Select Committee on Environment and Climate Action debate -
Thursday, 17 Oct 2024

Vote 29 - Environment, Climate and Communications (Supplementary)

An Cathaoirleach

Today's meeting has been convened to consider the Supplementary Estimate for Vote 29 as it relates to programmes A and B. I welcome the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, and his officials.

I will read the note on privilege. I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I remind members they are only allowed to participate in the meeting if they are physically located in the Leinster House complex. In this regard, I ask members to confirm they are on the grounds of Leinster House prior to making a contribution to the meeting.

Minister for the Environment, Climate and Communications (Deputy Eamon Ryan)

I thank the Cathaoirleach and the committee for this opportunity to present details of this Supplementary Estimate as it relates to programmes A and B of Vote 29 - environment, climate and communications. The main purpose of the Supplementary Estimate is to provide additional funding of €520 million for the fourth electricity costs emergency benefit scheme, €3.32 million for the SEAI and HSE pilot energy decarbonisation pathfinder project and €30 million for the national broadband plan, NBP.

The €30 million of additional funding for the NBP is required as the programme has exceeded its planned delivery for the year, with a significant ramp up in network deployments and end-user connections. This element of the Supplementary Estimate, which relates to programme D, was considered by the transport and communications committee yesterday.

The Supplementary Estimate also provides for the technical re-allocation of €440,000 to repay the EU Commission fo an overpayment of pre-financing funds made to Ireland from the EU just transition fund. The impact of the sharp rise in energy costs experienced in 2022 is still felt. Energy prices remain high and Irish households are paying on average 59% more for their electricity and 90% more for their gas than they were pre-crisis. This is despite the multiple rounds of price reductions announced by suppliers since 2023.

In light of the continued high cost of household energy bills, the Government has decided to further support domestic customers through a fourth electricity benefit scheme for this winter. The new scheme will be closely modelled on previous schemes and will include two electricity credits of €125, including VAT, to be applied to domestic electricity accounts in the November and December 2024 and January and February 2025 billing cycles. The credit will also apply to domestic customers whose households may not have an individual meter point reference number, MPRN, including some traveller families in certain local authority accommodations, those existing dwellings that have been divided for the purposes of accommodating additional people and sub-meters linked to the main MPRN. The scheme will be operated by ESB Networks which will make payments to the individual energy suppliers who will then credit individual domestic electricity accounts. The CRU is charged with oversight of the scheme. The Government has also taken further action in the budget to continue to support those who are most vulnerable to the effects of the cost-of-living crisis. Additional social welfare payments across several benefits and schemes will also provide support over the coming winter period.

Earlier this year, the SEAI and HSE pathfinder programme was approved for €48 million in funding from Ireland’s REPowerEU allocation for the period 2024 to 2026. This funding will support the deep retrofit of five HSE sites and will be critical in terms of providing learning and experience to the HSE, which has a vast national estate portfolio. A sum of €3.32 million is required this year, with a further €30 million allocated for the project in 2025. A technical allocation of €440,000 is required to repay an overpayment of pre-financing of funds received from the EU Commission.

I am happy to take questions from the committee on any aspect of this supplementary estimate as it relates to the electricity credit, the HSE pilot energy and decarbonisation pathfinder project and the EU just transition fund repayment.

An Cathaoirleach

I thank the Minister for his opening statement. We will first consider subhead A11. Do any members wish to come in on this very much technical one? It relates to the just transition fund of €440,000 and an overpayment by the European Commission. I will move on to subhead B5, which is the energy-efficiency programmes. This relates to the SEAI and HSE pathfinder programme. It was approved for €48 million and was funded from Ireland's REPowerEU allocation for the period 2024 to 2026.

Deputy Richard Bruton

I commend the Minister on the work he has done in the Department. He has made a real mark. We now have legislation and a framework for implementing our climate ambition. We have made significant progress and many good initiatives have been rolled out, such as the loan scheme that was recently put in place. It would be churlish not to recognise the effort, commitment and progress that the Minister has made and this is a great opportunity to do that.

We did not put the focus on energy efficiency that many other European countries did during the recent energy crisis. That was a missed opportunity to roll out a greater energy-efficiency consciousness. I am also on the enterprise committee and I know that the take-up of many of the energy-efficiency initiatives is very low. We need to put greater focus on shallow retrofits, particularly in rural Ireland, where the worst heating systems and BER standards apply. There is scope for further focus and initiative on those. I do not know exactly whether the pathfinder will be focused on those but there may be some lower hanging fruit in the energy-efficiency and shallow retrofit arena that some of the programmes are currently missing.

Deputy Eamon Ryan

I very much appreciate the Deputy's kind words. This will sound like a mutual appreciation society but much of what we have been able to do in the past four years was because there was a platform laid in what the Deputy had done with the likes of the waste-action plan and circular economy. The Climate Action Plan 2019 set the format that inspired the new legislation and I could go on.

At a time there is a lot of public lack of confidence in the ability of the State to deliver in a timely and cost-effective manner, my Department has shown real capability and I would very much credit the officials on that. To take some of the schemes we are examining today, the national broadband plan is working. It is accelerating and is ahead. Despite what some of the original critics argued against it, it has proven itself within our system.

Similarly, the deposit refund scheme is an incredible success. I spoke to officials about it yesterday and they said that part of that was because there was political certainty behind it. What has been done in terms of setting up an industry and NGO stakeholders approach also contributed to this. They knew the political system was convinced and certain on this. That certainty meant that we delivered more than our nearest neighbour, the UK, which was ahead of us on this and is now behind us. It is looking to see how we did it. The scheme has been an incredible success. It has been on time, on cost and ahead of expectations.

I would say the same on retrofitting and energy efficiency. I disagree somewhat with the Deputy that we have not put a focus on that. This has been particularly successful in the domestic sphere, with the likes of the warmer homes scheme, the SEAI, the new loan scheme the Deputy mentioned and the one-stop shops and so on. That really is working. He is correct about the commercial sector. For whatever combination of reasons, those grant supports for energy efficiency did not take up as well in the sector. It did not seem to have that scaling-up and rapid deployment and so on and I take the his basic point on that.

Efficiency is going to be absolutely key to meeting our climate targets. However, it was very interesting attending the European energy and environment Council on Monday and Tuesday this week. The debate was on the Draghi report, which centred on the electrification of everything and how Europe can improve its capability, planning and legal systems as well as elsewhere. What tends to be forgotten, we agreed at the Council, is the energy-efficiency side. We need to continue to double down on that. Putting particular focus on the enterprise sector might be good because that is where it has not kicked off sufficiently, as the Deputy said.

An Cathaoirleach

I thank the Minister for that. There are no other questions on subhead B5. We will move on to subhead B11, which is the electricity credit. Do colleagues wish to come in on this one?

Deputy O'Rourke is muted on our end.

We will try to resolve this if the Deputy gives us a moment. He is back and we can hear him now.

Deputy Darren O'Rourke

Sorry about that. I am sure the problem was at the committee's end. I thank the Minister. We have political differences and argue on detail and policy, but a huge amount of work has happened during the Minister's tenure. I acknowledge that and wish him well for the future. There may be opportunities again in the Dáil or in committee, but just in case there are not I want to express appreciation for and acknowledge that.

One issue with the electricity credit is low use and people being excluded who legitimately deserve the credit. To be fair, the low-use element was brought in to try to capture folks who had second homes or holiday homes that were not being used, which is appropriate. However, an unintended consequence is that mainly older people living alone with low energy use were not afforded the credit. Is that something on which the Department is working to find a solution for people? Most people got sorted, but I want to make sure it is on the radar.

Deputy Eamon Ryan

I thank Deputy O'Rourke for his kind words. I am blushing now. I had better get out of the place quickly before something goes wrong, but I appreciate his comments very much.

I will speak to a couple of points on the electricity credit. First, I again need to look to my officials here who have been responsible. It was initiated and designed in our Department and delivered by our Department with the ESB. It is another example of the State doing something well. It has worked effectively. It is low cost in terms of the application, and some may argue about whether it was right to apply it universally or if it could have been targeted. The case for a universal credit was that we still have significant issues. There are 278,000 households in arrears on electricity bills, and 171,000 in arrears on gas bills. The main benefit we saw in the past three years when we applied it was that it shrunk that arrears element significantly. Given that gas and electricity prices are still high compared with levels before the war in Ukraine, I think it is appropriate. It is also appropriate that it is clearly being tapered down and out. It cannot be permanent. These are extraordinary measures for extraordinary times. The approach is correct, and its ongoing wind-down is also correct.

I turn to the tweak and the changes that came. I think the provision, where it was households with less than 150 kW per quarter, is appropriate. They are not households where you are effectively living in the house. To address the Deputy's concern, anyone who is recognised as a vulnerable customer or a hardship case will still benefit from the payment even with very low usage. In a case where someone with very low energy use is in real difficulty because of it, they should first and foremost contact their energy supplier. We had approximately 100 complaints to the Commission for Regulation of Utilities and all of those were solved satisfactorily. Out of 2.5 million households we had 100 examples where that might be a problem and I am told all of those were solved to the satisfaction of the householder, so we can manage that within the overall scheme.

Deputy Richard Bruton

I commend the progress made on this by the Department. As the Minister rightly alluded, we had a considerable battle to get this approved, and I was gratified about a year ago to see the Minister's colleague, the Minister of State, Deputy Ossian Smyth, issue a reply indicating that the present calculation of the benefits was double the benefits estimated at the time it was approved. That vindicates how this was the right decision to make.

My one request to the Department is that we look at this asset as one where its potential needs to be developed. I think in particular of health services where, with modern technology, you can have predictive health, screening, remote consultation and monitoring. People could be facilitated by being delivered health services while remaining independent in their homes where they feel more comfortable and in control of what is happening to them. While Covid showed a welcome increase in such remote delivery, it has fallen away since as far as I can see. There is an onus on the Minister's Department to create a group that would engage in horizon scanning for how this asset we have put in, which is already generating more benefit that anyone anticipated, could be used to deliver services more remotely. That is just health.

Similar things could be said about education. We could look at public services and see opportunities. However, I do not see who in Government is charged with thinking of how we can best deploy this asset to deliver more balanced population growth, which is a big ambition of ours, to revive activity in more remote areas and to make sure in the long term that our health service is capable of responding to an ageing population. This may not apply generally, but I have heard from the UK that a former Minister has deemed the model of health being delivered as unsustainable in the long term and unless they move to more technology-based solutions, the system will become overwhelmed. That may be a call for someone to put it into their programme for Government, but I think the Minister's Department is pivotal to understanding the power of this network and what it could do for the future.

An Cathaoirleach

I will add to Deputy Bruton's point if I may. It is a really important one about how often our projections are conservative and we do not decide to make these investments. We spoke about this in respect of the Minister's transport portfolio in the Dáil earlier. If we were conservative in doing our business case, analysis and feasibility, we might not make the investments. We might not have done so with the broadband plan based on the benefit that was predicted with it. Deputy Bruton proceeded with it when he was Minister, and I think he has been vindicated. That should make us suspicious of how we make investment decisions and make us look at how we do projections. I would say the benefits are consistently greater than we project. If we were less conservative in our forecasting, we might have made many other investments in addition to the national broadband plan.

Deputy Eamon Ryan

I remember I had concerns at the time about the ownership of the assets with regard to the national broadband plan, but not the underlying economic logic and rationale. There was reasonable cross-party consensus about proceeding even if there were concerns about aspects of it. In this country we can sometimes work to reach consensus in the political system. The deposit refund scheme worked because industry knew the political system was serious about it. It is similar with this. The political confidence behind it helped get the project over the line.

It has surprised everyone. In hindsight, had we known that Covid and remote working were coming, we would have doubled down on the case for it. They make the case stronger.

I agree with Deputy Bruton. One of the areas in which he State has not delivered is in the use of electronic digital communication systems, for health particularly. We are better placed on its use in education. In health, remote monitoring, remote diagnosis and remote clinics and consulting surely have to be used. The State has incredible resources at the moment but the scale of the increase in health expenditure is not sustainable. While we have had real benefits in terms of much better outcomes, longer lives and reduced wait times, at some point soon that massive increase in the budget each year will become unsustainable. There are other areas where we need to spend money so we cannot keep massively increasing health budgets.

There is a lot of stuff for consideration for any future programme for Government. The way in which we manage our digital policy is fragmented in this Government, if we are being honest. Our Department has a very strong role. It is particularly strong on the cybersecurity and network side where we are achieving real success. We will have pretty much universal broadband within the next three to four years which gives us a competitive advantage.

There are a number of different Departments involved, covering justice, enterprise, education and culture, not to mention health, and the issue of how we achieve an integrated policy, particularly with artificial intelligence, is important. It is not just the broadband network but in other evolving technologies that we need to ask how we make best use of them. We are not sufficiently well equipped as a State to do that in a really co-ordinated way. The answer is difficult. We could get into fantasy Cabinet discussions but our digital strategy, per se, needs to be much stronger in the next programme for Government. Organisation and collation will be key. We will work with the Department of Health but, in truth, providing the network is not enough; it is how it is used.

Deputy Richard Bruton

I also advocated for the "disruptive technologies" programme, where €500 million-----

Deputy Eamon Ryan

That is where project finance is given for those ideas that are-----

Deputy Richard Bruton

We have medical device companies and ICT companies; we have wonderful resources. We are probably better placed than almost any state to think about a transformative programme in this area. It would be a low-cost toe in the water. It would be harder to integrate the State, as the Minister said, but it would be a good first step.

Deputy Eamon Ryan

Sorry for going into the weeds on this, Chair, but I very much agree with Deputy Bruton. The former head of digital strategy in the HSE, Martin Curley, was someone who I listened to with respect on this because he was doing exactly that. I was at events where he brought in the medical device industries we have here, which are highly resourced and capable, as well as the HSE, the hospital groups and so on. Before that, in the previous decade, he organised an event here for the European Commission called Open Innovation 2.0. He argued at that conference, and the European Commission picked up on it, that a quadruple helix of innovation is needed - this is a complex term - where the State, industry, academia and civil society get together and work in an integrated way. That is when innovation can occur in a very fruitful, effective way. Coming back to what I said earlier about our digital strategy, I do not think we have implemented that. We have an advantage as a small State because we can get the key actors in a room in the way we did for the waste strategy, which delivered. We need to do the same on the health digital side. It could be applied in other areas as well.

This is also about the patients. They have to be happy that where a device is measuring and monitoring them, they can share their data in a way that it is not in some commercial interest but in their interest. The four elements of co-operation are needed to ensure patients realise they are at the centre of everything we do.

Deputy Richard Bruton

Now that the Minister may have a little more time on his hands, he should listen to "The Rest is Politics - Leading", a podcast with Rory Stewart and Alastair Campbell, and the interview they did with Audrey Tang, the digital Minister in Taiwan. What Taiwan did around the co-designing of solutions is well worth a listen. It is amazing what was achieved in a relatively short period.

Deputy Eamon Ryan

We talk of little else when we get into the canteen on the coffee break.

An Cathaoirleach

It is the first time I have heard the quadruple helix mentioned in the committee but hopefully not the last. It sounds very important. We have reached the end of our consideration of the Supplementary Estimates. I thank members for their questions, the Minister for his answers and the officials for attending. The last day the Minister was here I said my goodbyes so I will not repeat them. I thank him for his engagement with the committee. It has always been a pleasure to have him and his officials here. We have always had very good sessions. I thank him for his work as Minister and the efforts he has made to direct the country in the right way with great success. I know Deputy Bruton will be here for at least one more session so I will not say my goodbyes to him just yet. I have been told the Minister will be back on Tuesday, when there will be more eulogies delivered and Senators will get a chance to say nice things about the Minister too.