Seanad Éireann debate -
Thursday, 23 Aug 1934

Vol. 19 No. 2

Electricity (Supply) (Amendment) (No. 2) Bill, 1934.

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

Minister for Industry and Commerce (Mr. Lemass)

The purpose of this Bill is to provide for the execution of certain works designed to increase the output capacity of the system of the Electricity Supply Board. The works are as set out in the First Schedule of the Bill and their purpose is to permit of the enlarging of the storage capacity of the Shannon by constructing certain works which will permit of the level of the three lakes being altered in the manner indicated. The further development of the storage capacity of these lakes has been engaging the attention of the Electricity Supply Board and the Department of Industry and Commerce for some years. Certain plans were prepared and certain experts of international repute were engaged to examine these plans and to investigate the matter generally and submit their report. On the basis of the report submitted by these experts it was decided that the most suitable method of increasing the storage capacity of the river was to carry out the works set out in the Schedule.

These works contemplate, first of all, the raising of the level of Lough Derg from the present maximum of 110 feet above sea level to 112 feet. That necessitates certain embankment work and other works and will also involve the flooding of about 6,000 acres of land in the vicinity of the lake, in respect of which compensation will have to be paid. It is proposed to permit of the lowering of the level of Lough Ree to a minimum level of 121 feet above sea level. That is the minimum which will still permit of navigation taking place over the lake. In the case of Lough Allen it is proposed to make provision for controlling the level of the water so that the high level will be about five feet above and the low level about nine feet below the present normal level. Certain consequential works will be necessary in that area and about 1,000 acres of land will be flooded, in respect of which compensation will have to be paid.

The purpose of this Bill is to enable the Electricity Supply Board to construct these works or to have them constructed through contractors. It is estimated that the total cost will be £623,000. The only abnormal feature of the Bill in respect of that part of it is that, in addition to advances in the ordinary way to the Electricity Supply Board from the Exchequer for the purpose of these works, provision is made for the making of certain grants to the maximum figure stated in the Bill. The reason why that provision is there is because the actual cost of the works was calculated to be in excess of their economic value to the Board, the economic value being the price at which the quantity of electricity that could be generated at Ardnacrusha if the additional storage were available could be generated at present by steam at the Board's steam station. A very considerable item, of course, in calculating the difference between the economic value and the actual cost, is the rate of interest which the Board has to pay on the advances. At present the rate is 5½ per cent., and discussions have been proceeding between the representatives of the Board and the Department of Industry and Commerce with the Department of Finance with a view to the reduction of that rate of interest, and it is practically certain that reduction will take place. It is certain that the rate of interest will not exceed 5 per cent., and if it is in fact reduced to 5 per cent., it is very likely that no grants will fall to be made under this Bill at all, as the gap between the actual cost and the economic value will be closed.

If the rate of interest is anything less than 5 per cent. there can be no question of a grant under any circumstances. But even if the rate of interest is not reduced any lower than 5 per cent. it is not likely that a grant will be called for. I should explain that the reason why the Bill was drafted in its present form and provision made for a grant is that the Government consider that from every point of view it is more desirable that this money should be expended in a manner which will give a very considerable amount of employment here, rather than on machinery which would have to be imported. Even though the actual cost of constructing these works should exceed the cost of producing the same amount of electricity by steam, it would be worth while to make up the difference out of the Unemployment Relief Fund. As it now appears that the economic value and the actual cost will not differ, it is obviously much more desirable that we should proceed to increase the storage capacity in this way rather than do it by the erection of additional steam plant.

The economic value of the works is estimated to be, in respect of Lough Derg, £402,000; in respect of Lough Ree, £14,000; and Lough Allen, £107,000. The total amount advanced to the Board to date—that is, the total capital invested in the Electricity Supply Board's system—is £9,683,621. The total advances authorised by legislation exceed that sum. The total is £11,119,688. The advances under the present Bill will be £530,000, bringing the total authorised advances to £11,649,688. There is, of course, need for this increased storage because the demands upon the Board's system are growing regularly.

Last year was an abnormal year and some 82,000,000 units were generated by steam. Even if increased storage had been available last year, almost three-fourths of that number of units would still have had to be generated by steam. Last year was abnormal in being one of the driest years on record, but the decision to proceed with these works has no bearing upon the drought. These works would be necessary in any event. They represent a phase in the development of the Shannon scheme which was contemplated from the beginning.

Other portions of this Bill have, of course, no connection with its main purpose. They are introduced because they contain various provisions which we considered necessary and advantage was taken in this Bill to give effect to them. The whole of Part II of the Bill relates to the proposal for increasing the storage capacity of the Shannon, for the execution of the works, the making of advances, payment of compensation, compulsory acquisition of land, the protection of public roads and so on. They are similar to the provisions of other Bills of the same kind which have been enacted by the Oireachtas.

There are one or two matters set out in Part III which are new. There is the proposal to prohibit the erection of buildings under the Board's transmission wires where the erection of such buildings, in the opinion of the Minister for Industry and Commerce, involves the risk of injury to the public or to such buildings or the occupiers thereof, and where the removal of such transmission wires to another site would impose unreasonable expense on the Board, or involve a substantial technical difficulty. The proposal is that persons proposing to erect buildings in the vicinity of the transmission wires shall be required to notify the Board, and, if after such notification the Minister is satisfied that there is a risk of injury to the public, to such buildings, or to the occupiers of such buildings, he can make an order prohibiting the erection of such buildings.

There is a provision in Section 21 which arises out of an Act which was passed here last year. That Act provided for payment to certain officers of local authorities of sums of money in respect of periods during which they were interned for their political opinions, or otherwise unable to perform their ordinary functions because of activities in relation to their political opinions during the troubled period. When the Act was passed, the Dublin Corporation declined to make the payment contemplated by it to certain former officers who had been employed in connection with the electricity undertaking. They declined on the ground that the electricity undertaking had been transferred to the Electricity Supply Board, and they contended that the payments should be properly made out of the assets transferred to the Electricity Supply Board, whose officers these men now are. This section empowers the Board to make these payments. It may be necessary to have some alterations in it. It is not clear that the case has been fully covered by the phraseology used.

I have dealt with the main purpose of the Bill. The works to be executed are set out in the First Schedule. The Second Schedule lays down the procedure to be followed in connection with any public inquiries which may be held. I do not think the Bill need cause Senators any concern. The works are necessary. They are required to increase the productivity of the Board's system. They will in all probability be 100 per cent. economic. Even if it did happen that any portion of the grant provided to be made to the Board as a grant towards the cost of the works, should have to be paid over to the Board, the execution of these works would still, in our opinion, be justifiable. The work will give a very large amount of employment. Almost the entire sum will be spent within the country, and the efficiency of the system will, in our opinion, be increased.

Further Bills for the provision of capital to enable additional works to be executed by the Board will be coming along from time to time. The demand for electricity is continuously growing, and the Board's system is being continuously increased to meet that demand. It is not at all unlikely that in the next and the following Session Bills similar to this may have to be introduced to provide for the construction of some works that will enable the productivity of the Board's system to be enlarged. That is what was always contemplated. At a quite early stage it will be necessary for us to consider the provision of the capital which will permit of the harnessing of the Liffey for power purposes, if the plans which are at present being examined in that connection should prove practicable and justifiable.

The construction of these works will be the last of the kind on the Shannon. They provide for the maximum storage which the experts consider possible. If the volume of water becomes inadequate to provide the power needed, then some other river will have to be harnessed—if a decision in policy does not induce us to turn to the production of power by other means such as steam. These are matters which are under examination at the moment. It is not yet possible to give any definite indication as to what the policy is likely to be, because we are awaiting the reports of experts and others who are examining the matter for the purpose of giving us their opinion.

Mr. Jameson

There are one or two questions which I should like to ask the Minister about this Bill. There is no doubt that the Government are seriously considering the extension of the Shannon scheme and that they are prepared to put £600,000 into it under this Bill. The Minister has referred to further demands for current from the Shannon scheme as justifying this expansion which, I suppose, is quite right. I suppose the Government have had elaborate examinations carried out as to the cost of manufacturing electricity and that they are positively certain that the supply to meet this expanding demand can be most economically provided by an expansion of the Shannon scheme. I believe from what I have heard from people connected with electricity development that the production of electricity by a low water scheme—what I would call water without elevation—is dearer than the cost of producing electricity by coal at the present time. I suppose the Minister, however, will tell us that the Government have had a careful examination of the question carried out and that they are persuaded that the most economic proposition for the Free State at present is to expend further moneys on the Shannon scheme. Of course, any money invested in a scheme that is not economic is money that is buried and we should study the matter carefully so that it may not be found hereafter that we can produce electricity considerably cheaper by some other method.

One remark made by the Minister rather astonishes me. He said that the expenditure of this money might be justified because of the employment it would give apart altogether from the economic value of the scheme. There are two ways of looking at the matter. You might expend money to keep industry going and eventually after spending a lot of money in that way you might not get any proper return on it. If you are going to expend money simply because you want to keep people in employment, that is a totally different proposition from putting money into an industry out of which you expect to make a profit. All the citizens of the State are shareholders in this scheme and have a great deal of money invested in it. I hope, therefore, the Ministry have thoroughly examined this scheme. We know that we have to expend some further money; that we will probably have to spend another £1,000,000, but before doing so we should endeavour to find out whether electricity cannot be produced by some more economic method. I see very elaborate provisions in the Bill for the payment of interest at 5 and 5½ per cent. Subsection (3) of Section 14 provides that if the Board fails to pay to the Minister for Finance any half-yearly payment due to him, the Board shall pay interest on the amount at certain rates. I take it that the Government have examined the accounts of the Electricity Supply Board, and I should like the Minister to tell us what reason they have for thinking that the Board is going to earn so much as will enable it to pay this 5 per cent. on this new expenditure.

We are looking forward to these electricity undertakings paying some dividend and they should certainly be able to pay back the moneys advanced to them and the interest upon them. I should like to know whether the Government's study of the undertaking has shown them that the Board is likely to be able to pay back this money. The Minister will, no doubt, tell us how far we are justified in expecting that the Board is going to be able to pay back interest and sinking fund on the capital, but we should also like him to say whether he is satisfied that the expansion of the scheme which is now contemplated is the best means of employing this money to provide the electricity we need. Of course, our object should be to produce our own electricity in the cheapest way possible. This scheme is of vital interest to the nation and we have always backed it up; but when we see this fresh expenditure coming along, we should like the Minister to tell us the justification for it and what justification he has for thinking that the Board can pay back the interest and sinking fund on the capital invested in this new extension. There is another item in Section 16 of £93,000, which I did not hear the Minister mention. No doubt he will tell us in his reply what that is for. The sum altogether involved amounts to something like £600,000, and if the Minister does not care to go into a discussion of these matters now, they should be examined later, as probably many questions will be asked when we are dealing with the Bill in Committee.

Mr. Comyn

As I understood the Minister, this is to be the last development on the Shannon.

Mr. Lemass

No. I do not want that impression to get abroad. It will probably be the last expenditure on storage development.

Mr. Comyn

That is all to the good. I also understood him to say that on a five per cent. basis, this expenditure is economically sound so that I do not anticipate any difficulty in regard to that matter. There is another question with a different aspect to which I would like to call the attention of the House. It relates to buildings under or in the vicinity of transmission wires. When these transmission wires were being put up and when the pylons were being erected, the land for that purpose was acquired by agreement and the sums paid for permission to erect the pylons were, if I remember rightly, very small. In some cases, these pylons are erected in small towns and in the yards of certain premises in these small towns. As I read this Bill, no trader will be permitted to erect any new building within certain specified distances of these wires. That is a burden to which I think the people who gave permission to erect the pylons never contemplated they would be subject. If this new prohibition is to be insisted upon, I should like to know if there is any provision as to compensation being paid to the people affected. If they had known that this prohibition would have followed, I expect that they would, when allowing the pylons to be put up in the back yards of their premises, have required a greatly increased amount of compensation.

Mr. Johnson

They would have been put up despite them.

Mr. Comyn

They would have demanded twenty times as much compensation as they agreed to accept for the mere erection of the pylon, in the first instance. A serious burden is, in this way, imposed upon certain people living in villages, and I cannot see that any provision is made for compensation.

Mr. Counihan

Arising out of the remarks of Senator Jameson, I should like to have heard something about experts having considered the advisability of developing electricity from the Liffey. That scheme was talked about a good deal when the Shannon Scheme was introduced, and I think that the Minister has got the plans in his office. Will the Minister consider the advisability of expending money in developing that scheme instead of expending it on the provision of additional water in the Shannon?

Mr. Johnson

I am surprised that Senator Counihan should have asked that question. Every Senator expected to have heard something about the Liffey scheme, and the Minister did tell us that the whole scheme was under discussion and examination in his office. I thought that that would have satisfied most Senators. As regards the question raised by Senator Jameson in respect of the sum of £93,000, the Minister went into considerable detail in connection with that portion of the Bill. Following upon what Senator Comyn said in regard to the prohibition of building under transmission wires, I should like to raise a question. I take it that a good deal of the emphasis of sub-section 1 is contained in the words, "involve risk of injury to the public or to such buildings." Probably there is not very much risk in respect of low-power wires. In this provision, however, a couple of questions which appear to me to be serious are involved. The section states that where the Minister is satisfied that the wires might involve risk of injury and that the removal of such wires to another site would involve unreasonable expense or substantial technical difficulty, he may, by order, prohibit the erection of any building whatever. It is the Minister who will decide what is "reasonable expense," and, almost certainly, he will give special consideration to the interests of the Electricity Supply Board because of the close connection between his Department and that Board, and his anxiety that it should prosper. "Reasonable expense," from the point of view of the Minister, may be represented by one figure, but from the point of view of any other person might be represented by a different figure. It seems to me that the decision as to what is reasonable in these circumstances should not lie wholly with the Minister for Industry and Commerce. As I read the section, the effect of it is that the builder or local authority proposing to build anywhere within 75 feet of either side of a transmission wire—I take it that that means a high-power transmission wire.

Mr. Comyn

Why?

Mr. Johnson

The section does not say so, but that is the wire which would involve risk of injury. In these circumstances, the builder or local authority must notify the Board of their intention at least two months before the beginning of the erection. Then the Minister may, on the application of the Board, make an order prohibiting the erection. Before making the order, he must publish his intention to do so and invite objections. The section indicates the time and manner in which objections may be made. The Minister may cause a public inquiry to be held. The period of time that must elapse between the publication of the intention to make the order and issue of the order is not set out in the section. The section provides that once a building is begun it cannot be prohibited. It follows that, if the order is to be effective, it must be made within two months after the notice has been given to the Electricity Supply Board by the intending builder of his intention to build. I ask the Minister to consider, from his point of view, whether that is sufficient time and whether the effect of this short period will not defeat the purpose he has in mind—that is to say, that the builder may begin to build before the expiry of the two months and that then the order cannot be issued. Supposing all that is clear and the Minister is satisfied that the time is sufficient, is it right that the Minister for Industry and Commerce should have the power to determine whether or not a building should be erected. I feel that that is not a power which should reside entirely within the authority of the Minister for Industry and Commerce. The Electricity Supply Board has very great powers already.

I think to give them this power, which probably would not be used very frequently, but which may be used to limit building operations here and there in a way that would be detrimental to the general interest on the grounds that to put the wires underground, or to divert them from their present position to another position would be too expensive: that the weighing up of the pros and cons of the public interest as against the interest of the Electricity Supply Board, should not lie wholly with the Minister for Industry and Commerce. I do not think that the bias should be in favour of the Electricity Supply Board. I have given notice of an amendment which does not go as far as I would like it to go, but it is to the effect that no order of this kind shall be issued without prior consultation with the Minister for Local Government. I would prefer to say "with the consent of the Minister for Local Government," although I see it would make no effective difference. There is the question, following on what Senator Comyn has raised——

Mr. Comyn

About compensation.

Mr. Johnson

Not so much about compensation but in regard to the position of persons who have bought land, or have occupied land, in the expectation that they will be using it as a building land and of the Electricity Supply Board exercising its powers in a rural area. I am not thinking of the city at the moment but of small urban or rural areas where the Electricity Supply Board comes along and erects its transmission wires. For building purposes that land has lost its value completely, and I do not think that the compensation that is likely to be payable would meet all the public requirements. That is a matter of general policy. On the particular questions that I raised, the first touching the period of notice, and the second of sole power residing in the Minister for Industry and Commerce, I think that the Minister should give his attention to these before the House takes the Committee Stage of the Bill.

Sir John Keane

There are one or two very refreshing features about this Bill as contrasted with the earlier Bills which show a sense of reality with regard to electrical development. I do not know whether Senators will remember the earlier discussions here: how we were told that there was to be no more imported coal, and that all electricity was going to come from native water. Now we are told that, subject to certain adjustments which one can quite understand, coal is more economical than water, and that if we are going to have water we have got to subsidise it by a grant-in-aid. In connection with that I want to ask the Minister a few questions, though, perhaps, it is not to the Minister for Industry and Commerce that these questions should be put. I should like to know if this grant-in-aid is going to be given out of borrowed money—I would like information on that because it will not be reproductive—or out of revenue, and, if so, will it be provided for by Supplementary Estimate? In connection with this new work, is it going to be done by open tender either in the country or outside, and if outside, as the main scheme was done, will it be open to all countries to tender, or will it only be open to tender within the country? I seriously hope that it will be open tender, because there is nothing more extravagant than restriction in a matter of that kind.

I would also remind the House that if it had not been for the earlier development in Dublin by the Corporation our electrical scheme would have been wrecked last year in two ways: first, on account of the drought and secondly, on account of inadequate finance. On account of the drought, we were saved last year by the Dublin power house. I am glad to hear the Minister say that it is contemplated to have further facilities provided for developing the Dublin power house for the handling of imported coal. With regard to finance everyone knows— Senator O'Neill especially—that the whole scheme—I speak of this with a certain amount of personal regard because, as Senators know, I was a severe critic of the earlier schemes— was saved by the adventitious aid, never contemplated in the original scheme, of absorbing the Dublin transmission system. The whole of the Dublin network which has been paid for by the ratepayers of Dublin was brought in for nothing, and that saved the finances of the whole of this electrical project. If that had to be bought and taken over at its value, of course, the Shannon scheme would have turned out to be wholly uneconomic. It is of interest to recollect that in the earlier schemes brought before the House nothing of the kind was ever contemplated. What was contemplated was the selling of electricity in bulk to various undertakers, the Dublin Corporation to be one. If that had been done, the whole scheme would have broken down financially.

There is another matter. I do trust that the Minister, as far as he is responsible, will use his influence with the Electricity Supply Board to keep constantly in mind the interests of consumers which are so liable to be overlooked. As Senators will know, the prospect of cheap electricity was held out to us when the earlier schemes were introduced, but not very long after the first scheme was put into operation a 25 per cent. additional charge was put on. If the public service is to be taken into consideration we certainly have the right to demand a reduction in charges. That bears on the matter that was dealt with by Senator Jameson that we cannot give a reduction in charges unless we generate electricity in the most economical manner. Personally, I do not believe that these hydro-electrical schemes can be economic on account of the high capital charges. This is a matter that I went into rather deeply on former occasions. The capital charges in connection with the kilowatt development of the Shannon scheme are higher than those operating in any other country. I have not the figures by me at the moment, but it came out that they were out of all proportion to the cost in Canada, Switzerland, Sweden or any of the other countries that I referred to on previous occasions, simply because the fall in the water supply is small here. The capital charges, therefore, had to be much greater here. There is no question about it that from the point of view of pure economics coal is a much better proposition and I am glad that at last we have had a qualified admission in that regard.

There is one further matter. We have now got £11,000,000 sunk in this electrical development. I do hope the day will come when we can take the whole of this electrical finance out of the Budget, and give the Board power to raise and handle its own finance. We should get all that out of the Budget, where it gives rise to complications, and very often is rather difficult to disentangle. In most other countries where electrical development has grown to the comparative extent that it has here, it is the practice to take the finances of these electricity schemes out of the normal Budget of the country. I would like to know from the Minister if he is in a position to give me an idea of the time when the repayment of capital is likely to commence. In an earlier Bill there was a provisional date fixed for that, but that date has long since passed. The Minister is empowered to inaugurate the repayment of capital. I understand that these payments have to be made by virtue of the fact that the original capital is liable, of course, to amortisation. There has to be a sinking fund set up. If that sinking fund is not provided out of the profits of the undertaking, then it will have to be provided out of the funds of the general taxpayer. I do not think it should. It should be borne by the undertaking in order that capital repayments should commence at a reasonably near date.

Mr. Guinness

It is regrettable, to a certain extent, that when coming to the House to ask for a grant of £600,000, which is a considerable grant in connection with the Shannon scheme, the Minister has not been able to give a résumé of its progress. On two or three occasions when his predecessor came to ask for further grants he gave the House—I do not say in great detail—certain figures showing the progress of the scheme. We began with £5,000,000. We have now spent nearly £12,000,000, and I think a good many millions have been voted for the scheme without the House actually knowing what work has been done, and what progress has been made. Doubtless the Electricity Supply Board issues a report every year, which is all very well as far as it goes, but on an occasion like this, when the Minister comes to the House, it would not be out of place for him to do as his predecessor did, to give a short account of what has been done, prices charged, and how they compare with the original estimate. I should like to endorse what Senator Jameson said with regard to electricity versus steam. Some years ago hydro-electric works were looked upon as the best form of developing electricity. Now they have rather gone by the board, but not altogether. In places where the power has been extremely suitable for hydro-electric works that has been adopted, but where that power has not been particularly suitable, steam stations have been found most economical. The Diesel engine has been largely the means of introducing the change. To mention one case, a good many people will probably have heard of the Victoria Falls Hydro-Electric Company, and many imagine that the Victoria Falls on being harnessed supplied all the electric power required in Johannesburg. As a matter of fact, they have never been harnessed, and the whole supply required for the mines in the Rand is provided by steam, mainly by coal. The Minister rather hinted at an examination by experts being made, and I hope that has not been forgotten, as it might possibly be found that the employment of steam for the generation of electricity would be a more economical proposition than the embanking of the Derg, the Ree and the Allen, which, from the engineering point of view, is, I think, a somewhat doubtful proposition. That is a matter I would not care to go into now, but engineers question the advisability of embanking lakes of that description owing to the injury done to the riparian owners.

Mr. Lemass

I do not know that it would be possible to say anything which would have a very direct bearing on the question as to whether it is more economical at the present time to produce electricity by steam than by water. I think if we were proposing to build a new unit to produce 100,000,000 units of electricity per year, we would find it would be cheaper to erect a steam unit than a hydro-electric unit. That is something upon which a conclusive opinion could not be offered until one knew all the facts of the situation. It is clear that is not the point involved here. We propose to undertake certain capital expenditure which will permit a much fuller utilisation of the equipment already there, and already paid for, and consequently we can contemplate that expenditure being economic, in comparison with the erection of a new steam station, much more easily than if we were to propose to build an entirely new hydro-electric unit, involving not merely storage capacity but also a generating station.

As regards Senator Jameson's question, I want to explain that the first point we put to the Electricity Supply Board was: What is the sum at which you can generate this number of units of electricity under the most favourable circumstances? They calculated that the number of units which this water would give us could be produced by steam at the Pigeon House at a certain figure, £530,000 to be exact. It is reasonably certain that the Board did not err in our favour in making that calculation. They knew of the intention of the Government to provide from grants whatever the difference might be between that sum and the actual cost of storage works on the Shannon, and consequently it was in their interest to give us the lowest possible figure representing the cost of getting the same number of units by steam. They gave us a figure, and we might have entered into a very long dispute with them as to whether that figure was a correct one or not. We might have got experts to set against the Board's experts, and have had a long controversy as to whether it would be £530,000, £550,000 or £600,000. We did not do so for this reason, that it became obvious that at the lowest figure the Board gave us, to give this number of units from steam, we could execute the works upon the Shannon at a not greater figure, subject to a reduction in the rate of interest payable on advances.

The interest payable on the Board's figures was 5½ per cent. when the Bill was introduced. Because interest was payable at that rate, the Board had to estimate that the actual cost of the works, including interest on the advances during the construction period and before the expenditure could be made remunerative, would be £623,000. The difference between what the Board regarded as the economic value of the works, the cost of producing the same number of units per year by steam, and the actual cost of carrying out the works on the Shannon, we propose to make good out of an advance from the Unemployment Relief Scheme, so that as far as the Board is concerned its capital liability will be the smaller figure at which it could get this number of units from any source. Since then discussions concerning the rate of interest have been proceeding, and a lower rate of interest will undoubtedly be payable by the Board in respect of this advance, than the 5½ per cent. paid heretofore. If a 5 per cent. rate is fixed it is very probable no grant will be made at all, and that the actual cost and the economic value will coincide. If a lower rate than 5 per cent. is fixed, it is probable the actual cost will be less than the cost of providing the same number of units from steam would be, so that it will be economic in every sense. One Senator asked if we were satisfied that the board would continue to pay advances on interest. The board can sell all the electricity that this additional storage will provide. This will increase the board's production by 14,000,000 units. There is demand for that electricity now.

The Board did produce by steam last year 82,000,000 units of electricity. Last year was an abnormal year, and partly because it was abnormal and because the installation of additional plant provided for by other Bills, took longer than was contemplated there was a period last year in which the demand for electricity taxed the Board's capacity to the utmost, and if a single unit had broken down, as might have happened, during a period of a week or ten days during the peak period, there might have been complete inability on the part of the Board to meet the demands upon it. Fortunately, that period was got over, and since then there has been a new unit installed at Ardnacrusha, and in the present year, under a Bill passed earlier, a new unit at the Pigeon House, so that at present the Board's productive activity is adequate to meet demands and will be for the remaining period of this year. Next year this additional number of units will have to be provided in some way, and probably more than this, because—and this has a bearing on Senator Sir John Keane's remarks—the more water power we provide the more steam power we must provide. As we increase the capacity of our hydro-electric plant by the installation of additional units at Ardnacrusha, or additional storage on the Shannon, we must, at the same time, increase the stand-by plant, and at a fairly early date, according to the experts, further additions to the steam plant will have to be made in order to provide stand-by equivalent to the hydro-electric plant.

I have no prejudice against steam at all, because I do not accept it automatically that the generation of electricity by steam must mean importing coal. It does not mean anything of the kind. We have anthracite coal, which is used for steam generation here and elsewhere. It has been most successfully used recently by certain large industrial concerns in this country that adapted their boilers for that purpose. There is also the possibility of using peat. It is being used most successfully for electricity generation purposes in Germany, Russia and certain other countries. We are trying to get information concerning the processes adopted there, and the success which has attended their efforts, as we may find it possible to do the same here. In any event, the generation of electricity by steam does not involve importing coal. We have to consider the question in relation to another scheme that came before us, proposals to develop the Liffey, which are being examined. There is the original Liffey proposal, as well as certain other proposals submitted by various parties, or prepared by the board's own engineers. These are being related at present to proposals which are being prepared by the Dublin Corporation for the utilisation of the Liffey to increase the city's water supply.

The engineers of the Board and of the Corporation are at present in consultation, with a view to seeing if one scheme could be devised, part of the cost to be borne by the Electricity Supply Board, and part by the Dublin Corporation, in order to serve both purposes. When they come to consider the question of utilising the Liffey and erecting a new generation station, we will be up against the fact that it will be probably cheaper to erect a steam station to give the same output. If we erect a steam station the £1,000,000 spent on it will, in the main, go to buy machinery manufactured abroad, but if we erect a hydro-station the £1,000,000 will go in the construction of works here, mainly in wages to the workers engaged in building embankments and so forth. It will be obvious that the question to ask is whether—assuming all the time that the charge upon the electricity undertaking will be the same —we should not make good out of the Unemployment Relief Fund whatever difference there might be between the cost of a steam station and a hydro-station to enable the hydro-station to be constructed without any additional charge on consumers, any additional capital liability on the Electricity Supply Board, and having regard to the fact that we are going to get a much better return in employment from the money spent in that way than money spent in another country.

Senator Jameson asked what was the £93,000 referred to in the Bill. That is the maximum amount which can be given by way of grant in accordance with what I have indicated. It is quite possible no grant out of that sum will be made at all. Senator Sir John Keane asked if we proposed to give power to the board to raise its own capital. In the next sentence the Senator asked when the board was going to start repaying the advances. The board is not in a position to start repaying the advances made to it. I do not want to go into the general question of the finances of the Shannon Scheme and the Electricity Supply Board, but it was contemplated that the repayment of advances would start this year. It will not start this year. It will not start next year. I cannot say when it is likely to start. It will not be for some years to come. I do not think we could contemplate the board successfully going to the public for capital, until it is able to produce a better set of accounts than it has produced up to the present.

Reference was made to that part of the Bill dealing with the prohibition of building in the danger area and the removal of transmission wires. It is not proposed to pay compensation. The Bill provides that no order can be made dealing with any building at present in course of construction, or at the time the order prohibiting building in that area is made. A case might be made in theory for the payment of compensation in other cases, but certainly in over 80 per cent. of the possible danger areas no buildings are likely to be constructed at any time. If we put in a provision for compensation it would mean that any person who owned land would only have to propose to erect a building in the vicinity to become entitled to compensation. The Minister for Industry and Commerce decides whether the removal of transmission wires to permit building to be undertaken would involve unreasonable cost. If someone came alone and said that he proposed to erect, at a cost of £500,000, a factory employing 2,000 people, and if there is only one suitable site near the board's transmission lines, we would not hesitate to tell the board to take the transmission wires out of that. If it was proposed to erect some building of no particular value or importance it is obvious we would have to take into account what the cost of taking down and removing the transmission wires would be, before authorising the erection of the building or the removal of the wires.

There is a point in Senator Johnson's suggestion about the possibility of the time being too short to permit an order being made before the construction of a building is known. I should like to look into that matter before expressing an opinion on it. Senator Sir John Keane asked if the works were being undertaken as the result of open tenders. I understand that the board advertised and received tenders from various firms for carrying out the works and it is on the basis of the lowest acceptable tender that the figures I have given are based. I cannot say what firm tendered successfully. I think there are different firms for different portions of the work. I gave a figure earlier in my remarks which may be misleading. I gave a figure in respect of the three different works which totalled £530,000. That is the economic value of the work to the board, not the actual cost. The actual cost in the case of Lough Derg is £452,000; Lough Allen, £150,000; and Lough Ree, £14,000. I agree with Senator Guinness that it is desirable that a résumé of the progress made should be given periodically. Certainly the normal source for that information is the published accounts of the board. It is true that my predecessor gave a more detailed statement, but he did so in circumstances when the reports of the board were many years in arrear. It was not until 1932 that the reports were published up-to-date. Since then we have got the reports regularly, and consequently the information available is fairly good.

Mr. Guinness

Would it be possible to give the number of units produced and consumed last year and in the present year?

Mr. Lemass

I have not got them now. The information I have is from the reports. I asked them occasionally to give me figures that are more up-to-date. The figures they give me can only be estimates because these are the only ones could be given until the final figures are given. I will endeavour to get the figures of units produced and sold before the Committee Stage. I do not know if there are any other points that it is necessary to deal with now which cannot be deferred until the Committee Stage. The position is that the construction of these works will probably be 100 per cent. economic. In any event, the board will only be charged with their economic value, and if the cost is anything in excess of that economic value, the difference will be made up from a grant from money already voted for the relief of unemployment. We are satisfied that the expenditure of the money in that particular way is likely to give more employment than in any other way.

Question put and agreed to.

Committee Stage ordered for Wednesday, August 29, 1934.

The Seanad adjourned at 10.30 p.m. until 11 a.m. on Friday, August 24, 1934.