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Dáil Éireann debate -
Thursday, 11 Dec 2014

Vol. 861 No. 3

Priority Questions

Bioenergy Strategy Implementation

Michael Moynihan

Question:

1. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources when he will publish a biomass strategy; if he has sought to examine the possibility of transforming Moneypoint, County Clare, to biomass to reduce our carbon emissions; his views on converting our peat power stations to biomass; and if he will make a statement on the matter. [47396/14]

The draft bioenergy plan was published in October and will undergo strategic environmental and appropriate assessments which will inform the content of the finalised plan. These assessment processes will commence shortly.

The draft plan sets out the broader context for the development of the biomass sector, as well as the current status with regard to the range of policy areas that must be co-ordinated to create the conditions necessary to support the development of this sector. The REFIT, renewable energy feed in tariff, schemes are the primary means through which electricity from a range of renewable sources is supported. In this regard, electricity from biomass, including co-firing with peat, is already supported through REFIT. The draft bioenergy plan recommends the continuation of REFIT for electricity generated from biomass and that the scheme would be kept under review to assess the most cost-effective way to support co-firing of biomass with peat.

The choice of technology is, however, ultimately a commercial decision for individual project developers and the fuel used at the Moneypoint plant is a matter for the operator. The Minister has no role or function in this regard. Notwithstanding this, there are several important issues that would demand further consideration before biomass could be used at Moneypoint. The conversion of Moneypoint to biomass would require significant levels of capital investment by the operator. Support tariffs substantially higher than those available for wind, the most cost-effective renewable technology in the electricity market, would also be required which could lead to increased electricity prices. Substantially more biomass than is available domestically would be required with large amounts of the resource having to be imported leading to uncertainty in security of supply. The sustainability of transporting large amounts of imported biomass would also be a cause for concern. The commitment of substantial amounts of biomass to Moneypoint would divert scarce biomass away from the renewable heat sector where biomass can be used more efficiently and where fewer alternative technologies exist.

The Minister and the Department will have to look carefully at the biomass issue. I have examined the use of biomass at the Drax power station in the United Kingdom, a station which generates 10% of the United Kingdom’s electricity requirements.

On the Minister’s point about transportation costs of biomass to the Moneypoint station, the same costs are already in place for transporting coal there. The boilers installed in the plant when it was constructed in 1979 are easier to convert to biomass than any other alternative fuel. Biomass should be put high on the renewables agenda because it is the best way to see reductions in carbon emissions.

I agree with the Deputy that biomass has a role in the bioenergy sector. It is hoped that biomass will account for 5% of the renewable electricity targets for 2020. Bord na Móna’s peat-generating plant in Edenderry, County Offaly, has been using biomass. It is expected the plant will apply to the Department under the REFIT scheme. The ESB, however, has so far not given any indication of using biomass at its power station in Lanesboro, County Longford.

While transportation costs are a factor, the real concern is with the renewable heat sector. Biomass is more efficient in this regard. Unlike wind, it is also a scarce resource. While there are constraints in its use, I accept there is potential in the use of biomass.

There is huge potential with biomass.

The changes to the Common Agricultural Policy introduced by Ray MacSharry have resulted in a major increase in afforestation, with sitka spruce the main species of tree used. The Drax power station in the United Kingdom imports this raw material from the United States. With proper research and development, it would be possible to deliver considerable added value in this area. Much of the timber coming on stream nationally is being sold as pulp and pellets at a low, albeit reasonable, return. We should target other uses for these resources. Given that they are being used differently in other parts of the world, why not use our commodity as biomass? Ireland is slightly behind the curve on this issue. Biomass is the way forward and we must challenge the system to seek to integrate the resources available to us.

The Deputy and I are on the same page with regard to the potential of this sector. If officials have not examined the case in the United Kingdom to which the Deputy referred as part of the consultation process on the draft bioenergy plan, I will ensure they do so. Realising the potential from forestry presents cross-departmental opportunities. I will contact the Minister of State, Deputy Tom Hayes, to examine this potential. The way forward is to take a concerted, constructive and organised approach.

Energy Policy Review

Michael Colreavy

Question:

2. Deputy Michael Colreavy asked the Minister for Communications, Energy and Natural Resources if the White Paper on Energy Policy in Ireland will outline a funding mechanism for renewable energy. [47494/14]

Ba mhaith liom beannachtaí na Nollag agus athbhliain nua fé mhaise a ghabháil leis an Aire agus leis an Cheann Comhairle. Is í seo an cheist dheiridh atá agamsa sa Dáil an téarma seo. Ba mhaith liom an tAire a mholadh maidir leis an bhfeabhas mór atá tagtha ar a chuid Gaeilge. D'éist mé leis an díospóireacht a bhí ar siúl an Mháirt seo caite. Ba léir an feabhas sin.

I ask the Minister if the White Paper on Energy Policy will outline the funding mechanism for renewable energy.

Ba mhaith liom mo bhuíochas a ghabháil leis an Teachta as ucht a teachtaireacht dearfa agus guím Nollaig shona air fosta.

Work on the development of a definitive energy policy is continuing. More than 1,240 written submissions were received arising from the public consultation process by the deadline of the end of July last. The Department is continuing to consider these submissions and engaging, through a series of seminars, with citizens and interested stakeholders, to ensure all views are heard and understood. It is also seeking to ensure that the assumptions on which the final policy paper will be written are tested and accurate so as to produce a dynamic and responsive evidence based framework, which will allow us to achieve a balance between sustainability, security and competitiveness challenges and opportunities.

Our overarching energy policy objective is to ensure secure and sustainable supplies of competitively priced energy to all consumers. While fossil fuels will remain part of the energy mix for some time, progress is being made towards increasing the share of renewable energy. The 2009 EU renewable energy directive set Ireland a legally binding 16% target from renewable sources by 2020, to be achieved through electricity, heat and transport.

The REFIT schemes underpin the development of a range of renewable electricity technologies, including hydro, biomass combustion, biomass combined heat and power, landfill gas and onshore wind. To date, wind energy has been the most cost-effective renewable technology in the electricity market, contributing most towards the achievement of the 2020 target. Work on the design of future incentives for renewable generation will commence next year. Any incentives will ensure maximum value for the electricity consumer and an appropriate return to project developers.

It should also be noted that the building regulations support the uptake of renewable heat. The draft bioenergy plan recommends the introduction from 2016 of a renewable heat incentive for larger heat users to change to renewable source heating solutions. In the transport sector, the biofuels obligation scheme and grants for purchasing electric vehicles underpin renewable energy deployment.

I attended a briefing by the Sustainable Energy Authority of Ireland, SEAI, last week at which it presented its annual report. The report contains a large amount of good information, including enough statistics to give a person a nose bleed. The SEAI probably needs to work more closely with the Commission on Energy Regulation because a key element was missing from its report, namely, information on the comparative costs per unit of the various forms of energy, including the public subsidy per unit.

While I accept that renewable energy is the way forward, it must compete with a hard-nosed fossil fuel industry. The level of subsidy and its cost to citizens must be reviewed. The people going cold this winter are not confined to those living on the streets but include many people who cannot heat their own homes because of fuel poverty.

We are moving into a new phase in which we must be ambitious about what can be achieved. Whether using biofuels or providing grants for electric vehicles, we must consider all options. I have here a statistic on the biofuel obligation which will give the Deputy an idea of changes taking place in this area. The biofuel obligation increased from 4% to 6% from January 2013 and further increases will be required in future years if we are to comply with the renewable energy directive. The requirement for increased amounts of biofuel will incentivise the sustainable growth of the Irish biofuels market, which will support indigenous biofuel producers and expand the sustainable indigenous production of biofuels. In 2013, for example, 150 million litres of biofuel were placed on the Irish market.

We must be ambitious and examine international best practice. Every politician in the House is in contact with individuals involved in the renewable energy industry or university research in this area. A forum is also required in the House to advance new ideas on renewable energy. Officials in the Department are open to having such an engagement.

While Ireland has obligations under the EU directive, our primary obligation is to provide affordable energy. I accept renewable energy is the direction in which we must move but we also require basic data that will allow us to compare the price for renewable energy vis-à-vis the price of fossil fuels, taking into account the public subsidy being paid and the price per unit of production.

The introduction of wind energy is having a direct effect on price and creating a more competitive market. The development by EirGrid of east-west infrastructure in recent years has also contributed to the energy mix and introduced more competition.

While final agreement has not yet been reached on the new INTERREG programme, it appears there will be a pillar focused directly on sustainable transport. This issue will affect the Deputy's constituency. Perhaps we need to have a conversation at this juncture about how the Department and Government can proactively feed into the INTERREG funding that will come on stream in 2015. The Deputy and I come from the same neck of the woods and our constituencies do not have access to sophisticated transport infrastructure. As we both come from the Border area, we will be in a position to target INTERREG funding under the sustainable transport pillar in the year ahead.

National Broadband Plan Implementation

Tom Fleming

Question:

3. Deputy Tom Fleming asked the Minister for Communications, Energy and Natural Resources when new generation quality broadband with speeds comparable to the broadband service that is available to customers on the east coast will be available to areas of County Kerry that currently have speeds of only 5 Mbps; and if he will make a statement on the matter. [47394/14]

There are large pockets of County Kerry where broadband reception is either very weak or non-existent. Ireland has dropped five places to 56th in the world in terms of broadband speeds, a performance that is worse than Mongolia which is regarded as a Third World country.

I thank the Deputy for his question. The national broadband plan aims to ensure that every citizen and business, regardless of location, has access to a high quality, high speed broadband service. This will be achieved through a combination of commercial investments and a State-led intervention in areas where commercial services will not be provided.

The commercial telecommunications sector is currently investing approximately €2.5 billion in network upgrades and I understand that over €18 million has been invested in broadband services in Kerry over the past 18 months. Approximately 1.6 million of the 2.3 million premises in Ireland are expected to have access to commercial high speed broadband services over the next number of years. These very significant investments represent a step-change in the quality of broadband services available.

On 24 November last, a public consultation on a national high speed coverage map 2016 was launched. This allows all members of the public, be they business or residential, to identify whether their premises-home is included in the Government's proposed intervention. It also provides detailed information on a county-by-county basis as to which villages and townlands are to be included. The map can be accessed at www.broadband.gov.ie. The areas on the map marked blue will all have access to high speed broadband services of at least 30 Mbps from the commercial sector by end of 2016. The areas marked amber will require the intervention of the State. It is anticipated that speeds of at least 30 Mbps will be delivered through the Government's intervention and the network will be designed to cater for future increased demand from consumers and business.

The next steps in this process will see a further public consultation on a detailed intervention strategy in mid-2015. A detailed procurement process will be undertaken in order to select a potential preferred bidder-bidders towards the end of 2015. In this regard, the Department will design a tender in a way that maximises efficiencies and keeps the cost to taxpayers as low as possible. It is expected that the physical build of this network will commence from 2016. This complex and ambitious project is a key priority for Government. It aims to conclusively address current connectivity challenges in Ireland.

The reality is that in terms of broadband speeds Ireland is a two-speed country. While some cities and towns have excellent coverage, large tracts of rural areas are served by up to 200 Eircom exchanges that have not been upgraded and provide broadband speeds of only 3 Mbps to 4 Mbps. While I welcome the recent announcement, reiterated this morning by the Minister of State, regarding the upgrade and expansion of broadband services, it remains the case that by 2016 one third of this country will still not have access to any satisfactory broadband service.

I would like to outline for the Minister of State the situation facing a business in County Kerry, which indicates the current situation is anti-trade, anti-business and anti-rural Ireland.

I must ask the Deputy to conclude. I will allow him in again.

The reason the Minister introduced this intervention last month is to try to address the challenge of broadband service provision in Kerry and other parts of the country that do not have access to broadband, be that for businesses, primary schools, secondary schools or at a domestic level. The focus now is on whether the mix in this regard will be a combination of wireless and copper or fibre. The process is a complex one in that we must adhere to EU guidelines in relation to commercial services. Where commercial companies are unable to access services, State intervention will be provided. It is crucial that people who feel excluded make known their situation between now and June 2015. There is already engagement on this issue between the Department and Kerry County Council and other local authorities but we must ensure this engagement is ongoing.

I was going to refer earlier to the situation faced by a business in Castleisland, County Kerry which employs more than 100 people and is a much needed facility in the area given the haemorrhage of much of its youth because of a lack of jobs. In this instance, to obtain the broadband service required for the business the owner has had to relocate two of his workforce to Dublin. Current broadband speed in Castleisland is 4 Mbps. Eircom has informed the businessman concerned that the cost to him to access its broadband service would be €40,000 over three years. Having made further inquiries he discovered that businesses in Dublin are charged €99 per month for a 120 Mbps service. It is unfortunate that this man has had to relocate some of his workforce to Dublin because of the discriminatory nature of broadband service provision in the Castleisland area. We need to move immediately to ensure a level playing pitch in respect of broadband service provision.

I share those sentiments and can relate to the Deputy's argument. I have come across similar businesses. In regard to the specific business in Castleisland, if the Deputy forwards me the details, I will discuss it with my Department officials and seek to have them engage with the company.

I also have responsibility for the Gaeltacht in County Kerry. Údarás na Gaeltachta is already engaging with the Department as part of the strategic consultation process to identify deficits and how we can move forward. Earlier I used the word "ambitious" in regard to renewable energy. With regard to broadband, we need to be strategically aggressive in our pursuit of broadband service provision. The situation in respect of the provision of broadband services is not dissimilar to that in which this country found itself in the 1920s with regard to rural electrification. Broadband is in a similar space to that of electricity in the 1920s in that it is necessary. As stated by the Deputy, we must do everything to combat the discrimination in terms of the rural-urban divide. I will work with the Deputy on any issues to do with County Kerry.

Postcode Implementation

Michael Moynihan

Question:

4. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources if his attention has been drawn to the concerns expressed by freight transport companies here surrounding the launch of Eircode; the costs surrounding Eircode; when the post code will be operational; and if he will make a statement on the matter. [47397/14]

Is the Minister of State aware of the concerns expressed by some of the freight transport companies surrounding the launch of the Eircode? Will he outline the costs surrounding implementation of that code and how it will be operated, and make a statement on the matter?

I thank the Deputy for the question. The Eircode postcode has been designed, inter alia, to manage challenges around finding addresses in Ireland, specifically the fact that more than 35% of addresses are not unique. This issue underpins the solution adopted which will assign a unique seven-digit alphanumeric identifier to each address. The first three characters of the code, called a routing key, will be used to help sort mail, but it is not directly linked to counties, towns or other geographic features. A routing key will be shared by a number of properties in an area, and will become familiar, rather like the prefix on landline phone numbers.

The second part of the Eircode postcode, the unique identifier, has four characters drawn from a carefully selected set of letters and numbers that identify each address. The Eircode design has a flexible structure with plenty of spare capacity. That means that it is future-proofed to allow for changes to buildings and new developments. There has been widespread support from public sector bodies and private businesses, with particular interest from the retail and financial industries, for the introduction of postcodes nationally. For example, Nightline, Ireland’s biggest independent logistics firm, is fully supportive of the introduction of Eircode. In addition, the emergency services and, in particular, the National Ambulance Service, have welcomed the introduction of Eircode as the codes will facilitate the speedier deployment of its services.

The Freight Transport Association of Ireland and other bodies, as the Deputy has pointed out, have expressed concerns over the non-sequenced nature of Eircode. A sequential design has a number of drawbacks, including the potential to lead to the inability to assign a sequential Eircode postcode to new builds and to cope with the expansion in the number of addresses in the future. The cost to the Exchequer of the national postcode system over the ten-year cycle of the contract is expected to be €27 million, excluding VAT, with costs covering design, database upgrades, media and postcode distribution.

An extensive public information campaign will commence early next year to inform the public about Eircode postcodes and promote their use. This will include outreach activities to ensure the public, especially the vulnerable and hard-to-reach, obtain information on Eircode in a timely manner. Eircode postcodes are expected to be launched by the middle of next year when every household and business in the country will receive a letter containing their postcode.

I thank the Minister of State. There is major concern among some freight transport companies. In recent weeks there have been conflicting reports about the cost to the Exchequer of the setting up of Eircode. The cost of outside consultants, which will be about 6% of the overall budget, was discussed at a committee. When the figures were added up, it equated to a total cost of €50 million. It was also said the cost would be only €27 million. The Minister of State might outline the exact costs incurred in regard to setting up postcodes. What figures refer to outside consultants? What is the overall cost? Is it €27 million, €50 million or €55 million? A cost of €87 million was also mentioned.

The cost to the Exchequer of the national Eircode system over the ten-year cycle of the contract is expected to be €27 million, excluding VAT, with costs covering design, database upgrades, media and postcode distribution. The cost of the contract will be €16 million over the first two years and a further €1.2 million per annum for the remaining eight years of the contract. The bulk of the cost can be attributed to the dissemination and communications processes. The cost of designing the Eircode postcodes and associated databases is not a significant component of the overall cost.

Capita, the company employed, has been paid €3.22 million, including VAT, to date on foot of delivery of agreed milestones. For further clarification, consultancy costs from 2010 to 2014 were €1.12797 million. PA Consulting received €941,000, including VAT, Mason Hayes & Curran received €141,000, including VAT, while other consultants received €44,000. The Deputy referred specifically to costs. On the cost to businesses and SMEs from the introduction of Eircode, Eircode postcodes will be made available to a variety of business users who can avail of the postcodes free of charge for a limited number of look-ups per day, approximately 15, from a dedicated website.

Officials said the cost of outside consultants was about 6% of the total cost. The Minister of State gave a figure of €3.22 million in regard to the delivery of the contract and gave other figures of €1.2 million. If €3.2 million is 6% of the overall budget, it would equate to a budget of over €50 million. Figures have been bandied around. For clarification, can the Minister of State confirm that every cent being used by the State to produce the Eircode postcodes leads to a grand total of €27 million? Are other costs not showing up?

Rather than repeat what I said in my reply, I will revert to my officials. If there are other costs or ancillary costs, I will get the officials from the Department to shed more light on them. The important point about costs is something on which all Departments have to be focused, namely, efficiency. There is a lot of engagement with An Post, for example, in terms of data. It has a geodirectory and information systems. Where there are efficiencies and savings can be made, there is no doubt that the Minister, Deputy White, will ensure that will be done. If there are ancillary costs and a further breakdown other than the information available here, I will get officials to get in touch with the Deputy directly.

Postcode Implementation

Tom Fleming

Question:

5. Deputy Tom Fleming asked the Minister for Communications, Energy and Natural Resources the total amount spent to date in consultancy fees on the proposed Eircode postcode system; the anticipated estimated cost of the project; the up-to-date progress regarding the roll-out of postcodes; if their implementation will be of help to the viability and future development of the post office network; and if he will make a statement on the matter. [47395/14]

The figures on the consultancy fees for the setting up of Eircode are exorbitant. I fear we could have a debacle similar to the Irish Water situation if this is allowed to continue in its current form. The Freight Association of Ireland has raised some problems. It said the system will be useless for its members. The chairman of the Fire and Emergency Services Association said the random nature of the system could cause confusion for first responders. This is a very serious matter.

I will be repeating some information as the question is similar to others. The cost to the Exchequer of the national postcode system over the ten-year cycle of the contract is expected to be €27 million, excluding VAT, with costs covering design, database upgrades, media and postcode distribution. A contract was signed with Capita Business Support Services Ireland limited in December 2013 to develop and roll out the national postcode system over a ten-year period. Total spend to date on that contract is €3.22 million. Aside from the contract with Capita, consultancy costs of €1.12797 million, including VAT, have been incurred from 2010 to date on the national postcode system.

The design for the national postcode system was approved by Government and the brand Eircode was launched for the national postcode system in April 2014. Capita launched the website www.eircode.ie earlier this year. Over recent months, Capita has engaged with a number of private and public stakeholders to brief them on the project and prepare them for the launch of Eircode postcodes next year. Overall, the response to the project has been very positive. To support dissemination of Eircode postcodes, the databases of large public sector bodies are being Eircode enabled. This work is expected to be concluded this month, which means that public sector bodies with large customer-facing databases will be in a position to use the codes immediately on launch.

An extensive public information campaign will commence early next year to inform the public about Eircodes and promote their usage. This will include outreach activities to ensure the public, and especially the vulnerable and hard to reach, obtain information on Eircodes in a timely manner. Eircodes are expected to be launched by the middle of next year when every household and business in the country will receive a letter containing their Eircode. Although not aimed primarily at growing the post office network, it is expected that Eircodes will assist the mail service by providing a stimulus to mail volumes through direct marketing capabilities. In addition, An Post has been selected to disseminate Eircodes next year and will benefit accordingly.

I believe the views of the two organisations to which I referred earlier must be taken on board. In particular, the concerns of the Irish Fire and Emergency Services Association regarding the emergency services raise the possibility of being faced with catastrophic situations in which fatalities may be involved due to an erroneous system. The association has a problem with the randomised nature of the Eircode system whereby the code generated for each address is random, which means the Eircodes for adjacent properties bear no relation to each other. The lack of a sequenced code structure ensures that the postcode offers no assistance to the drivers who are seeking to negotiate the most efficient route when making either emergency calls or deliveries.

The ironic point in this regard is that An Post already has set up a code of its own and has stated it does not require this new postcode as such.

I will let the Deputy back in.

It has developed its own GeoDirectory national address system. My question is whether this will cause problems for An Post. Might it be a further burden on An Post's viability?

I thank the Deputy for his questions. On the first point with regard to emergency services, my information is that the ambulance services have welcomed it. I do not have information on fire services but my officials certainly will follow up on that point. An exhaustive consultative process has been carried out in this regard and consequently, I am sure the fire services already have been contacted. However, if concerns exist there, the Department must follow up on them. In respect of the non-sequenced nature of the Eircode system, there probably is a couple of elements in the thinking behind it. First, one reason behind the non-sequenced mechanism is the desire to avoid setting up a discriminatory system in which certain areas could be targeted by geography or otherwise if they all were in one block. Second, a feature of development in Ireland is the use of once-off housing. The Deputy might consider an example of a roadway in his own constituency in which two houses stand at present. It is possible that in two years' time, a brother or sister will build a house in between the two. It would be difficult to come up with a sequenced system that would build into future planning. However, I certainly will raise the concern regarding the fire services.

The Office of the Data Protection Commissioner also had some difficulties in this regard. In its most recent report, it reflected on how the Eircode system will award individual codes to each address, contrary to advice the then commissioner gave as long ago as 2005. This is being done contrary to his advice when at that time, he warned that a code which identified unique address instead of wider areas would pose a problem for data protection. Nevertheless, on 8 October 2013, the then Minister announced that the Cabinet had agreed to the roll-out of a unique seven-digit character code to each letterbox. I believe this matter should be reconsidered.

I acknowledge that a number of concerns were raised in the past. There always will be issues with a new system but with regard to the Data Protection Commissioner, as part of the Department's approach to the introduction of Eircodes, communications between the two have addressed the implementation, dissemination and commercialisation of Eircodes to ensure adherence to all pertinent data protection legislation. The Data Protection Commissioner's office has been advised of and has noted the rationale and policy justification for the approach suggested for the Eircode roll-out and implementation. However, I believe the key point regarding the roll-out is the intricate - I will not use that word and even am struggling with English words these days - the intrinsic link between An Post and the system. It will be part of the roll-out and its expertise and knowledge base is absolutely paramount to the success of this project because it has its GeoDirectory and has the information whereby postal staff on the ground know precisely where the people are. Consequently, An Post is a key and integral part of this development.

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