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Dáil Éireann debate -
Thursday, 27 Apr 2023

Vol. 1037 No. 3

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Energy Prices

Darren O'Rourke

Question:

70. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications if he will outline the engagements, if any, the Commissioner for the Regulation of Utilities has had with energy providers here to ensure reductions in wholesale prices are passed on to customers; the measures he will take to ensure that the super-excess windfall profits of those companies for all of 2022 will be captured in the planned windfall tax measures and if he will make a statement on the matter. [19966/23]

I ask the Minister if he will outline the engagements, if any, the Commissioner for the Regulation of Utilities, CRU, has had with energy providers here to ensure reductions in wholesale prices are passed on to customers and the measures he will take to ensure that the super-excess windfall profits of those companies for all 2022 will be captured in the planned windfall tax measures.

I thank the Deputy for the question. Council Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices came into force in October 2022. This regulation seeks to address windfall gains in the energy sector through a temporary solidarity contribution based on taxable profits in the fossil fuel production and refining sector and a cap on market revenues of specific generation technologies in the electricity sector. The general scheme of the energy (windfall gains in the energy sector) Bill 2023, which will implement the temporary solidarity contribution and the cap on market revenues, was approved by Government and published on 21 March.

The cap on market revenues in the electricity sector will apply from December 2022 to June 2023. The Council regulation does not provide scope to extend the cap on market revenues prior to this period. The temporary solidarity contribution will apply for 2022 and 2023.

The Commission for the Regulation of Utilities, CRU, was assigned consumer protection functions under the Electricity Regulation Act 1999 and subsequent legislation, and has statutory responsibility for the compliance by energy suppliers with their consumer protection obligations. Electricity and gas retail markets in Ireland operate within a European Union regulatory regime, wherein electricity and gas markets are commercial and liberalised. Operating within this overall EU framework, responsibility for the regulation of the electricity and gas markets, including the matters raised by the Deputy, is solely a matter for the CRU. The CRU is answerable to the relevant Oireachtas committee.

Like the Deputy, and I am sure all the other Members here, we are very keen to see prices come down, with international gas prices having started to come down from their historical highs. This must be done within the liberal market system, as we said, but I, like the Deputy, look forward to this happening. It is, though, a matter for the CRU to oversee the market directly in this regard.

That is the most pathetic answer I have ever heard. The Minister has responsibility for this area but he is acting like a commentator. As far as I can see, energy companies are laughing at him, the Government and the regulator, which the Minister refuses to resource and empower. By extension, these companies are laughing at ordinary customers. This is not something I cannot stand for. The companies in question are reporting record profits, charging the highest prices in Europe, as reported, and, according to this morning's newspapers, engaging in sloppy billing practices. Some 11,000 Electric Ireland customers have not received bills. A number of these people have not received a bill for four months. This is a deeply concerning issue. These people will receive bills for thousands of euro next month. Will the Minister update us concerning what he is doing to respond to this issue? Will he ensure that people will not be penalised because of the mistake made by Electric Ireland? What will he do to protect them?

The systems we have in place, including the CRU, are designed to protect consumers exactly in the way the Deputy outlined. In recent years, where there were instances of bill amounts not being correct, refunds were given to the customers involved as soon as the errors were discovered. The CRU's regulatory context, like those of so many of our other regulatory bodies, has been dramatically increased in the past two years to ensure that it has the capability of overseeing that function.

This Government's role is, first and foremost, to make sure there are no excess profits being made. The introduction of the proposed legislation last month, which will give rise to some of the highest tax rates of any European country in this regard, is an example showing that we do take this duty of protecting the consumer to the maximum extent we can. Those revenues, which will be lower than may have originally been expected, because gas prices have fallen, that accrue from the market cap will go back to electricity customers, because we, like the Deputy and every party in this House, wish to protect consumers through this difficult time.

I have two questions. What engagement has the Minister had directly with energy companies to ensure the reductions in wholesale prices are passed on to customers? Equally, and the Minister referred to this in his initial response, the cap on market revenues is wholly inadequate. It does not capture any of the bumper profits companies made during last July, August and September. A price of €92 per megawatt hour is profitable for wind and solar energy suppliers. Those companies were getting more than €400 per megawatt hour. Other countries, such as France, Austria, the Netherlands and Belgium, have introduced measures to go back and to target those super-excess profits garnered prior to December 2022.

Yesterday, the Taoiseach responded to me during Questions on Policy or Promised Legislation by saying that the Government would look at this issue. Will the Minister commit to looking at this approach as an option, to ensure energy companies do not wipe the eyes of Irish taxpayers?

We will look at every option, but whatever we do must be within European law. We cannot enact measures-----

France operates within European law.

We will look and see, as I said, at what other governments have done. We must ensure that what we do is within European law. To answer the Deputy's first question, I met representatives of every one of the 13 supply companies we have over the past year of this crisis, and paid particular attention to what they were doing to protect their most vulnerable customers. People at risk of being cut-off are those we must favour first. We must ensure these companies' billing and customer relations systems treat people in a way during this extraordinary period which means they are not cutting off customers and that they have funds in place, which they do, for hardship cases-----

Some of them have not received a bill in four months now.

As I said, if there are any instances of that happening, where a bill has not been received, it is the job of the regulator to ensure that those companies do meet their commitments and statutory requirements, which the CRU does regulate.

Energy Policy

Bríd Smith

Question:

71. Deputy Bríd Smith asked the Minister for the Environment, Climate and Communications if he can clarify the position in respect of proposals to build a liquefied natural gas, LNG, terminal in the State; and if he will make a statement on the matter. [20127/23]

The Minister has now twice made comments that have held the door open to the building of an LNG facility here in the State. I wish to give the Minister an opportunity to state quite clearly his, the Government's and the Green Party's position concerning the building of an LNG facility. I ask this because this aspect begs another question of whether the Minister accepts the report of the Intergovernmental Panel on Climate Change, IPCC, and the statements of the International Energy Agency, IEA, in this regard. Instead of creating ambiguity, will the Minister please clearly answer the question regarding intentions regarding an LNG facility in the State?

In May 2021, the Government published its policy statement on the importation of fracked gas.

This policy sets out that, pending the outcome of the review of the security of energy supply of Ireland’s electricity and natural gas systems, it would not be appropriate for Ireland to permit or proceed with the development of any LNG terminals. Until the review has been completed, this is and remains the Government's policy position. The review is focused on the period to 2030, but in the context of ensuring a sustainable transition to 2050.

The range of measures being examined as part of the review includes the need for additional capacity to import energy, the use of energy storage, fuel diversification, the demand-side response and the development of renewable alternative gas supplies. My Department is now at an advanced stage of completing this review. A detailed technical analysis has been published and an extensive consultation process has been carried out. The response to the consultation was extensive, with over 450 submissions received from a broad range of individuals and organisations. The consultation responses were reviewed and analysed, and they have provided important insights on a number of aspects such as risks, mitigation options and policy measures.

My Department is preparing energy security recommendations. I will bring my recommendations arising from the review to Government in the coming months for its consideration.

I thank the Minister. I still think the door is being held open. There is still creative ambiguity in the Minister's response. The Business Post reported last week that the Minister had conceded that Ireland needed to build an LNG terminal. This would be a reversal of a key policy of the Green Party because, as the Minister said, the world changed when the Nord Stream gas pipeline was blown up last year.

Most people who are concerned about climate change believe that the basic premise we follow is the science, the IPCC and what scientists globally are telling us to do. We do not need, nor can we afford to have, any new fossil fuel infrastructure built in this State or anywhere else. The ambiguity in the response is that the Minister may be hinting at the idea of a non-commercial State-led LNG terminal as against a commercial enterprise. That makes no difference to the atmosphere, climate and science. Who am I telling? The Minister knows this too well. I ask him to clear up the ambiguity.

There has been no change of policy and there is no intention to open any doors or change any previously held position in any way. What I said was true. The war in Ukraine has changed the world, and the issue of having storage as security backup for our country is something that cannot be ignored. That does not mean that we import fracked gas, or do not live within our climate limits and follow the IPCC. We will not consider facilities which breach those constraints which we have to have first and foremost in our minds. The first security matter we need to get right is that we do not see the planet burning. Nothing has changed in that regard, but it is appropriate and right to for us to consider the short-term storage options we can use to provide security for our people while we switch to renewables and reduce the demand for gas, which is the key measure we will implement in the coming decade.

I reiterate that the Minister is not being explicit and is not clearing up the ambiguity. He is saying that we may well need some form of new fossil fuel infrastructure to store gas. He knows as well as I and anybody else in the House who takes any interest in the science does that it does not matter whether it is fracked gas or any other kinds of gas, it still emits methane and far too much CO2 due to storage and use. We do not need any more fossil fuel infrastructure. We do not have a shortage of gas. We need to build on renewables. The Minister has been in Europe doing that, but he needs to explicitly state what his intentions are. He may have said that the world has changed because of the war and so on, but apparently he also said Ireland may need to build an LNG terminal. Can he please clarify that and rule it out completely? Is he in a position to indicate that he will not reverse the policy of the Government or his party or the demand of the climate movement that there will be no new fossil fuel infrastructure in this country?

We will have no new fossil fuel infrastructure in this country that sees us breaching our climate limits. We are currently building emergency gas-fired generation, which is new fossil fuel infrastructure, but it is only being agreed on and provided for on a security basis as long as we know it will not lead to us breaching our emissions limits.

I would argue that there is an issue around the deployment of fracked gas. It is important that we continue with the approach that has been taken in the House over a number of years and say that we do not import fracked gas. That is a secondary issue. At the same time, we have to consider the short-term measures. Over the course of the decade, we will start to see the ramping up of renewables here. The introduction of heat pumps in our heating systems will see the demand for gas drop. This will bring us out of an insecure situation whereby we are dependent on such fossil fuels. The first priority and certainty is that we will do nothing which will see us breaching the climate commitments we are by Irish and European law committed to delivering on. No storage or other security system will be successful if it breaches those limits.

Waste Management

Darren O'Rourke

Question:

72. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications how he intends to maximise compost and recyclable waste; if he recognises that charges and increasing charges are a disincentive in this regard, but are a logical consequence of the privatisation of waste collection services; and if he will make a statement on the matter. [19967/23]

How does the Minister intend to maximise compost and recyclable waste if he recognises increasing charges are a disincentive in this regard, but are also a logical consequence of the privatisation of waste collection services?

A range of measures are already in place to support greater levels of waste segregation and recycling and other measures will soon be introduced. The landfill levy is an important and highly successful such measure which has played an important part in Ireland’s improved waste performance since its introduction in 2002.

The Circular Economy and Miscellaneous Provisions Act provides for a number of further measures from the waste action plan for a circular economy. These include incentivised waste collection charging in the commercial sector from 1 July; a recovery levy on municipal waste recovery operations at municipal landfills, waste to energy plants, co-incineration plants and the export of waste; the expansion of household bio-waste collection services; and the introduction of a deposit return scheme for single use PET plastic bottles and aluminium and steel cans, which will go live in the first quarter of 2024. These measures will assist in encouraging greater waste minimisation and improved source segregation of waste by customers across the State and contribute to achieving challenging EU targets for municipal waste recycling of 55% by 2025, 60% by 2030 and 65% by 2035.

In terms of pricing, the waste management market is serviced by private companies, where prices charged are matters between those companies and their customers, subject to compliance with all applicable environmental and other relevant legislation, including contract and consumer legislation. It should be noted that most collectors have traditionally charged for the collection of recycling or compost bins, but they are required to do so at a rate below that which they charge for residual waste collection.

While the Minister has no role in setting prices in a private market, given the significant market reforms due to be delivered this year to which I have referred, he has however instructed his officials to instruct the price monitoring group to monitor whether fair and transparent pricing is consistent in the market, in line with commitments given in the waste action plan for a circular economy.

The news that Panda waste is introducing a new €3.80 charge for brown bin lifts in the middle of a cost-of-living crisis and at a time when we are trying to encourage people to segregate their waste appropriately landed like a lead balloon. There was a significant response from customers of the company and people generally, outlining the probable consequences of that measure.

There is a real risk that there will be more inappropriate use of bins and dumping and a reduction in appropriate segregation, reusing and recycling. There was a commitment from the Taoiseach regarding a review of waste collection. Is that ongoing? When will it be completed?

I appreciate that many people were shocked when one of the largest waste collectors introduced a charge for something for which it had previously not been charging. Nobody wishes to pay for something they previously did not pay for.

The Deputy asked how I intend to maximise compost and recyclable waste. I do not wish to maximise compost and recyclable waste. I wish to minimise it. The national policy is to cut food waste by 50% by 2030, which is line with EU policy. Without nitpicking, the question is how do I maximise the amount of waste created. I wish to minimise it. After we have minimised the quantity of waste, within that structure, I wish to make sure that the highest proportion of anything residual is recycled or composted. That is the policy. We are at a point where 130 kg per year of food waste is generated by each household. That food waste, whether it is collected for free or not, costs money. It is worth approximately €700 per year of cost to households. Our primary policy is to reduce that 130 kg down to 65 kg, which will cut the costs to households by €350 per year.

The Minister of State knows well - when I read the question to him, I spotted that as well - that my point is about maximising the appropriate segregation of waste and, of course, reducing the amount of waste. The Minister of State outlined the policy, which is to reduce waste, in the first instance, and ensure that it is appropriately segregated. I am asking the Minister of State how, in the name of God, charging people at a rate they cannot afford for compost and recyclable waste is intended to encourage them to use their recycle waste and the compost waste bins. That is what I am asking the Minister of State. It is directly related to the fact this is a for-profit model. It is about the bottom line of private companies, in the first instance. How will the Minister of State intervene to ensure we have a model that appropriately responds to the policy?

There is a group that did exist before I was appointed, namely, the price monitoring group. Its job is to examine the market and see if changes are needed. I have asked the group to reform. It includes an economist, people from the Central Statistics Office, CSO, and consumer experts. They have been asked to play the role of mystery shopper to find out what the prices are on the market and to recommend if we need to put in any changes. Although it is a private market, we have collection licences and there are conditions on those. One is not allowed to offer flat fees for black-bin waste. One must charge less for collecting recycled waste than for collecting brown-bin waste. We can make changes where they are needed. I will examine the issue carefully and see what we can do. In the meantime, any householders concerned about the cost of their food waste should have a look at stopfoodwaste.ie, which provides a very useful set of suggestions for how to minimise the volume of food waste being produced in a house.

Wind Energy Generation

Cathal Berry

Question:

73. Deputy Cathal Berry asked the Minister for the Environment, Climate and Communications the number of offshore wind turbines he expects to be off the Irish coast by the end of 2024, 2025 and 2026, respectively; and if he will make a statement on the matter. [20209/23]

Approximately how many offshore wind turbines do we expect to have in situ for the end of next year and the end of 2025 and 2026?

There are already and will be seven turbines in place at the Arklow wind bank, which have been in place for almost 20 years. Under the climate action plan 2023, the Government has committed to a target of a further 5 GW of installed offshore wind capacity in Ireland’s maritime area by 2030 and a further 2 GW from wind farms, which will be developed for conversion to other power uses. Significant work has been undertaken by my Department in the past two years to develop the regulatory framework to enable the construction and operation of offshore wind farms and associated infrastructure.

The national marine planning framework, which was adopted by Government in May 2021, is Ireland’s first marine spatial plan. The Maritime Area Planning Act 2021 was enacted in December 2021 and established the legislative foundation for the new marine planning system. Under the Marine Area Planning Act, a new maritime area consent, MAC, regime for offshore energy projects was developed by my Department to replace the foreshore lease system. I issued the first MACs for seven phase 1 offshore projects in December 2022.

In addition, a new maritime directorate has been established in An Bord Pleanála that will have responsibility for the assessment of planning applications for offshore development. The Maritime Area Regulatory Authority, MARA, is being established, which will have sole authority for granting further MACs for all future marine infrastructure required to deploy offshore wind energy.

In order to provide a route to market for offshore wind projects, the Government approved the terms and conditions of the first offshore renewable electricity auction in November 2022. The auction process opened in January 2023 and final auction results will be available in June. The successful phase 1 projects with MACs will progress through the planning system. After having secured planning permission from An Bord Pleanála, the developers will commence offshore wind farm construction and deployment, which will become operational in the latter part of this decade.

I very much acknowledge and appreciate all the work that is going on in the background, such as the establishment of MARA, the legislation and the planning bits and pieces that are taking place. However, what people really need and want to know is when construction will happen. I take the Minister's point. He said the back end of this decade. The key question for me is as to whether there will be any construction of offshore wind turbines in the lifetime of this Dáil or the next? We seem to be talking about megawatts and gigawatts, but it would be great to see the number of structures that will be put out there. A precondition for this would be the port situation. We know Belfast is the only port on this island capable of assembling these wind turbines. Have we identified a port or two in this jurisdiction that could be used? Have we looked at upgrading ports to facilitate the assembly and construction of these turbines?

The critical thing in the lifetime of this Government is getting those phase 1 projects, of which there are six on the east coast and one on the west coast, through the auction process and subject to their qualifying on that, into the planning system this year. The timelines depend on An Bord Pleanála, but we are conscious we are in a race with other European countries, or with the US and others, who are looking for the same supply chain, ships, cables and other infrastructure. We are looking to try to make sure, with the greatest certainty, that the timetable is minimised and we start to see installations happening in the likes of 2026 and 2027. It is in the period 2028-29 that we expect the phase 1 projects to be delivered.

While that is happening, we switch to phase 2, which is further projects to make sure we meet that 5 GW target, where we have designated zones. Those are the appropriate place for wind energy to be developed, because we have learned a planned-led approach is the right way. Included in that is the use of Irish ports, that is, Belfast and ports in the South which need to be up and running in time for that sort of delivery schedule.

That is great. Thus, the specifics most likely relate to the period from 2026 onwards. At least we have a good, if tentative, timeline. I am glad about the Arklow wind bank. I managed to sail past it last summer on a trip to France. There are seven turbines there that were constructed approximately 20 years ago. I stand open to correction, but my understanding is that it was the largest offshore wind farm in the world at the time. We were a leader 20 years ago, but we have become a laggard ever since. I am always struck by how ambitious our parents' generation was, what it could do and how we seem to be tied up in bureaucracy all the time. I very much welcome that tentative timeline. Obviously it is not ideal, but it makes sense and it seems to be quite achievable. All I would do is urge the Minister and the wider Government to pursue this project at best safe speed. Wind is an incredible resource. We are the envy of Europe and the sooner we start harnessing the power of the wind, the better off we will all be, because we get to merge both the green and blue economies. I cannot recommend it enough.

I very much agree with the Deputy's vision of where we need to go. We were one of the initial leaders in offshore wind and then other countries, as the Deputy says, such as the UK, Germany, Holland and Belgium developed much quicker and much faster. However, we also developed renewables onshore. Within in a European context, we are in the top three countries in integrating new variable renewable power. We are actually quite successful in this area of renewable development, but that success now moves to both solar and offshore energy in particular.

The Deputy is right. We have a real opportunity, because we have a comparative advantage as a result of having a large sea area, where there are stronger winds. We have real capability. We need to be fast and at the same time, we need to get our environmental planning and bring coastal communities with us, including fishing communities and others.

It is absolutely feasible for us to do that to deliver that 5 GW before the end of this decade but then start on the additional 2 GW and on from there to the really big project which is going into deeper waters at much bigger scale. Everything we are doing is to get that planning process right so that we deliver the really big prospect, as the Deputy said, like our forefathers and women before us, who thought big when they set up the likes of Ardnacrusha. That is where we need to go.

International Agreements

Joan Collins

Question:

74. Deputy Joan Collins asked the Minister for the Environment, Climate and Communications if the Government intends to declare its intent to leave the Energy Charter Treaty, given the widely criticised European Commission reforms to the treaty. [20140/23]

Does the Government intend to declare its intention to leave the Energy Charter Treaty, ECT, in light of the widely criticised reforms proposed by the European Commission? When I questioned the Taoiseach on the ECT last week, I was told we would work in concert with the EU on modernisation. However, the European Commission said that given the number of countries quitting individually, renegotiating the treaty did not seem feasible and that modernisation had failed. Will the Government declare its intention to leave the Energy Charter Treaty given the failed reform process by the European Commission?

Ireland has expressed strong views within the EU on the compatibility of the Energy Charter Treaty with the Paris Climate Agreement, especially the charter treaty's dispute resolution mechanism. We continue to express our strong views within the EU on these issues. We believe it carries more weight in international negotiations to advocate them as part of the European Union.

In 2017, the Energy Charter Conference decided to modernise the treaty in order to respond to criticisms of the dispute resolution mechanism in Article 26. Our view is that it is inconsistent with the objectives of the Paris Agreement and with policy objectives of the EU and other countries which seek to phase out fossil fuels in favour of renewables. This modernisation process has not been completed.

Ireland continues to support a co-ordinated EU withdrawal from the Energy Charter Treaty if it is not modernised to align it with the Paris Agreement, to address our concerns, and to support international efforts to decarbonise electricity systems and promote more renewable energy.

We are working with EU partners to reach a common position. If a decision is made for a co-ordinated exit of EU member states from the treaty, Ireland will support that position and we will withdraw. However, we reserve the right, and maintain this a live option, to unilaterally withdraw should the treaty not be reformed to a level that is deemed satisfactory.

Nine countries have indicated they will leave the treaty and a number have already left. The modernisation attempts have failed. The European Commission has already agreed on modernisation reforms leading to countries exiting the treaty with EU officials saying that there is no qualified majority in the Council to adopt the modernised treaty. The European Commission said that given the number of countries quitting individually, renegotiating the treaty did not seem feasible. Countries have been leaving the treaty in reaction to these reforms. Reforms include a provision to protect existing fossil fuel companies for ten years.

The treaty has been described as a threat to climate action by civil society groups and UN experts and violates the goals of the Paris Climate Agreement by offering legal protection to climate-wrecking fossil fuel companies. I ask the Minister to lead by example. The modernisation is not working and even if it works there will be fewer countries in the ECT putting more pressure on the countries that remain, if they do, to support the ECT financially.

I had meetings last week with some of the nine countries the Deputy mentioned. They were very appreciative of our support and our co-ordinated work with them within the European Union to seek to deliver a withdrawal from the treaty. We are best placed and have most influence in that European Union process to achieve that objective rather than acting unilaterally. However, as I said in my opening response, should that not be successful, we reserve the right to act in that way. I agree with the Deputy. I do not believe the modernisation recommendations have delivered the scale of change we need in the treaty. In those circumstances, it is not appropriate for us to continue to be members. I believe a co-ordinated European approach to achieve a common withdrawal is the best way we can use our influence within the European Union to deliver on the climate agenda that I seek to further.

We need to lead on these issues and we are not leading by remaining in those negotiations. We are supporting the closed-door arbitration court which allows companies to sue for lost profits. We are supporting the protection of €344.6 billion in European fossil fuel assets. Total claims are estimated to cost governments €1.3 trillion worldwide by 2050. There is an ongoing case brought by German company RWE for €1.4 billion despite Germany announcing in 2023 its own phasing-out of coal. How can we even stay within these negotiations. They are not working. Why have nine countries, the Netherlands, Slovenia, Spain, Germany, France, Italy, Denmark, Poland and Luxembourg, already left? We should be leading. The European Parliament voted with a majority of 100 votes to leave the treaty. Eight countries represent about 70% EU population. An open letter signed by more than 280 parliamentarians from across the EU said that "The ECT is a serious threat to Europe's climate neutrality target and more broadly to the implementation of the Paris Agreement." The Minister should come before the Dáil and have statements on this to allow a real debate on where we are at the moment. We should be pulling out of this and indicating that very strongly.

I do not disagree with the criticisms the Deputy outlined in the first part of her last contribution. However, we are also in the middle of negotiations and discussions with the European Commission on the issue. Various Commission papers are being circulated. It would not be right for us to abandon that process and-----

Why have the other countries abandoned it?

They have not. They are working with us and are appreciative of our support in working in a co-ordinated European way to see how we can achieve and deliver a European withdrawal which meets the objectives of those nine countries and will also meet the Irish objectives and still maintain a common European position. That is a prize worth trying to gain and deliver. We are in the middle of doing that at this time.

It is benefiting the fossil fuel companies. We should have statements on this in the Dáil.

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