JOINT COMMITTEE ON CLIMATE CHANGE AND ENERGY SECURITY debate

Energy Security: Discussion with NOW Ireland.

Chairman

The delegation from the National Offshore Wind Association, NOW Ireland, is led by Mr. Brian Britton, its spokesman and co-ordinator. He is accompanied by Mr. Stephen Wheeler from Airtricity, Ms Nicola McLaughlin of the Codling Wind Farm and our dear friend from Murray Consultants, Mr. Mark Brennock, who is no stranger to us. I also welcome other members of the association who are in the Visitors Gallery. They are all very welcome, including the chairman, Mr. Michael McBennet.

The format is that Mr. Britton will make his presentation which will be followed by a question and answer session. I am obliged to indicate that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee.

Mr. Brian Britton

On behalf of NOW Ireland, I thank the members of the Oireachtas committee for inviting us to attend. We have given members a hard copy of our presentation. If they wish, they can make notes and refer to them later.

NOW Ireland is a representative body for all the enterprises involved in developing offshore wind energy projects in Irish coastal waters. They include Airtricity, Codling Windfarm, Saorgus, Oriel Windfarm and Fuinneamh Sceirde Teo. These companies are poised to make an investment in excess of €4 billion to develop the offshore wind energy sector in Ireland. Offshore wind energy projects are fundamental to Ireland achieving its medium-term and long-term energy and climate change objectives. In the short term onshore wind energy projects will help us to achieve the targets set for 2012. However, in the longer term more exacting targets will require the deployment of renewable capacity best met through the scale of projects offered by Ireland's offshore wind eneregy project developers.

Ireland has some of the world's best resources and can harness wind offshore to deliver large generation capacity and high load factors. From 2012 onwards, offshore wind energy projects will become a key driver in the Irish energy sector. In the short term a delivery of 2,000 MW is possible. However, the potential offered by Irish waters is much greater than this and we will be seeking to create a climate where Ireland will become the "green energy centre for Europe".

The market for energy, both globally and domestically, has changed in the past decade. The issues that shape energy policy have altered to such a degree that the solutions and policies of yesterday are now of little value. NOW Ireland welcomes the establishment of the Oireachtas committee and views its deliberations and output as critically important to the provision of the policies that will help us to meet our energy needs.

The current discussion is based on three basic challenges: achieving long-term security of supply of energy; maintaining and, if possible, enhancing our economic position relative to other nations; meeting our international obligations under treaties and, perhaps more importantly, our moral imperative to address climate change. In terms of security of supply, as members are aware, Ireland has the highest dependency on imported fossil fuels for generation in the European Union. International studies have repeatedly highlighted the precarious nature of Ireland's energy dependency on imported oil, fuel and gas. Such a dependency may have been economically sustainable in the 1980s and 1990s. Now, however, it represents short-term thinking and a failure to understand the challenges we face both as a nation and as an economy. Oil prices have risen sixfold since 2002, by 125% since February 2007 and 25% in the past four months. We should not kid ourselves that these are blips and that all will return to normal in the years ahead. In recent weeks Goldman Sachs analyist, Argus Muti, has predicted a rise in oil prices to $200 per barrel within the next six months to two years as being increasingly likely. This suggestion - laughable only a few years ago - was given added credibility by Tullow Oil's Tom Hickey who claimed the figure was a strong possibility.

Ireland is a price taker when it comes to oil, gas and coal. Because of our generation mix and geographical position removed from oil and gas producers, we will be forced to pay a heavy price if we do not act now to change our mindset.

On competitiveness, while we seek to make this change, it is critical that we do so in a way that enhances our competitiveness and creates economic opportunity. Opponents of renewable energy have often used this as an argument on which to oppose the deployment of renewables. This argument holds no water and indeed threatens the opportunity for us to develop an important new sector for the economy. Not only can renewable energy reduce energy prices, it can also be a catalyst for growth.

We need to frame our energy policy in relation to our international obligations. The challenges that have been set in terms of climate change targets provide an impetus not only to Ireland, but to all nations, to address energy priorities. Ireland has been set the target of achieving 15% generation from renewable energy by 2012 and 33% by 2020. It is becoming clear that the 2012 target can be achieved, largely through the deployment of onshore wind. This year will see us reach the milestone of 1,000 MW of energy from that source. It is less clear, however, how we are to achieve our 2020 targets. Achieving them will require a substantial increase in generating capacity. From 2012 onwards, this can best be achieved through deployment of offshore wind energy.

The 1,000 MW of onshore wind energy that has been achieved to date has required the development of hundreds of small wind farm projects around the country. The five operators represented in NOW Ireland have the capacity to deliver over 2,000 MW from just five offshore projects. That would represent nearly 40% of our current national generating requirement, powering 1.5 million homes. Some 2,000 MW of offshore wind energy will remove the equivalent of approximately 3 million tonnes of carbon dioxide from the economy annually. It will significantly reduce the amount likely to be paid out in carbon credits, which is estimated to be between €170 million and €530 million annually for Ireland based on current and recommended UN fines. It will help to insulate Ireland from the costs of full auctioning in the emissions trading scheme from 2013 onwards.

Capacity of 2,000 MW represents the return from existing and pending lease areas. The Irish waters offer potential for far greater returns in the years ahead. We believe that, within easily accessible waters in the Irish Sea and Celtic Sea, there is in excess of 5,000 MW available, with the Atlantic Ocean offering even greater potential as construction technology improves. Offshore wind enjoys a number of competitive advantages which allow it achieve these greater returns. Wind is stronger and more consistent offshore than it is onshore. This ensures a larger generating capacity and a more reliable supply of energy. Offshore wind enjoys a load factor advantage over onshore wind of between 40% to 45%.

A new breed of wind turbines, specifically designed for offshore conditions, has the potential to allow for generation of over 6 MW per turbine. These machines are likely to come on stream from 2012, the time at which we believe Ireland's offshore projects will be rolled out. To put this in context, a single turbine of this size will produce the energy of four onshore turbines or ten marine generators. This scale advantage means that we can make more efficient use of our natural resources, while using the minimum necessary deployment of machinery.

This phase of development, beginning around 2012, holds the key to delivering Ireland's 2020 renewable energy target. Given the right support and a change in mindset, NOW Ireland is convinced a target of 10 GW of renewable energy should be set, 4,000 MW of which will come from offshore wind energy. Ireland will not only be meeting its own green energy targets but will be playing a key role in meeting the targets for the European Union, as suggested by Commissioner Piebalgs, while also providing a substantial boost to our own economy.

How do we get to this promised land and achieve these goals, which effectively represent a tenfold increase on our current performance? To date, a number of factors have stunted the development of offshore wind energy projects in Ireland. Before we move forward, we must understand and address these barriers to development. They include industry-wide issues, policy issues including pricing and planning, and grid infrastructure and interconnection.

The first and perhaps best known of the constraints has been the availability of turbines large enough to take full advantage of the opportunities that offshore wind provides. Turbine manufacturers have concentrated their efforts on producing turbines to meet the requirements of the global onshore market. Only now are we seeing the investment in research and development which will deliver offshore turbines of 6 MW plus.

Another challenge we have faced and will continue to face is the difficulty of constructing at sea and the availability of human resources and machinery to do so. We face supply-chain constraints and this is an issue we must address as an industry. However, companies are smart and, if there is a market, suppliers will come on board to deliver for that market. These constraints are global and have been experienced in all countries that have begun the process of developing offshore wind energy projects.

With regard to uniquely Irish features, the lack of a guaranteed pricing structure for offshore wind was for many years a disincentive to investment in this sector. To this end, we welcome the Minister's announcement of a renewable energy feed-in tariff scheme for offshore wind. We have already noted increased interest in the sector since this announcement. While there is much still to be discussed regarding how this scheme will operate, NOW Ireland looks forward to working with the Department to create a system that will ensure investment for the benefit of both the sector and the State.

While there has been movement on pricing, the same cannot be said about planning. Ireland already has the most rigorous permitting system in Europe. There has been some suggestion that the permitting system is to change in the near future. NOW Ireland would welcome such change. Any new licensing system must offer greater clarity, with clearly defined timelines, and greater certainty than currently obtains for the level of investment required in offshore projects. We deserve a system that addresses the needs of citizens while meeting the requirement of developing a real energy alternative in the most practicable manner. To achieve this will require joined-up thinking between Departments.

On the question of infrastructure, grid connection remains the most serious barrier to the development of renewable energy in Ireland. Members will be aware from their meetings with onshore operators that serious concerns have been raised over delays to grid connection. The challenge of grid connection facing offshore operators is no less serious. NOW Ireland contends this is a critical issue that must be addressed in the coming year. We need a grid design that offers the maximum flexibility to generators and that also offers as great and robust a level of interconnection as possible with our neighbours in the United Kingdom and Europe.

It has been heartening to note from recent discussions with the Department of Communications, Energy and Natural Resources that these points are being taken on board. Furthermore, it is heartening to see that the needs of offshore wind developers are now being treated as distinct and not merely a bolt-on to the onshore market. Given the location, the construction technologies required and the capacity that can be delivered from offshore wind, offshore projects have different grid needs to onshore projects. Offshore projects also offer different potential. For example, the Codling Bank project alone can deliver 1,100 MW. The differences are such that the offshore operators, as a group, are likely to seek to be treated separately from the Gate 3 process.

The current "gate" system is designed to accommodate a large volume of small, interacting wind projects seeking connection that are not seen as dispatchable. There is a large volume of projects in the queue seeking connection. However, offshore wind projects do not fit the definition of projects the "gate" system is designed to manage. Offshore projects are large and discrete; they each generate a large swathe of power. Eirgrid has defined large-scale wind projects as "partially dispatchable". If we are to solve the grid conundrum, it must be in a targeted way, not one that assumes all renewable types are the same.

A grid and network that supports renewable energy is by its nature a flexible one. Our generation mix is not conducive to deployment of renewable levels necessary to meet our 2020 targets. If we are serious about attaining our renewable targets, we need to create an over-arching energy infrastructure to deliver them.

The other key element of the infrastructure mix will be the investment in interconnection. This is where the real opportunity lies to benefit from renewable technology. Through interconnection we have the potential to move from energy dependency to being part of a trans-European energy market, whereby we can sell energy into an international grid. To achieve this, we need a change of mindset and to learn lessons from the past. We need to understand the full potential of our resources. With serious investment in interconnection, Ireland can become a European energy power. I ask members who believe this is a pipe dream to consider the development of the oil and gas industry in the United Kingdom, Norway and the Gulf of Mexico in the 1970s. Major constraints were faced up to as these regions developed their energy resources at a time when middle-eastern oil and gas became too expensive and insecure. The result in each case was a massive economic return for those countries. Necessity was the mother of invention.

Interconnection must be central to our thinking. I welcome the announcement by the Minister for Communications, Energy and Natural Resources, Deputy Ryan, that he wishes to pursue a feasibility study on Ireland's interconnection links with its neighbours. This would, if it occurred, be the first link in a Celtic grid. We should not stop there.

A north-south grid in the Irish Sea should be considered. Our counterparts in Norway are already seeking to interconnect to Scotland. The goal of a European grid is attainable and it is essential. The re-establishing of the renewable energy development group by the Minister, with offshore represented for the first time, is to be welcomed. We trust through the consequent public private partnership that practicality and foresight will be brought to bear on grid and interconnection.

We also welcome the announcement by Science Foundation of Ireland that renewable energy will join information technology and pharmaceuticals as key strategic areas in which research and development will be supported. This is a massive boost for our sector. Ireland can become a world leader in energy research and the work being undertaken in Dundalk Institute of Technology provides an important first step in this direction.

Other countries are already taking a lead in developing not only offshore wind energy but investing in the research and development capability needed to support this growing industry. In the Emden-Ost industrial region in northern Germany, six towns are actively developing their potential to manufacture wind turbines and develop related support enterprises. The aim is not just to develop a local and renewable energy source but also to create a cluster, a centre of excellence, which will drive further economic growth.

Up to 150,000 jobs have already been created across the EU in the wind energy industry, 80,000 jobs in Germany, including 11,000 in Emden-Ost. The EWEA forecast is that 400,000 jobs will have been created across the EU by 2030. Food for thought at a time when Ireland's construction industry is in decline.

The potential economic returns are proven. The Stern report highlights that economic activity directed at averting climate change will develop into a multi-billion euro industry. Taking the example of Germany, the German enterprise minister recently indicated that in the short to medium term, people employed in the energy sector will exceed those employed in the German automobile industry. This is not an aspiration.

A cost benefit analysis of the German renewable energy incentive scheme carried out by the Feuerhof Institute has demonstrated that the investment in renewable energy infrastructure and support for the development of their industry has netted the German economy approximately €9 billion. A €5 billion return on a €4 billion investment. NOW Ireland has commissioned Indecon to carry out a similar cost benefit analysis for Ireland. The results of this study will be shared with the renewable energy development group.

The following benefits in savings have been calculated as a consequence of the German renewable energy Act: costs of the renewable energy Act and additional costs of feed in tariffs, €3.5 billion; direct savings, €4.3 billion; and electricity price savings due to the merit-order-effect, between €3 billion and €5 billion. The total return on renewables investment is between €7.3 billion and €9.3 billion, a net benefit of €3.5 billion to €5.5 billion.

Other countries such as Scotland, Denmark and Norway are pushing hard to become the European centres for offshore wind power. Scotland and Germany are pushing this agenda because they see the economic opportunity. Ireland needs to seize that opportunity. We could deliver in a cluster of ports, similar to those in Emden-Ost, stretching from Harland and Wolff in Belfast to Rosslare, a network of enterprises delivering the turbines and equipment and then servicing the offshore network in the Irish Sea and beyond.

Foreign direct investment, is rapidly becoming "Found Something Cheaper". We can no longer depend on other countries to provide the majority of our jobs and our earnings. In a recent market outlook statement, Friends First economist, Mr. Jim Power, indicated Ireland will come under further pressure with job losses in the multinational sector. Successful companies and economies are founded on the ability to be flexible, to see opportunities and to seize them. Successful companies look at a market and realise that it is not static and that in the changes which occur there is the potential for greatness. Ireland Inc. needs to think in this way.

The energy market has changed and we have the natural resources to compete. Ireland has some of the best wind resources in the world. In this changed energy environment, Ireland has the chance to look to its natural resources, to develop them and to become a world leader. We cannot afford to get locked into an outmoded view of the Irish energy market.

Ireland has traditionally been dependent on other countries for our energy with 90% imported. Due to this we find it hard to think of ourselves as being energy rich. We find it hard to understand the full potential of what we can achieve in terms of energy. However, Ireland has successfully capitalised on its natural resources, tourism and food. I have some experience in both of these sectors.

We have developed our natural resources in the agricultural sector to a level where we are able to punch well above our weight and have become world players. Similarly in tourism, how many countries actually attract more visitors than their total population? Ireland does well when it plays to its strengths. Our resources of wind, both offshore and onshore, place us in a position where we can meet not only our own energy needs, but can contribute to the needs of our European neighbours.

The process of starting this offshore sector will require investment. It is an investment worth taking. Opponents of renewable energy talk of subsidies, of costs about competitiveness as if the development of a secure and indigenous energy resource is likely to harm the economy. That is a myth. According to UN figures from 2007, subsidies to solid fuels, oil and gas in the EU outstrip those to renewables by a factor of four to one. Governments are allowing a situation whereby instead of investing in our future energy security, they are supporting industries in decline and options that cannot provide the answers to our needs.

Investment in renewables works. The net effect of investing in wind power has been shown, both in Ireland and overseas, to reduce the overall cost of electricity to consumers. Onshore wind energy projects in Ireland are already subsidising the Irish consumers' electricity bill. Offshore projects have the potential to do the same and at a far higher level of generating capacity.

This is a new era and the policies of supporting the old solutions will not work. If we are to build for a new energy reality, our infrastructural investment must reflect this. We must work in partnership, Government and industry, to plan a grid which recognises the reality of a world where we cannot rely on oil and gas. Building for the future is not subsidy, it is investment. Joined-up thinking is needed. We need the infrastructure to deliver the potential of our invaluable wind resource and put it up to the private sector to deliver capacity. It worked for oil and gas in the 1970s and will work for wind. If industry, in partnership with the Government and State agencies, can overcome the barriers to development, if we can shift our mindset from that of energy dependence to that of energy opportunity and if we can take full advantage of our natural resources, then we can achieve our renewable energy goals. Offshore wind energy projects have the capacity to deliver not only our targets for climate change and renewable energy but also to be a driver for economic growth. We have the potential to deliver capacity not just for Ireland but for Europe.

Chairman

I thank Mr. Britton for his presentation.

Deputy Liz McManus

I thank the delegation for its extremely interesting presentation. What wind projects have permission to go ahead? The previous Government granted many permissions for wind farms but there seems to be a vagueness about the timeframe to what has been committed. When the Minister announced the refit scheme, which was helpful to the industry, he made it clear that it was the turn of the industry to respond. He also indicated that the industry had undertaken a €4 billion investment. It is not very clear to me, but the tenor I get from Mr. Britton's document appears to be that he is looking for investment supports. Perhaps he can clarify whether it is now a requirement to look for more investment, more facilitation by the Government or EirGrid in order for these ventures to take off - or are they taking off, anyway? I take the point about the difficulties with regard to manufacturing components. How can we have a role to play in that? Is it something Ireland does not do, manufacture big components? That is for other countries to do, perhaps, and we are reliant on them or do possibilities exist for us to be involved in such activity?

I was interested to hear planning was a difficulty because most of the committee's members will have received documents from people concerned that when it comes to offshore developments the planning regime is not the same as for projects on land. They have been urging the protection they are seeking in this regard for quite some time. Just before the last election, Deputy John Gormley issued a letter stating no more permissions would be granted until the Foreshore Act was amended. Perhaps Mr. Britton might comment on that.

As regards the role of EirGrid, my understanding from presentations we have received is that it will invest further in the infrastructure and will provide more licensing relatively soon. However, Mr. Britton argues his members want to be treated differently by EirGrid, in some type of separate stream, as they provide a different product. Perhaps he might indicate how that might operate, precisely. I can see the point, but I am not clear as to how it might be done. I do not understand, for example, what the term "partially dispatchable" means, so perhaps he can clarify it. Certainly, the interconnector is something we all support. This morning the other committee on energy heard a presentation on a private east-west connector. I do not know how feasible that is, but certainly interconnection is a development that has very strong support, I believe, on all sides of the Oireachtas.

Deputy Seán Fleming

I thank Mr. Britton for making the presentation today, and he is very welcome. I have a couple of questions to get clarification on his presentation.

Is he talking about wind, exclusively, or is he including wave power? I am somewhat confused and perhaps this is reflected in my lack of knowledge of the area - and perhaps other members are the same. I do not get a concept of the scale we are talking about, relative to the Irish market. The figures on page 4 indicate Mr. Britton would like to get 4,000 MW from the offshore wind industry. In the line about this there is a reference to 10 GW. Can he say what the relationship is between them as they are in the one sentence. Most of us do not know whether one is ten or a thousand times the other. I am sorry for displaying my lack of knowledge in this regard, but Mr. Britton is familiar with the area and we are not.

Relative to the Irish market I should like him to give us the scale as regards what offshore wind energy projects might produce in the short-term or the long-term - 10%, 20%, 30% or 40%. Obviously, he is really talking about this ultimately being an export business, not just satisfying the Irish market. He mentioned a region in Germany where there is a relatively large wind power industry. Is that mainly onshore, or is the technology being developed for offshore operations? There are similarities but obviously significant differences as well. What is the highest percentage, in terms of any country's requirements, being produced by offshore wind energy projects - or are matters just at a theoretical stage? We realise that the industry is probably in its very early stages, but we want to get an idea of where precisely it is at. Might we find that this has been done two years ago in south-east Asia or is it possible that Ireland might lead the posse on this issue?

Senator Paudie Coffey

I also welcome Mr. Britton to the committee. It is very informative to us as Members of the Oireachtas to hear the submission. There is general realisation across sectors that there has to be a change of mind set from the energy dependent culture we have. I am glad Mr. Britton has outlined to the committee the opportunities he sees as regards climate change and energy security matters and how they may be tackled in what he calls, Ireland Inc.

I need clarification on some of the issues mentioned. As regards planning, Deputy McManus mentioned foreshore licences in the context of the bureaucratic hurdles to be overcome in getting them and the wider planning model that Mr. Britton's offshore wind farmers should fit into. What does he envisage would deliver the potential he has outlined? Is it something like an overall spatial and management plan for our coasts, and coastal waters, to give him a process to which he can apply, and that will deliver an entire wind farm, for instance, within a clear time line? I hope he can understand where I am coming from.

He mentioned the opponents to renewable energy and I should like him to clarify who these are. Renewable energy has enormous potential and is something that should be encouraged. I should hate to believe there is any substantial opposition to that prospect. As regards planning, what will be the impacts on our seas - whether through shipping, fishing or coastal erosion? As regards grid connections, what essentially needs to happen? He has referred to the difficulties, but what has to be done as regards grid connections and EirGrid to make the potential he outlines realisable?

He also mentioned interconnection. It is good we are speaking of a UK interconnector through cabling. Mr. Britton has said Ireland should be an energy exporter and that we should look at interconnecting with mainland Europe. France is not a million miles away and I thank him for raising that. I shall be delighted if he can respond to some of those points.

Mr. Brian Britton

We have organised matters whereby I shall take the questions asked by Deputies McManus and Fleming and Senator Coffey. Then Mr. Wheeler will deal with certain aspects, as will Ms McLaughlin. I shall direct matters if that is all right.

In reply to Deputy McManus there are five companies involved for all of Ireland and I shall try to explain where they are at in the context of the 2,000 MW figure. Airtricity has approved approximately 550 MW for counties Wicklow and Wexford. Codling Wind Farm has consented to 1,100 MW. That leaves the three other members. Oriel Wind Farm is in the final stages of the consenting process. We have been in the process about three years and have carried out all of the environmental assessments. We are looking for 330 MW off County Louth. Also in the process is Saorgus, which is looking at approximately 500 MW in the Bray bank, near Kish. In the west Fuinneamh Sceirde Teo is looking at 100 MW off County Galway. Therefore we have had approximately 1,500 or 1,600 MW consented to, and the rest are in the process.

Chairman

What does Mr. Britton mean by "consented to"?

Mr. Brian Britton

Lease consent has been given by the Department responsible for the marine for them to provide 1,600 MW of wind power in those locations. The other three companies are either at the middle stage or the advanced stage of consenting. We are going through the process. If we assume that the approximate cost of investment is that applied in the industry of between €2 million and €3 million per megawatt, then we come up with a figure in excess of €4 billion for 2,100 MW. There is consent for approximately €2.5 billion to €3 billion, with the remainder awaiting consent.

Deputy Liz McManus

How many turbines does that involve?

Mr. Brian Britton

The turbines put up by Airtricity generate 2.7 MW of electricity. The real benefit to offshore energy is apparent from the 6 MW turbine that is being developed. For example, we are proposing to construct 55 turbines in Oriel, off County Louth, in order to generate 330 MW. The industry is developing that kind of turbine.

The second point raised by the Deputy was about the manufacturing opportunity. I presented a paper to the gateway conference in Dundalk last November and I used the example of Emden-Ost in Germany. Emden-Ost is 100 km between Emden and Bremen. The company there manufactures turbines for onshore and offshore locations. It services onshore and offshore wind-farms. Looking at the component parts of a turbine, there are opportunities that Ireland could be considering. A turbine consists of the foundation, the tower, the cell and the blades. We in Ireland could be using our high educational standards to get involved in research to develop the new turbine required to deal with the offshore situation. Looking at all our ports along the east coast from Rosslare to Arklow, Wicklow, Dundalk, Greenore, Warrenpoint and up to Harland and Wolff, there is no reason we could not be servicing offshore wind-farms. We could be doing this all the way to the western seaboard of the UK.

The equivalents of the IDA in many European countries are actively looking at encouraging investment in turbine manufacture and assembly. TEKS in Finland, Innovation Norway, Invest NI and the Scottish Enterprise Board are all extremely active in encouraging people to invest in research and development and in the creation of jobs to cater for the offshore industry that they see developing. The oil and gas industry developed from nothing in the 1970s to deal with the crisis in the Middle East, and it has tremendously benefited the economies of Norway, the UK and Mexico. They saw the threat of having no fuel. We are now looking at the threat of climate change and the threat of security of supply. The governments of these countries speeded up the planning process, investment in the industry and research and development, all of which was needed to create oil and gas infrastructure. They could then get that oil and gas into the market and create revenue for their countries.

We need a change of mindset to achieve that here. We have a resource that is costing nothing to this country. We can use it to fulfil our energy needs and then possibly export it, creating jobs in a whole new sector. That is what we mean by the manufacturing opportunity.

We support all renewables. Wave and tidal energy developments are quite a few years behind wind energy developments, but anything that can help in the renewables sector is vital.

Chairman

We visited the Marine Institute in Galway last week. Some of us went to its test site in Galway Bay to see the machinery used for the production of wave energy. At the meeting there we talked about the need to speed up and put in place a structure that will deal with these opportunities quickly.

I was told by the Minister of Agriculture, Fisheries and Food at this committee that responsibility for the Fisheries and Foreshore (Amendment) Act 1998 is being transferred to the Department of the Environment, Heritage and Local Government. The section of the Department of the Environment, Heritage and Local Government that will deal with this is based in Clonakilty, and because of the refusal of staff to move there, the foreshore licence process is being held up. One of the tasks of this committee will be to invite the Minister for Communications, Energy and Natural Resources here to find out exactly how the Government will deal with each application quickly and what standards are to be set, so that everybody knows where they stand. However, it seems that all of these opportunities could be delayed significantly unless we get our act together. I do not think there is a structure in place for it.

If somebody goes in to the local authority with a planning application, then that person knows that it will be dealt with by that local authority within a couple of months, and that there is an appeal system. Have we got such a system in place for these licences? This is vitally important for targets in 2012 and 2020.

Mr. Brian Britton

I will refer once to Oriel wind farm. We have been involved in the system for three and a half years. Last November, 14 of the 15 statutory bodies in this country had approved our application, but the remaining body held it up. We finally got a response from the body in April. For the joined-up thinking required to solve the problem, we need the Minister for Communications, Energy and Natural Resources, the Minister for the Environment, Heritage and Local Government and the Minister for Agriculture, Fisheries and Food. There is a very rigorous system, with which we have no problem. However, it needs to be speeded up and improved. We believe that we will have lost a year because of one particular statutory body holding up the process.

Senator Fiona O’Malley

Which one?

Mr. Brian Britton

The National Parks and Wildlife Service, which was formerly known as Dúchas.

Deputy Seán Fleming

Mr. Britton might give us a list of all those bodies that had an input.

Mr. Brian Britton

The other 14 all responded. We contacted 360 bodies in total. Oriel wind farm was praised at European level for the amount of public consultation adopted and for putting our EIS up on the system. However, one body held us up and we have fallen behind other projects. It might not be until the autumn before our project can assessed.

Senator Fiona O’Malley

What was the reason for holding up the project?

Mr. Brian Britton

The body stated that there was a lack of resources.

Mr. Stephen Wheeler

The Chairman hit the nail on the head. The process is unclear, the requirements are unclear and there is no fixed timeline. It can be incredibly protracted as we are unsure of the submission we need to make, and we spend a lot of money on them. They take between 12 and 18 months to prepare but it is a difficulty that there is no clear requirement as to what exactly is required. The most important element is the timeline. Currently, there is no statutory timeline as with onshore projects where one has 12 weeks. There is no timeline with regard to offshore projects.

Before addressing Deputy McManus's points, the other key point is that there is uncertainty currently as to whether this is the responsibility of the Department of Agriculture, Fisheries and Food or the Department of the Environment, Heritage and Local Government. This uncertainty brings inactivity. While Airtricity has a consented licence, I want to talk a little more on why we have not built that out and what the obstacles are for other members of NOW Ireland and other developers. We are not moving forward because of this uncertainty and the level of inactivity. The move from the Department of Agriculture, Fisheries and Food to the Department of the Environment, Heritage and Local Government needs to be made very soon. NOW Ireland has met with the Minister, Deputy Gormley, to discuss the issue and we believe it is happening. However, there needs to be an urgency in this regard.

Deputy McManus mainly addressed the obstacles. The key point she was trying to get across concerned the reasons we have not built and are not building. If we take Airtricity as a case in point, we built 25 MW on the Arklow Bank but we have a licence to build over 500 MW there and we are fully committed to doing this. However, why am I sitting here today when there has been an announcement that we are building 500 MW in the UK at what will be the world's leading wind farm? Why are we doing this in UK waters and not in Irish waters? There are key answers to this question, which I will take the committee through.

The Deputy touched on the €140 per megawatt hour refit subsidy that has been introduced and which is extremely welcome. However, this needs to be ratified and put in place so that we know when it will be available. If one considers the position of onshore energy at present, we have talked about refit since 2005 yet the PSO order has still not been presented to the House. Airtricity has built onshore wind farms on the basis of refit yet we still have not got this three years later. We need that--

Deputy Liz McManus

Is Mr. Wheeler suggesting it requires a statutory instrument and that that has not been preceded with?

Mr. Stephen Wheeler

I imagine it does.

Deputy Liz McManus

We will certainly follow that up.

Senator Fiona O’Malley

What does Mr. Wheeler mean by "I imagine it does"?

Mr. Stephen Wheeler

It is not there. If I ask for a refit contract today, can I get a refit contract? No, I cannot. It is the same with onshore projects.

The other obstacle is the grid. If one compares Ireland with the UK, the renewable offer certificate system is in place in the UK and fully accessible. This is one of the key drivers of our building programme in the UK. EirGrid and the grid have come up as a common theme in the questions. What EirGrid has done recently is to be very much welcomed. Instead of patching up and looking at connecting small amounts of generation capacity in separate areas, for the first time EirGrid is looking at a development strategy for the future. It is asking what the grid system in Ireland will look like by 2025. We should be mindful that this is the first time this has happened.

Senator Coffey referred to interconnection to Europe, which is an absolute must for Ireland Inc. if it is to excel in offshore and renewable energy. We must not just rely upon interconnection to the UK. We must go further afield. Again, EirGrid's current research and investigations into this must be welcomed. However, could Airtricity connect the Arklow Bank to the Irish grid at present? The answer is "No". The grid cannot take a 500 MW connection from the Arklow Bank right now. EirGrid will not issue an offer because we are at the back, at Gate 3, which means there are 7,000 MW of wind farms ahead of Arklow in the gate system. Admittedly, Airtricity was late in getting its application in, but to achieve targets and to achieve the scale Arklow provides, this must be treated differently. Some 500 MW offshore is very different from 25 MW onshore.

What does "partially dispatchable" mean? As we know, wind sometimes blows and sometimes does not blow. It is blowing the majority of the time but we have to know its peak. With offshore, we have the scale. As we get bigger and bigger wind farms, there is a greater likelihood of wind blowing in certain parts. That is where the term "partially dispatchable" comes from.

Deputy Dara Calleary

Mr. Wheeler said the grid cannot take it. Is it EirGrid which is not in a position to deal with this or is it a physical issue with the grid?

Mr. Stephen Wheeler

The grid needs to be physically upgraded to take this. It cannot currently take it. It is a physical limitation.

The other issue we must touch on is interconnection. EirGrid is building an east-west interconnector which will be delivered sometime on the timeline 2010 to 2012, which is also to be greatly welcomed. My opinion and that of Airtricity is that we need more interconnection. We cannot just stop and allow this to be the only project. We need to be interconnected to Europe and further afield. This is a huge area which EirGrid is examining but it is an area that policy should be driving and encouraging.

We have a huge natural resource. Why are we doing this? What is the key driver? It is security of supply. We are here today to discuss climate change. As members know, Ireland does not have gas or oil but it has a huge abundance of wind ability. In reply to Deputy Fleming on the figures, 10 GW is the same as 10,000 MW. The current instalment capacity in Ireland is approximately 7,000 MW. EirGrid's capacity statement suggests it is looking to increase this every year and the expectation for 2012 to 2015 is approximately 9,000 MW.

Ireland has an opportunity not just to focus on this country but to export, which is where interconnection becomes a major player. This is an issue of which we should be mindful. We should be leaders in this but we are not. Germany, Denmark and Spain are the current leaders in wind, both onshore and offshore. Ireland has an opportunity which we should be pursuing.

Chairman

I am sorry for interrupting. Leaving aside which Department is dealing with matters at present, from a supplier's point of view, which Department would be the ideal one to handle all of this? It is a straight question. While it could be the Department of Agriculture, Fisheries and Food or the Department of the Environment, Heritage and Local Government, the Department of the Environment, Heritage and Local Government does not ring any bells with me.

Mr. Stephen Wheeler

It is the uncertainty that is causing the inactivity. It does not matter which Department it is.

Chairman

What is needed? Obviously, one needs expertise within whatever Department is handling this. If the expertise is in one place but it should be in another place, we should be making a recommendation to the Government that changes are made and staff are transferred. This is an all-party committee. We are not here to represent ourselves but to support the very thing Mr. Wheeler is trying to do. What we can do as a committee is to try to apply pressure to bring about the change that is necessary. When people such as today's witnesses make submissions, it is important that we put on the record the sort of blockages that should be removed.

It strikes me that this is all over the place and this is the reason we are not getting anywhere. Mr. Wheeler convinced me a long time ago that this is something well worth pursuing but it will not be pursued unless we put the structures in place. It was the same with wave energy. Has NOW Ireland had any contact with the Marine Institute in this regard?

Mr. Stephen Wheeler

We have. We are very familiar with Eoin Sweeney and his team there. From an Airtricity perspective, we are working with Mr. Sweeney both on the marine side as well as the offshore side.

Mr. Brian Britton

From a planning perspective, the marine licence vetting committee is an excellent body that operates within the consenting process. It is a non-statutory body comprising experts who assess all proposed offshore wind projects. Any project submitted to the consenting process will be considered by the committee on up to four separate occasions.

Chairman

How is this body funded?

Senator Fiona O’Malley

It comes under the aegis of the Department.

Mr. Brian Britton

Yes. It is funded by the Department of Transport, which has responsibility for marine matters.

Deputy Liz McManus

Is there any facility for private citizens to feed into that vetting process in the same way as is possible in regard to planning applications?

Mr. Brian Britton

We would be in favour of the entire consenting process becoming streamlined in the same way as applies to large infrastructure projects. Each of our projects generally involves an investment of €5 million or €6 million. The large infrastructure planning process involving An Bord Pleanála is straightforward and transparent and we would support something similar in regard to wind projects. For now, however, we are stuck with the most rigorous consenting process of any country in Europe.

The marine licence vetting committee examines our environmental impact assessments and reviews our studies before we are allowed to go to public consultation. After that period of public consultation, we must return to the committee for reassessment after which the committee makes recommendations to the Department. It invariably comes up with queries and we deal with those and go back to the committee. Finally, when this process is complete, the committee will make its final recommendation to the Department. The members of the committee are experts in this area.

However, there is a different regime for offshore as opposed to onshore projects. The marine licence vetting committee must be given a stronger role in dealing with offshore projects. Our concerns are climate change and the security of energy supply. As an island nation, it is logical that we should seek to develop the offshore wind option. The marine licence vetting committee understands the dangers and could probably deal with the roadblocks. It is time to knock some heads together. The marine licence vetting committee is an excellent body and it should be given the necessary powers in regard to offshore development.

There are companies affiliated to the National Offshore Wind Association of Ireland which have invested millions of euro in getting to where they are today but are still not consented. With the transfer of responsibility for marine matters from the Department of Communications, Energy and Natural Resources to the Department of Transport, it is important that such companies are not confronted with a rule change that puts them back to square one.

Senator Coffey asked about the degree of opposition to offshore wind projects. There are NIMBYs everywhere but feedback from our members indicates a generally positive response from the public. In the last year in particular, the public is becoming increasingly aware of the threats to our energy supply. There are newspaper headlines almost every day referring to rising carbon dioxide emissions and the prospect of major hikes in the cost of utilities. Bord Gáis announced only today that it is applying for a significant increase in the price of gas. The cost of oil has reached $126 a barrel. Consumers know that something must be done. We hope the NIMBYs will fade into the background but we are aware that there will always be some degree of opposition.

Several members asked about the various impacts of offshore wind energy development. My colleague, Ms McLaughlin, will deal with that in terms of the issues that arise as one goes through the planning process.

Ms Nicola McLaughlin

The impacts of offshore wind farm development are site-specific and project-specific. The level of impact from any project is mostly down to where it is located. One must go through a robust process of studies and surveys to determine what those impacts will be. Millions of euro have been spent by Airtricity, Oriel and others in undertaking surveys and environmental impact assessments for projects. Assessing the potential impacts of a project involves looking at everything throughout the entire ecosystem. This includes analysing the impact for benthic organisms on the seabed, carrying out water quality studies and undertaking borehole studies to determine what is under the seabed. We analyse the impact on birds and marine life. Every conceivable element in the ecosystem must be addressed robustly in the environmental impact assessment.

It is difficult to outline the impacts of offshore wind farm development. It is all down to where the project is located and how it will be built. In large part, we are only discovering what those impacts might be once the projects are up and running. Airtricity has one project that is now generating 25 MW and it can study and monitor that project to assist it in assessing the potential impacts of other projects. The entire industry can learn from the projects that are up and running in Ireland, the United Kingdom and elsewhere in Europe. Mitigation is put in place on many sites. Some of the main concerns in regard to particular projects related to bird life and water quality. Studies on offshore wind farms in the United Kingdom and Europe show the impacts are not what was anticipated. This is a welcome indication that the environmental impact assessment work that is being done is robust.

I will give the Europe-wide figures. By 2010, the installed capacity for wind power in Europe is expected to be 80 GW. Of that, only 3.5 GW, or less than 5%, will be from offshore sources. However, major changes will take place on the way to 2020. According to figures cited by the European Wind Energy Association, the expected installed capacity in 2020 will be 180 GW, of which offshore projects will contribute 35 GW. The percentage will have risen from less than 5% to 20%. If one goes a step further and looks forward to 2030, the total installed capacity of wind energy projects will be 300 GW, of which 120 GW will come from offshore sources.

While offshore capacity lags behind onshore capacity for obvious reasons, there is an increasing push towards offshore generation because it can deliver scale. In many of the progressive countries, such as Denmark, Germany and Spain, onshore is highly saturated. Just before attending this meeting, we discussed the fact that in Spain a couple of weekends ago, 41% of the demand on a certain day was met from wind. As they are saturated from an onshore point of view, they now are looking to offshore projects. These countries are leading the way with regard to offshore projects. In addition, the United Kingdom's policies on support regimes and the grid also are highly supportive in this regard.

Chairman

I will bring in some more speakers. I will call on Deputy Doyle, Senator O'Sullivan, Deputy Calleary, Senator O'Malley and Deputy Cuffe, in that order.

Deputy Andrew Doyle

I will not delay the meeting because the discussion has covered many of the relevant points. The presentation grouped barriers to development under four headings. As for industry-wide issues, in the main the problem is with the supply of turbines. How much of a hold-up is this causing, especially on the consented sites in the witnesses' possession?

Of the other three headings, the issues pertaining to Irish policy probably are those which are most directly related to Oireachtas business. The delegation seeks Government policies to fast-track offshore development by way of spatial policy and planning procedure, as well as proposing the marine licence vetting committee should be given a status and a home whereby it can deal with the process of getting offshore developments into the critical infrastructure category. What timelines are associated with both the grid infrastructure and the interconnection? Mr. Wheeler commented on the position in Arklow. What timelines are associated with that project and elsewhere in respect of grid infrastructure development? How do current projected timelines affect the aspirations of the members of NOW Ireland?

By definition, the Joint Committee on Climate Change and Energy Security must consider anything that addresses those two topics. However, members would do well, in anything they put forward to the Cabinet, to state this is a potential resource the Government must recognise and assist in developing. The comparisons with the Gulf of Mexico, the United Kingdom and Norway probably highlight this point. What appeared to be an uneconomic resource became an economic resource with huge potential when circumstances changed. A major shift in circumstances is taking place - I refer to recent headlines on oil prices - whereby something that probably was not economically viable previously suddenly is becoming highly positive in the long term. Ireland has not been accustomed to having any natural resources, other than the traditional ones.

Senator Ned O’Sullivan

While many of the points I intended to raise have been answered, as the Cathaoirleach noted, it is clear there is a duplication of services in this respect. There appear to be layers of bureaucracy and the message for the Government arising from the excellent presentation and highly stimulating discussion is that it must get its act together and achieve some cohesion in this regard. However, I am slightly confused in that Mr. Britton stated that production will reach 1,000 MW in the current year. Consequently, the witnesses appear to be doing fairly well, despite the existing challenges and obstacles. Is it simplistic to ask why not simply keep going, thereby making more energy and more money? While such an approach is probably simplistic, every mickle makes a muckle. As they continue, the witnesses probably will do better, despite the obstacles.

Specifically, what do the witnesses require the Government to do for them? Is this primarily a request for funding or do their needs pertain to the licensing issue and the clearing of obstacles? Is NOW Ireland a group that is exclusive to its five component parts or is it an all-embracing group for everyone in Ireland who is in this business? In other words, are other competitors such as the ESB or others, also working in this field? I seek information in this regard.

What is the ratio between cost and productivity in respect of offshore wind power generation? While everyone desires renewable energy, there are costs associated with all energy production, including energy costs. How does offshore wind power generation compare with onshore wind power generation? Alternatively, how would it compare with the proposed new liquefied natural gas, LNG, terminal that is to be established in my neck of the woods in County Kerry? How will that compare in respect of its output and the costs that are needed to drive such output?

I revert to the environmental issues on which members have not focused greatly. There must be some environmental impact associated with a development of this nature. I am from County Kerry, which is a centre for tourism. Some time ago, one of the local newspapers printed an imaginary montage showing what massive turbines would look like five or six miles off the Ring of Kerry, Ballybunion Beach or similar locations. The topic gave rise to major scares in the local newspapers at the time. Are such concerns real and could there be a negative effect on tourism, fishing or navigation in general? Is there a downside in this regard? What is in it for the local population and are there potential spin-offs at local level?

As the Chairman noted, members made a highly instructive trip to Galway Bay last week to view the wave generation project. It might be a good idea for members to view some of the witnesses' operations in practice. It should be on a day on which the sea is particularly calm as not all members are great sailors.

The generation of power by wind and wave offshore is closely physically aligned. Are there meaningful partnerships or linkages between the two? Obviously NOW Ireland considers wind power to be a much stronger generator. It probably is considerably more advanced than wave power in technology etc. Presumably however, the aim is the same, namely, the creation of energy from the sea and the same problems probably arise. This certainly is the case in respect of interconnecting with the grid and so on, as both forms of generation operate in the same territory. Can a case be made for a link-up in this regard?

I revert to my question in respect of NOW Ireland. Does it represent a national push or does it comprise one group of entrepreneurs who are in the business to make money? Do similar operators exist?

Senator Fiona O’Malley

I welcome the delegation and thank it for its presentation. I have some questions arising from the points made. I presume licensing and permitting are the same thing. The witnesses originally used the word "permitting". Why can such projects not be subject to the critical infrastructure provisions? They would move along much more quickly and the process would be considerably more streamlined. Is there a good reason they cannot be determined through that legislative proposal? I can see the timeline is very unfair to people making the investments that are left waiting. It is bit like the licensing for buses. It is just not on when people are investing money for a good end for the country. It would seem that it is in everybody's interests that there is clarity and swift delivery. I can see why the delegation is very annoyed about that.

How far out is the delegation talking about? Are we talking about 25 km out or closer than that? I know that connectivity makes sense in respect of the population bases in the east coast but the west coast has all the real potential. To what extent is energy being exploited on the west coast? I am interested in the grid issue because without the renewal of the grid, none of it matters. A grid study was carried out. I know the experts in the grid do not have a great deal of time for offshore wind because they say it is far too expensive. The delegation knows this better than I do. Even the grid study is quite short-term. The real strength of the offshore stuff will be 30 to 50 years hence. We should invest now for that future. As the delegation said, in the past two years offshore wind energy projects have become much more economically viable than would have been envisaged.

The grid is a problem. If we are talking about 25 km off in respect of connectivity to the grid, who is expected to pay for it? Let us say that our existing grid which needs renewing will cost so much money and consumers will end up paying for it. We are all alarmed at the headlines in today's newspaper about the cost of gas and electricity. This largely relates to the cost of oil, not to mind the cost of investments that must be made in the grid. How realisable is that? I am interested in teasing this issue out. Does the delegation see private enterprise building the grid to get offshore connectivity or must the grid remain in public ownership, in which we all essentially believe.

The delegation mentioned the IDA-type business and how it should encourage research and development. I have always found it curious that it is not more involved in this area. Is there a reason for this? The potential is enormous. From my knowledge of this sector, I detect hostility, although that may be too strong a word. There is certainly strong reticence and lack of engagement and failure to really see the potential. Will the delegation speak about that? Is the IDA just not interested in this area?

I think the delegation has answered all my questions. In respect of economic viability and all of NOW Ireland's forecasting, let us say that we are looking 30 to 50 years hence. Hydrogen will be a significant user of energy. Has NOW Ireland factored in those changes? The delegation responded to Deputy Fleming about its projections on offshore wind. Can they be changed because of advances in other renewable technologies? How reliable and accurate has NOW Ireland been to date in terms of its forecasting?

Deputy Ciarán Cuffe

I apologise for my late arrival. I extend the welcome that I am sure has already been given to the delegation. I am very excited by the possibilities of offshore wind energy but it is crucial that we get it right early on. Ireland has great possibilities with wind energy. I heard Commissioner Dimas say that a couple of months ago at a meeting in Brussels.

It is crucial that the planning regime inspires confidence for all stakeholders. I note Mr. Britton's comments about NIMBYism. A good planning system is both transparent and accessible, has the necessary skills and delivers results in a timely manner. I am not yet convinced that the marine licence vetting committee is in a position to do that due primarily to the legislation under which it operates. It is crucial that we update the legislation in this area. I am not convinced that there are sufficient skills applied to visual assessment or assessment of wildlife and marine life. I note Ms McLaughlin's concerns where she stated that we are only really learning the impacts once they are up and running. That sends shivers down the spine of an environmentalist with a planning background, like me. It is crucial that we know exactly what the outcomes will be before we put in some of the most massive infrastructure in the State. I have not visited the Arklow Bank but the turbines there are half the height of the Pigeon House chimneys from base to tip of blades. We are not even at the larger scale being developed and built elsewhere at the moment. It is really crucial that we get these decisions right. As an environmentalist, I am torn between the huge need to provide more renewable energy and energy security and yet carefully contemplate the addition of billions of euro worth of infrastructure on to the grid in as fast a time frame as possible.

Senator O'Malley's comments were interesting in that she is not completely convinced that offshore wind energy projects will be a winner. It reminds me of the fellow fishing off the rock and not being convinced that heading out to sea in a fishing boat will deliver results. There is an enormous resource to be tackled.

Senator Fiona O’Malley

I agree. Did I not make that clear to the Deputy?

Deputy Ciarán Cuffe

I thought the Senator was equivocating slightly.

Senator Fiona O’Malley

Not remotely.

Deputy Ciarán Cuffe

Regarding the capability of the marine licence vetting committee, we have found it to be a committee of experts but the appointees should be formalised within a system. We need a group of experts to assess offshore wind projects. Relative to the environmental impact assessments and the work that must be done on them, there is extensive consultation with the marine, fishing and shipping bodies. Extensive work is done on geology and tidal matters. Relative to the projects with which we have been involved, we have been put through the hoops in terms of the detail and work required.

One must also examine the investment companies are making in offshore wind farms, as referred to by Senator O'Malley. We should be trying to attract investment in renewables and offshore energy projects with the resources we have. The resources do not cost us anything. Financial forecasting has examined the capital costs. In terms of offshore projects, the capital costs are extremely high because one is dealing with such a difficult environment. There is a major demand for onshore projects but within five years the new technology and turbines will have arrived and will lead to economies of scale offshore.

Members know about the wind turbine in Dundalk which produces 850 kW. We are talking about 6MW turbines, eight times the power for one and a half times the height or size. These are the economies of scale with the new turbines.

On the visual impact, we invite the committee to have a look at one of the offshore wind farms in Europe and meet the communities who live beside it. We could set up a meeting in a country such as Denmark. Just as when the committee went to Galway last week, it will get a feel for what the local communities think.

Regarding Senator O'Sullivan's point, I come from County Donegal and am I often asked about turbines in Donegal Bay. I have no problem with turbines which are a visitor and tourist attraction. As a Donegal man, I welcome anything that brings tourists to the county. Ms McLaughlin referred to the fact that I was a member of the tourism product review group which examined tourism policy in the next five years. When considering the environmental impact, particularly turbines in the ocean, 87% of visitors said they would come to see them or considered them to have no impact, while 4% had a problem with them. The remainder had no opinion.

We cannot put turbines further out than 20 km because there is 50 m to 60 m of water and technology does not allow it. Ireland can do nothing and allow oil and gas prices to increase by 600% and wait for 30 or 50 years. Why do we not do what Norway and the United Kingdom did in the 1970s, get the finger out - if the committee will excuse the language - and invest in technology and research and create jobs? This country is facing serious economic issues and this is a resource. Perhaps I say this because when County Donegal had no tourists during the Troubles, we went out and got them

In the agri sector, one can see what the Kerry Group and the IAWS have done, setting up factories all over the world. They are some of the largest agri companies. They looked at our resources and developed internationally. Ireland is short-sighted if it does not do the same with the resource it has today.

In view of the subsea structure, the tidal conditions and the wave heights, it is not possible to build an offshore wind farm in the Atlantic Ocean. Perhaps it will be possible to do so in 15 or 20 years.

On the east coast, unfortunately, once one goes out about 18 km, one starts to get into the deeper waters. That is why we are positioned where we are. Licensing should be part of the critical infrastructure. Offshore--

Senator Fiona O’Malley

Does Mr. Britton know why it is not?

Mr. Brian Britton

We would support it being part of critical infrastructure. There is an impasse as to whether it is the responsibility of the Department of Communications, Energy and Natural Resources, with offices in Clonakilty or whether it will move to the Department of the Environment, Heritage and Local Government. All we can do at NOW Ireland is accept the current system but we would like to see it streamlined and a more straightforward planning mechanism put in place. That might assist in dealing with queries people have about public consultation. We have done the best we can, as a group, to engage the public. If the system is improved and the public is engaged more, we would welcome that. We have no problem engaging with the public. We have found that when we met people who had issues or concerns and discussed them openly, we were usually able to sort them out.

In terms of environmental impact, the projects will not cause problems for tourism. Those involved in fishing are also supportive. In fact, turbines improve spawning which can increase fish stocks. Navigation is not an issue either. There has been positive support from the navigation authorities. Even in terms of lighting, the turbines will be lit well enough to be seen at sea but will not cause visual impairment on land.

The 1,000 MW in production is from onshore wind energy projects. NOW Ireland represents the offshore industry. There are only five people investing in offshore wind farms in Ireland but we also have quite a number of other members supporting the industry, including environmental impact consultants, surveyors, accountants, bankers and so forth, the people who are needed to build the infrastructure and members of NOW Ireland.

We work closely with the IWEA on common points of policy. The IWEA represents the onshore sector of the industry. However, what we are trying to do requires a great deal of finance, a totally different turbine size and is a more difficult environment in which to work, because of the foundations. We formed NOW Ireland just over a year ago because we found that our voice was not being heard. We found it very strange that despite the fact that five companies are investing in excess of €4 billion in this country, we could not get our voice heard. We have had our voice heard since we formed our association. The Minister's announcement about the renewable energy feed-in tariff, REFIT, scheme of 14 cent was welcome. A subgroup within NOW Ireland is dealing with the Department at the moment, ironing out the tail ends of that announcement.

In response to Senator O'Malley's question, we are working with the Department because there are some details that must be ironed out. I assure the committee that the Minister's announcement has helped considerably to provide a foundation for our industry to attract the financial investment and support it needs. Bankers were not going to touch the offshore wind sector until they knew there was stability in the price.

I spoke earlier about new technology and there are other developments coming down the line. However, if we wait for things to happen, nothing will happen. Energy storage is fast coming down the line. People often talk about the unreliability of wind but some members of NOW Ireland are also involved with some of the largest energy storage research companies in the world. That area is developing rapidly and efficient storage will come to pass.

On the issue of connection, we are examining the option of peaking plants, where when the wind is not blowing, it is possible to switch over to another energy source. The wind blows for approximately 40% of the time in Ireland.

Deputy Andrew Doyle

That was my point on the time lines for the grid update. If we placed an order in the morning and did not receive the machine until 2010, is the timeline for the grid and interconnection update in harmony with that? In other words, if one were to order the machines, place them in appropriate locations and get them ready to connect, would one have a grid that could take them?

Mr. Stephen Wheeler

Unlikely, at the moment. If one examines this from an onshore sector perspective one sees that onshore developers are getting grid connections with two dates. One is the shallow connection, which effectively is the connection directly into the grid, where one is constrained and the lead in time there is probably two or three years. With the deep reinforcement connection, that is the deep 110 kV to 220 kV works, the wait time is approximately five years. Grid time lines are the biggest pressure point. That is why we must act now rather than waiting another few years. If we wait, we will fall behind on turbine procurement and the grid will not be ready.

Senator O'Malley was correct when she referred to EirGrid's attitude. If one examines its latest study, it considered offshore wind energy projects to have the potential to make only a minor contribution. Having said that, it was only in 2003 that a moratorium was put in place and "wind" was a bad word. Suddenly it is seen as a good thing, which we who have championed it welcome. EirGrid and ESB Networks have really taken on the grid opportunities and worked closely with onshore wind power producers. I agree they have not reached that point with offshore wind power production but I would remind members that they only embraced it in the recent past. They will eventually get to the offshore production because it provides the kind of scale that is not possible with onshore production.

Senator Fiona O’Malley

The investment in the grid must start now so that we can deliver the capacity.

Mr. Stephen Wheeler

Yes. It must be part of the plan. That is something that we are lobbying for, as the offshore development group. There is talk of interconnection to Europe and additional interconnection to England, which should be welcomed and supported. However, we must also connect offshore wind energy projects to the existing grid. That is not being done.

EirGrid's plans only include 500 MW from offshore wind power production, which is very small, relative to the resource that exists.

Mr. Brian Britton

Ms Nicola McLaughlin

Before we build an offshore wind farm we are very well aware of its potential impacts. I will draw on the experience I have had in Codling Wind Park and other projects I have worked on in the UK. We spent more than two years assessing the potential impact of Codling Wind Park before we got consent for that project. For Codling we spent €2 million assessing what those impacts might be in the environmental impact assessments, EIAs. We are well aware of what they might be for that project. I was trying to make the point that it is very difficult for me to say what the environmental impact of an offshore wind farm will be because it is very site specific and all the studies need to be geared toward the impact in the location. For example, there might be bird or navigation issues in one area and none in another.

On operational projects, when we carry out the EIAs we have a view of the potential impact. In the foreshore leases we sign up to a foreshore monitoring programme that will operate before, during and after construction so we can assess the change in the site and confirm our predictions based on monitoring and assessment before construction began. Because projects are in operation, that firm information is feeding back to us to say that the predictions we make in the EIAs are true and correct. This additional information feeding back assists in writing EIAs. With another project to look at to see what happened when it was built and went into operation one can look at a new project with one's eyes open and with experience from somewhere else. I do not want members to think we go into these offshore projects without knowing what is going on.

Deputy Ciarán Cuffe

I take that point. I may have framed Ms McLaughlin's quote slightly out of the context in which she made those remarks. My concerns relate to the need to have a planning system in place that is more accessible, transparent and brings greater clarity. I have concerns that the framework for public participation is not as rigorous as I would like. We have spent a large amount of time providing a land-based planning system that is beyond political patronage, where the decision making process is removed from the politicians. It is crucial we have a similar system for offshore wind farms.

As Mr. Britton said, we need a system that works in a timely manner. Ms McLaughlin expressed not quite exasperation but an element of frustration at having to go back to the same agency five times. None of us wants that to happen. We want a system that is timely, efficient and in which we can stand over the assessment in every area, whether visual or cetacean and marine life. I have no doubt it is possible to have such a system and I echo Mr. Wheeler's statement that there are many positive add-ons for marine life, navigation and fishermen. However we need a more rigorous system that addresses those concerns. While I have no doubt that the environmental impact assessment is rigorous, the assessment procedure must be beyond reproach and I am not convinced it is.

Ms Nicola McLaughlin

We welcome a robust process for the assessment of these projects. I stand behind the comments of Mr. Britton and Mr. Wheeler that there is a robust framework available in Ireland with the MLVC. It needs to be tweaked and changes could be made to improve it. From our perspective, improving the timeframes involved would go a long way towards improving the system.

We should bear in mind what other countries are doing. A lot of them are now moving closer to the Irish system, in which the MLVC effectively provides a one-stop-shop for assessing these projects. Other countries are now putting in place similar frameworks to that which Ireland already has in place. It does fall down in certain areas but, overall, a lot of consultation goes into these projects, although committee members clearly consider that it is not happening. All of the offshore projects in Ireland have been the subject of substantial consultations, including public consultation. For the Codling project, we conducted wide-ranging consultations for two years, including a roadshow we took up and down the east coast over a couple of weeks and which allowed us to show people what the project would look like using different visuals. In view of that, people welcomed the project. We are concerned here with a 1,100 MW project and we did not get one objection. That is because of the level of consultation undertaken. I can say the same about the other projects on the east coast. Everybody has done a lot within that framework.

The role of the MLVC is to assess the environmental impact assessments we have carried out. During that process it consults with all the other statutory consultees. It talks to the Department of the Environment, Heritage and Local Government and other Government agencies in order to determine their views of the projects before they make any decision. That is essentially what is happening. There is an ongoing iterative process in which it comes back to us perhaps five times in order to address questions. Issues are thrown up by different Departments and the MLVC passes them on to be addressed by each of the developers.

Deputy Ciarán Cuffe

Is that further information publicly available during the process?

Mr. Brian Britton

Yes.

Ms Nicola McLaughlin

Yes, it is available.

Deputy Ciarán Cuffe

Is there an opportunity for the observations made to be circulated?

Ms Nicola McLaughlin

Yes. That information can be viewed at the Department and comments can be made throughout the process, which are fed back. It is an interactive process.

Mr. Brian Britton

I would like to wrap up a couple of points. Unfortunately, Senator O'Malley has left the meeting but I will answer her comments about agencies in Ireland. We consider that the agencies have not believed in this sector. Ireland has been successful in the areas of pharmaceuticals and technology and there is now an opportunity in renewables. All I can say today is that the new Minister for Enterprise, Trade and Employment, who is a neighbour of mine in Donegal, has already been informed about this opportunity since she took up her new position. I hope there will be developments in the future.

We were asked about grid connection and the supports available in other countries. We welcome the refit and we welcome the examination of interconnection by the Minister, Deputy Ryan. However, let us consider our competitors in Europe. We are talking here about a resource. They have refits and in many cases the grid is provided along with other supports. If we are to be serious about a sector that can provide such benefits to this country, we believe that if the appropriate grid is provided, there will be a three-year payback in terms of carbon fines saved. We were conservative in the figures we gave in our presentation, but this country is currently facing carbon fines of between €170 million and €530 million.

An investigation of the exact level of fines we are facing should be carried out. At NOW Ireland we are doing some research on this within our technical committee. Major projects require partnership. If we consider the way in which energy developed in the world, we see that there was some investment by Government to attract investment from the private sector to make things happen. It is a three-year payback to have people create jobs and invest €4 million in this country. We should be encouraging people to come in and invest here.

Finally, let us consider our Celtic neighbours. Members of our association have met with Alex Salmond, the First Minister of Scotland. He and his team are completely supportive of the Celtic grid and are encouraging their own authorities to invest in it. They have counterparts in the UK, including Wales and Norway. Ireland will be left behind if we do not follow suit because that Celtic grid is on the way. We should not be afraid of asking for the infrastructure to be provided. Anything that has happened in any industry in this country has been done in partnership, with the Government providing the infrastructure and the industry following suit. That is what we would like to see.

We have a tremendous opportunity in this sector. We are doing a cost-benefit analysis, as I mentioned earlier. What if this throws up the same results and the German cost-benefit study? There were representatives of six Departments at the renewable energy development committee and when we announced that we, a private group representing the offshore sector, were doing a cost-benefit analysis they were very anxious to get the results as quickly as possible. Perhaps one of the Departments should be doing this, but at least we are doing it independently and we will give them the results. That is what this country needs to understand the benefit of renewables.

If at any time members of the committee wish to contact us or clarify anything we would be happy to give them the information required. I hope that after today's discussion they have a better understanding of the challenges facing us and the solutions to these challenges, and that they encourage the enlightened support this industry needs in the future for the benefit of everybody. If a visit to an offshore wind farm in one of our neighbouring European countries can be facilitated, we would be glad to help the group to participate.

Chairman

As a committee we made a decision that rather than attend conferences and so on we would visit places to educate ourselves. One of our visits is to Sweden, although the purpose of it is to deal with other matters besides offshore energy production. We will undertake one of these visits each year.

It is timely that the representatives came in this week as it followed on from our visit to Galway last week. While we were there we were informed of the urgent need to do something about the planning system. I assure the representatives we will be making contact with the appropriate Ministers and pushing this issue as a committee. The people working on wave energy will also benefit from this because by the time the system is properly up and running they will be ready to submit their applications. Wave and wind will be working together. Most of the wind energy projects are on the east coast while the bulk of development in wave energy will be on the west coast, so the two types of energy generation complement each other. However, it is all to the benefit of this country.

I speak for every member of the committee when I say that we are totally committed to renewables. We are committed to wave and wind energy. What has happened in the past in this country is that we have been dreaming. People have been talking about the possibility of nuclear energy and of importing energy through interconnectors. We have been fixated with importing energy because that is what we are used to. The point has been made here and has also been made on other occasions that it is time we started thinking of what we can export.

This is an exciting area and the representatives have our full support. In answer to their kind invitation I invite the representatives to contact us if they wish to attend this committee at any stage in the future. We are all in a learning process. I have learned much, both this and last week. On behalf of the committee I thank the representatives for coming here today and giving of their expertise and advice. We wish them every success in the future and assure them we will do our bit to try and speed up the process in terms of planning and infrastructure. It might not be any harm to invite EirGrid to the committee so that we may hear its proposals in this area.

Deputy Andrew Doyle

Would it be possible to have the cost-benefit analysis circulated when it is completed?

Chairman

Yes, I am sure Mr. Britton will make that available to us.

Mr. Brian Britton

In reply to the Chairman's invitation I was going to mention that when we have results that might be of benefit to the committee we would be happy to give a presentation to the committee or supply it with a copy. This is key to the committee's objectives in respect of energy security and climate change. It is something I intended to offer. I thank Deputy Doyle.

The joint committee adjourned at 4.40 p.m. until 2.15 p.m. on Wednesday, 28 May 2008.

JOINT COMMITTEE ON CLIMATE CHANGE AND ENERGY SECURITY debate - Wednesday, 14 May 2008

Energy Security: Discussion with NOW Ireland.

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Mr. Stephen Wheeler

Mr. Stephen Wheeler

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Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Brian Britton

Mr. Brian Britton

Mr. Brian Britton

Ms Nicola McLaughlin

Mr. Brian Britton

Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

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Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

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Mr. Brian Britton

Mr. Brian Britton

Mr. Stephen Wheeler

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Mr. Brian Britton

Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Stephen Wheeler

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Mr. Stephen Wheeler

Mr. Stephen Wheeler

Mr. Brian Britton

Ms Nicola McLaughlin

Ms Nicola McLaughlin

Mr. Brian Britton

Ms Nicola McLaughlin

Ms Nicola McLaughlin

Mr. Brian Britton

Mr. Brian Britton

JOINT COMMITTEE ON CLIMATE CHANGE AND ENERGY SECURITY debate -
Wednesday, 14 May 2008