competition for three national DTT multiplex contracts in March 2008. On 21 July 2008 the BCI announced its intention to enter into contract negotiations with Boxer DTT Limited for the award of the three national commercial DTT multiplexes. On 20 April 2009 the BCI announced that Boxer DTT Limited had withdrawn from contract negotiations.
The BCI subsequently approached the second placed applicant, the One Vision consortium, and has announced that it has now agreed to enter into contract negotiations with One Vision. I welcome this development and look forward to a speedy and successful conclusion to these negotiations. The BCI has confirmed that it is committed to pursuing the development of DTT services in Ireland as quickly as possible. I emphasise the BCI is an independent body and that I have no role in its licensing process. However, I am closely monitoring the progress being made.
The United Kingdom has a schedule to switch off analogue television in different regions from 2008 to 2012 in favour of digital terrestrial television. Analogue services in Wales are set to switch off in autumn 2009. This is likely to impact viewers along the south east of the country who currently receive overspill of the UK analogue terrestrial television channels. Viewers on cable and satellite will not be affected. Both RTE and the BCI are aware of the situation in Wales and of the importance of providing DTT along the south-east of Ireland, as a matter of priority.
Since the Minister is taking two priority questions together I hope there will be real engagement on the issue rather than simply statements from both sides. My party strongly supports DTT and we support the Government in its roll-out of DTT, including commercial DTT and free-to-air channels. To give the impression that the pull-out by the Boxer consortium has caused nothing more than a need for the BCI to move on to the next best bidder, namely, One Vision, and to proceed as if there is no problem is totally misrepresenting the situation.
According to its own targets, the Boxer consortium was due to roll out digital terrestrial television before this summer. It has pulled out of a 12-year contract and the BCI is now undertaking negotiations with the next best bidder, One Vision. People must know the position. One Vision is made up of Setanta Ireland, Eircom and TV3, all good companies, but all of which are under severe financial pressure at present. Does the Minister have confidence in the process? Does he believe One Vision can now do what he expected Boxer to do considering the financing required for rolling out three multiplexes, or, will there be legal motions or a legal requirement to go to the next best bidder through the BCI? Is this a realistic attempt to roll out commercial DTT through BCI negotiations with One Vision or are we simply going through the motions? Will we be starting again in several months' time?
My second question is specific and was not referred to by the Minister, although he should have done so. What has taken place with Boxer has put Ireland under significant pressure. Is is not true to say RTE has already spent the majority of the money it intends rolling out DTT infrastructure already? It has spent €40 million to date and it anticipates that at least a further €60 million is required to provide DTT coverage throughout the country. Will the Minister insist on RTE having three or four channels free-to-air on DTT by the end of the year in the absence of a commercial operator? If he does so, would it make life financially impossible for RTE?
To correct a detail, Boxer did not pull out of the contract. It did not agree a contract with the BCI or RTE on the transmission side. A contract was not ended, there was an inability to agree a contract. That is a real concern and it is a pity. Everyone would admit the timeline involved is not ideal and we did not wish for it. We sought the signature of a contract and for the services to be in place quickly. There was a welcome development. However, at least in the process organised by the BCI there is a system where an alternative bidder may be approached.
I have confidence in the process and I do not believe the companies involved are simply going through the motions. There is no obligation on a second bidder or any other bidder to enter into such negotiations or to give an expression of interest. However, I am not surprised it has done so because, I imagine, for each of the companies involved there is a very significant strategic benefit in terms of involvement in the new DTT services.
Although the economy is in difficult straits and companies are in difficult times as a result, these are solid, profitable, effective, well-managed companies. Arqiva is the fourth company in the consortium, which the Deputy forgot to mention. This is its strategic business decision. If I were in the telecommunications, broadcasting, or network services business, as these companies are, I would view this as a significant opportunity, and, therefore, I have every confidence. Although I cannot be certain how the negotiations will proceed there is no question of a false confidence. I am deliberately not involved in the licensing or contract negotiation process. However, it is viable for us to move very quickly to get a DTT service.
It is true that RTE is under financial pressure in terms of delivering DTT services. The downturn in advertising has placed on RTE a real commercial difficulty, and this is the case with every other station at present. However, everyone must face a fundamental reality in this process. We will switch off the analogue system in 2012 because there is significant economic benefit for the country to remain on the path towards investing in a network to provide digital services and to switch off analogue. We simply cannot turn back. It would show a lack of vision in terms of the development of our spectrum on broadband and a whole range of other services. Although it is difficult for RTE, and I fully accept it is in a very difficult position financially, we are fully committed to the network and to the ability to switch off by 2012.
It is regrettable that we find ourselves in this situation. It is very important that whatever can be done is done to ensure we reach the important targets set by the Minister. However, we must first consider the record. The Minister is saying that if he were in that line of business he would be very excited to take on such a project. However, a consortium with a good deal of experience in the area walked away from the contract, which it did not sign, after eight months.
Why did the Minister and the BCI allow for such an extended period before it came to this regrettable conclusion? When the announcement was made last July, the Minister stated that he was delighted at the speed at which the BCI has pursued this activity. Will the Minister not take some responsibility for the fact that there was a long period of negotiation which ended up in the sand? Will he assure us, in terms of his rather naive confidence in the process, that there is a deadline for the negotiations underway involving the BCI? The statement made was that One Vision now has the licence. However, it is accompanied by the rather large caveat that it is subject to contractual negotiations. What is the deadline and what restrictions are in place to ensure we do not end up in eight or nine months time with an unholy mess on our hands because of a repeat of what happened before? Has the Minister any concerns related to the Boxer withdrawal? The quote recorded in respect of its decision was that is was due to prevailing and anticipated economic circumstances. Does the Minister accept such circumstances prevail regardless of who takes up the contract? Has the Minister carried out any assessment in terms of the likelihood of the ability of the second consortium to step up to the plate?
I want to get the Minister in before time expires.
I appreciate that, but——
Time is time.
——two questions have been taken together.
I represent an east coast constituency. This autumn, people in my county, and the Leas-Cheann Comhairle's, are going to lose the benefits of the overspill they have enjoyed for 30 years. The Minister has no control over that, but he has to deal with it. Will he guarantee that those people will have access to the channels they currently enjoy? Will he make that commitment?
There is much confusion about the analogue switch-off, if indeed people understand anything about what is going to happen. Will the Minister set up a public awareness forum to ensure that information is delivered to people who will be directly affected?
On our involvement, we took appropriate action. The lesson we have learned from the past is that Ministers do not get directly involved in contract negotiations.
There is no deadline in the contract.
However, we were involved in pulling together every aspect where the State has a role, be it the regulation of spectrum, the development of the network or my Department's work on the set-top boxes and other infrastructure we need for digital terrestrial television. We have worked consistently on that.
We have no set-top boxes now.
The contract negotiations were a matter for the consortium and RTE, and for the consortium and the BCI. I regret that the negotiations were not successful, that they were protracted and that they did not lead to an outcome. Since that failure became apparent, the BCI has been determined to proceed to a successful outcome. It has set tight deadlines to see whether other consortia are interested. At least we have a positive situation in that other consortia have said of their own volition that they are interested and they are entering contract negotiations. I do not want to set a timescale for that other than to say I expect it will be a short period of months rather than a long one.
It is in everyone's commercial interests to get out there with a service that still has a viable future in Ireland, as it does in every other country in Europe. Without taking a line on one platform or means of providing the service versus another, I believe the option of digital terrestrial television has a future and that the Irish public will use it. It is up to the commercial companies involved to decide on the contract arrangements.
There is an issue about the loss of spillover that will occur later this year when the UK switches off its analogue system. I have been particularly concerned about that, which is why I put time pressures on everyone on the issue. This is a technical issue, but I understand there still will be a certain amount of digital spillover, albeit not on the scale of the analogue spillover.
The Minister does not know how much there will be.
I do not have a map of the digital spillover, but I am told there will be a certain amount. As I said in my first answer, the key development is that we have built the network that will cover that section of the country. Subject to contract negotiations and agreement, it should be possible for us to get services up and running quickly so that the channels are available to people. They will not get them in the same way as they do in the current situation, where they are free and the overspill exists on the basis of geography. Obviously, the commercial multiplexes or whatever system is created under the final contract arrangements will charge for access to certain services, so the position will not be the same. However, we must have our own digital terrestrial platform and I believe that will be achieved.
62 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources if he is satisfied that energy price reductions for gas and electricity represent an appropriate price reduction in the context of international energy markets; and if he will make a statement on the matter. [19118/09]
The regulation of ESB customer supply electricity tariffs and BGE gas tariffs is the statutory responsibility of the Commission for Energy Regulation under the Electricity Regulation Act 1999 and the Gas (Interim) Regulation Act 2002. The CER does not apply tariff regulation to large users of electricity or gas. There is enough competition at the upper end of the markets to allow customers to receive competitively priced offers without the need for price regulation. The majority of these large industrial and commercial electricity users are now supplied by independent suppliers. Many of these large industrial consumers are on tariffs directly linked to commodity prices or single electricity market prices. These companies have directly and regularly experienced the benefits of falling fossil fuel prices in recent months.
I welcome the CER's decision to reduce regulated electricity tariffs by 10% and gas tariffs by 12% from 1 May following the first-quarter review of tariffs it undertook at my request in light of the economic circumstances and the decline in fossil fuel prices. The commission's decision on electricity tariffs reflects the fall in international fossil fuel prices, which follows a period of sustained increases in oil, gas and coal prices. The CER's decision on gas tariffs reflects the lower gas costs, exchange rate developments and increased sales during the winter months due to the particularly cold weather. Under the regulatory regime, these tariff decreases would have taken place from 1 October. There is still scope for a further reduction in gas tariffs from 1 October if wholesale gas prices continue to remain low. The likelihood of a further reduction in electricity tariffs is limited.
The CER is required to assess the costs underlying regulated tariffs to ensure they are fully cost reflective. Energy prices have fallen by less than the overall fall in global fuel commodities because the CER took steps in 2008 to ensure that when international oil, gas and coal prices were increasing rapidly, customers were insulated from the worst effects of the spike in fuel prices.
Additional information not given on the floor of the House.
The CER's approach in 2008 took account of the emerging difficulties in the economy and the negative impact of large-scale price increases on business and consumers, including vulnerable customers. With the dramatic increase in gas prices, we faced potential electricity and gas tariff increases in the range of 30% to 40% from 1 October 2008. In order to prevent such dramatic increases the CER decided to adopt a two-phase approach to its pricing process. This involved a lower increase in the summer of 2008, which meant selling electricity and gas below the full estimated cost for that period. These costs then had to be recovered in 2009, but the potential price increase was offset by falling gas prices and an ESB rebate of more than €300 million negotiated by the CER for all electricity customers.
This approach meant that when fossil fuel prices were increasing exponentially in early and mid-2008, the CER decided on an increase of 17.5% in the price of electricity and 20% in the price of gas. These increases were significantly lower than the wholesale price of gas would have suggested. In contrast, some of our European neighbours saw much steeper price increases.
The comparatively high energy costs in Ireland have been an acknowledged issue for the enterprise sector for a number of years, despite the overall relatively low energy intensity of Irish industry. This concern has been exacerbated for business in the current economic climate. A range of policy actions are underway that aim to mitigate energy costs in the medium term as well as reviewing all possibilities to reduce the extent of the price differential for the enterprise sector. This work is of the utmost priority for my Department, working with the CER and all key players, in the very challenging economic environment for business.
When the Minister leaves office and his record is assessed, this will be his biggest failing. We are losing jobs by the week and international companies are openly saying they are leaving Ireland because of the cost of energy. The 2008 figures from neutral assessors of Ireland's energy prices show that only Cyprus has higher prices than Ireland for industrial electricity. Industrial electricity prices in Ireland have moved from being the European average to being 50% higher than that, and the position with household electricity prices is no better. Only Italy has higher prices, and prices in Ireland have moved from being nearly 30% below the EU average to being almost 30% above it. A great deal of this has happened on the Minister's watch. The position with gas prices is not much more optimistic.
There are specific things the Minister and the Government can do to reduce electricity prices and to ease the pressure on nursing homes that are turning off heating because they cannot afford the electricity bills. Is it the Minister's agenda to keep electricity prices high in order to try to reduce usage and encourage energy conservation as part of the climate change agenda or is he serious about trying to bring down energy costs in Ireland? A 12% reduction in gas prices between now and September is nothing like the reduction we need. According to the CER, wholesale gas prices account for 60% of retail gas prices for households in Ireland. Wholesale gas prices in the UK have gone from £1 per therm to 25p per therm in the past two weeks, but all we get is a 12% reduction in price. On electricity, we are getting a 10% reduction in price, but the Minister misled the House today. He said we are seeing a reduction in ESB prices because of a reduction in fossil fuel prices in the past year, but that is not true. The ESB has said, and the CER will confirm, that the electricity price reduction this month resulted from the ESB reducing its network and transmission charges. It has nothing to do with fossil fuel prices coming down.
When will the Minister take seriously the issue of energy prices as well as his other agenda, which I support, on climate change?
I utterly refute the nonsense the Deputy is peddling, that those of us on this side of the House want higher energy prices. That is ridiculous. It has no foundation in fact. It is pure political spin. Everything we are doing is to achieve sound energy policy, to bring prices down and to help Irish industry.
So why are our prices the most expensive in Europe?
I want that just as much as Deputy Coveney.
The Minister does not.
Excuse me. That is ridiculous.
In two years in his job, the Minister has never said our electricity prices are too expensive.
Everything we are doing is aimed at reducing prices in line with sound energy policy. It was intervention from the political system on this side which caused the regulator and the ESB to work towards achieving these reductions.
After we hounded the Minister for a month.
The competition we are achieving means industrial users have seen an approximate 25% decrease in electricity prices.
Households are getting 10%. That sums it up.
We have a competitive electricity market which is due to sound energy policy rather than soundbites that mean nothing and have no substance. The development of renewables is a way of bringing down electricity and gas prices, as well as tackling climate change. The Deputy does not seem to get the message that tackling climate change does not have to be expensive; it saves us money.
We get it. The Minister can do two things at the one time.
Please allow the Minister to continue without interruption.
We are meeting our targets for the development of renewables, including wind energy project connections. While the United Kingdom has languished with low single figures, we are at a figure of up to 13% and will meet the 15% target next year.
Consumers will pay.
If one talks to people who know something about what is happening with electricity prices, they say this is bringing down prices. We have introduced a single electricity market — an all-island system. This gives a clear indication of what is happening and shows that prices are coming down due to a more competitive market with increased use of renewables and by having a Government which knows something about energy policy. This means lower prices, more competition and clean supplies.
As usual, we do not get a clear statement from the Minister that electricity is too expensive in Ireland.
I could not have been more clear.
The Minister says we are achieving our targets and that competition is working, which is rubbish. Competition is not working in Ireland, which is why, compared to other countries — our competitors — Ireland is becoming more expensive. The party represented by the Minister of State, Deputy Conor Lenihan, should realise this and take the Minister in charge, if necessary, because his other agendas are resulting in job the closure of businesses that should not be closing and job losses. Energy is too expensive in Ireland for both businesses and households.
I want cheaper energy supplies; as such I am committed to bringing down energy prices. The way to do this is by developing renewable energy sources, which represent the cheapest, most secure and cleanest supplies we have.
There are things we can do immediately.
To do this, we need to build a grid. Instead of opposing it, which the Deputy's party has done consistently——
No, it has not.
——it might support the policies we are adopting which would bring down prices and help the country by having a vision for the future, rather than focusing on short-term political gain.
63 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources if he has read the Drive to Zero electric car document published by the Joint Committee on Climate Change and Energy Security; and if he will implement the recommendations of the report. [19121/09]
I have read with considerable interest the report of the Joint Committee on Climate Change and Energy Security on electric vehicles and I am grateful to members of the committee for their valuable contribution. The recommendations made in the report are being considered in the context of our work to implement an overall strategy for electric vehicles.
Much of the report resonates with the Government's strategic initiatives to ensure Ireland is ahead of the curve in the electrification of transport. Together with the Minister for Transport, I have announced plans for the large-scale deployment of electric vehicles in Ireland. The target of 10% of all vehicles to be powered by electricity by 2020 will represent up to 250,000 cars on Irish roads in the next 12 years. This scale of deployment of electric vehicles will have a very positive impact in reducing carbon emissions and imported oil consumption in the transport sector.
Initiatives to advance the strategy are under way. The interdepartmental-agency task force is meeting regularly to progress the framework for deployment of electric vehicles in Ireland. It is chaired by my Department and comprises the Departments of Transport, Finance, the Environment, Heritage and Local Government and Enterprise, Trade and Employment, SEI, the ESB, IDA Ireland and Enterprise Ireland. As the Deputy will appreciate, good planning and preparation are vital to ensure our ambitious targets in this area are met. Accordingly, the task force is developing the options and timeframe for putting in place the necessary infrastructure and other arrangements for the national roll-out of electric vehicles. We will also take full account of global developments as the technologies mature. The task force will shortly report its initial findings and advise on next steps.
Three working groups have been set up under the aegis of the task force, namely, the transport-infrastructure group, the fiscal group and the enterprise group. The reports of these groups will critically feed into the task force's main report. Employment opportunities, the costs involved in providing car charging infrastructure and all associated issues, including funding options, will be addressed in the report.
The ESB and SEI have been working intensively as part of the task force and visited Israel and Denmark last year to study their approaches to fast-tracking the deployment of electric vehicles. I am satisfied there is sufficient expertise available to the task force and in the key agencies to enable planning to be effectively achieved.
The recently concluded memorandum of understanding with Renault-Nissan will ensure Ireland will be one of the first countries to be supplied with both Renault and Nissan electric cars. This represents a major opportunity for Ireland. Under the memorandum of understanding, ESB Networks will be able to avail of data on developments in electric vehicles which will inform our consideration of optimum infrastructure, support mechanisms and the potential benefits accruing. The role of the Government is to develop and consider options for the establishment, operation and maintenance of an electric vehicle charging infrastructure network in Ireland, together with considering measures to develop a market for the vehicles. The memorandum of understanding does not convey exclusive rights in the provision of electric cars. Ireland is open for business to all manufacturers and I look forward to building relationships with all global players in the sector.
I hope the report is evidence that what the Minister said in response to our last exchange, namely, that my party was in some way seeking short-term political gain in the energy sector, is nonsense. We strongly support a very aggressive and ambitious roll-out of electric vehicles. I ask the Minster to accept that what he said in a heated exchange a few minutes ago was nonsense. He can ensure cheaper electricity while at the same time pursuing an aggressive climate change agenda, a point he does not seem to accept.
This is an all-party report. Does the Minister accept the committee's conclusion that we should be talking to those in Northern Ireland, in particular the Northern Ireland Assembly, to try to pursue an all-island project for electric vehicles? The situation will be very difficult in Border counties if we do not do this, particularly if there are hundreds of thousands of electric vehicles and a proper charging infrastructure south of the Border but none north of theBorder.
Will the Minister ensure those responsible for providing the tens of thousands of charging points which will be required in Ireland to facilitate electric vehicles on a grand scale, not just pet projects in different parts of the country, will ensure an open tendering process that will allow all companies which wish to tender for this business to do so? Perhaps the ESB will win the tender competition because it has the capacity to do so — who knows? However, we should not create a monopoly by stating the ESB should roll out this infrastructure. We should open it up to public tender to ensure other companies will also have an opportunity to put the infrastructure in place.
Will the Minister outline the membership of the task force, including the representatives from private industry?
I welcome the report of the Oireachtas committee which is progressive and in line with our thinking. I also welcome the suggestion of close co-operation with Northern Ireland and agree with the Deputy that it makes sense for us to develop this as an all-island project. As an island nation, we have an advantage in that there are certain distance limitations which mean that, as battery technology develops, it may be easier to deploy here than in Texas or some other location.
In terms of supply company exclusivity, in all of what we are doing there are no exclusive arrangements. While we have entered into memoranda of association with the ESB and Renault-Nissan, this in no way precludes other motor or supply companies which may wish to deploy the infrastructure. It is important to recognise that having access to vehicles was a major step forward because we now know that in a very short timeframe of approximately two years, standard vehicles, including family cars, will be available. It is also important that the ESB has committed to this and will create jobs in installing access points. However, that is not to preclude another company applying on whatever basis with regard to the billing system and the power supply system chosen.
I gave the list of members of the steering committee. This is a Government initiative and it primarily involves departmental, agency and State company representatives. That is not to stop bodies such as SEI which has a central role working with other private operators. This is not an exclusive arrangement. It is frontier technology. With Israel, Denmark and Portugal, we are developing an infrastructure that has not yet been tried or tested. It is a new infrastructure for the 21st century; therefore, this is only the beginning. It will involve a huge number of companies and has huge economic potential for Ireland, a country that does not have any oil but does have significant renewable resources.
I apologise that Deputy Coonan is not present to take Question No. 64. It is my fault, not his, that he is unavoidably absent.
Question No. 64 withdrawn.
