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Dáil Éireann debate -
Wednesday, 9 Nov 2011

Vol. 746 No. 1

Energy (Miscellaneous Provisions) Bill 2011: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

I welcome the opportunity to contribute to the debate. Most of the objectives of the Bill are unexceptional and can be fully supported. For example, the Bill proposes the introduction in primary legislation of a legal framework to increase energy efficiency as it relates to energy suppliers and distributors. Anything that contributes to energy efficiency must be welcomed. The amendment to the Electricity Supply Board (Superannuation) Act 1942 is also included in the legislation to restate in primary legislation the superannuation arrangement for certain former employees of the ESB. This is unexceptional. The legislation contains an amendment to the Gas Act 1976 to restate in primary legislation the superannuation arrangement for certain former employees of Bord Gais who transferred to Gaslink.

The amendment of the Energy (Miscellaneous Provisions) Act 1995 will reduce the risk of theft of gas and electricity, and obviously anything that reduces theft of anything is welcome. There are also provisions to amend the Electricity Regulation Act 1999 to improve electricity and gas safety and I welcome those. The main provisions of the Bill are welcome and there is little in it that is controversial.

In the Minister's speech, however, he said things that were both controversial and contradictory to answers he gave earlier in the day during Question Time. During his speech he referred again to the privatisation of ESB. He had indicated during Question Time that there would not be a fire sale of assets happening in the immediate future. He later came into the House and said, "As Deputies are aware, a group co-chaired by my Department and the Department of Public Expenditure and Reform has been mandated by Government to report back by end November as to the best approach to the proposed sale of a minority stake in ESB. Subject to a positive decision by Government after consideration of the report of this group, I would envisage the specific transaction being progressed through 2012." One minute the Minister was saying we would not have a fire sale, that there is no rush and we would get full value, and then later the same day he stood up and said we would sell it all in 2012 as a fire sale.

What are the real facts? Is one view his personal view of the matter, that he would take from his Labour Party background, and is the other the script provided by Fine Gael or the Civil Service? It is important the real Deputy Pat Rabbitte stands up and clarifies the matter as he is trying to face in two directions at the same time.

Ministers should remember they have now been in Government for nine months and this has given them plenty of time to form their own views on many matters and plenty of time to confirm what they said in opposition and what we said in government: that the troika does not mind as long as we adhere to the bottom line and as long as the necessary structural change is made to ensure stable finances in the future. It cannot be argued that selling an entity like ESB has long-term structural benefits in terms of price or benefit to the economy because we will lose the dividend that would be brought in. It is different if pension age is changed, that would have a long-term structural effect and saving. Policy must be sustainable in the long-term and the ESB has proven to be sustainable in the long term.

This is and always was an ideological decision on the part of Fine Gael and it is sad to see the party of James Connolly, which holds the balance of power in this Dáil, siding with the hawks in Fine Gael rather than with the consensus of all other parties in the Dáil. I do not envy the Minister's position and I suggest he follow his gut feeling in the matter and not back this issue. If he stands firm and does the right thing he will find that the colleagues who share Government with him are so fond of power, they will relent. He will also find the troika is not an immutable body and it too will relent as long as the bottom line is right. The Minister will then be the hero of the hour and in such circumstances I will be the first to salute him. If he gives in to Fine Gael, he will always be remembered as the Minister who betrayed the principles of his party and sold the family silver for short-term expediency.

Fianna Fáil in Government made a firm decision that the power lines were not for sale, in part or in whole. Sinn Féin opposes the sale, as does the ULA and the other Independent Members behind me, with one or two exceptions. The majority in the Dáil opposes this sale, as long as the Labour Party stands with its principles. I ask the Minister to think seriously about this issue again, to stand firm and protect strategic infrastructure. I have outlined again and again the dangers that will arise if we privatise the electricity transmission and network system where shareholder interest will predominate, no matter how small the minority stake is, because it will be an obligation of the board to recognise the fiduciary responsibility of the minority shareholder.

I welcome the energy reduction demand target and energy efficiency fund. This will add nationally to energy conservation, reduce imports of oil and gas and result in a reduced carbon footprint. I am concerned, however, at the Minister's remarks when he talked about going from an Exchequer funded system to a "pay as you save" framework, where he tries to use the fund to offset Exchequer investment. That is happening at a time where the Minister is answering parliamentary questions to say he cannot give a second warmer homes scheme grant to people on low incomes because he does not have the money to do it, even though we know the poor in this country suffer significantly from fuel poverty because of a lack of thermal quality in their houses.

The Minister must be more ambitious. The warmer homes scheme focuses on those in fuel poverty and on low incomes and we should be making more resources available for this work, not less. In government, we provided €43 million in 2008, €92 million in 2009, €100 million in 2010 and €109 million in 2011. The Government provided another €30 million for the scheme in the jobs initiative. At the time, the Government claimed this €30 million would create 2,000 jobs. As we pointed out last week, every job created in terms of extra PAYE and PRSI and reductions in job seeker's allowances is worth €20,000. According to the Government's own figures, for expenditure of €30 million, the Exchequer will get a direct return of €40 million. There is, therefore, no limit to the funds that can be put in place because the scheme will fund itself. The argument from the Department of Finance about dead weight has been made many times: people do it anyway, according to the Department. If that is the case, many are doing it on the black market and the State is not getting its share. We know the building industry is on its uppers so if activity is stimulated and the grant is 35% or less for those on higher incomes, the scheme pays for itself immediately through reductions in the numbers on welfare and increases in PRSI and taxes. It is extremely difficult to persuade the Department of Finance to accept this argument which I made on many occasions when I served as a Minister.

It is important that the Government recognise that a scheme of this nature must be self-financing. If one is seeking a return on capital spending in respect of a 100% State-funded a project to build a school or a road and if one takes it that the clawback in tax, PAYE and PRSI contributions will be approximately 35%, one will be obliged to find the other 65%. If, however, one provides a grant of 35% and one bears in mind the fact that once people begin to do certain things to their homes, they will automatically want to do others, in real terms the grant will amount to approximately 10% or 12% of the total expenditure involved. In such instances, the State is getting its money back with interest. Members must continue to make this argument until those who never seem to perceive the logic of the position are convinced that what I have outlined is a mathematical certainty.

The only counter-argument is that which contemplates the theory of dead weight. I do not accept that there is dead weight in the economy. It would be fine to make this counter-argument if people were in the mood to borrow and spend money, but they are not willing to do this at present, unless they are provided with incentives. As a result, there is very little dead weight which really refers to someone who does the work, even if a grant is not available. One of the major challenges we face relates to the black economy. I refer to people who have work done, not all of which is put through the books. If it is a grant-aided scheme, it is not possible to obtain a grant unless all the work is put through the books. Any dead weight would, therefore, be more than offset by removing people from the black economy.

What are the Minister's proposals in respect of persons on low incomes who need the benefit of immediate savings? The pay-as-you-save scheme is fine for those on high incomes. I put solar panels in place on my house and, owing to the fact that I would not get my money back for seven years, I did so because I wanted to save the environment rather than for any other reason. However, I was in a position where I could happily make a saving in meeting my energy needs over a seven-year period. The idea that someone who is already in financial difficulties should borrow money from his or her utility company and then pay it back while not making a gain for seven years is incredible. What will happen in respect of the pay-as-you-save system brought forward by the Minister which will be operated by utility companies is that those who can afford to have the work carried out or borrow from the ESB or whomever will be fine. However, those who have really been put to the pin of their collar financially will not be able to afford to have the work done.

The old system was best. Those participating in community employment schemes or rural social schemes, etc. such as the Te Teolaí scheme in the Gaeltacht were actually carrying out the work that was necessary in people's homes. Not only was there no cost involved, this led to the creation of social employment. There is one very successful project in Galway that is staffed by members of the Traveller community. The individuals concerned are involved in carrying out work under the warmer homes schemes. There is an extra social benefit in this regard in that people's perception of the Traveller community is being altered.

When dealing with schemes, it must always be remembered that the weakest in society encounter the greatest difficulties in completing forms, etc. There is an urban myth that those to whom I refer know about everything. Some of them do and some do not. Elderly people, in particular, find completing forms daunting. It is much easier for them to have someone from the warmer homes scheme come to their house and help them complete the form. The work is generally done for them by community groups and they benefit from other intangible supports. I am not seeking to denigrate the excellent work being done in this regard by private companies throughout the country, I am merely trying to emphasise the contribution made by community groups.

If we are serious about reducing our dependence on oil and gas imports, the simplest way to do this would be through the conservation of energy in all its forms. The greatest hedge against the future — the troika must love this — would be to reduce the amount of heat lost from people's houses as a result of bad insulation, etc. Such lost energy merely pollutes the atmosphere with CO2. If the Government wants to create jobs and change the structures which obtain in order that we might import less oil and if it wants people, particularly the less well-off, to be comfortable, it should invest its money in the way I have outlined. It should see the money for which provision is made in the Bill as additional rather than as substitute funding.

As stated, the Bill is unexceptional from the point of view of substance. I will be examining it in much greater detail prior to Committee Stage in order to discover whether any technical issues arise. I cannot argue with the principle underpinning the Bill which my party will be supporting. I look forward to a detailed debate on the provisions of the Bill on Committee Stage.

I wish to share time with Deputy McLellan.

I welcome the Bill as it provides an opportunity to debate the issues legislated for in its provisions and also to debate wider energy matters. The matters to which I refer include fuel poverty which is inseparable from any debate on energy and which is impacted upon in various ways by some of the issues covered in the Bill.

A number of matters with which the Bill deals seem relatively straightforward. I refer, for example, to those which relate to the safety functions of the Commission for Energy Regulation, changes to existing legislation regarding the investigation of breaches of the Electricity Regulation Act and measures designed to address the theft of electricity and gas. Provision is also made for legislating for the transfer of pension entitlements from Bord Gáis and the ESB to the new companies established in the relevant sectors. The provisions to which I refer all appear to be uncomplicated in nature. If there are any issues that arise, we can deal with them via amendment on Committee Stage.

The main sections of the legislation which could have a major economic impact are those which deal with the energy demand reduction target programme. This is one of the key parts of the State's commitment to reduce energy consumption by 20% by 2020. The programme seeks to place efficiency obligations on suppliers and distributors. According to the explanatory memorandum accompanying the Bill, the programme has the potential to bring about significant savings for consumers, as well as reducing the overall level of carbon emissions from energy consumption within the economy. If all of this results in savings for the consumer, it must be welcomed, particularly in the context of rising energy costs and the burden, often unsustainable, these costs are placing on many families around the country.

We must forge ahead with other means of reducing the economic burden of energy costs which form a significant and growíng component of household and business costs. There is also the massive cost to the economy which is still hugely dependent on importing fossil fuels — to a level of almost 90% of current requirements. In that regard, we must press ahead with developing our own indigenous renewable resources. There will continue to be a great deal of discussion about this matter. The State has signed up to meet some ambitious targets and some have questioned whether these can be met. Among the reasons they cite are the high start-up costs of and the difficulty in capitalising projects such as those to which I refer. They also highlight planning issues, particularly where wind energy projects are concerned. Good progress has been made in wind energy generation, but we could certainly do a great deal more. The same applies to wave energy generation, which is at a much less developed stage. I am aware, however, that a number of important projects are being developed.

Given that it has been estimated that there is €100 billion in potential energy to be generated from wave power around our coastline, the incentive is not lacking. I mention tidal energy, as distinct from wave energy. There are significant opportunities to develop that if there is the political will to push it through. Not only could we be in a position where much of our energy requirements are met from a renewable indigenous source, but the development of that resource could lead to a massive economic stimulus and help to create many thousands of jobs. It has also been forecast that were this island to develop this resource to anything like its potential, we could become an exporter of wave generated energy to countries that do not possess our natural advantages.

To return to the concrete proposals in the Bill, there appears to be general agreement on the part of those involved in energy suppliers with the energy demand reduction target programme. Bord Gáis, for example, believes that the programme has the potential to increase employment through the provision of energy efficient boilers, insulation, and so on. However, the company raises the possibility that the added costs involved, while benefiting the suppliers of energy efficient products, could add such a burden to consumers that they would further reduce demand for energy. That obviously applies to business and domestic consumers. The company's point regarding the impact of these measures at a time of overall economic downturn needs to be borne in mind when framing programmes such as this.

The ESB, in its submission to the consultation process on the programme, also made the point that there is insufficient data on how consumers are likely to react, and on final energy use. It also makes the point that there will be inevitably higher costs. Given that the ESB claims that these will be passed on ultimately to the consumer, the programme must be clear about where and when the promised savings to the consumer will come.

We can all accept that making a house more energy efficient through better insulation will lead to less use of electricity and gas for heating purposes and, ultimately, to lower household bills, but care must be taken to ensure that those are not offset by prohibitive initial costs. Care must also be taken to ensure that the suppliers do not offset any additional costs to themselves simply by increasing the prices they charge to consumers in which case the consumers see no benefit in terms of their own budgets, which is a far more important consideration to them than reducing the level of carbon emissions, however worthy that objective might be. Realistically, in the current economic climate where people find themselves struggling to put food on the table, the practice of reducing their overall energy costs by denying themselves adequate heating could increase unless the area is properly regulated to ensure that it will not be a further burden on the consumer.

On the issue of increasing the costs on households, I note the Tipperary Energy Agency's submission which claims that the programme of increasing household energy efficiency would only work in consultation with the local authority suppliers of social housing and with 100% long-term support. That is indicative of how many would regard the costs involved. That would not apply to private households which, presumably, would have to meet the extra costs themselves.

The ESB also recommended that a levy be imposed on all energy users in order to fund the EDRT. This raises the spectre of further costs. Considerable caution must be exercised before such a measure would be imposed given the current economic situation and the burden that is placing on households and businesses.

I certainly agree with the ESB on its linking of the programme to the targets for the production of energy from renewable sources. That would complement what I said earlier on the need to press forward much more aggressively on that and have a much more long-term and imaginative vision of what is possible in the energy sector rather than concentrating on measures such as this.

In a reply to a question on fuel poverty recently, the Minister referred to the energy efficiency of homes as being a key factor, along with what I would regard as the even more important factors of energy prices and actual household income. A report based on statistics gathered over the winter of 2006-2007 showed that there were 1,300 excess deaths which in large measure can be attributed to illness caused by persons being unable to properly heat their homes. The vast majority of those deaths were of those aged 65 and over. In his reply, the Minister stated that enhancing the energy efficiency of low-income homes through permanent structural improvements is the most effective means of addressing energy affordability. He went on to list the energy efficiency improvements made in almost 76,000 homes under the Better Energy: Warmer Homes scheme, and that 14,543 homes had been retrofitted this year. He promises to publish the affordable energy strategy within the next few weeks.

Clearly, the emphasis of the affordable energy strategy will be to concentrate on improving the energy efficiency of the homes in which people who are struggling to pay energy bills are living. I have no difficulty with that approach but I would question whether enough is being done about the other causes of fuel poverty.

I have also had a number of representations on the warmer homes insulation scheme. The position as it stands is that people can only apply for one form of insulation, either attic or cavity wall. While I understand that such is the current criteria, it is something that ought to be addressed. Those who have responsibility for administering the scheme admit that it is a deficiency that they are currently unable to address due to the limits on the amount of funding available. That is something I hope the Minister might address as part of implementing the strategy which he promises will be unveiled shortly. That is a significant difficulty. While there will be an argument that in the current economic environment the extra funding cannot be made available, surely the logic of tackling fuel poverty in this way would indicate that the extra funding would prove to be cost effective in a relatively short period. That would come about as energy costs and the burden on the State through social welfare in this area fall, not to mention the cost of coping with health issues brought on by the inability to properly heat homes.

I have had a number of representations on this issue from people who have had attic insulation installed in their homes but who, because they do not now qualify also for cavity wall insulations, are still experiencing problems. In one case of which I am aware, this is leading to a worsening of respiratory and other health problems due to inadequate heating and insulation. Most of the houses of which I speak were built in the 1930s, 1940s and 1950s. It is essential that there is adequate heating in those houses. Many of those householders are the second, and in some cases third, generation living in those houses.

Where they have applied, through various agencies, for attic insulation, the greatest energy saving for houses such as those is what I would call the wrap-around outside insulation. It costs approximately €4,500 to the Exchequer per home but it is invaluable to those who reside in such houses due to the amount of energy it saves. In most instances, in houses such as those which I have encountered the householders are persons on the wrong side of 60 — a little like the Minister of State, Deputy O'Dowd and me — and it is of significant value to them.

Deputy Ferris may speak for himself.

I look my age. What is the Minister of State's excuse?

Apart from improving the energy efficiency of homes, there is the overall issue of cost. Obviously, as with the inability to meet the cost of anything, income is the key issue and we all are aware of why people's incomes are under such pressure at present. I will park that for the moment.

There are other major contributory factor. Actual energy cost is something that can and should be addressed by the State. We have seen significant increases in energy prices imposed by the main suppliers with the result that energy costs take up a greater proportion of household budgets. That is happening to so many people. I concur with Members from the Government side of the House that during the election of February of this year when the winter was terrible, one of the most striking aspects was that those in the low to middle-income bracket found themselves turning on their heating for an hour in the morning and an hour in the evening because they could not afford any more. Another striking aspect is that those who had oil or kerosine heating in their homes no longer fill their tanks because they cannot afford to do so. They go out with five gallon drums to buy ten or 15 gallons of kerosine so that they can have hot water and heat their homes for a limited period of the day. It is a terrible indictment of the system. Significant price increases are taking up a greater percentage of household budgets. This is true for all sectors of society, including business, but it is particularly the case for those in receipt of social welfare payments and the working poor on the minimum wage or close to it, for whom basic costs such as food and energy inevitably comprise a much higher proportion of their household budgets than they do for those on higher incomes. This matter can and ought to be directly addressed by the State as part of any programme to address fuel poverty. Through the regulator, the State should refuse requests for price increases on the basis of the overall social and economic costs as opposed to the short-term possible falls in income on the part of the suppliers who have in any event done well in recent years in terms of profits.

I apologise for interrupting, but the Deputy is sharing time and has already spoken for 15 minutes.

Ten minutes are to go to Deputy McLellan.

Five minutes are remaining to Deputy Martin Ferris.

I will not even take that. I will be brief.

The Government's commitment to tackling fuel poverty must be called into question, given the cuts to the amount of free gas and electricity units available under the household benefits scheme. This situation needs to be reversed to allow those most in need some relief from rising energy costs. The Minister of State has probably encountered people who are hurting — the most vulnerable, those with small incomes, old age pensioners or those with no incomes and only slight contributory pensions, assuming they even qualify for them. They must deprive themselves of proper heating for their homes because of their financial position. Will the Minister of State and the Government take this fact on board and ensure that people will at least be able to live in some form of comfort in these terrible economic times?

I welcome the Bill in principle. We will study it in great detail and table any amendment we draft. I hope the Bill will be passed as soon as possible and will take people's needs into consideration. The Bill offers an opportunity to debate all of the issues for which it proposes to legislate. I look forward to being part of the debate.

Most of the specifics of the Bill have been adequately dealt with and my colleague, Deputy Martin Ferris, has addressed the issue of fuel poverty, which is central to the energy sector and is particularly important as we enter winter when many people find it most difficult to heat themselves and their homes properly. I hope this will be taken into account when framing the budget and that some concrete income measures can be introduced to tackle fuel poverty alongside the plans to address fuel efficiency within homes.

The wider issue is one of where to access our energy. Central to this is increasing the proportion of our energy needs that are met from indigenous renewable sources. The State has signed up to ambitious targets for renewable energy generation, but there are questions regarding how they will be achieved in the context of overall policy. One matter is certain, namely, in common with other possible job creation initiatives, the targets require positive engagement from the State sector. This appears to be frowned on at present and goes against the obvious ideological bias that apparently dictates the IMF's approach. For example, the development of renewable energy sources ought to be led by State agencies. In this context, it is vital that the ESB, Bord Gáis and Coillte be kept in public ownership to be the driving forces in the sector. The Government plans to establish the NewERA company, which will be involved in the bio-energy sector, and we will watch with interest how it develops in the context of possible objections by the IMF and EU to State investment.

The scale of our energy dependency is indicated by the fact that we import to meet 90% of our needs and consume approximately 8 million tonnes of oil per year. Most of it is used by private car owners. There is considerable scope for the replacement of a significant part of that through substituting bio-fuels. It is an undeveloped sector in Ireland despite what one might imagine to be the natural advantages of an agricultural country. My party has published proposals to revitalise the sugar beet sector as a source for such fuels following the scandalous closure of the sugar sector by Greencore under the previous Administration. The closure impacted on my county in particular through the closure of the factory at Mallow. Thanks to the European Court of Auditors, we now know that this was not done in accordance with any EU decision or recommendation, as was claimed. My party and others would argue that it is not too late to retrieve that situation and revive the traditional sugar sector. As part of that effort, we should divert a substantial part of the crop into the production of bio-fuels.

I have recently seen a proposal that explored the possibilities for bio-diesel production. A factory established for this purpose could utilise all aspects of the crops, including the end production of fuel. One estimate is that a factory processing a crop from 50,000 acres of tillage land could employ 250 people. This would give a local economy a significant boost and address the need to lessen our dependence on imported fossil fuels via an indigenous substitute.

We have almost 3 million acres of tillage land. Their potential is considerable, even if only a relatively small proportion of that land is diverted into the production of crops for use as inputs into alternative fuel production. Given the forthcoming review of the Common Agricultural Policy, CAP, this consideration ought to be examined as part of facilitating farmers who are in receipt of the decoupled single farm payment to venture into alternative farm-based enterprises. Research into bio-fuel production indicates high returns to the primary producer. Nor would it threaten food production, as the same crops can be processed for food prior to being utilised in fuel production.

There is also an argument in favour of producing and operating electric cars. The potential savings from replacing petrol are indicated by the fact that petrol imports cost in the region of €6 billion per year. Some people who have conducted research into this matter are convinced that having a direct input into the production of such vehicles could be possible.

Apart from the fact that replacing imported fuel with indigenous sources would have a considerable impact on our energy balance of payments, it could have a significant impact on the economy in general. The Government has recognised this potential in its proposal for NewERA and we will watch how that develops with interest, particularly given the question of whether the establishment of such a public company and its direct involvement in job creation would be tolerated by the IMF and EU in light of their insistence that the proceeds from sales of State assets — they should not be sold in the first place — be used instead to pay the bank debt.

The main benefit of large-scale alternative fuel production from native sources would be to create sustainable domestic employment and help to reduce our dependence on overseas direct investment, thereby strengthening the economy overall. It has been estimated by the Spirit of Ireland group, which has conducted extensive research in the energy sector, that an indigenous energy economy could create more than 80,000 jobs. In the current climate, surely this is something worth striving for, particularly as it would be based on our own natural resources and would return to us a significant level of control over our economic destiny.

I hope that the Bill can form part of an overall debate on the energy sector and that the Government's plan to tackle fuel poverty goes beyond the measures and restrictions that have been indicated to date.

May I share time with Deputy Mattie McGrath?

Is that agreed? Agreed.

This Bill should fit into a superstructure, namely, the climate change Bill. I regret that the publication of that Bill has been postponed. One element of the Government may have been enthusiastic about including the Bill in the programme for Government, but it has not been endorsed wholeheartedly. This is regrettable. It is important that the heads of the Bill are published so we can see some progress on it.

That said, I welcome the Bill before the House as part of the wider cultural shift we have been seeing in recent years towards smarter use of our energy. Heavy emissions models and widespread inefficiencies have been common in industry for years and I am glad to see the Bill reflects the change which is already under way and establishes legal compulsion on energy suppliers. As competition develops in our internal market we run the risk of an under-regulated market losing sight of the urgent need to achieve efficiencies. Therefore, I welcome the fact that the Bill seeks to address this potential problem.

The Bill is also very welcome in so far as it provides for an energy demand reduction target programme and I hope it will go a long way towards achieving our 20% efficiency target under the national energy efficiency action plan and help to reduce carbon emissions. I suggest this target is too modest. Nonetheless, the measures are a help.

Sustainability will come much more to the fore in future years. I used the Ecology Foundation as the source of the following statistics. A total of 90% of Ireland's energy mix comprises fossil fuels, namely, oil, gas and coal. Ireland has the fourth highest dependency in Europe on imported fuels. Imported fuels cost Ireland more than €6 billion per annum. We are getting used to the difference between millions and billions and we understand the impact €1 billion can have. If we could reduce the balance of payments of our fuel bill it would make a significant difference. We import all of our oil and coal and 95% of our gas, which will come as a surprise to people.

A total of 55% of our electricity is generated from gas, and it is only when one considers this statistic that it brings into sharp focus how exposed we are, as Ireland has only 11 days gas supply stored compared to 92 days in France and 84 days in Germany. This is a very high risk strategy. We need only consider the earthquake in Japan which knocked out a major nuclear plant. Not only was there an impact on the local population but also on the industrial sector. It takes considerable time to replace such an energy loss. Energy security is a very important issue and our dependence on the importation of fuels is a serious problem for us. It is a high-risk strategy.

If Germany had an Atlantic coast similar to Ireland's would it have made much more of it as a resource than we do? It provides a great opportunity but it is under-performing. I hope we do significantly more with regard to wave and wind energy because the Atlantic is a wonderful resource and it will become incredibly important in terms of our future energy security.

In recent years progress has been made in home energy retrofitting. I hope the Bill will help many people who until now have not had an opportunity to access grants or financial arrangements to allow them offset some of the cost of insulating their homes and other efficiency measures. There is no doubt it makes a sizeable difference. I live in a very modest terraced house and a few years ago I installed very good insulation in the attic. During the very bad weather I could see the difference made because the frost and snow stayed on the roof. It was clear the energy was being contained in the house rather than heating the environment.

The establishment of an energy efficiency fund is a particularly interesting aspect of the Bill and I look forward to seeing the type of projects it will help to fund.

I welcome the regulatory power the Bill confers on the Minister and the Commission for Energy Regulations. However, I am concerned about some aspects. Will the Minister elaborate on what the Bill considers to be "small energy suppliers" as referred to in section 11(1) in Chapter 4? What are the criteria used by the Department in drafting the definition? Conflict could arise at the edge of this. Does the Minister have any estimates on how much money will typically be taken in by the energy efficiency fund? I presume it will be a rolling fund because it will be paid off over time and will have new entrants.

Does the Minister envisage any adverse effects on smaller retrofitters? An issue which was raised very early was the opportunity for people who formerly worked in the construction sector to retrain and obtain the accreditation required to do the work. However, some people who did this were concerned about larger suppliers dictating who the contractors would be. I would like to know how this is likely to roll out and how this aspect will be managed. It will be quite important for people who have diverted from a particular type of job to this profession. Opportunities exist if they are properly harnessed.

What impact on the Department does the Minister envisage the administration of the energy efficiency order system and the oversight of voluntary energy efficiency agreements will have? Will additional staff and resources be required? How will it play out from an institutional point of view? It may well be that these will be teased out on Committee Stage but I would welcome a response to know the type of amendments to table.

The Bill seems to introduce a number of sensible measures in respect of pension entitlements for Bord Gáis and ESB employees who transfer to other sector organisations and this is needed.

I was interested in some documentation from the Sustainable Energy Authority of Ireland. We were fortunate to have had a briefing with it several weeks ago. While we would like to think that in the first instance consumers think about the environment, what motivates people to take up initiatives such as the warmer home scheme are comfort gains and energy savings. According to research, the environmental benefit was a weak motivator. A total of 65% of people believe the value of their home increased after they upgraded so it will be important. Comfort is also an important factor as the majority of participants cited energy savings followed by comfort gains.

It has been well established that most households do not know their energy costs or prices, which is interesting. That brings us into another area that was touched on by previous speakers, concerning fuel poverty. Often, those who receive free units of electricity or gas do not use them in full because they are terrified of receiving a bill. They find it almost impossible to quantify what they are using. Devices exist to do so and it is important that they become better known among those in receipt of social welfare. One of the arguments made about fuel poverty is that someone who is housebound should receive the fuel allowance for the whole year. The eight months fuel allowance allocated by the Department of Social Protection is very welcome and it is unfortunate that it was reduced in recent months. Paying it for eight months is a false economy in respect of someone who is housebound if people end up in hospital because of inadequate heating.

I refer to sustainability. If we are not at peak oil, we are very close to it. Sustainability must become one of the cornerstones of all policy. We are very exposed due to the lead-in time for the importation of fuel. We have only 11 days of fuel. The ecosystem, the increasing population of the world and the demands of the newer economies would make the issue of sustainability more important. This type of scheme will be important in reducing demand but not necessarily reducing the quality of people's lives when we can retrofit homes and make them more fuel efficient.

I am glad to make a contribution on this Bill. It is stated in the objectives that this Bill tidies up old Acts, which have served us well but need to be tidied up. We need changes to modernise and to bring us to where we are in 2011. This country is far behind others in energy conservation. We have paid lip-service to it over many years in spite of a number of fuel crises. I welcome the energy reduction programme, which is necessary. We have commitments to our European partners and within our world remit. We must be serious about this. We must use the carrot and stick approach and bring people with us other than using only the big stick and trying to compel people to do something. The Irish people will follow if they are encouraged but they will not be driven. This is right because we were driven for long enough by a foreign occupation and we have an inherent feeling about that. We have a view on being told what to do, what to use and what not to do.

Oil companies leave much to be desired. Some have disappeared, others have entered the market. Where is the competition in the market? There is price-fixing. We had a debate on the Competition Authority today. The Competition Authority may as well not be there. I am told that it has been in existence since 1991 but former chairpersons of the authority have resigned. During the Celtic tiger years, the authority could not function due to a lack of funding. I would like to see the energy regulator get serious with big oil companies. There is price-fixing in terms of the prices paid at the pumps. This leaves a role for those who launder fuel. There has been a clampdown on it recently, which is welcome. Not only is the fuel of poor quality, people are supporting the black economy and putting money into the pockets of gangsters. Sometimes people are driven to go to those areas but they are foolish because it is penny-wise and pound-foolish.

I am shocked at the price of fuel at the pumps. It was very bad this time last year, increased in the spring, decreased over the summer but has increased again. At the thought of winter, oil companies increase prices and add charges because they know the nights are getting longer and the climate is getting colder. This is an opportunity for the energy regulator to do some meaningful work and impose controls. The Bill mentions our national commitments but these people must be compliant and must draw the line. The Competition Authority is ineffectual so someone with teeth and resources must be appointed. NERA is my bugbear and it has plenty of people going around trying to close down businesses that are on their knees. Some of these people should be directed to bigger companies that have the power and wherewithal to fight off any investigation by going to the High Court. We must turn our attention there.

Many speakers have referred to the fact that 90% of our fuel is fossil fuel. We import almost all of it, including all our coal and oil, which is a pity. We cannot produce coal here and we have a poor history of mining. This is a worrying situation because we are vulnerable. We are at the whim of world prices, price-fixing and cartels. Cutting turf and bringing it home for the winter is a pastime of many families and communities but now that has been prohibited. All sorts of threats have been issued for next spring if people attempt to cut turf. They will all be locked up and their vehicles will be impounded. That is wrong because turf cutting is part of our heritage and our culture. Fuel poverty may be forced on those who are not allowed to carry on practices that have been handed down from generation to generation.

It is shocking that we only store 11 days of gas and oil supply. In times of unrest in parts of the Middle East, we have seen what can happen with shortages. We are too vulnerable. The Joint Committee on Communications, Energy and Natural Resources of the last Dáil visited Ringaskiddy and other plants. We saw the valuable work that goes on but it is far too small a supply to have on stand-by. Eleven days is not even two weeks. This is a major issue.

I had many battles and fundamental disagreements with the previous Minister, Mr. John Gormley. He had many issues on the Climate Change Bill and I was concerned about it with regard to agriculture. The baby should not have been thrown out with the bath water.

The Minister, Deputy Hogan — or Big Phil as I know him affectionately — dropped the ball. Kilkenny are good at putting the ball into the net but he dropped the ball, or one could call it a bombshell, regarding the Climate Change Bill. He even caught some of his Cabinet colleagues by surprise. Knee-jerk reactions like that send out the wrong signals to all our partners.

What was the knee-jerk reaction?

It was that announcement. Could I carry on now uninterrupted, if the Deputy does not mind?

Is the Deputy having a go at the Minister, Deputy Hogan?

I disagree with the way he announced it.

What is the Deputy for?

May I speak through the Chair?

This is not the plinth.

The Deputy interrupts morning and evening, every time he is here.

Can we have some order, please?

The Deputy would get the award for being the best heckler this year.

We are getting tired of Deputy McGrath's double standards.

He is continuously heckling every morning on the Order of Business and elsewhere.

He is like the wind.

It is time that the Ceann Comhairle was fair to people and reprimanded him. I am not criticising Deputy McConalogue who is doing his best. The Ceann Comhairle is showing a very unfair bias towards that side of the House. Whether he cannot hear or whatever, I do not know, but it is most unnerving when these Deputies are heckling. Deputy Buttimer and Deputy Durkan are past masters at it on a daily basis.

Is he for climate change or against it?

Can we have some order, please? Deputy Buttimer will have a few minutes to speak when Deputy McGrath has finished.

It is not appropriate to refer to the Ceann Comhairle in his absence. The Deputy should address any issues he has to the Chair. Please allow Deputy McGrath to continue uninterrupted.

Go raibh maith agat. I apologise for what I said about the Ceann Comhairle but when it continues it is not nice. We should respect each other's views and opinions here and be allowed to express them without fear or favour. We have all been equally elected to this Chamber and we do not have to be lectured by anybody else.

The Minister, Deputy Hogan, made his announcement last week but I do not think the farming organisations or anybody else expected it. When we were trying to deal with issues of concern he decided to announce that, unbeknownst to anybody.

Does the Deputy want the Climate Change Bill back?

That is what he announced. We were dealing with a Bill that was brought before us by the last government. I would be the first to admit that we had problems with it. We were trying to amend it but this was certainly a bolt from the blue.

The Bill also covers matters such as energy safety and energy theft, which are of vital importance for a number of reasons. Energy safety is paramount for industry practitioners, householders and the agriculture sector. I welcome those intentions as laid down in the Bill's provisions. I also welcome the stronger powers to combat energy theft. Businesses and families must carry their fair share of energy costs but energy theft is both dangerous and wrong. The Bill proposes powers to allow for entry to property and carrying out assessments and investigations where such ongoing problems are apparent.

There is a big difference between a person refusing to pay energy bills and being unable to do so. Such a refusal should be dealt with strictly but inability to pay is a different matter. I do not support recent cuts to the free fuel allowance that were introduced by the Government through sleight of hand because they will have a big effect on needy families. The figures on fuel poverty are very stark.

The Sustainable Energy Authority of Ireland has outlined energy conservation schemes, which I welcome and support, although they are too intermittent. They were introduced by the last government and are being continued by the current Government, and they are badly needed. I do not know why it is that when we want to introduce such an innovative scheme, which is long overdue, there must be so much red tape, delays and intermittent funding. I am involved with Muintir na Tíre, a national organisation that was awarded the contract for delivering this scheme in South Tipperary. I spoke earlier to the manager there who described the delays, form filling and transposition of invoices into the SEAI before rebates were paid. It beggars belief. In addition, it is bizarre that our friends in the banks are not playing their part. A company has been established which took 28 people off the live register who are doing wonderful work on the fuel allowance scheme. Nonetheless, there is a large amount of red tape involved. One cannot operate any business without some kind of bank overdraft but they were flatly refused an overdraft. This is despite the fact that Muintir na Tíre has been in operation since 1937 and has good relations with the banks. Thankfully, they got an overdraft through the credit union which got them out of a hole. They have big cash-flow problems because they must assess the houses concerned, buy materials, supply and install them, have them satisfactorily assessed and then submit their invoices. There are huge logjams there which cause delays. It is not fair to have managers in charge who must fight with the banks on a daily basis.

Deputy Catherine Murphy raised a topical issue earlier concerning the impact of banks that are not Government-supported. She outlined the problems that small businesses have with such banks, as they try to survive from day to day and week to week. The banks are just not playing ball. In the case of South Tipperary, whether the logjam is in Departments or the SEAI, it is heart-rending and unfair. Those concerned with the project do not know if they will be able to keep people off the live register for another week or so, in spite of having commitments to assess houses within deadlines. This is a wonderful scheme but its operation needs to be streamlined. At this stage, it should be running correctly. If the budget is available it should be free-flowing, albeit with checks and balances. We are way behind in energy conservation and are inefficient. I welcome the energy reduction programme, which is important.

The energy efficiency fund is another important feature of the Bill, which is welcome although it will require a great deal of work to implement. I also welcome the security of tenure for workers who transferred from companies such as the ESB and Bord Gáis Éireann to other areas. The numbers of those involved may be small but the Bill takes care of those issues. They were encouraged to move so they must receive the protection to which they are entitled.

I am glad to have been able to address the aforementioned issues concerning the Bill. I thank the Chairperson for providing some protection against interruptions. I believe that my views are as important as anybody else's in this House. The social implications of this Bill are most important, including the links between fuel poverty, energy efficiency and energy theft. These are vital areas that must be sorted out and protected.

I welcome the opportunity to speak on this Bill, which has broad cross-party support. The key objective of the legislation is to reduce energy demand through a targeted programme which will place energy efficiency obligations on energy suppliers and distributors. This is very welcome.

Some time ago, people visited my constituency office to seek primary legislation concerning the pension entitlements of Bord Gáis Éireann employees who transferred to GasLink and, equally, those who transferred from the ESB and ESB Networks to EirGrid.

The energy efficiency obligation scheme for energy suppliers and distributors has the potential to result in significant savings for consumers. Ultimately, it has the potential to reduce national energy consumption and associated carbon emissions. While the legislation seems fairly straightforward, it ticks several very important boxes that the Government and country have been trying to tick, there will be an Exchequer cost but the cost-benefit analyses in Ireland and abroad suggest this will be outweighed significantly by the benefits.

The first benefit relates to competition. Yesterday and today, the House considered legislation on cartels and the encouragement of competition in the economy. Welcome data published recently show Ireland's competitiveness has been improving steadily over recent months. This is crucial to encouraging foreign direct investment. Reductions in the cost of energy, particularly for businesses, have lagged behind other reductions. I very much welcome the fact that this Bill may, in a significant way over time, add to the competitiveness bundle we are trying to achieve. The bundle includes other reduced costs associated with doing business in the State.

The Bill refers to the Government's energy efficiency target of achieving energy savings in the order of 20% by 2020. It will ensure compliance with EU legislation and that competitiveness is supported. It will provide a robust electricity and gas safety regime. We should all be extremely concerned about safety.

I welcome the manner in which the Bill will help those who are less well off. Energy affordability and health and comfort levels of vulnerable members of society must be borne in mind. The programme will assist by prioritising energy upgrades for those on low incomes. This will be written into the targets to be imposed on energy suppliers. Suppliers will be compelled to meet the targets, which may not have been the case to date. The Bill will have other direct consequences for socially excluded and vulnerable groups.

I noted the interaction between Deputy Mattie McGrath and my colleague Deputy Buttimer. There is no doubt that there will be an environmental benefit to the Bill. The reduction in energy consumption will result in reduced emissions of carbon dioxide and other greenhouse gases. The announcement by the Minister for the Environment, Community and Local Government, Deputy Hogan, was very much welcome to me, a Member representing a constituency that is half rural. I agree with Deputy Buttimer's point that it is not really possible to criticise the former Minister, Mr. John Gormley, for what he did and also seek to criticise the current Minister for doing the exact opposite. This is a ridiculous argument and anybody would be forgiven for reacting to it.

Like many of our semi-State bodies, the energy companies have continued to serve this country extremely well. In these difficult times, there remains the potential to obtain more benefits from them. The companies make profits, they have reserves and have great technical experience, and they have very well-qualified engineers and other technical staff. Their experience can be used to a greater extent.

Let me refer to the Hibernia Atlantic cable that is to extend from London to New York. It offers the potential for tier-1 connectivity into what might be described as the western corridor. I am aware that negotiations are ongoing in this regard and do not want to refer to the matter specifically; suffice it to say we should seek to determine how existing large semi-State companies could develop new and more energy-efficient forms of energy supply. I refer also to initiatives such as the provision of broadband connectivity. The companies in question are some of the few in our economy that have access to the capital required to carry out the projects to which I refer. I do not expect the Minister of State to comment on this but to take my points on board.

Deputies referred to those who are in difficulty paying their utility bills. The pay-as-you-go metering that has been rolled out has been of great benefit. I encourage the energy companies to become aware that there are people who are unable to pay. It is not that they do not want to pay. This has been addressed on many occasions.

I very much regard this legislation as part of a joined-up government approach to a large number of issues that have started to arise. It marries well with the competition legislation dealt with yesterday and today, which legislation is to improve our international competitiveness through combating monopolies and cartels. It is remarkable that, after years of inaction, such steady steps can and will return this country to the position to which we know it can be returned. I refer to an economy that is competitive, dynamic and efficient. While this Bill is a small block in that building process, it is definitely a step in the right direction. I compliment the Minister of State and encourage him to keep his eye on the potential of a company such as Bord Gáis with regard to my native county, Cork, and with regard to linking into a broadband cable at some time in the near future.

Cuirim fáilte roimh an Aire Stáit, Deputy O'Dowd. I join Deputy Dara Murphy in referring to the Hibernia Atlantic corridor. The issues of tier-1 connectivity and the cable are important, as he rightly stated.

This is a very important Bill. Deputy Mattie McGrath's remarks tonight certainly demonstrated some cheek. One cannot be against the former Minister, Mr. John Gormley, and against the current Minister, Deputy Hogan. The Government has been quite clear regarding climate change. One cannot speak out of both sides of one's mouth; it is disingenuous to do so. Deputy McGrath was against Mr. Gormley and is now against the Minister, Deputy Hogan. One must be for one or the other. Let us call a spade a spade.

This is very important legislation that I hope will reduce the cost to the consumer.

The onus of ensuring energy supply and security is important. I hope we will have a discussion with energy suppliers in order that we can be assured they can absorb costs and will not pass the extra charges on to their customers. It is important that, collectively, we assist people in terms of energy costs and that we work to increase energy efficiency.

The issue of energy is critical. We are dependent on fuel imports to the level of 89%, which is too high. The Bill deals with energy safety and energy theft. Another aspect of the Bill is energy efficiency, the achievement of which requires major leadership and impetus. In terms of energy efficiency targets set for 2020, we have a job to do. I compliment the Sustainable Energy Authority of Ireland on its work on the important challenges in the energy sector and in the area of energy efficiency. Public bodies, the Houses of the Oireachtas, county councils and semi-States all have an important role to play in the promotion of energy efficiency and homeowners and landlords must also play a role in this. Over-dependency on fossil fuels is becoming unacceptable. We must reduce our energy usage and the Government and its agencies must take the lead. I compliment the Government on this and, in particular, the Minister of State, Deputy Ring, who recently announced grants to improve the energy efficiency of local authority pools, which is to be welcomed.

In any campaign we launch in this area it is important we focus on and adopt measures to cut our consumption costs and costs for the taxpayers having regard to the current economic climate. The old adage of reduce, reuse and recycle still stands.

I wish to refer to fuel poverty, an extraordinarily difficult problem for many homeowners and households. There was a protest by widows and widowers outside these Houses today and one of the big talking points they raised was energy costs. The Minister of State knows from his extensive canvassing in Louth that many elderly people refuse to put on the heating, they are afraid to do so, and they wear jackets and coats indoors. We must address fuel poverty. As incomes have fallen, the proportion of household income spent on fuel has increased. Fuel poverty, by definition, is where a household spends 10% of income on energy and the number of households experiencing fuel poverty will have increased in recent years. To paint the picture of people suffering from fuel poverty, many people on low incomes live in older buildings with poor heating and poor insulation and such houses have been badly maintained in the case of some rental properties and in the case of local authority houses there is a cycle of replacing windows, doors and so on and that work has not been done as often as it should have been.

I welcome the €30 million increase in the allocation for the better energy scheme, which will target the problem of fuel poverty. The programme for Government, for those who do not know, is clear where it proposes the phasing out of direct State supports for energy efficiency and a movement towards a more "pay as you save" model. That is to be welcomed. We must reduce upfront the cost to the household and, in doing that, we must start with the concept of energy efficiency. Speaking from the experience of having been a school teacher in my previous incarnation, the green schools programme is a fantastic initiative. I visited my school, Scoil an Spioraid Naoimh buachaillí agus cailiní, before the summer holidays and it had won its second green flag award. That is fantastic. Young boys and girls together with their parents are being made aware of green issues. If the pupils of that school and their parents can become aware of those, why can the rest of us not?

The issue of energy theft is important and must be tackled. The Bill proposes that the Commission for Energy Regulation would be able to prosecute offenders. The current system where only the ESB and Bord Gáis can prosecute offenders for the theft of energy is not suited to a deregulated market and the Bill extends theft provisions to all consumers and not only to the ESB or Bord Gáis but to all independent suppliers. It is estimated that energy theft of €32 million per annum occurs here. It is estimated such theft costs almost £10 sterling per household per annum in the United Kingdom. That is an extraordinary amount of money. As energy prices increase, energy theft will increase in value and become a more pronounced problem. We must make a decision that we will not tolerate it because it undermines efforts to increase the security of supply, improve energy efficiency and the targeting of resources where they are most needed.

The provision in the Bill that obliges a consumer who is aware that a meter has being interfered with, and who is not registered with the ESB or Bord Gáis, to take all reasonable steps to ensure that such interference is discontinued is appropriate. Failure to do so will be an offence. We must send a message that people who interfere with a meter and engage in such theft damage not only the energy supplier but their fellow neighbours. Sergeant Tony Davis was interviewed on Newstalk yesterday in a nice segment on the issue of theft from ESB substations and equipment. People are going into substations and stealing equipment. Such theft poses not only a physical risk to those directly involved but to neighbours and young children who might be playing outside and it causes financial losses for the energy supplier. In some cases, it causes a cut off in supply of the energy source, electricity in this instance in the case of the ESB. In addition to the existing criminal code, this provision in the Bill may assist in tackling the problem of energy theft. It is worth recording that the Bill provides for deemed contracts which will also help in the prevention of energy theft and will provide for charges to be applied where energy is used but contract provisions have not been formally accepted. In essence, it provides that if one uses electricity or gas, even if one does not have a formal contract, one is still responsible for paying the cost. I welcome the provision that charges imposed under deemed contracts are not to contain any penalties. That is a welcome provision. There is also provision for the commission to make regulations in regard to deemed contracts. It is important that such regulations only impose charges which are similar to actual contracts. Charges should not be limited to pure usage: other elements such as standing charges should also be included. It is important that aspect is examined.

I wish to refer to the issue of energy costs and the process whereby Bord Gáis is able to pass on costs to their consumers. That company made a profit of close to €120 million in 2010. It also announced, and the Minister of State can correct me on this, that it had applied to the energy regulator and received approval for an increase in its charges to be passed on to its customers. More than 100,000 Bord Gáis customers are in arrears and any increase in such energy costs to the consumer will put a further strain on customers and increase pressure in terms of the payments of their bills. In terms of fuel and energy, surely there is an obligation on the energy supplier, be it the ESB or EirGrid, to absorb such a cost and not to pass it on to its customers. People have a difficulty in being able to afford to pay their bills - many people are struggling. If we are serious about creating a more energy efficient State and tackling fuel poverty, Bord Gáis in particular and other energy suppliers must be asked to absorb costs given that they have made inordinate profits.

Deputy McLoughlin has six minutes.

I welcome the opportunity to speak on Second Stage.

I must interrupt the Deputy as the next speaker is Deputy John Brown. Deputy Brown has 20 minutes. My apologies about that.

I will not use all my allocated time.

I welcome the opportunity presented by the Second Stage debate on the Energy (Miscellaneous Provisions) Bill 2011 to discuss a range of issues pertaining to the future well-being of the country. Various speakers have noted that the proportion of imported fuels, at 89%, is too high and that our over-reliance on fossil fuels is not good for our future economic development.

Fianna Fáil supports the Bill in principle, although we will be seeking clarity on whether the streamlined better energy homes programme will result in reduced Government support for energy efficiency schemes. The Minister must also clarify whether energy companies will be prevented from passing on the costs of the new scheme to families already facing large increases in energy costs.

The Bill introduces measures to increase energy efficiency among energy suppliers and distributors. The Electricity Supply Board (Superannuation) Act 1942 is being amended to restate in primary legislation certain pension arrangements for former employees of the Electricity Supply Board who transferred to Eirgrid. These are welcome measures, as is the amendment of the Energy (Miscellaneous Provisions) Act 1995 to reduce the risk of theft of gas and electricity.

While the Bill's objectives are laudable and the issues outlined by the Minister relevant, a number of issues arise. Deputy Buttimer spoke about green flag days in schools. I have attended many flag waving day events and it is tremendous to see teachers, parents and children working in partnership to acquire a green flag. At my end of the country Wexford County Council has designated an official to work with schools on this welcome initiative. It is easier to convince youngsters of the importance of the environment than it is to convert older people because schoolchildren like to protect the environment and celebrate environment days.

Although the Wexford team has not often played in Croke Park in recent years, the greening of that stadium was a great achievement on the part of GAA officials and the ESB. It is one of the flagship stadiums worldwide in terms of energy efficiency.

It is difficult to quantify fuel poverty, but we all know from canvassing and dealing with people in our clinics that there are significant difficulties in this regard, particularly given the increases in fuel costs in recent years. I was involved in the oil business for 13 years before I was elected to this House. Oil men have told me that the quantities of oil they are selling to older people and others who are suffering the effects of the recession have decreased from 500 or 1,000 litres to 100 litres this year because people are finding it difficult to find the money to pay for fuel. I recognise that the budget will be difficult, but the Government should consider ways of helping those on low incomes to provide heat. We should increase the fuel allowance or, at least, maintain it at the current level in order to deal with oil poverty.

Having worked in the oil business, I question whether it is being operated properly. Oil companies are engaging in rip-off practices. When I was Minister of State at the Department of the Environment, Community and Local Government, I tried to deal with this issue and have called on the companies to answer our questions. It is baffling that they can increase their prices immediately when spot prices rise on world markets but are slow to decrease them when they go down. We are told they must cover the cost of keeping oil in storage, but there is a monopoly or cartel operating in the business that needs to be broken. It is time that explanations were sought from the companies for the variances in oil prices and their slowness to decrease them.

The provisions included in the Bill on electrical and gas safety are important. Electrical investigation officers and gas safety officers will be given statutory powers, while gas safety provisions will be extended to include liquefied petroleum gas, LPG. Gas companies have until now been self-regulating, but that has not worked to the satisfaction of the public or this House. There have been a number of accidents and fatalities and the Minister is right to address this issue. A number of housing estates around the country are connected to LPG supplies rather than the natural gas grid. I understand these estates will now be covered by the safety regulations.

County Wexford does not have access to a natural gas supply, even though the neighbouring counties of Waterford, Kilkenny and Wicklow are connected to the grid. I have raised this issue on numerous occasions, including as a Minister of State, but Bord Gáis offered every excuse in the world for its failure to connect us. A new company has taken over the former ESB generating station in Campile, New Ross, and plans to invest considerable amounts in upgrading its capacity. However, it needs a supply of natural gas. Given that it has been quoted a high price for connecting to the grid on its own behalf, perhaps the time has come to provide a natural gas supply for the county. It is important that the company which intends to invest significant amounts of money in County Wexford is facilitated in its endeavours.

The energy efficiency fund will be managed by the Minister. While I have no problem with that, perhaps the Minister will explain how and on what type of programmes the fund will be used. How much does he expect will be in the fund? How will it be spent? It is important that he explain fully how it will operate. It is a little unusual that the Minister will manage the fund, but that might be a good thing. However, he should explain fully how he will do that.

The better energy programme, formerly known as the national retrofit programme, is designed to ensure there are more opportunities for householders and businesses to reduce their energy consumption, leading to real and lasting cost savings. The better energy programme will replace the three existing SEAI grants. Will the Minister ensure no costs will be passed on to the customer as a result of these changes?

There is a great deal of talk at present about the construction industry being on its knees. There is a great opportunity for that industry to become actively involved in the new scheme. I read recently that there are approximately 900,000 homes and 100,000 public and commercial buildings that are energy deficient and could be upgraded. This would be a great opportunity for the construction industry. Already, approximately €84 million has been paid out under the home energy savings scheme and 100,000 home owners participated in the scheme. There were 200,000 retrofit measures. If there are 900,000 energy deficient homes, it presents a great opportunity for the building industry to come on board with the Minister, Deputy Pat Rabbitte, who addressed the construction industry last June and appealed to it to co-operate and become actively involved in the scheme. I agree with Deputy Buttimer that it is important that the industry put forward ideas and suggestions on how it could get involved in this area.

I wish to raise a matter involving a company in my home county. I have sent correspondence about it to the Minister for Finance and the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte. The company, located in Wexford, employs 68 people and has a suggestion or proposal for the Minister. More than 1 million houses in Ireland have inefficient glazing, be it single glazing or inefficient double glazing. The company proposes to upgrade those houses with energy efficient glazing without changing the window frames. We have seen much advertising about this in recent times. The company says this can be done at a fraction of the cost of a complete replacement, as the householder does not need to redecorate. It is the glass that makes the difference. Current double glazing is up to 60% more efficient than double glazing installed before 2004.

The company launched its service last May and has generated in excess of 800 inquiries so far. Its conversion rate is between 20% and 25%. The reason the company raised the issue with me and other Deputies from Wexford is that in nearly every inquiry to the company people have asked if any grant is available for the upgrade. Unfortunately, the company must tell them there is not. The company recognises there is not much money in the Government coffers at present so it proposes that the Government consider making this service VAT free to householders in that the householder could claim back the VAT element of 13.5%. The suggestion should be considered. I am sure there are other companies that have the same idea and are carrying out the same project. It should be considered. Many houses have been upgraded under the schemes that existed in the Department in recent years, but there has been no grant for windows. Much of the heat in a house goes out through the windows owing to the inefficiency of the glass, so the suggestion should be considered by the Minister.

The ESB has been involved in some schemes in recent times with the Department and the Government of the day. It still feels it is in a monopoly situation even though some of the market has been opened to competition. Last week I discovered a case where a business in Wexford had to close down two years ago owing to the economic situation in which it found itself. The company had paid huge sums of money to the ESB to connect three-phase electricity and so forth. The owner of the factory managed to lease the factory in the last two months to a new company, but when that company applied for an ESB connection it was asked to pay the same amount of money again because it was more than two years since the factory closed. It was asked to pay €3,000 even though the previous company had paid that amount. That is not helpful to industry and to communities that wish to re-establish a business in an area.

I thank the Minister for bringing the Bill before the House. Most of what he proposes is welcome, but he must explain some of the issues I and other Deputies have raised. The key question is whether energy suppliers will pass on increased costs to customers or whether the Government will be able to prevent this. That important question is worrying people.

Wind and wave energy must be given serious consideration. They cannot be considered in isolation. In the case of wave energy in particular, or electric seas as it is called by some, the Minister must set up a project involving Scotland, Northern Ireland, England and the Republic. There is a tremendous opportunity to do that. Mr. John Barry is assistant director of the Institute for a Sustainable World at Queen's University Belfast, and last year he presented a very good paper on how the four countries, if they came together, could generate huge amounts of electricity from the seas which could be sold on the world market. The Minister should examine this suggestion.

I thank the Minister for introducing the Bill and giving us the opportunity to speak on it.

I welcome the opportunity to speak on this important Bill. I wish to highlight a number of objectives, including the introduction of primary legislation to increase energy efficiency as it relates to energy suppliers and distributors, the amendment of the Energy (Miscellaneous Provisions) Act 1995 to reduce the risk of theft of gas and electricity and the amendment of the Electricity Regulation Act 1999 to improve electricity and gas safety.

The Bill proposes to provide the legal framework for an energy efficient obligation scheme for energy suppliers and distributors. To achieve this the Bill proposes to put in place the framework to enable the Minister for Communications, Energy and Natural Resources to implement an energy utility energy efficient obligation scheme, the energy demand reduction target, EDRT. This will quantify a quantity of energy savings to be achieved collectively by all retail energy sales companies and energy distributors over a specified period. Under the energy services directive, ESD, member states may exclude small distributors, small distribution system operators and small retail energy sales companies.

Debate adjourned.