Proposal re Agreement with Danish State on Statistical Transfer of Energy from Renewable Sources: Motion

I move:

That Dáil Éireann approves the terms of the Agreement between Ireland and the Danish State on the establishment of a framework for the statistical transfer of energy from renewable sources for target compliance purposes under Directive 2009/28/EC, signed and done at Dublin on 1st December, 2020, a copy of which was laid before Dáil Éireann on 4th December, 2020.

I thank the Acting Chairman for the opportunity to speak on this important matter. Under the 2009 renewable energy directive, we are committed to achieving 16% of our energy demand from renewable resources by the end of 2020. Notwithstanding the good progress that has been achieved, especially in renewable electricity, projections by the Sustainable Energy Authority of Ireland, SEAI, indicate that a shortfall of between 3% and 4% is likely by year end. In order to ensure compliance with the directive, the Department of the Environment, Climate and Communications has negotiated international agreements with Estonia and Denmark to purchase statistical transfers for 2020. Following Government approval in late November, my colleague, the Minister, Deputy Ryan, signed both agreements in Dublin earlier this month. They will enter into force, subject to ratification by the Dáil Éireann. This mechanism is part of the European architecture under the 2009 renewable energy directive designed to allow member states to meet their targets. While it was not our preference to achieve compliance via this mechanism, we have, unfortunately, exhausted all alternative options for compliance through other policies and measures.

Ireland is not alone among member states which will fall short of its binding renewable energy targets. Luxembourg, Malta and the Netherlands have all concluded similar arrangements in recent years. As to costs, the State will pay €37.5 million to Estonia for the purchase of 2.5 TW hours of energy and €12.5 million to Denmark for a volume of 1 TW hour of energy. In total, the State will procure 3.5 TW hours of renewable energy at a cost of €50 million this year. While the Government acknowledges that this is a significant cost to the State, it is nevertheless important to point out that the funds received by both Estonia and Denmark will be used to accelerate deployment of renewable electricity in their jurisdictions, in line with their national energy and climate plans. Both of the agreements are with EU member states with which Ireland shares a common commitment to taking robust climate action in accelerating the roll-out of renewable energy to supply our grid, heat our homes and move our people as part of an integrated transport network. Like Ireland, Denmark and Estonia are small countries with a strong European identity and these agreements will strengthen future co-operation between Ireland and its fellow EU member states to tackle the climate emergency and put citizens at the heart of the climate transition.

Since coming into office in June, this Government has overseen the first auction under the transformational renewable electricity support scheme. This will see a major upscaling in renewable energy projects connecting to the grid from 2021, with, for the first time, solar energy and community-owned projects supplying homes across Ireland. The programme for Government provides that a reliable supply of safe, secure and clean energy is essential to deliver a phase-out of fossil fuels. The Government is committed to rapid decarbonisation of the energy sector and will take the necessary action to deliver at least 70% renewable electricity by 2030. The climate action plan included a commitment to 3.5 GW of offshore wind by 2030, up to 8.2 GW of onshore wind and up to 1.5 GW of solar energy. The programme for Government commits to a further increase in offshore wind development to 5 GW by 2030.

On sustainable transport, the climate plan has a target of 936,000 electric vehicles to be on the road in Ireland by 2030 and also includes a range of actions to support the uptake of electric vehicles.

I welcome the launch by the European Commission last week of the sustainable and smart mobility strategy, which lays the foundation for how the EU transport system can achieve its green and digital transformation. To give a flavour of some of the ambitious actions contained in the strategy, by 2030 at least 30 million zero-emission cars will be in operation on European roads, 100 European cities will be climate-neutral, high-speed rail traffic will double across Europe, automated mobility will be deployed at a large scale, and zero-emission marine vessels will be market-ready.

It is important for Ireland to demonstrate its commitment to meeting renewable energy targets and sustainable transport commitments in support of the wider aspirations of the European Green Deal. The forthcoming climate action plan next year will further step up our ambitions with the necessary actions to ensure the cross-government effort that is required is being implemented and monitored effectively. I look forward to hearing the contributions from Members on this important issue and I thank the House.

The EU renewable energy directive of 2009 set Ireland a legally binding target of meeting 16% of our energy demands from renewable sources by 2020. Due to decades of inaction in this area, we are set to miss this target. The SEAI predicts that between 12.5% and 13.2% of our energy requirements will be met from renewable sources this year. There are many reasons for this failure but the actions of the previous Fine Gael-led Administration deserve particular criticism. We have proof positive today that its climate rhetoric was not matched by climate action, although we did not have to wait until today to find that out. Sinn Féin and other progressive voices have been beating that drum for some time.

This transaction is not just bad news for our environment and international climate obligations, it is also bad news for Irish taxpayers who are set to foot a bill of €50 million. To be clear, we have failed to meet reasonable and fair energy transition obligations. A reduction of in and around 1% year on year since we agreed to these targets was required but we could not even manage that. Statistical transfers for target compliance purposes is a convoluted way of saying we are here to agree to pay €50 million in fines for missing our renewable energy targets for 2020. To meet our binding obligations on paper, we now have to buy credits from Denmark and Estonia to make up for the State’s failings in this area. My colleague, Senator Lynn Boylan, put it well when she said that this is like modern-day indulgences. For €50 million, we get a piece of paper and absolution.

When we look at this from the perspective of opportunity cost, we might reasonably consider what could have been done with €50 million. How many homes could have been retrofitted? How many solar panels or heat pumps could we have installed? How many sustainable energy communities could we have supported? Those opportunities have now shifted to Denmark and Estonia.

It should also be noted that we are paying a higher premium to Estonia, at €15 per megawatt hour, than to Denmark, at €12.50 per megawatt hour. Estonia is getting a better return on its investment. With the EU and climate, the profit motive must always apply. These countries have committed to spending this money to further reduce their own emissions, which is welcome. Had we made different choices, we might have been in their position. Irish taxpayers are big losers in this and we are paying a high price but it is important to acknowledge that we are not the biggest losers. The biggest losers here are the poorest people on the planet, those who are living at the coalface of the climate crisis, and of course the planet itself and its flora and fauna. No amount of statistical transfers and economic wizardry or commodification of the climate crisis can distract from that.

If this is about money, then we have to agree that it is a complete waste of money. It is an indictment of Government policy and an even greater indictment of Government inaction. To add insult to injury, previous administrations have actively blocked solutions brought forward by Opposition parties in this area, including by my colleague, Deputy Stanley. His Microgeneration Support Scheme Bill 2017 would have allowed small-scale production of electricity through solar and wind energy production. It provided that excess electricity produced by small-scale microgenerators, whether households, farms, small businesses, local schools, community groups or the GAA, could be fed into the grid and that this would be paid for. In doing so, it would have provided for energy self-sufficiency and a small return for individuals. That was a win-win scenario but, instead, we are moving at snail’s pace. Deputies need not take my word on this as the issue has been well reported on Noteworthy.ie and by various groups.

We need a step change in approach. We also need to move away from the carbon credit approach and drive down our overall emissions in real and measurable terms.

Paying €50 million does not help our environment. Paying €50 million will not build more wind farms in the Irish Sea and increase the State's renewable energy capacity. This €50 million of taxpayers' money is lost today.

I conclude by encouraging a step change in the State's approach to offshore wind energy. In a parliamentary reply to me recently, the Minister stated that the State does not directly own or operate, or plan to own or operate, any such resources. We have massive offshore wind potential. It is imperative that it is not privatised - that it is not a case of moving from big oil to big wind or paying our way out of this crisis. We need to start taking our climate obligations seriously and match the rhetoric with action.

The Minister of State's statement this morning hit the right tone at the start. It was regretful and there was even a hint of contrition at the fact that we are a laggard in terms of meeting our climate change targets within the European family. She mentioned that we are not alone and that Luxembourg, Malta and the Netherlands are also in a similar boat. We may not be alone but we are in a minority - a sorry minority - of countries that are falling way behind. While the Minister of State's statement hit the right note in that regard, in the sixth paragraph she stated that it is important to point out that the funds for Estonia and Denmark will be used to accelerate deployment of renewable electricity in their jurisdictions in line with their national energy and climate plans. To be honest, that actually compounds the shame of having to pay €50 million in Irish taxpayers' money to make up for the shortfall in our own targets. Not only will that money leave our shores where it could be invested in decarbonising our economy and improving our renewable energy resources, it is going to countries that are already miles ahead of us so we are going to fund them to go even further in terms of their own renewable energy resources. Fair play to them, as they are ahead of us. This will probably not permeate down to the man and woman on the street - the people who will come to our Zoom clinics and contact our offices. If we tried to explain this to the ordinary man and woman on the street, they would be shocked that we are paying this amount of money in penalties that will go to the best boys and girls in the class to allow them to become even better. It is shocking.

Deputy O'Rourke raised a fundamental point at the end of his contribution. The renewable energy that is coming on stream will not be State-owned. It will be privatised so we will be going from big oil to big wind - I hope we can find another phrase. This is where we are going. The Government needs to tell us how much of the renewable energy coming on stream will be siphoned off for other multinational corporations such as those running data centres that are entering into prepaid contracts with companies that own wind farms to siphon off up to 15%, 20% or 25% of the energy created in order to power data centres, which are huge carbon emitters and very poor in terms of creating jobs. There is a structure here that will only get bigger and will be bad for the worker, the economy and the Irish taxpayer because we will continue to pay these exorbitant penalties to countries that are doing things far better than us.

Another related element in terms of carbon emissions is transport. I am moving away slightly from renewable energy generation to the emissions from our transport sector. We went from level 5 to level 2. I know Deputy O'Rourke from Meath and Deputy Whitmore from north Wicklow travel to Dublin. I bet they had similar conversations as I did coming as I do from north County Dublin - "janey mack, travel just absolutely shot up overnight when we left level 5." Everyone was back in their cars heading into cities for work or shopping. Our air quality is disgraceful having gone back to 1980s levels when smog was a fact of life in Dublin and our major towns. Traffic is back. Unless we go back into level 5, traffic is back to the worst levels and has been for the past number of years. It was sold by the Government as some indicator that the economy was recovering and everyone was back to work. It is great that the economy was recovering at a particular point but we are all in cars with the target of 2030 for everyone to be driving electric or hybrid cars coming down the tracks. I asked the Government in a parliamentary question whether there are any plans for a scrappage scheme supported by the State to allow the hundreds of thousands of people who own diesel or petrol cars to scrap these cars and over the course of the next five, six or seven years get an electric or hybrid car in an affordable way. The answer to my question was a flat "No" so the Government is not really interested in tackling this at either a micro or macro level, as is proven by this. I am really concerned that in 2021, we will all be here again talking about the next statistical transfer and the next piece of accounting sleight of hand, which is shameful.

This week marks the fifth anniversary of the signing of the Paris Agreement by ourselves, the EU and 193 states. It would have been really nice to have been able to celebrate this anniversary and for us to be able to stand tall as a nation and say that we had taken our climate obligations seriously, met the relatively low targets that had been set for us and shown leadership in this regard. Instead we are here to approve a paper exercise - a sleight of hand that essentially is just us pretending we have met the targets. We refer to it as a statistical transfer but the reality is that it is a certificate of a failure that will cost us €50 million. This figure of €50 million could and should have been spent on our public infrastructure - our own green infrastructure. Instead it is winging its way to Estonia and Denmark to enable them to invest in their public infrastructure. I note that the Minister of State and the Minister for the Environment, Climate and Communications yesterday said that it was a positive thing and that this money was going over to these countries, which would invest in their green infrastructure. It is not positive. We need that money here. We have targets to meet and we need to make sure we are investing in the areas in which we should be investing. It is ridiculous that instead of investing in our own public services, we are investing in the public services of a different country. It is a huge amount of money. As we attempt to tackle climate change and biodiversity loss, there are so many areas where we could focus that money. Our environmental organisations are crying out for more funding. We can imagine what they could do with €50 million.

The money could also go towards our much-needed retrofitting of homes. To put it into perspective, €50 million could retrofit between 1,500 and 2,500 homes in this country. It could have purchased 5,000 solar panels for schools across the country. Environmental groups such as BirdWatch Ireland and the Irish Wildlife Trust get approximately €15,000 per year in State funding and here we are sending €50 million to other countries. Instead of us using this money, it is going to another country to reward it for its good behaviour and progress on developing renewable energy. It is a real slap on the wrist for us - a slap in the face actually for those environmental organisations that need money to do the great work they do.

This is not something we will be able to vote against today but it offers us and the Government an opportunity to reflect on the mistakes of the past Government so that they are not repeated and that Ireland's capacity to generate renewable energy and meet any subsequent targets successfully, including the programme for Government target of 70% renewable energy by 2030, is boosted. Unfortunately, we are so far behind that it is likely we will struggle to meet the target in ten years' time. In 2018, compared to other EU countries, Ireland had the second largest gap to the 2020 target and the second lowest share of renewable heat of any EU member state. Because heat is a large share of final end use, Ireland's low share of renewable heat is the main reason we failed to meet our 2020 renewable energy targets. The Irish Wind Energy Association, IWEA, also predicts that with regard to onshore wind expansion, Ireland will struggle to reach its national target of 70% electricity from renewable energy by 2030.

According to the IWEA, this is due to existing barriers to planning and grid connections that are yet to be resolved. The decisions of past Governments have led us to where we are. Past Governments, for example, decided to only allow onshore wind to compete in the support scheme they had set up and not facilitate offshore wind and solar. Hence, we are top-heavy when it comes to wind and we are lagging far behind in the areas of heat transport and solar energy.

How many bad decisions that we are now beholden to have led us here? How much in time and effort do we have to make up for past mistakes? How can we ensure this Government does absolutely everything necessary to make up for that missed time as well as progressively develop our renewable energy sector to meet current and future targets? It is time to take this issue of our climate obligations both nationally and internationally seriously; paper exercises will not cut it any longer.

It is a bit of a shock to the system that we must pay out €50 million for nothing. What I mean is there is no return to us. We are paying €50 million to two other countries, namely, Denmark and Estonia, for the privilege of having a piece of paper to say we met our requirements. As has been said, €50 million is a lot of money. The main thing I will say is that is this year; it is 2020. What will we be paying out next year? We need to look at this in a sobering way to see exactly what we are doing and, more appropriately, not doing.

It has been pointed out that €50 million could do many things in this country. I believe, however, it is much deeper than just the cost alone. We must examine why we are so far behind and why we are not able to get our offshore wind onto the agenda.

The authorities in our port in Galway will tell the Minister of State one of the big issues we have is foreshore licenses, which can take years, and there is no timeframe by which a person will receive one. We must also make sure our maritime planning is set in a way that it is conducive to getting offshore wind energy under way.

Like the Minister, I am from the west of Ireland. We know the potential of the Atlantic for us and for the west of Ireland to develop a proper offshore wind energy industry. It should be the game changer for the region. To make it the game changer, however, we need to make sure and move fast to ensure we tidy up the archaic way we give licences and, in particular, foreshore licenses. Places such as Galway Port and Shannon Foynes Port should be the cornerstones of the development of offshore wind in in this country. We need to do that. Both ports are doing their best to develop but they are being stymied by reams of regulation. Much of it is EU regulation this country has transposed in a way that makes it almost impossible to work in.

I suggest that is the starting point for us today. It has cost us €50 million to pay for the sins of this year. What do we need to do? We must make sure that people who want to take on offshore energy are in a position to be able to do it quickly and in a way that produces the results for us. We talk about it being privatised. I believe we need to have a shareholding in the private enterprise that is and will be carrying out this work. We need to make sure there is a dividend for the State.

We also need to shake up the whole area of retrofitting of houses. A person who is in fuel poverty and who applies for a grant for a house is told he or she must wait two years before getting the house inspected. There is therefore a huge problem regarding how we do our business, which is manifesting itself when we must pay money to another country to help them develop what we should be doing in our own country. It is a wake-up call. We need to do it and we have the potential to do it but we need to move fast. Many people will say we cannot do this and that. It is time, however, for a change of attitude to make sure we get people in place to get things done, and make sure we develop our offshore wind, public transport, electronic care fleet, autonomous cars and all these areas to have a vision for the next 20 or 30 years, and realise that vision by making sure we put in place the necessary measures to allow the development to happen. There is great potential in this for Ireland; we are well positioned. The west of Ireland has clean water and a clean environment. We need to harness that potential and start doing it now.

Almost a month ago, it was reported that we were to pay €12.5 million to Denmark and €37.5 million to Estonia for the statistical transfer of renewable energy sources. This €50 million was for 3,500 gigawatt hours of renewable electricity because we are missing our agreed target by between 3% and 4%. Our overall target was 16% and because of our inability to reach our targets, we are buying gigawatt hours on paper. Our target was previously 20% but had to be lowered because we were already significantly behind with renewable energy.

For me, this is a good example of our wasteful political policies. We are always reactive rather than being proactive. EU member states such as Denmark, Estonia, Lithuania and others are making millions from countries that are missing their targets yet we continue.

In an Irish Independent article of October 26 last, the Minister, Deputy Ryan, is reported to have said: "It's with real regret that we are not spending €50m to meet the target. Instead we are going to have to purchase those credits for not meeting it.” These targets were set ten years ago. It is not like we have not had time to put the renewable energy infrastructure in place. If only we were proactive and prioritised our capital spending. He went on to say, "It shows that these European directives, both on renewables and climate emissions, have real teeth. They do require us to act."

In her speech, the Minister of State said the forthcoming climate action plan next year will further step up our ambitions with the necessary actions to ensure the cross-Government effort required to implement and monitor it effectively. Denmark and Estonia can clap their hands and wait for that money to come.

Is it really surprising that we are being held accountable for meeting the climate action targets we agreed? I suppose it is not unusual that the Minister, Deputy Ryan, might be stumped by this, considering the Government has form in signing up to UN conventions, etc., and not bothering to adhere to all of the commitments.

Climate actions are serious. The school strikes last year put this firmly on the political agenda but what is lesser known is how financially costly the Government’s inaction is for the Exchequer. Interestingly, an article dated January 27, 2020 by GreenNews.ie stated, “Lack of climate action will cost the state over €7 billion by the end of this year, the Green Party has said in the lead up to the general election.” What the Green Party says in the lead up to a general election, however, and what the Green Party does in Government seems to also be a case of missing targets.

I listened with interest to the Minister of State's presentation this morning. I am slightly bemused by the commitment in the programme for Government and the lack of action on it to develop offshore energy. Obviously, a large amount of the renewable energy we are purchasing from Denmark is offshore energy. Perhaps, people have had the opportunity to see television documentaries on it or see them in person. One can even see huge amount of offshore energy as one arrives in Copenhagen Airport, Kastrup.

I ask the Minister of State to forgive my ignorance, but I am not aware of any similar offshore energy projects in Ireland, nor am I aware of any particular projects that the Government is advancing. I am aware of Moneypoint power station in Clare, which is beside the sea. I received a response to a parliamentary question a couple of weeks ago and since then, the Government has announced that the lifespan of the power station is to be further curtailed and I do not see any plan to replace it. It needs to be replaced for the economies of Clare and Ireland but with what are we going to replace it? Moneypoint is situated on the coast, on the Shannon Estuary. It has two large networks that leave it and cross the country in arcs, one going to the north of Dublin and the other to the south of Dublin. It is, essentially, irreplaceable in terms of the national network. I would have expected a greater degree of urgency than has been seen to date to develop offshore energy and to research tidal and wave energy. The estuary is a relatively shallow basin and has some of the highest waves and tides in Europe, along with the Bristol Channel. I am not an expert in engineering, but I would like to see State-sponsored research into that as a matter of urgency and not something that comes up as a footnote in a debate around Ireland not fulfilling its renewable energy commitments.

I would welcome something real coming out of this morning's debate. I accept the Government finds itself in the position it does, that we are not meeting the renewable energy targets and must do something about it in the short term. However, if we continue the way we are going now, we are going to be back here in ten years' time with exactly the same story. I want a task force to be set up to look at the reality that renewable energy is going to have to come out of Moneypoint. It has to be a part of the story. The Government is not going to be able to build a pylon network of the sort that is traversing the country, coming from Moneypoint. We all know the pylon difficulties across the country. There are pylons there. Moneypoint is situated right on the coast. That is an advantage that the Government needs to take cognisance of and move forward with a degree of urgency that I have not seen to date.

I thank the Deputies for their contributions, specifically the members of the Select Committee on Climate Action who gave priority consideration to these agreements at their meeting yesterday afternoon. A number of Deputies have rightly remarked on the significant costs to the State associated with these agreements and what an equivalent investment of €50 million would have achieved in retrofitting our housing stock, or in education or public health. The solution to avoiding future costs for statistical transfers or other such measures is not to reduce our climate and energy ambitions, it is to accelerate delivery across all Departments and State agencies concerned. The Government's Climate Action and Low Carbon Development (Amendment) Bill will establish a 2050 climate neutrality objective in law and place all relevant climate plans and strategies on a statutory footing. The Bill will define how five-year carbon budgets and related sectoral targets will be set, with every sector contributing, ensuring that we continue to work to achieve a broad political and societal consensus on the transition to a climate-neutral economy and society. Putting these requirements in legislation places a clear obligation on this Government and future Governments to take sustained climate action. The Bill also provides appropriate oversight by Government, a strengthened climate change advisory council and a significantly strengthened accountability and oversight role for the Oireachtas.

A number of Deputies commented on the enormous opportunity from offshore renewable energy. To progress our commitment of having 5 GW of installed offshore wind capacity by 2030, the Department is developing the terms and conditions of the offshore renewable electricity support scheme, RESS. The offshore RESS will be the means for supporting offshore wind developments via a competitive, auction-based framework. The competitive element is required under the state aid clearance for the scheme in order to achieve our renewable energy ambitions at the lowest cost to consumers.

The Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, will shortly be publishing a public consultation on microgeneration. It will seek stakeholder views on a microgeneration support scheme which will, in time, provide an export tariff for excess electricity produced by homes and businesses. The proposed scheme will be aligned with the requirements of the recast renewable energy directive 2018 which has to be transposed by June 2021. The scheme will offer homes, businesses and farms an opportunity to earn some money for excess electricity produced. However, it is important that people first reduce their energy demand through energy efficiency measures, such as retrofitting and measures like it.

The Government is committed to achieving net zero emissions by 2050 and an annual reduction of 7% in overall greenhouse gas emissions by 2030, including through maximising the amount of renewable energy on the grid. Future advances and system flexibility, storage technologies, including batteries and green hydrogen, as well as regional and international interconnection, will enable high levels of renewable electricity on our grid.

Question put and declared carried.