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Seanad Éireann debate -
Thursday, 16 Feb 2012

Vol. 213 No. 9

Energy (Miscellaneous Provisions) Bill 2011: Committee and Remaining Stages

I welcome the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte.

Sections 1 to 13, inclusive, agreed to.

I move amendment No. 1:

In page 33, between lines 27 and 28, to insert the following subsection:

"(6) Without prejudice to the generality of subsection (5), energy efficiency improvement measures include the provision of dry lining or any other form of wall insulation, or the provision of double glazed windows.”.

The purpose of the amendment is to add a small subsection on dry lining insulation in walls. Our main concern is to ensure this provision aimed at energy efficiency would be allowed. The Minister is well aware of the issue of fuel poverty and that there has been talk that the ESB, or a section of it, will be sold. Some of the money would go towards job creation, but would some of it go towards the alleviation of fuel poverty?

The Senator is right. We dealt with this amendment in the other House on both Committee and Report Stages. His colleague, Deputy Éamon Ó Cuív, withdrew it for the straightforward simple reason that being this prescriptive about energy efficiency in terms of improvements in insulation was not a matter to be considered in primary legislation. As technology changes, we can see the changes being approved for the programme on energy efficiency. Therefore, to hardwire something like this in primary legislation would constrain us. I regret that I cannot accept the amendment and my reasons and arguments have not changed since the debate in the other House. As I said, it would tie the hands of the Minister unreasonably. As technology is changing all the time and the nature and scope of the scheme will change, about which there is no doubt, I would prefer not to be stuck with something so prescriptive in primary legislation.

I am concerned about primary legislation not being prescriptive. As the Minister is aware, a report was published by the Joint Committee on European Scrutiny that indicated 75% of legislation in any given year was implemented by way of statutory instruments signed by Ministers to give effect to EU law and often to amend legislation where that power had been given to the Minister under primary legislation. The concern in this regard is that there is no scrutiny. Under the Government committees have been given the power to scrutinise EU legislation, but there is no power in the case of the Joint Committee on Foreign Affairs and Trade which has been told statutory instruments will be passed to it at the same time as they are passed to the Oireachtas Library and Research Service, meaning they will already have taken effect; therefore, changes to primary legislation are made without the approval or knowledge of Members of the Oireachtas. If 25% of legislation in a given year is debated by the 226 Members of the Oireachtas and 75% is implemented by way of statutory instrument, primary legislation must be more prescriptive because there is no mechanism for Members to scrutinise statutory instruments until after the fact when we are told committee members will receive copies of statutory instruments at the same time as the public. This makes me wonder about the reason primary legislation should not be more prescriptive. I accept the Minister's contention that concepts are changing and that my amendment may be too prescriptive. My fear is that statutory instruments are used to regulate in all legislation. Once we make the law, the Minister is all powerful, as he can use the process of statutory instruments to add or subtract from a list of schemes and the methods of conserving energy will never by scrutinised by anybody in this House. There are no checks and balances.

I welcome the Minister to the House. I accept his view on the amendment, but Senator Daly makes an important point. Our initial surge into energy efficiency and green energy has been shown to have been excessive in terms of achieving value for money. The OECD recommended the end of grants for offshore windmills and the phasing out of grants for windmills on land. It also has doubts about tidal and solar energy. To echo what Senator Daly said, as a legislature, we need to keep in mind whether a proposal is cost effective or just possible in engineering terms.

The advice of an bord snip nua is that energy efficiency schemes should be funded in the future only if the cost of achieving the reduction in carbon outputs secured by them is equal to or less than the market price for carbon credits. Things that seem to be good on philosophical or ethical grounds may not make much sense on economic grounds. That is the important point Senator Daly raises. Energy efficiency measures have to be efficient. I recall from the literature that the most cost effective energy saving measure is simply to draw the curtains at dusk as that will keep heat in a dwelling, and is much less expensive than some of the measures that have crept in. It is important to keep an economic perspective, as I am sure the Minister is doing, on some of these proposals, which were so enthusiastically advocated. Certainly the OECD reported that on the producers side they may not make much economic sense. We must be equally vigilant in persuading the consumer what energy efficiency measures are worthwhile. The ultimate test of a really good energy saving measure is the benefit of a reduced energy bill and therefore why should it need to be subsidised at all, apart from an information campaign? In these straitened times we must consider the use of resources and as Senator Daly has said some of these programmes require to be kept under constant scrutiny, as I am sure they are.

Senator Daly raises a reasonable point about the extent of legislation that goes through the House by way of statutory instrument as compared to primary legislation. I did not know, to be honest, that the ratio was 75:25, but if the Senator says that is the case, I accept it. In fairness, the Office of the Attorney General and the Parliamentary Counsel keep a close eye on what a Minister can get away with in a statutory instrument, as compared to primary legislation. It must conform to certain rigorous standards. I am not trying to duck primary legislation, because we are dealing with the Bill. I am raising the wisdom of trying to dictate to the market the type of measures that can be supported. It would be unwise to be so prescriptive. It is simply not wise to set out certain things in primary legislation, but better to leave it to the particular terms of the scheme. It is not fair to say that the public gets access to statutory instruments at the same time as Members of the House. When a statutory instrument is made, it is laid before both Houses of the Oireachtas and there is a period of 21 days in which it can be annulled. It is open to every Member who feels that strongly about it to move a motion to have it annulled. It is not something that goes through sight unseen, or that should go through sight unseen. It is an arcane process to stay up at night with a wad of statutory instruments for bedtime reading, which I accept, but there is a requirement that it can be annulled within 21 days.

Senator Barrett raises a bigger question on energy efficiency and whether the measures in place to facilitate thermal efficiency are economic. The current better energy scheme is a grants based scheme, but as I have said before we are on a glide path to a pay-as-you-save scheme. What is being proposed is a new financial model in conjunction with the banks on the one hand and the energy supply companies. We have put an enormous level of work into this project. I have met the chief executives of the two banks and my officials have been dealing with the people appointed by them to work on the detail. The energy companies are on board. The idea is that one would pay for the renovations or refurbishment from the savings that accrue from the gains made. If we can put that model together, it will be very worthwhile. It sounds easier said than done. There are difficulties, such as the period of repayments and so on, but we must make the scheme attractive to the householder so that he or she is likely to want to avail of it.

What confronts us now is that we import more than 90% of our energy. The price is set elsewhere. There is very little that we can do about it. Perhaps we can do something in limited areas such as transport, if we were to tackle the issue of excise duty. The rise one sees in the forecourt price, is to some extent contributed to by the tax take. Generally, we have little enough control over the market price. We have been taking steps to improve energy security but in terms of what we can do about cost, the best we can do is to bring down consumption. There is no doubt but that energy efficiency measures are proven in that regard. We waste energy. Our built environment is not very efficient. Even during the boom years, the standards in our domestic residences were not up to par. The invigilation of standards was not adequate. There is no doubt that as a result, energy is being wasted. Energy is also being wasted in our public buildings. I imagine that the splendid room in which we meet, which is part of an old house, is woefully inefficient. There are opportunities for a win-win in this area. Not only would these works save energy and reduce consumption, but they would also create employment. We are developing some expertise in that regard. In response to Senator Barrett's question, I will say I hope we will be able to move out of a grants-based approach. Demand has been built. There is a greater awareness that pulling the curtains, which may be advisable for reasons of thermal efficiency or simple concealment, is not adequate in itself. We need to do more than that. The Sustainable Energy Authority of Ireland returns to do random checks on homes that have been refurbished. There is no doubt that the evidence it has garnered shows significant reductions in one's energy bill.

I thank the Minister and wish him every success with his efforts with the glide path model he has described. It might be helpful if it were to be declared by both sides that in the event of a doubling in the world price, a list of specific projects would become worthwhile; and in the event of a further doubling, another set of projects would become worthwhile, etc. Something similar could be provided for within houses. That would facilitate better decision-making in the entire area. I commend the Minister for his efforts to get us to abide by such a scale, both in the production of electricity and its consumption.

Amendment, by leave, withdrawn.
Amendment No. 2 not moved.
Section 14 agreed to.
Title agreed to.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."

I thank the Members of the House for their co-operation. Although this is an important Bill, it is not a controversial one. We had a reasonable debate on it on Second Stage. It is important that the measures outlined in the Bill are put in place. I do not think any great issue of dispute arose with regard to the merits of the legislation. I am glad we have been able to finalise it. There are some reasons that make it necessary for it to be completed at the earliest possible time. In the future, as we make progress with energy efficiency measures and evolve into a different system, we can have a general discussion in the House on the merits of any changes that would encourage more householders to improve the thermal efficiency of their homes.

I would like to respond to Senator Barrett's point about the efficient use of resources in the context of what Senator Daly said about fuel poverty. I am not an expert on the matter, but having examined it I do not doubt that an increase in energy efficiency would make a significant contribution to the alleviation of fuel poverty. The traditional fuel allowance support scheme is not the most efficient way to address fuel poverty. It is helpful and valuable. A great deal of heat goes up the chimney. If homes were more thermal efficient, it would make a bigger contribution to the alleviation of fuel poverty, which is obviously an issue. It is scarcely a surprise, in current economic circumstances, that the problem of fuel poverty is not easing.

The warmer homes scheme is the way to go. Those who have responded to surveys as part of the evaluation of the scheme will agree that it has made a world of difference. It is a far more economic use of resources than continuing to spend significant moneys on fuel allowance. In the last ten years we have spent €2 billion on fuel supports and approximately €80 million on thermal efficiency measures. When the expenditure of €2 billion is subjected to the test mentioned by Senator Barrett, it is hard to say to say we get value for the taxpayers' money in question, or that it addresses fuel poverty needs in the targeted way they need to be addressed.

I thank the Minister for his comments and wish him well in his portfolio. I thank him for coming to the House. As he said, this uncontroversial Bill did not attract robust exchanges on Second Stage. We were glad to co-operate with the Minister and point out to him some of the improvements that could be made to the legislation.

I wish to mention what I find amazing about the statutory instruments issue. It came to my attention when I read a thesis by Garrett Greene from County Clare on the analysis that is done by EU scrutiny committees. He pointed out that 75% of legislation is introduced in this manner. Perhaps the Minister will bring that fact to the attention of his Cabinet colleagues. Given that transparency is so important, we need more oversight of statutory instruments. I am sure the Attorney General is not as concerned about what the Minister can get away with. It is a question of having the best and most efficient system. I do not intend to spend my evenings reading the latest statutory instruments that have been approved by these Houses. I suggest that the members of all committees be given a list of the latest statutory instruments, as well as details of what such instruments will do, as a matter of course. I estimate that 99% of statutory instruments are fairly standard. They involve small measures like increases in fines. I am afraid that the 1% of statutory instruments that might cause trouble down the line could be among those that are passed sight unseen. I thank the Minister for coming to the House today

I echo everything that has been said. I thank the Minister and wish him well. As I spoke during the Second Stage debate, I wanted to be present when we wrapped it up. I pay tribute to my colleague, Senator Daly, who proposed amendments as our party's spokesperson in this area. I hope the Minister will fight the good fight at Cabinet level to restore some of the money that was lost to his Department as a result of the economic downturn. He knows that additional funds would help small operators in the home heating sector. I am sure he will agree this Bill is about trying to improve fuel efficiency, not only in terms of suppliers and distributors but also in terms of home owners. Perhaps that is one way of reducing our overall energy bill. I hope the Minister will secure the resources to allow him to be more proactive in trying to encourage householders to be more fuel efficient. I appreciate that he is quite active in this regard. I could give many examples of what could be done. Many people leave electrical appliances, such as, televisions and computers on stand-by mode, not realising that it is costing them up to 50% of the original cost if the appliance had been on fully. Even that simple efficiency measure of turning off the appliance at source would help to reduce the energy bill considerably. I wish the Minister well in an important portfolio.

I thank the Minister for bringing the Bill before the House. I commend my colleagues across the floor for some interesting contributions and pay tribute to the Minister for his open-mindedness and consideration in these matters. It is not a contentious Bill but important housework in tidying up many loose ends in the area. The Minister mentioned the standard of builds. Whatever about retrofitting old buildings and houses that are ten to 20 years old, it is a matter of concern that houses that have been built in the past decade have had such deficiencies and failings in the area of energy conservation and efficiency. I am aware the Minister and his colleague in the Department of the Environment, Heritage and Local Government are working on introducing measures to ensure the standards set out are implemented. The standard to which some houses were built and the prices charged are not reflected in the quality of work.

Senator Barrett raised many issues that may be uncomfortable for us and that we may not wish to hear. I am a big fan of renewable energy and green technology but we must examine their merits and cost-effectiveness. On the last day we heard that the nuclear option has not been ruled out even though the issue raises the hackles of many people, including me, who protested at Carnsore many years ago.

I thank the Minister and members for their constructive contributions.

I join my colleagues in thanking the Minister for bringing the Bill to the House. In his last summation the €2 billion in fuel supports that he mentioned shows where we are coming from in the past ten years. If the houses had been built and insulated properly it would not have been necessary to spend the €2 billion. The same issue arises in another area involving retrofitting facilities for the disabled in houses for people who need it where we are spending hundreds of millions of euros. If they had been built properly with a low level access shower and toilet downstairs we would not have to do that work.

I thank my colleagues who contributed to the debate which, at times, went beyond the remit of the Bill. I appreciate that the Minister took many positive comments on board. I wish him well with the Bill and any other Bills he may initiate.

Question put and agreed to.

When is it proposed to sit again.

At 2.30 p.m. on Tuesday next.

The Seanad adjourned at 2.35 p.m. until 2.30 p.m. on Tuesday, 21 February 2012.