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Dáil Éireann debate -
Tuesday, 5 Apr 2011

Vol. 729 No. 2

Other Questions

Programmes for Government

Barry Cowen

Question:

28 Deputy Barry Cowen asked the Minister for Communications, Energy and Natural Resources if the conditions to be agreed with the International Monetary Fund in order to allocate funding for NewERA, as stated in the Fine Gael election manifesto, have been agreed and if not, when this will happen. [5791/11]

Niall Collins

Question:

30 Deputy Niall Collins asked the Minister for Communications, Energy and Natural Resources the number of jobs that will be created by NewERA and the interaction he will have with other Departments in its implementation. [5789/11]

Niall Collins

Question:

40 Deputy Niall Collins asked the Minister for Communications, Energy and Natural Resources the amount that will be invested under the NewERA plan; and the proportion that will be provided by the National Pensions Reserve Fund. [5790/11]

Dara Calleary

Question:

241 Deputy Dara Calleary asked the Minister for Communications, Energy and Natural Resources the role he will play in developing NewERA; and when this process will begin. [5788/11]

I propose to take Questions Nos. 28, 30, 40 and 241 together.

Under the NewERA plan, the Government intends that the State companies concerned will make significant investments in key priority areas including energy networks, bioenergy, broadband, water and forestry. These investments will be commercially financed and will be off the Government balance sheet. The investments will also be set in the context of a new national development plan to be drawn up by the Government for the period 2012-2019.

I will consult the Ministers for Finance and Expenditure and Public Reform as the NewERA plan is developed to ensure compliance with the IMF-EU economic adjustment programme for Ireland. The potential for participation by the National Pension Reserve Fund commission in the NewERA infrastructure investment programmes will be pursued with the Minister for Finance and the NPRF commission. The range of existing and planned investment programmes under the NewERA plan will contribute to maintaining jobs and economic recovery in the short term. The NewERA plan will also underpin jobs and growth in the longer term by creating the necessary infrastructure to support enterprise investment.

As the Minister responsible for the NewERA plan I am working with the Ministers for Finance and Environment, Community and Local Government and all relevant ministerial colleagues to ensure collective delivery.

What is the next step in the process? The Minister of State outlined the investment programme being funded under NewERA, which will absorb money from the National Pensions Reserve Fund and, according to the programme for Government, it is also proposed to finance the investment programme from the sale of certain State assets. Up to €2 billion is targeted through such sales. The programme also states, however, that assets will only be sold when market conditions are right and when adequate regulatory structures have been established to protect consumer interests. We do not know when those conditions will be right for any such sales. In the short term, will the initial investments be funded through the National Pensions Reserve Fund and has the Minister identified how much money will be available after the bank recapitalisation for investment through that channel?

I said in my reply that investments would be set in the context of the new national development plan, which will be for the period 2012 to 2019. While everything must be done it must be done at the right time. The Deputy is right; there can be no fire-sale of assets and that is made clear in the programme for Government. Another report by Mr. Colm McCarthy is yet to be published and there are issues in that surrounding the sale of some assets that I hope will bring in €2 billion. Those assets will be non-essential and will not form part of our critical infrastructure.

Is the establishment of the NewERA authority the first step envisaged in the whole project?

The NewERA entity will be established through legislation, which takes time. It is important that we get this right and consult our colleagues in Government, the Civil Service and the State and semi-State bodies. It is vital to our national recovery that we take the time to get this right and put the investments in place, taking time to sell those non-essential State assets at a time when we will get the greatest benefit from them. The drive and energy will initially be directed towards water infrastructure and broadband. As we move through the programme, it is hoped we will create the thousands of jobs needed. The key is to do this right and ensure the legislation is signed off so we can move forward together. If we do not do that, it will not lead to job creation that is needed.

On the interaction with other Departments, have there been any discussion with the Department of Transport, Tourism and Sport on access to public amenities like Coillte forests, such as at Lough Key in Boyle, or the cut away bogs owned by Bord na Móna? As part of the NewERA project there is public concern that existing access to State-run forests owned by Coillte and to cut away bogs may be threatened.

At present Coillte is under the control of the Department of Agriculture, Fisheries and Food and the Minister in that Department, Deputy Simon Coveney, could answer that question properly. I can state with clarity, however, that there is no question of not having access to existing and potential recreational amenities of the country. This is not anything other than protecting what we have, particularly our amenities. Those are what drive the tourism agenda, recreational amenities, fisheries and other attractions, which will never be changed but we must create jobs. That is our priority. By identifying and keeping those areas as part of our plan, it will grow the jobs that we so urgently need.

On a number of occasions, the Minister of State used the word "essential" about State assets but no one has defined what is essential and what is not. Will it be possible to advise the House on what is essential and what is not?

NewERA will allow enormous scope for a new form of community co-operative to engage with this programme. We must look at European legislation on the use of such co-operatives, which might not face the same inhibitions as State companies. I ask the Minister of State to consider that as one way to move NewERA forward.

I am happy to take on board the Deputy's suggestion. Perhaps after this we could discuss how to start that process and consult the bodies that must be involved in it.

I am talking about the sale of non-strategic State assets. Those will be defined by Colm McCarthy and others in the report that will be produced in the very near future. I am sure we all have a view on that. The collective effort of all concerned, including all sides in this House, will make this work. It is the only way we can rescue the country from the awful place it is in now. I welcome and support any suggestions and will meet the bodies mentioned by Deputy Colreavy, as well as taking on board Deputy Naughten's comments.

Deputy Colreavy asked the question I wanted to ask: what exactly is a non-essential or non-strategic State asset? This must be defined. This group of 17 illustrious people, whoever they are, although I know they are all very wealthy, with significant business interests——

The Deputy has a few bob himself.

——is recommending the selling of ports and harbours. Are those non-strategic assets? I ask this question because a mantra has been repeated by Fine Gael representatives in the debate on how to deal with unemployment that the State does not create jobs. What then are Bord na Móna, ESB, the health service or the ports and harbours? They create useful employment. The State can and should create jobs. Perhaps the Minister of State can give us an idea of what a non-essential or non-strategic State asset is because I am worried any of these things could be considered non-strategic.

As an example, if wood grows on a piece of land, it can be sold but the strategic asset of the land is held on to. I hope the Deputy can accept that.

Did the Minister of State get that from the Minister?

We are working together.

Ministers could be defined as non-essential assets.

Electricity Generation

David Stanton

Question:

29 Deputy David Stanton asked the Minister for Communications, Energy and Natural Resources further to Parliamentary Questions Nos. 53 and 61 of 30 November 2010, the number of customers currently on the ESB micro-generation tariff; and if he will make a statement on the matter. [6636/11]

David Stanton

Question:

34 Deputy David Stanton asked the Minister for Communications, Energy and Natural Resources the initiatives in place or due to be put in place by him to encourage micro-generation; and if he will make a statement on the matter. [6367/11]

I propose to take Questions Nos. 29 and 34 together.

I am informed there are 364 customers on the ESB microgeneration tariff to date, representing a total connected generation capacity of just in excess of 2 MW. The technologies being deployed are wind turbines, solar installations and small-scale hydro turbines. ESB Networks is currently processing 18 customer applications and these are at different stages of completion. ESB Networks agreed in 2009 to provide the necessary import and export metering free of charge to the first 4,000 domestic microgeneration customers. ESB Networks also provides a support payment of ten cent per kilowatt hour for those eligible customers for the first 3,000 kW hours exported back to the grid annually for a period of five years.

The take-up has been disappointingly low despite an overall tariff rate of 19 cent per kilowatt hour being available. This compares to the wholesale electricity price, which is currently averaging approximately seven cent per kilowatt hour. Currently, ESB Customer Supply, now rebranded ESB Electric Ireland, is the only electricity supplier in the market offering microgeneration tariffs to domestic customers who generate up to 11 kW.

The Sustainable Energy Authority of Ireland, SEAI, is currently completing an 18 month microgeneration pilot scheme and is monitoring the performance of the 42 installations involved. Those participating in the pilot have been able to avail of the tariffs offered. The findings from the pilot will provide valuable data with regard to microgeneration and which will inform policy decisions on how best to stimulate the sector. In line with the programme for Government commitment, I have asked my Department and the SEAI to finalise their cost-benefit analysis work on a feed in tariff programme for microgeneration. Any such programme must be fully cost effective and take into consideration the overall cost implications for all electricity consumers.

I thank the Minister for his response. When does the Minister expect the SEAI study to be completed? Is the ESB carrying out a review of this as well? Has the Department identified any barriers or why, as the Minister stated, there is such a low uptake in a scheme which could have great potential? For example, has anyone considered the fact that VAT can be reclaimed on diesel generators but not on wind generators? Would this assist if it were put into practice? Is there any reason it should not be allowed? Is it not an anomaly that someone can reclaim VAT if he or she generates electricity on a farm using a diesel generator but not if he or she uses a wind generator?

I suspect Deputy Stanton knows more about the detail of this than I do and I am struggling to understand the barriers and obstacles to which he refers. For example, I am aware that the single electricity market price paid for electricity is approximately €60 per megawatt hour. The ESB pays microgenerators approximately three times this amount, that is, €190. Obviously, this is a barrier from the point of view of the State in the sense that if a subsidy is required — this signals that it is required — it is a significant matter. I hope that I will have the conclusions of the SEAI report before the autumn. It is analysing various scenarios related to levels of feed in tariffs which would be required.

As the Deputy is aware, the REFIT, renewable energy feed in tariff, system operates for large-scale projects. It is funded by public service obligation on all consumers. We have made a commitment in the programme for Government to provide a REFIT system for microgenerators for the reasons Deputy Stanton has hinted. However, as the programme for Government states, "The tariff will not be significantly above single energy market price for electricity". We must wait and see what the conclusions will be. Since the scheme announced has the capacity to accommodate 4,000 participants, the level of uptake is disappointing. Is it the case that the level of subsidy is inadequate? How much further can one go? The contribution of renewables is critical. If one were obliged to increase the subsidy, would it be the most economic way of feeding back into the grid? We must wait and see. I was surprised to learn that there have been only 364 applicants of the scheme as it stands.

What way is the scheme being marketed, sold or put out to people who might be customers? I have seen no marketing for it anywhere. Would the Minister examine this and consider a public awareness campaign such that people could know a little more about the scheme?

The Minister may not have this information but he might get it to me. Is it true there was a problem with generating at the 11kW level? I understand the SEAI was examining this earlier in the year. Perhaps the Minister will come back to me and inform me whether this issue has been resolved or whether there has been any further information issued from the SEAI.

The Deputy may well have a point about the effectiveness of the marketing of the initiative but one should be struck by the number of correspondents who communicate with the Department about it. It would appear that there is a wider level of interest than there is of uptake and I am unsure why this is the case. There is regular e-mail traffic to the Department from individuals seeking information on it. The ESB is the only supplier and no other supplier has chosen to enter the market. I suppose this is because of the cost of the supports involved. Nevertheless, only the ESB is in place and I suppose to some degree this constrains it. I will certainly examine the point raised by the Deputy and come back to him on it.

Departmental Expenditure

Question:

31 Deputy Michael P. Kitt asked the Minister for Communications, Energy and Natural Resources his budget and his priorities for 2011. [6650/11]

The budget in my Department is set out in the Revised Estimates for public services 2011. The total gross Vote provision is €475 million, comprising €336 million for current expenditure and €139 million for capital expenditure. Of the gross current provision, a sum of €222 million relates to the Vote neutral broadcasting licence fee receipts. This is money which passes through the Vote as a receipt with corresponding expenditure. When this is netted off the gross provision, the Department's 2011 budget is €253 million, made up of a €114 million current allocation and a €139 million capital allocation.

My Department's expenditure priorities in 2011 include the energy efficiency programmes amounting to €69.4 million — the bulk of expenditure in this area will be on the national energy efficiency retrofit programme; energy research programmes totalling €20.4 million, including progressing the ocean energy programme; and information and communications technology programmes totalling €43.8 million — most of this allocation is to fund broadband investment in cases of market failure.

As reflected in the allocations, the priorities in 2011 are the funding of public sector broadcasting, funding of energy efficiency and renewable energy technologies and investment in broadband in cases of market failure. The investment in energy efficiency will play an important role in promoting employment in the construction sector. Broadband intervention, especially through the national broadband scheme, is furthering the roll-out of broadband infrastructure, which plays a key role in underpinning economic and social development. In addition, my Department will provide some €34 million to fund TG4 and almost €29 million to fund inland fisheries in the current year.

I thank the Minister for his reply. He referred to expenditure of €69 million for the energy efficiency area. The home energy savings scheme has been one of the most successful grant schemes administered by the SEAI. Is it the Minister's intention to continue to fund that scheme? As he will be aware, there is provision in the Finance Act 2011 for some tax relief for persons who invest in energy efficiency measures in their homes but it is subject to a commencement order. Would he like to comment on that?

I agree with the Deputy. It is beyond dispute that the home efficiency home heating scheme has great merit. It ticks all the boxes in terms of energy efficiency and energy saving, making a contribution to meeting our carbon targets and, third but by no means least, job creation. Job application in that area is very significant at a time when there are so many unemployed workers in the construction sector. It is my intention to continue the scheme although I am in the process of examining the development of perhaps a wider scheme, which would encompass some of the existing schemes like the warmer homes scheme and so on, and rebranding it. All that is left for me to do now is to find the money. That is the hard bit. In terms of not only domestic dwellings but public buildings, there is a huge saving in the medium term for the State and considerable potential for job creation in this area. I hope when the Minister for Finance brings in his jobs budget that this area will be well represented in it.

I have not yet made up my mind or examined the issue raised by Deputy McGrath in terms of the tax relief provided in the last Finance Act in this area. My understanding is that it is a relief at the standard rate. This issue is similar to the debate with Deputy Stanton on microgeneration or, perhaps more pertinently, the argument in the pensions industry that if people were given a tax break at the marginal rate, there would be a very significant uptake. However, if the rate was changed to the standard rate, what would be the uptake and what would be the effect on the pensions industry and the people employed there?

Similarly in this respect, would domestic dwellers, for example, incur at this time the necessary spend for a 20% tax break or could that money be used more productively? That is the issue I have to examine. There is no doubt but that in terms of energy saving, import substitution, the jobs dimension of the scheme, and our 2020 targets and thereafter, this would make a significant contribution and there is a jobs dimension to it. Whether an estimate of the tax foregone might be better used elsewhere is something that I have not yet made up my mind about but the short answer to Deputy McGrath's question is that I agree it is a worthwhile scheme as it is operating and it is my definite intention to continue it.

I acknowledge the Minister's comments as to whether any tax relief in this area, as set out in the Finance Act, would provide a tangible incentive. The administration of the scheme has been quite efficient. As the Minister will be aware, people who apply online have an answer in a short number of days. It is easy to administer and it is easy for the home owner to avail of it. Whether the Minister would be better off configuring additional support into the direct grant scheme rather than in terms of tax relief is a matter which I agree could be reconsidered.

I agree with the Deputy that they are the issues that require to be crystallised because the scheme is a good one. We have not touched on the issue of fuel poverty, which, unfortunately, is a growing difficulty in that area. This scheme, which is separate from the scheme administered by the local authorities, makes a significant contribution.

In that regard, having welcomed the ESB's announcement yesterday, I was disappointed about an aspect of it. Deregulation in the marketplace finished yesterday and was accompanied by a statement from the ESB to make a not insignificant reduction in energy prices graded according to different categories but, unfortunately, people already in trouble were excluded from that. I am sure an element of that comprises customers who are recalcitrant in the sense of flitting from one company to another to evade their ESB or gas bills and I understand the ESB's response in respect of that small category. However, there are genuine people in difficulty as a result of fuel poverty, of having been disconnected and of their inability to pay their bills. I ask the ESB to re-examine whether it is not feasible to distinguish between those genuinely in need and those who simply are seeking to evade paying their normal tariff.

Written Answers follow Adjournment Debate.

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