Priority Questions

Renewable Energy Tariff Scheme

Éamon Ó Cuív


1 Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources when it is expected that the European Commission will give state aids permission to the REFIT scheme; the reason for the delay in approving same; and if he will make a statement on the matter. [29908/11]

Under Directive 2001/77/EC, Ireland was assigned a renewable electricity target of 13.2% by 2010. Following extensive public consultation and consideration, it was decided that to reach the 2010 targets, a new scheme was necessary to deliver the build rate required to meet the renewable electricity directive target level. Experience across Europe clearly showed that feed-in tariffs were proving the most successful of the options available to member states in terms of encouraging new build. It was for this reason that the renewable energy feed-in tariff, known as REFIT, was announced in 2006 for certain categories of renewable energy, including wind and hydro power. It received state aid clearance in 2007, and the REFIT scheme has achieved its goal in that, at the end of 2010, Ireland had succeeded in surpassing the 2010 target.

The planned extension of the first REFIT scheme is designed to support up to 4,000 MW of onshore wind, landfill gas and hydro technologies. The new REFIT scheme for biomass technologies is designed to support a range of technologies, including combined heat and power, CHP, and anaerobic digestion, as well as co-firing of biomass in the peat power plants. Separate state aid applications are being progressed with the European Commission in regard to these schemes. The Commission is finalising its assessments on both applications.

Does the Minister agree, in view of the European Union's stated objectives in regard to renewable energy, that there is a contradiction between the huge delay in giving these state aid permissions and the targets of the European Union itself? Will the Minister explain whether he believes the time it is taking is reasonable? Will he further clarify when he believes the permissions will be given?

I broadly agree with the Deputy in that the time taken is longer than I would like. I was in Brussels last week on a number of different issues, and the same question was raised with me by our own MEPs. The latest information I have as a result is that the biomass REFIT is likely to emerge as early as next week, which is welcome because I am aware of a couple of tangible projects that are in the offing and others which are queued up. On the question of the renewal of REFIT for onshore wind, this might still be a few weeks down the line.

Will it be three or four weeks?

It is impossible to say. Once it goes through the system, we have complied by providing the information required from us. After that, it goes through the system in the Commission and, like everywhere else, that system has its own bureaucracy.

I find it extraordinary that the Union has been lecturing us about our public service yet it cannot deliver something that is of vital European as well as Irish interest. I understand 1,000 MW of power is ready to proceed.

As I understand it, under the REFIT scheme, as proposed, a generator — in other words, the person who owns the windmill — gets €66 per MW hour produced, whereas the supplier — in other words, the middleman — gets just under €10 per MW hour. I further understand that in the event of the price of electricity rising dramatically, which could easily happen as oil becomes scarce, all of the upside goes to the middleman — the supplier — rather than to the generator. Is my understanding correct? Does the Minister consider this a reasonable balance? Should that balance be more in favour of, first, the consumer, in that when the price goes over a certain limit there would be a rebate to the PSO, and, second, the generator — in other words, the person who invested in the windmills — rather than the middle group, namely, the network which delivers the electricity?

I view this from the point of view of the targets we have to make. It is clear from the experience across Europe that without some kind of a feed-in subsidy, it would not happen.

Then make it higher.

I believe we are agreed on that much.

It should go to the generator.

Yes, but only the supply company is prepared to take it on. Otherwise, there would not be the extent of progress that has been made in terms of building out the capacity. Only the supply companies would take it on.

With regard to REFIT 1, as we have known it, a number of changes have been introduced to the mechanism that tighten up some of the Deputy's concern, and they are with the Commission at present. As the Deputy knows, the problem with wind is one of intermittent supply, and we have to try to build in for that. Where the market price goes above a certain limit, it falls out. There are recent studies on this point which the Deputy might be interested in following up in the Oireachtas Library, in particular a study by EirGrid and the SEAI which addresses the particular issue he raises.

We move to Question No. 2.

With no disrespect to the Minister, it does not address the balance between the generator, the supplier and the consumer. I know the study to which he refers and while it deals with the cost to the State of REFIT, it does not address the issue that——

Electricity Generation

Brian Stanley


2 Deputy Brian Stanley asked the Minister for Communications, Energy and Natural Resources his strategy on electricity generation from wind and wave; and his views that the targets set will be achieved. [30320/11]

Under the renewable energy directive, 2009/28/EC, Ireland was set a binding national target by the European Union of 16% of all energy consumed to be from renewable sources by 2020. National targets of 40% electricity, 12% heating and cooling and 10% transport are commensurate with reaching our overall directive target. Currently, there is approximately 1,800 MW of renewable generation operational, of which just over 1,500 MW is from wind power, in addition to 240 MW from hydro-generation and 30 MW from biomass renewable generation. Operators of a further 1,000 MW of new renewable generation from the Gate 1 and Gate 2 group processing series have signed grid connection offers and are awaiting grid connection, mainly in the next year or two.

As part of the Gate 3 process, an additional 3,900 MW of offers issued to renewable generators. Even allowing for challenges that some developers face owing to increased planning restrictions in and around special areas of conservation, this amount of renewable generation is well in line with achieving Ireland's target.

Ocean technologies are still very much at the research and development phase and there are no wave energy devices operating on a commercial scale anywhere in the world. A number of Irish universities and the Marine Institute are pursuing research and other initiatives in the ocean energy sector and a quarter scale test site for devices has been established in Galway Bay. The intention is to eventually be able to test full scale grid connected pre-commercial wave energy prototypes. In order to achieve this goal, an ocean energy development unit in the Sustainable Energy Authority of Ireland has been pursuing a strategy of developing a site where this testing could take place.

Additional information not given on the floor of the House

EirGrid's GRID25 strategy sets out the high level plan for delivering an upgraded electricity transmission network to 2025. EirGrid is working to enhance the national network capacity between now and 2025 by reinforcing existing lines, deploying new grid technology and building new transmission lines.

The programme for Government states a future Gate 4, if required, will be plan-led, that is, future wind farms are to be built at locations where the wind regime is best and built in numbers or clusters to reduce the cost of connection to the grid. In the event that a Gate 4 process is contemplated in due course, my Department will engage with the Commission for Energy Regulation, EirGrid, ESB Networks and the industry on its design in the light, inter alia, of the programme for Government.

I tabled this question because some experts have queried whether these targets regarding renewable energy can be met by 2020. With the correct strategies in place, it will be possible to do this. It will form a central part of our energy policy and bring jobs and overall economic benefits. If we could harness even a small part of the estimated billions that can be realised from wave energy generation around the coasts, it could provide a massive injection for local economies, as well as meeting their energy requirements. However, how much of this is likely to be realised? The Minister mentioned planning. Does he agree that the hold-ups in planning and the delay in allowing projects at planning stage to commence are placing the targets in doubt? What steps——

I thank the Deputy. I call the Minister and will revert to the Deputy.

I will give the Deputy one last piece of information that is relevant to this question. It pertains to the proposed Atlantic marine energy test site at Belmullet, County Mayo, which is approaching a stage of development that could see it ready to enter the full consenting process within the next few months, subject to budgetary considerations in 2012 and future years. The test site includes two offshore test areas at water depths of 50 m and 100 m which would, in turn, be connected to a shore-based electricity substation.

I do not disagree with the Deputy regarding the contribution that might be made. However, some of these technologies are still very much at the research stage. I hope the Government will be able to continue to fund some of this research because Ireland is uniquely endowed in this sector.

In response to the Deputy's question on planning, yes there are and continue to be difficulties in the system, whereby projects that are essential for this and other purposes have slowed down. It is a constant challenge to balance the rights of individual citizens and the public interest. Trying to get the balance right is a difficult challenge.

I had a short space in which to speak the first time.

The Deputy did not really, but he should proceed.

Are specific steps being taken with regard to the planning process?

Another question pertains to NewERA. While it has not been specified, it is envisaged that NewERA will be involved in it.

Involved in what?

Involved in rolling out wave and wind energy projects. Does the Minister envisage a role for NewERA in this regard?

Overall, this sector has huge potential for job creation if the technology can be developed, as well as for the finances of the State, because it would reduce the amount of money leaving the State as we import most of our fuel requirements. Moreover, it also has huge potential in terms of the reduction of CO2 emissions as it is clean energy.

I agree with the Deputy that anything that reduces Ireland's dependence on the importation of fossil fuels is a positive development and there are certainly possibilities into the future in this regard. In addition, it undoubtedly would help to reduce Ireland's carbon emissions.

As for the role of NewERA in this regard, the main issue confronting the Government is the provision of adequate funding to continue the research under way. The NewERA proposition, in respect of whatever parallel stream of funding will be put in place, is to invest in additional job creation. I cannot honestly tell the Deputy that when this issue was being discussed, the question of ocean and wave energy generation was at the top of the pile. However, if progress is made in the use of the testbed, research and so on, it undoubtedly would be free to apply for funding from that source. However, the more immediate challenges relates to continuing the research work under way.

Telecommunications Services

Tom Fleming


3 Deputy Tom Fleming asked the Minister for Communications, Energy and Natural Resources if he will ensure that next generation uncongested broadband is rolled out in County Kerry. [30300/11]

The telecommunications market in Ireland, including the provision of next generation broadband networks and services, has been fully liberalised since 1999 and has since seen the steady growth and development of significant well regulated competition in the provision of the full range of telecommunications products and services. Provision of broadband services, including next generation broadband, is, therefore, primarily a matter for the private sector telecommunications operators.

The Government is not a commercial operator in this market and can only intervene in cases of market failure. Such interventions are subject to state aid clearance by the European Commission. Nevertheless, it is a priority of the Government that there be broadband coverage across the entire country. Therefore, in cases of market failure to deliver quality services, the Government will continue to intervene, where it is appropriate and possible to do so.

The group broadband scheme, the national broadband scheme, NBS, and the rural broadband scheme are all examples of where the Government has intervened previously to ensure broadband availability in areas, particularly rural areas, where commercial investors have failed to provide services. The national broadband scheme, now completed, has delivered broadband services to some 1,028 electoral districts countrywide. A basic broadband service is now available in all areas of the country. This has been provided ahead of a European Commission target to have such a basic broadband service widely available across the Union by the end of 2013. The rural broadband scheme which recently closed for applications aims to identify remaining individual premises in rural Ireland that are unable to obtain a broadband service for reasons specific to the premises, even though broadband is generally available in the area.

These interventions are additional to the overall progress being made on the quality and delivery of broadband within the competitive market. For example, broadband speeds of up to 100 megabits per second, mbps, are already available to approximately 500,000 premises using coaxial cable. This will increase to more than 700,000 premises by the end of next year. Telephone lines now provide digital subscriber line broadband offering speeds of up to 24 mbps, depending on distance from exchanges.

Additional information not given on the floor of the House

In addition to these improvements in fixed line services, developments in wireless technologies are also delivering higher speeds. Fixed wireless products, are increasingly available, and are advertising speeds of up to 10 mbps, while mobile broadband speeds are also being increased. The speeds being provided through these technologies will be considerably enhanced with the availability of new spectrum as a consequence of the switch to digital television services. ComReg proposes to auction this valuable spectrum for the purposes of providing fourth generation high-speed wireless broadband services. Current statistics indicate that more than 80% of customers nationally have opted into broadband services in the range of 2 mbps to 10 mbps.

Under the NewERA proposals in the programme for Government, there is a commitment to co-invest with the private sector and commercial semi-State sector to bring forward next generation broadband customer access to every home and business in the State. This commitment must be implemented in a manner compliant with the applicable EU state aid rules, which I mentioned previously. The next generation broadband task force, which I chair and which also comprises the Minister of State, Deputy O'Dowd, the chief executive officers, CEOs, of all the major telecommunications companies operating in the Irish market and of some Internet service provider companies, is currently considering how best to facilitate the roll-out of next generation broadband. The purpose of the task force is to discuss the optimal policy environment required to facilitate the provision of high-speed broadband across Ireland. The task force will also assist me in identifying those areas of the country where commercial service providers are planning to invest and areas more appropriate to market intervention to ensure the Government commitment to next generation customer access is delivered.

I thank the Minister for his reply. No part of County Kerry has yet been upgraded to next generation uncongested broadband. As the county is the main tourism hub in Ireland, it is imperative that this is rolled out in the short term. The problem was highlighted at the recent Irish Open golf championship in Killarney. The broadband speeds available for visiting journalists fell far short of what is available to the media in other developed countries they would visit in carrying out their job. Only the good will and expertise of the local technicians on the ground who patchworked the existing service kept the system going over that week. If it were not for them, the system would have virtually collapsed.

The same applies to conferences. Large numbers of people attend conferences in Killarney and other parts of Kerry. With the huge influx of tourists and so on——

I must call the Minister.

Pilot schemes are operating in Dublin and Wexford for next generation uncongested broadband and I believe Kerry would merit this service.

Of course I agree with Deputy Tom Fleming that every part of the country should have adequate connectivity. I am not sure the facts and figures bear out the notion that those in Kerry are especially disadvantaged. I know all Kerry men are very good at communicating that view, especially on the third Sunday in September, but I do not think it is necessarily true. The point he is raising relates to a particular event, the Irish Open. As a result there was extraordinary pressure on the system with the world's media in attendance. In those circumstances, the sponsor or the organiser ought to have arranged that booster resources were available because such an event would stretch any system.

I do not know if the Deputy saw the remarks of President Bill Clinton who said at Dublin Castle that our broadband is better than the broadband in the United States in many parts of the country, which is true. That is not to say it is adequate. I acknowledge that given topography and so on, there are difficulties in counties such as Kerry. That is especially true at a time when there is the great pressure, as there was during the Irish Open. I acknowledge that is a problem.

I take it the Deputy is happy enough.

A Leas-Cheann Comhairle——

I will allow the Deputy to speak very briefly because we are out of time.

We are very dependent on tourism. We also have our small businesses, industries and farmers who need to expand their businesses and livelihoods. They are being greatly inhibited in job creation and so on by what is available owing to our peripherality. There was a recent survey by the Kerry Community & Voluntary Forum.

A question, please.

It really spelled it out and I will present it to the Minister's office because it deserves consideration. It states that public statements about the national coverage of broadband are patently incorrect when it comes to County Kerry. As can be seen from the report, large areas of the county have no or at best limited coverage. There are other facts and figures in the report and I ask the Minister to have his staff review it.

The Deputy could give that to the Minister. I must proceed to Question No. 4.

There is optic cable lying idle in County Kerry at the moment.

I thank the Deputy.

I ask the Minister to approach Eircom to come back into the business of providing broadband. With its expertise——

We must proceed to the next question.

—— and the structures, it deserves to be considered.

Strategic Energy Infrastructure

Éamon Ó Cuív


4 Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources if he considers any of the gas networks, the electricity networks, or the electricity transmission systems as strategic infrastructure; and if he will make a statement on the matter. [30188/11]

Investment in the development and maintenance of Ireland's gas and electricity network infrastructure is of fundamental strategic importance for the economy. Secure and reliable energy supply is a prerequisite for inward investment, for indigenous enterprise and for all consumers. Energy is the lifeblood of all economic production, whether in the high-tech ICT and bio-pharmaceutical sectors, the services sector or indigenous sectors such as agrifood.

Ireland has achieved a reliable and modern electricity and gas infrastructure over the past decade. The building of these modern and reliable energy network systems was achieved by extensive and well executed investment by the State-owned network companies, ESB, Bord Gáis Éireann and EirGrid. The networks must be maintained and enhanced as necessary to ensure Ireland has an energy infrastructure which is fully fit for purpose. Investment in strategic energy infrastructure is a key priority for the European Union.

The Government fully endorses the strategic national importance of investing in Ireland's electricity transmission infrastructure. Delivery by EirGrid of its national grid development strategy, known as GRID25, is critical to economic recovery, regional development, security of supply, competitiveness and the achievement of Ireland's renewable electricity targets. The east-west electricity interconnector between Ireland and the UK will be completed by the end of next year. Investment in the networks and infrastructure by Bord Gáis Éireann, ESB and EirGrid in recent years has been significant. The importance of the investment was demonstrated in the very adverse weather conditions in 2010 when the gas and electricity networks were shown to be robust and reliable.

The Government recognises the importance of the energy sector to the economic and social functioning of the State, and that the State must continue to have a strong and direct presence in electricity, particularly in the regulated transmission and distribution networks. The same principle applies in the gas sector. This presence must be maintained in a way that protects overall economic competitiveness and does not deter private investment. The process to analyse options for the minority stake sale in ESB will fully reflect these principles.

I am very pleased the Minister has confirmed that these are strategic national assets. How can he square what he has just said about these being strategic national assets with the commitment in the programme for Government that the sale of assets would be non-strategic assets? How can the Minister explain the Government's decision to sell what he has now has declared to be strategic national assets? There was no equivocation about a part sale or whatever — they were not to be sold. How can the Minister explain the Government's decision to part sell the ESB?

I have no difficulty reconciling what we have said. There is no doubt that these are strategic assets and it is for that reason that the Government has decided to sell only a minority stake in the ESB to ensure the State maintains a controlling interest. It would have been my wish that we were not forced into this position at all, but the memorandum of understanding with the IMF and EU signed by the previous Government, of which the Deputy was a member, in November 2010 made plain that the disposal of State assets was a condition of the funding of the State. I wish it were not so and my colleagues will hold discussions with the troika this week on the issue. We will see what will come out of that, but unfortunately that is the genesis of the problem.

The Minister is incorrect and he should check the source document, the memorandum of understanding, where he will see that the previous Government committed itself to a review which was carried out by Dr. Colm McCarthy. To ensure efficient gas and electricity networks, there was no number nor was there a specific commitment to sell any State assets. The present Government made the money commitment, not us. Even before the publication of Dr. McCarthy's report, the programme for Government stated:

"We will target up to €2 billion in sales of non-strategic state assets drawing from the recommendations of the McCarthy Review Group on State Assets when available."

The programme for Government also states that:

"Assets will only be sold when market conditions are right and when adequate regulatory structures have been established to protect the consumer interests."

I believe that when any stake in these assets is sold, the private interest predominates, but does the Minister think that market conditions will be right over the next four years to sell these State assets, in line with the programme for Government?

If I knew the answer to that, I would be going down to Paddy Power. I do not know what the situation will be in four years. What I do know is that market conditions are not propitious right now and, therefore, we will not be selling anything at the moment. I made that clear on a number of occasions.

We really should not be rewriting history here. I notice that it is now the new mantra of the Deputy's party that they never agreed to sell any State assets. I saw Senator Thomas Byrne from Meath on Sean O'Rourke's programme on Sunday night, and his position was that the Fianna Fáil Government never signed away the State assets. Of course it did.

That is why we are where we are. That is why the previous Government brought in Colm McCarthy, whose report stated that we should sell . It is not possible to forget something that happened before Christmas. Even if someone were a presidential candidate he would remember he was a member of the Executive before Christmas. That was only a few months ago.

These are the origins of the problem and we have decided on the minimum we can negotiate. There is no question of control falling out of the hands of the State.

Thank you Minister. I am sorry Deputy——

If the Minister checked the documentation, he would find there was no firm commitment. We undertook to carry out a review and the Minister is always trying to bluster his way out of his Government's decisions. This Government gave these money commitments in the programme for Government. No amount of bluster will get away from the facts in cold print.

We are proceeding to the next question.

The only thing the last Government did not do was to put in a figure, and according to what the troika told us, that Government begged not to put in a figure and leave it as it was.

The Minister now admits that there was no figure and no commitment.

State Companies

Seamus Healy


5 Deputy Seamus Healy asked the Minister for Communications, Energy and Natural Resources if he will rely in the main on investment in modern industry through State companies such as the ESB and others to generate economic growth and jobs in view of problems (details supplied). [30361/11]

I can assure the Deputy that employment creation is the central economic objective of the Government. This issue encompasses a number of key Departments, including Jobs, Enterprise and Innovation, Finance, Public Expenditure and Reform, Education and Skills, and this Department.

In so far as my own responsibilities are concerned, I have statutory responsibility for the State energy companies as well as for RTE and An Post. I also have more general responsibility in the areas of energy and telecommunications which impinge on competitiveness.

It is the case that ESB, Bord Gáis Éireann, EirGrid and Bord na Móna have invested significantly and cost effectively in Ireland's energy infrastructure and the energy sector over the last decade. Their current corporate strategies, in line with my overall objectives for the energy sector, commit to continued investment in the energy networks and in renewable power generation.

The investment programmes of these successful State companies are critical for the regeneration of the economy, for inward investment and for regional development. ESB, BGE and Bord na Móna have consistently paid dividends to the Exchequer over recent years and are major employers as well as generators of economic activity.

EirGrid, as the State-owned transmission system operator, operates the successful single electricity market, thus ensuring security of energy supply for business and consumers. EirGrid is currently completing, on behalf of the Government, the construction of the east-west electricity interconnector and is working to roll out vital transmission infrastructure under GRID25. The investment in interconnection and the transmission grid is critical for the economy and for achieving our ambitions in renewable energy.

The Government recognises that the cost of energy in Ireland is a serious competitiveness issue facing energy consumers during this difficult period for the economy. The provision of secure, sustainable and competitive energy supplies is critical for the economy and is a challenge we are determined to meet.

Additional information not given on the floor of the House

The competitive nature of the Irish energy market, which is characterised by price transparency and the highest level of customer switching in the EU, helps put downward pressure on prices. In addition, we must focus on all possible additional actions to mitigate costs where possible for business and domestic customers. Additionally, from an electronic communications policy perspective, competition and investment certainty have given rise to significant competitiveness improvements over recent years. New entrant service providers have increased choice and quality and driven prices downwards, all to the benefit of business and residential customers.

I thank the Minister for his reply. Would he agree that the policy of relying on the private sector to create jobs and solve the economic and social crisis in this country has failed? He himself stated that the various companies under his umbrella have been successful. In the early years of the State, companies like the ESB, Bord na Móna and the Irish Sugar Company were the key drivers in the economy and in creating jobs in the economy.

We now have a situation where nearly 450,000 people are unemployed. We have lost more than 6,000 jobs since the Government came into office, while another 950 jobs were lost today at Aviva. Merck Sharp & Dohme has announced 40 job losses, while jobs were recently lost at TalkTalk and MBNA. Does the Minister agree it is now necessary for the State to provide investment for State companies to create jobs, because the private sector clearly has failed and cannot deal with our current situation?

I agree with the Deputy that we have a huge unemployment problem. There is no doubt about that. It has been made immeasurably worse by the collapse of the construction sector, and therefore a huge segment of construction workers, with varying levels of skill, are out of work. That is the huge mountain this Government must try to scale.

I cannot agree with the Deputy if he is saying that the private sector has failed and we should rely on the State companies. It is not one or the other. We live in a mixed economy. State companies have made a significant contribution to employment, as well as discharging their responsibilities on the supply of energy, telecoms, postal services, cutting turf and so on. Without the role of the multinational sector and without the role of thousands of small and medium sized enterprises, however, our unemployment situation would be a great deal worse. I cannot agree with the Deputy that it is either-or, but I agree with him that wherever we can extract value and cause employment to be created, that ought to be our target.

Of course I never suggested that it is either-or. The current situation is that the private sector has simply failed to create the jobs. The jobs the sector has created are obviously very welcome. I am suggesting that we cannot be excessively dependent on either the private sector or foreign direct investment and that we must invest in our own State and semi-State companies to create jobs.

We are due to pay €3.5 billion to unsecured bondholders in Anglo Irish Bank, and I think €700 million of that is to be paid in the next few days. Can the Minister assure the House that we will get at least the same benefits as those proposed for Greece, whereby the claims of these bondholders will be reduced by 50%? The €1.75 billion saved on that reduction should be put into State companies for direct job creation.

I agree with the Deputy about leveraging jobs in the State sector wherever we can. The Minister of State, Deputy O'Dowd, has been preoccupied with this issue for more than the last six months. Wherever we can source investment for the creation of new employment connected with the State companies, we will do that. For example, one of the major projects the Minister of State, Deputy O'Dowd, has been concerned with is the creation of a water utility company. Therefore, I have no difference with Deputy Healy on that issue.

As regards the prospective settlement in the eurozone concerning the Greek debt problem, the Deputy will have heard the views of my colleague, the Minister for Finance, Deputy Noonan, including his public statements on the bondholders issue as it relates to Anglo Irish Bank. At this stage, I do not know — I do not know if anybody knows — whether a settlement in the wider eurozone will be concluded this weekend. Plainly, it is a matter that concerns all member states and especially Portugal and Ireland. What concerns us particularly are the settlement terms to be agreed. It is important that there be a settlement, if not at the weekend, then as soon as possible thereafter.

It seems to be taking a long time.