I move amendment No. 1:
In page 6, line 4, to delete "gross" and substitute "net".
I welcome the Minister to the House. We had a useful debate on this issue yesterday. I have been in contact with the ESB, Bord Gáis and other interested parties and they suggested that this amendment may make a difference to certain people operating in the business.
The definition of "combined heat and power" refers to the utilisable heat and electricity having to be greater than 70 per cent based on the gross calorific value of the fuel used. The reference to "gross" is the basis upon which most fuels are sold, whereas the power industry and the manufacturers almost universally represent the performance of their plant by reference to the net calorific value as this equates to the useful heat in the fuel. The ratio of net calorific value to gross calorific value changes for different fuels, but for natural gas 70 per cent of the gross calorific value equals approximately 78 per cent of the net calorific value.
The use of this test of 70 per cent is quite a high standard of efficiency by world standards and would result in a significant number of potential combined heat and power schemes in Ireland not qualifying under this test. A more typical and acceptable level would be 70 per cent of the net calorific value.
By way of contrast, none of the proposed new generating projects for Ireland, using state of art technology, will even achieve efficiency of 60 per cent of the net calorific value. The use of a threshold of 70 per cent for CHP represents a considerable improvement in fuel utilisation efficiency.
The effect of the use of the word "gross" as opposed to "net" as a measure is to set a higher hurdle that would lead to potential bona fide CHP plants not qualifying or may close out a significant proportion of the potential CHP market in Ireland to independent suppliers. I am concerned that medium and small scale CHP plants, using technologies and designs as efficient as the successful Guinness plant in Dublin, will not qualify under the existing definition in the Bill or, at best, they may be on the borderline. That is the case that has been made to me and I await the Minister's reply.