Electricity Regulation Bill, 1998: Committee Stage.

Before we begin consideration of the Bill I ask that we proceed with due haste but also with due care. The position is complicated in that we have amendments from this side of the House and a long list of ministerial amendments. We are trying to read the Bill with the Minister's amendments and then deal with our amendments also. The position is complicated and I ask that we hasten slowly so that we do not miss anything as we go along.

Beyond reading it with the usual speed I will not interfere with the process.

SECTION 1.

Question proposed: "That section 1 stand part of the Bill."

When does the Minister intend the Bill to come into operation? Has she or her Department a view on the two-phased process? I understand from the interested parties that there may be an evolution of competition. There are ESB issues, such as stranded capacities and PSOs, and there is the possibility of full-blooded competition further down the road. When does the Minister intend the initial licences to be awarded? Does she have a period in mind for a transitional phase before we move to full competition?

I thank the Chairman for his patience with regard to making the arrangements. I have never seen such interest in a Bill. I remarked to Deputy Stagg in the Dáil that I read an article in which Deputy Yates said I was not going far enough in terms of competition while in another article he said I was going too far. I figure I have just about got it right. I also read an article in which Deputy O'Malley took exception to many parts of the Bill and I want to record that he did not discuss the matter with me at any time. I am not being vindictive in any way - I am just stating a fact.

The regulator will come into being officially - he is already there - once the Bill is passed by the Oireachtas. When that lengthy process is complete the putative regulator will become the regulator.

Licensing will come into being on 19 February, the date of the inauguration of the competitive elements. That is laid out in the directive. Lest anybody thinks I picked that date out of the blue, I should like to say it was outlined in the directive when I came into the Department.

On the evolution of competition, 28 per cent of the top market will be opened up on 19 February 2000 and the directive outlines the stages and dates when the market will be further opened up. The next date is 2003 and further dates are set out in the directive.

We should note in passing that the Minister gave Deputy O'Malley a slap on the ear.

Those are the Deputy's words.

That probably augurs well for the way matters will proceed in the future, perhaps in the very near future, given that slaps on the ear are coming hard and fast.

I did not use the phrase "slap on the ear". I would not dream of doing so. I am far too ladylike.

Corporal punishment has been abolished. Maybe it was even stronger than a slap on the ear.

It is important to note the Government was involved directly in negotiations on the directive and it was conscious of the dangers posed to existing enterprise during those negotiations. That awareness was part of the reason it achieved a target of 28 per cent in terms of opening up the top end of the market. That target is not confined only to the top end of the market, it can apply to any part of it. The target of 28 per cent will include the bottom and middle end of the market that will be open to alternatives. Taken together, that amounts to 28 per cent of the market. We are not bound by the 28 per cent target. We could take another view and decide to open up 100 per cent of the market. Some cases could arise due to excess capacity which could give rise to much more than 28 per cent of the market being opened up quickly. When we were in Government we recognised that as a danger. The Government also recognises it as a danger and everybody concerned has agreed to a 28 per cent target in terms of opening up the market. During the period until we open up 32 per cent of the market it is important only 28 per cent of the market is opened up, otherwise we will damage our existing energy infrastructure.

Deputy Yates's question related to the evolution of competition.

I tabled an amendment to the Title of the Bill.

Which amendment?

It proposes the Irish version should also be included. The Minister tabled a similar amendment.

My amendment proposes to correct a spelling mistake.

Perhaps the word was spelt wrong in one of my amendments.

No, it was incorrect in one of my amendments.

Amendment No. 103 deals with the title.

We are not dealing with amendment No. 103 now.

I do not know why we are not.

We usually start at the beginning.

Section 1 deals with the Title. The Title is surely the first part of the Bill.

The Title comes at the end .

I do not want it to appear that members are divided in their views on this Bill, but I am not happy with certain aspects of it. Obviously the Minister was not happy with a good deal of it because of the number of amendments she tabled.

My doubts were deepened of late when I was contacted by the ESB group of unions and ESB worker directors who expressed their concern, which I share, about the deregulation of the electricity market.

We are discussing section 1 and anything members say must relate to it. This is not a Second Stage debate.

The Minister spoke about the combined areas of heat and power and some amendments are tabled on this matter. I hope shewill take on board the views of her Government colleagues on this matter.

Of course I will.

I will make those points very forcefully.

I will listen to any view expressed by the Deputy.

We will come to that matter latter.

I made the point that their views have not been put to me.

We talked about 28 per cent of the market being opened up. It should be borne in mind that in Denmark the aspiration is that renewal energy will constitute 40 per cent of the market. If that is a realistic aspiration in Denmark, it is also realistic on a western seaboard island such as Ireland. We should be striving to make the best use of indigenous energy. I raised that point because there was talk about the Minister being selective in the implementation of section 1, which she is entitled to be.

Question put and agreed to.
SECTION 2.

Amendments Nos. 1, 12 and 21 are related and may be taken together. Is that agreed? Agreed.

I move amendment No. 1:

In page 5, section (1), between lines 28 and 29, to insert the following definition:

"alternative' means any renewable, sustainable energy sources and shall include wind, hydro, biomass, waste, tidal, solar and wave etc. but not nuclear fission."

Amendment No. 1 is the more substantive of three amendments. It proposes that a definition of the word "alternative" should be included in the Bill. As the word "alternative" is peppered throughout the Bill, it should be defined. The Minister might want to change the wording of the definition. I would agree to a change of wording provided it takes account of the need to insist that energy suppliers engaged in the alternative sector understand there must be a renewal and sustainable aspect to their operations. A number of examples of alternative energy are listed in my amendment. The amendment excludes nuclear fission because some of those engaged in the nuclear industry would like to jump on that bandwagon and call themselves alternatives because they are not dealing with fossil fuel. The provision should state explicitly that our national policy is that there will be no nuclear power here.

Amendments Nos. 12 and 21 seek to insert the word "sustainable" after the word "renewable". That is in line with what the Minister's party spoke about before the last general election. It said that all policies would be audited for their sustainability and I ask that that be included in the Bill.

Amendment No. 1 seeks to insert a separate definition of the word "alternative". That would cause confusion regarding the existing definition of the Bill. In addition, the use of the term "etc." is not precise enough or suitable in a definition.

The Minister has the necessary resources in her Department to ensure the wording is definitive.

Yes, the Deputy is correct in saying we have power to exclude nuclear energy as a form of electricity generation in terms of the power to set criteria for the authorisation of new generating capacity. Section 17 empowers the Minister to make orders. The exclusion of nuclear energy would be better effected through the criteria for authorisation, which is dealt with under that section.

I could accept a redefinition of the word "renewable" or the word "alternative" which would exclude nuclear energy. It is important that we make a statement on that. I could return to the issue of nuclear energy when we are debating the relevant section. I would be glad to accept a redefinition which would specifically state that we are excluding nuclear energy. I would be glad to insert a wording to that effect in amendment No. 12 to section 17 which entitles the Minister to make enabling orders.

Amendments Nos. 1 and 21 seek to insert the word "sustainable". Is that correct?

Amendment No. 1 is broader than that. It includes nuclear as well as other forms.

I am taking out the word "nuclear".

I am saying that it should give people an idea. As a result of what the Minister said, I will withdraw that from amendment No. 1. However, there is merit in positively stating the types of energy that would be considered. There may be others, such as geothermal, for instance.

Amendment No. 1 mentions "wind, hydro, biomass, waste, tidal, solar and wave, etc.", but not nuclear. Amendment No. 21 seeks to insert the word "sustainable".

The advice I have received from my Department is that inserting the word "sustainable", which I think is advisable, will lead to eight further amendments throughout the Bill, where that coupling of words arises. However, I am prepared to accept the amendment. It is proper to do so, although that is not the advice I have received. I will be walloped afterwards.

I welcome the amendment and the decision of the Minister to accept the exclusion of nuclear fission as an energy source. Will the Minister address the problem that will automatically arise from that? We will have interconnection with Northern Ireland, which in turn has interconnection with Britain and which will be buying nuclear-produced energy from Scotland. If this problem is not addressed we will run into a stone wall.

The Bill provides for interconnection and the purchase of electricity outside the State. The interconnector with Northern Ireland has a capacity to handle power to the equivalent of a 500 mw power station. That calculation was made when I was Minister of State in the Department. Northern Ireland, in turn, will interconnect with Britain, particularly Scotland, and will be entitled to import nuclear-produced energy into its system. How will the Minister prevent nuclear-produced energy being transferred here through the interconnector?

We were talking about this point earlier. It could be a condition of issuing a licence. That sounds fine in theory, but until it is put into practice I do not know how it would work out. By stating such in section 17 and excluding the word "nuclear", it would follow through to other operations with which the regulator will be concerned. He or she would have to take into account that nuclear-produced electricity is specifically excluded.

For example, if Cement Roadstone Holdings, on this side of the Border, decided to buy its electricity from the Northern Ireland Electricity Board, which in turn imported it from a nuclear-powered generator in Scotland, would the Minister have power to prevent that private user from importing such nuclear-produced energy into the State for use here?

I do not know and have not been advised on that matter. I will consult the Deputy later about it. It is certainly an important issue. There is no point in my pretending that I know the answer because I do not.

It is something we need to address. The Department has been considering it and I remember raising the matter before, but we did not come up with a solution then. The only real solution is to have no interconnection, which is even more difficult to imagine.

We do not want to paint pictures just for the sake of it.

This morning we talked about it being made a condition of granting a licence to an operator.

I am sure an operator could appeal to the European Court on that issue.

Perhaps. That is something on which I will have to come back to the Deputy. We have not teased out that matter fully.

I can understand the Minister having to obtain advice on that matter, but the public is keen to establish its right to nuclear-free electricity. The market might play a role in deciding the policy of anybody considering taking nuclear power. I hope the Minister can intervene before such a proposal arises. It has to be borne in mind that to date the public has expressed strong opinions on the matter. Is the Minister accepting the principle of including the word "sustainable" in the section?

Yes, and that decision will lead to nine consequential Government amendments.

On amendment No. 1, I realise we are not accepting the inclusion of the reference to nuclear fission.

We are, under the enabling section.

The definition of the word "alternative" has merit.

Yes, I think it has.

Will the Minister bring forward an amendment to that effect?

When we are debating the powers available to me, or to any Minister, under section 17, I will be glad to insert the words "nuclear fission" there.

As to the positive statement of what alternative energy means, is that to be defined?

It is defined by the words "or alternatives". Does the Deputy want each source mentioned?

When people read the word "alternative" I would like them to know what is on the Minister's mind.

The Deputy would like to have a definition of "alternative" inserted, but it is in page 7.

"Alternative" could mean an alternative Government, or anything alternative.

We will not go into that.

Not yet anyway.

No. If the Deputy looks at the Bill, he will see that in page 7 there is mention of renewable or alternative forms of energy: wind, hydro, biomass, waste, tidal, solar and wave. Later I will be inserting the words "nuclear fission".

Amendment, by leave, withdrawn.

Amendments Nos. 2, 3, 4 and 5 are related and may be discussed together, by agreement.

I move amendment No. 2:

In page 5, subsection (1), to delete lines 33 to 36, and substitute the following:

" 'combined heat and power' means the simultaneous production of usable heat and electricity from an integrated thermo-dynamic process where——

(a) in respect of a particular fuel source and its application, the ratio of electricity or usefully applied heat, or both electricity and usefully applied heat, to the overall energy input is greater than the minimum level fixed from time to time by the Commission, and

(b) the integrated thermo-dynamic process satisfies other technical, economic and environmental criteria as may be stipulated by the Commission;".

These amendments relate to the definition of combined heat and power. This definition was the subject of a number of representations seeking to clarify the meaning of the term.

Amendment No. 2 in my name was drafted with the assistance of technical experts in the Irish Energy Centre. It would mean that the commission, that is, Mr. Reeves, would have the power to set the ratio of energy conversion as well as other technical, economic and environmental criteria for a plant to qualify as a combined heat and power plant.

This definition of combined heat and power is a key point in the Bill. I have been lobbied simultaneously in four different directions - by BGE, which would be in favour of the Minister's amendment; by the ESB and the independent power procurers, who are opposed to excessive CHP; and by the renewable power interests, wind power, etc., who are concerned that CHP will be a Trojan horse which will put them out of business. Sections 13 and 27 are critical to this issue. My role, having been approached by a number of different vested interests, is to articulate their case and to make my own judgment on which way I will vote.

Let us be clear, there are serious conflicting vested interests with regard to many aspects of the Bill. It is impossible for anyone to have a monopoly of wisdom on the best way to proceed. As far as I am concerned, the public interest is dictated not by any group but by what will ultimately be in the interests of the consumer. That is my guiding principle.

Everyone disagrees about the role CHP should play. At one end of the scale, the ESB feels it is based on fossil fuels, and people will set up heating plants, mar dhea, of 350 megawatts which produce a little heat and a great deal of electricity, which will undermine the Bill. At the other end of the scale, two groups say that CHP is a technically efficient way of producing both heat and electricity. However, they all agree on one matter - they do not like the Minister's amendment. They feel the Minister has made a clever political move, which is, to pass this difficulty to Mr. Reeves. In other words, the Minister's definition of CHP shall be the ratio of electricity or usefully applied heat to be fixed from time to time by the commission. That gets the Minister off the hook but it lands everybody in a state of uncertainty. The interested parties have said they do not know how Mr. Reeves will define CHP and, therefore, a cloud of uncertainty is being put over all the investment decisions of the ESB and other interested parties.

Therefore, I have tried to define CHP as being where an overall thermal efficiency in excess of 70 per cent is achieved. Some people in the electricity business, including the ESB and IPPs, have told me that one achieves the high levels of efficiency at 85 per cent and that that should be the figure. BGE lobbied me to say it should be 60 per cent. If the Minister said her views are somewhere between those of Deputy Stagg and me and that she is sort of correct, then I hope I am sort of correct if my view is between that of BGE and the ESB, at between 60 per cent and 85 per cent. I seek to insert some sort of certainty. Mr. Reeves will be grappling with the same difficulties which face us in this section. It is better, irrespective of whether the figure is 65, 70, 75, 80 or 85 per cent, to define it because everyone seems to agree with that.

The point of amendment No. 4, is that, section 2, lines 33 to 36, state that combined heat and power means the simultaneous production of useful heat and electricity from a single source where more than 30 per cent of the total heat output is or may be commercially used as heat, and irrespective of the definition used, the words "or may be" undermine any figure. It is as if to say "sure whatever you are having yourself." I have been lobbied to the effect that this also creates great uncertainty. The definition in the Bill is loose and could include schemes which are not particularly efficient or which would not be normally regarded as CHP in other countries. I seek to bring clarity to that and to take out the words "or may be", which leave the definition completely open-ended.

About 70 per cent overall scheme efficiency is reasonable by international norms. I ask the Minister to bear in mind that arguments from the renewable sector are to the effect that CHP will move in on its end of the market. That sector says CHP is based on fossil fuels - coal, gas, oil, pet-coke and residual fuel oils - which generate large quantities of megawatts. Therefore, if there is a dedicated slot for renewable sources, and CHP is defined as a renewable sources they will be squeezed out because the cost of generating wind power will be more expensive than CHP. I ask the Minister to address that concern, which really arises under section 13. It is not possible to go part of the road with everyone.

That is what the Deputy has tried to do in some of his amendments.

I made an honest attempt here to define CHP. It is based on international norms of efficiency. CHP is good in that if one can combine the production of electricity and heat, it is common sense to do so. That is good for the country and for the consumer. It is an efficient use of energy resources. If it is loosely defined, the CHP industry will totally undermine the parameters of competition which the Bill attempts to set out. Bad and all as the Bill is, to throw everything to Mr. Reeves will lead to a year of uncertainty. It will result in the same arguments being addressed to him and in everyone being unhappy.

The Attorney General produced a paper, with which the Minister will be familiar, about the right of this House to transfer its power to make policy from the democratically accountable arena to regulators, quangos or anybody else who is not elected. He came down strongly against transferring such powers.

This is a policy issue. It is not a technical matter. It is a matter of making a policy decision on what constitutes combined heat and power. It is widely accepted that where 30 per cent of the energy produced goes into heat, that is a fair description of what is required. The Minister's original definition is fine.

Is that the one in the Bill?

Yes. It was fine as it stood before the Minister was got at, so to speak, except that it had "may be" thrown into it.

Nobody can "get at" a member once he or she is here. When the members are here they are their own people. The Deputy should not worry.

That is why it is worthwhile talking to the Minister on this matter. The only flaw in the definition in the Bill is that it includes the words "may be". As Deputy Yates said, that is as if to say "sure whatever you are having yourself", which is unacceptable. I suggest strongly that, rather than ask the regulator to decide policy about combined heat and power, we ensure that there will not be a plethora of sham combined heat and power generators, where the only thing that would be heated would be their bank accounts or maybe the office of the general manager of the company producing the electricity. If no limit is set on the amount of heat which must be used from the generating station, we are asking the regulator to make policy. We should not do that.

The wording of the section would be perfect if the words "or may be" were omitted. The section would then read, "combined heat and power means the simultaneous production of usable heat and electricity from an single course where more than 30 per cent of the total heat output is commercially used as heat;". Deputy Sargent's amendment No. 5 would improve the wording by inserting the words "directly or indirectly" after the word "used". The Minister might be able to respond positively to my suggestion which would shorten the debate on this matter.

"Combined heat and power" needs to be defined because it will become a moveable feast. Everybody will try to claim the high moral ground. The Minister has an opportunity to do that in her amendment, but we must be cautious. Not only will every fossil fuel user try to ensure its operation is defined as combined heat and power to get extra credit for its operation, but there will also be an attempt to say this is as good as makes no difference to the renewable sources. That argument will arise when we come to deal with later sections. We must insist the fossil fuel sector is defined and is as efficient and accountable as it can be technically. Why did the Minister slide back from setting limits and leave people guessing about what she meant?

They were left in energetic limbo.

It was an attempt at precision. This issue was the subject of detailed representations. I am sure representations were made to each member of the select committee. Representations were made to me at the outset but after a while they were made to other members. I am sure that is the case with representations made in respect of all legislation. If people find a Minister is not very forthcoming, they approach the Opposition, but I am open to ideas.

I agree with Deputy Yates that the concept of combined heat and power is a useful mechanism. I saw the Guinness operation and another one is looming large. As of now only the ESB has the right to give authorisation to combined heat and power. As Deputy Stagg said, an attempt is being made to say that nearly everything is combined heat and power, which diminishes other legitimate means. That is like riding on the coat-tails of a good idea and seeking to give it another aura.

This amendment was not drafted without thought. We had the assistance of technical experts form the Irish Energy Centre. It allows for flexibility in working this out. The precision in terms of exact percentages or ratios will be difficult to adhere to as the measure advances and, therefore, there must be flexibility.

This issue of combined heat and power and the alternatives which arise later is central to the Bill. I would like to defer dealing with these amendments until Report Stage, if that is in order.

I accept the Minister's point that she will examine this matter further. It would be impossible for other competitors in the alternative energy sector, those involved in wind energy and other sources of energy, to draw up a plan because of the uncertainty in terms of provisions relating to this area in the legislation. They could not approach a bank for a loan on the basis of what is in this legislation because it would create uncertainty in this area.

There is a need for flexibility in working out this issue, but that may create a problem when those engaged in other sources of energy require finance for their endeavours. They will need some assurance that they will be listened to.

The Minister said matters have to be worked out in this area. Two matters have to be worked out; the efficiency of the plant arising from combined heat and power use and the sharing of power between primary energy or electricity and heating. Those are the only matters that have to be worked out. We could set a parameter that the plant must have a fuel efficiency level above a certain mark. Deputy Yates suggested 70 per cent, which is a low benchmark. We could also set the parameter that sharing of power cannot be below 30 per cent. That would provide the parameters required.

That would provide the flexibility required.

Chairman, I do not know the procedure for returning to a matter on Report Stage.

If the Minister withdraws her amendment, amendments Nos. 3, 4, and 5 cannot be moved. That would resolve the matter.

These issues must be given more detailed consideration.

I appreciate the Minister's flexibility on this issue and that she is not casting anything in stone. I accept her bona fides in that, but I do not have any idea in which direction she is moving. The concern is that there may be bona fide CHP projects, some of which are approved as such but, in practice, do not operate as such. They are essentially electricity generators.

Where it was meant to be using waste in a proper way?

Exactly. They may get incentives, but under the terms of electricity generation they would come in under the category of having a particular entitlement to CHP, which they would not have.

The Minister said the Irish Energy Centre suggested this amendment. It includes the words "greater than the minimum level fixed". I could understand if the Minister said there must be flexibility between 70 per cent and 80 per cent. If she is saying it is impossible to do that or that the regulator officer of the commission, Mr. Reeves, must decide that, we are leaving it very open ended. I am not sure if in a Report Stage amendment the Minister might refer this matter to the regulator. If so, I recommend that the regulator should fine tune this, but legislators should decide the broad parameters. We should deal with the principles and then the broad parameters.

The minimum level will be fixed by the regulator. The net point about this issue is dealt with in amendment No. 4. There is a concern that the sluice gates would open if the words "or may be" are not omitted. The Minister either agrees or disagrees with this point. She does not need advice from the Irish Energy Centre to decide that. I do not have any idea about the Minister's view on this.

I have a view on this. It is a very important Bill and competing interests have sought the ears of all members. They became shriller and louder as we reached Committee Stage. The purpose of democracy is for people to make their views heard and, hopefully, common sense will win the day. However, competing interests are far apart on sections of the Bill. No matter how many people say that the ESB welcomes competition, the opposite is the case.

It is welcomed in telecommunications.

I do not blame the ESB, it is a monopoly. All of us are used to competition because of the proportional representation system. If it were first past the post, one would not mind as much. However, the ESB's call for amendment is loud. The CHP people have made strides and perhaps the title, "combined heat and power" leads to a distortion because they are involved in the conversion of waste and not the manufacture of power. Renewable resources provide Denmark with 12 per cent of its energy needs and these resources are strutting their stuff. Therefore, there are huge competing interests.

It is not easy to be on one side or the other in regard to the Bill but I am determined to take an even hand in it. The Deputy has tabled amendments which contradict one another. I do not fault that because it is a good idea to debate them. I wish to return to this group of amendments on Report Stage. Amendment No. 4 would change the definition of "combined heat and power" in the Bill such that a plant could only be divided if the heat output was being used commercially but I will return with an amendment on that.

Will the Minister and her officials hold discussions with Opposition spokespersons in the interim?

It is a good idea because it is more informal and Report Stage is truncated. For example, I cannot reply to the Minister if she makes an interesting remark. Under Standing Orders one is only allowed to contribute once, which makes debate difficult. A meeting might be the best way to deal with thorny issues.

We will return to this issue during the debate.

I thought the Minister was not returning to this, that she proposed to meet us after Committee Stage but before Report Stage.

My understanding was that this amendment would be deferred, not withdrawn.

Procedurally, we cannot return to this amendment when we debate amendment No. 27, for example.

I am sure if it is agreed to defer the debate on this amendment, it can be raised.——

That cannot be done.

One moves or withdraws an amendment.

The normal procedure would be to withdraw it at this stage and reintroduce it on Report Stage but Deputy Yates said that Report Stage will be truncated.

May we defer amendment No. 6, for example, until the conclusion of the debate?

No, because we must proceed in a logical way.

If I withdraw amendment No. 3, for example, I cannot say tomorrow that I have changed my mind.

The Deputy can reintroduce it on Report Stage.

Yes, but that does not give me many options.

In the meantime, Deputy Stagg has suggested that we have a meeting with my officials between Committee Stage and Report Stage.

I accept the Minister's point regarding the word "commercially". Let everybody be disgusted or pleased with what is decided, I see some merit in making a determination on the issue of definition rather than leaving it to Mr. Reeves. Whether people think it is the greatest ruse or godsend for CHP, there would be certainty for everybody and I see merit in that.

I do also, and I prefer that there is precision without tying hands to an exact ratio which would make it impossible to have flexibility. That would not be right. However, this and later sections clearly identify the huge competing interests which have emerged in the preparation of the Bill. I thank Deputies for the way this issue has been managed.

I am glad the Minister has agreed to an informal chat before Report Stage and I would be happy to discuss this at greater length but I warn that we may try to take every interest on board——

That is not possible.

——because by doing so we would not be doing a service to any of them. There will be uncertainty for all of them, particularly those that are new. It is a small sector and they will not get the investment they need to grow unless they know the ground rules. I am afraid we must stand on toes, but I withdraw my amendment on my basis.

I have no problem with that. I fully accept that there are difficult decisions ahead of us in this regard. The process that has been outlined may well help to clarify the matter.

Amendment, by leave, withdrawn.
Amendments Nos. 3 to 5, inclusive, not moved.

Amendments Nos. 6 and 7 are consequential on amendment No. 31 and all may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 6:

In page 6, subsection (1), between lines 31 and 32, to insert the following definition:

" 'electrical contracting industry' means the industry of all electrical contractors in Ireland;".

This is important and all the issues involved were brought to the Minister's attention. The amendment deals with the Register of Electrical Contractors of Ireland, a body established to represent the electrical contracting industry with an obligation to work with the ESB in the context of public safety. If I want to fit out another betting shop, I must get a RECI certificate before the ESB will connect it to its network. The rule is that one will not get an ESB connection unless one gets a member of RECI to give one a certificate. One cannot get a cowboy to do a wiring job and one must conform to minimum standards. That works well for commercial property but no such regulatory process or controls are in place for domestic dwellings. There is a total absence of effective regulation in regard to domestic dwellings. The ESB says it has no responsibility beyond metering, but beyond the meter is the householder.

Therefore, the safety of electrical installations in houses is a matter of serious public concern. According to the statistics for 1996, 476 fires were caused by faulty electrical wiring alone, an average of almost two fires per day due to faulty wiring. We all know anecdotes about people escaping with their lives and losing all their property due to such circumstances.

RECI is under pressure. It charges its members for the self-regulatory role it performs. It has asked the Minister, the Tánaiste and others to introduce a regulatory regime for domestic dwellings. The general manager of RECI wrote to the Minister on 6 January stating this was a public safety concern. The statistics for fires proves this. Needless to say, the Minister was full of tea and sympathy. I tabled a question on this in the Dáil——

The Deputy received a reply.

——and got another classic reply. I do not know whether the Minister wrote it herself, but the reply said her Department had initiated discussions with the Department of Enterprise, Trade and Employment concerning a possible supervisory role for the health and safety authority. First, it attempted to shift responsibility to the Department of Enterprise, Trade and Employment and then to the HSAI.

The HSAI is under the aegis of the Department of Enterprise, Trade and Employment. Is the Deputy aware of that?

Anywhere except the Department of Public Enterprise.

Exactly, because we are not going to deal with it.

I asked the Department of Enterprise, Trade and Employment whether it would take responsibility for this and, needless to say, it shunted me back to the Department of Public Enterprise. Houses are going on fire due to electrical faults and the ESB does not take responsibility beyond the meter. Someone must grasp this nettle and say that a RECI certificate is needed to connect a household. Under this Bill Mr. Reeves will take responsibility for this because no-one else will.

Amendment No. 6 defines the electrical contracting industry, amendment No. 7 defines electrical contractor and amendment No. 31, which is related, will determine the terms of reference in section 8 to ensure that the electrical contracting industry operates to the highest possible standards and, subject to the consent of the Minister and following consultation with the HSAI, to introduce regulations.

It is simple and straightforward, although I have been told it cannot be done. However, this is a sound case. There will be little opportunity to deal with this in primary legislation. If it is not dealt with now, it never will be. I appeal to the Minister to accept this proposal and bestow responsibility on the commission that will be established. It and the HSAI can draw up the regulations in their own good time so we can give the same protection to private dwellings as is given to commercial property.

I support these amendments. I am sure Mr. Tom Reeves will do an excellent job.

I will not accept these amendments. The purpose of establishing the regulator is to create an independent person or body to deal with the economic regulation of the electricity industry. However, standards for contractors are not covered, as Deputy Yates is aware. That is a completely different matter. Deputy Yates is correct in saying this matter has been going to and fro between our Department and the Department of Enterprise, Trade and Employment. However, I think the matter rests with that Department and perhaps the HSAI. It is certainly not within the remit of the regulator who deals with the economic regulation of the electricity industry. RECI is covered by the Electro-Technical Council of Ireland and is self-regulated. The ESB is satisfied with that. It is not the business of the regulator to look at standards, necessary and admirable as that is; it is a matter for the Department of Enterprise, Trade and Employment and the HSAI for which it is responsible.

I am not a happy camper. I appreciate no Department wants to take responsibility for this and it is another headache. However, there is a genuine issue of safety involved. RECI was referred by the Tánaiste to the Minister of State, Deputy Tom Kitt.

He has responsibility for consumer matters.

Yes. I ask the Minister, can someone not take the initiative? I understand the Minister for Enterprise, Trade and Employment will not accept this amendment and that it can be voted down. Will the Minister give a commitment to take up the matter.

I have written to her.

Something proactive needs to be done. We are introducing a road worthiness test for cars so surely there should be an equivalent test for electrical wiring in houses? It has been proved that fires are related to faulty electrical wiring. I am thinking about elderly people - I do not want to be emotive about this but it is a serious issue. A solution has been found in the commercial domain. Even if one does not accept the legal aspect, perhaps the views of the committee could be referred to the appropriate Ministers or the HSAI? The Minister knows that if a Minister takes a personal interest in a matter, it will be taken a little more seriously.

I accept what the Deputy said. There is no doubt it is an issue. We are aware of cases of house fires in our constituencies and the resulting trauma. However, it is not feasible to ask the regulator of the electricity business to take this issue on board. Writing letters is, as the Deputy said, different to from following the matter up oneself. I will discuss this matter with the Tánaiste following the next Cabinet meeting.

I withdraw amendments Nos. 6 and 7 on that basis. I also ask the Chairman to take up this matter on behalf of the committee as it is a genuine concern.

It is in limbo as of now.

Perhaps we should write to the HSAI and ask it to meet RECI to draw up regulations. At least some work would be done on this, even if it is not at a political level.

We shall send an extract of this debate to them.

Amendment, by leave, withdrawn.
Amendment No. 7 not moved.

I move amendment No. 8:

In page 6, subsection (1), between lines 31 and 32, to insert the following definition:

" 'electricity undertaking' means any person engaged in generation, transmission, distribution or supply of electricity, including any holder of a licence or authorisation under this Act, or any person who has been granted a permit under section 37 of the Principal Act;".

This technical amendment clarifies what is meant in the Bill by 'electricity undertaking'.

Why was this amendment not included previously? I understand it is a definition section. However, why was it deemed necessary to define 'electricity undertaking'? The definition seems obvious. Why was its inclusion deemed legally necessary?

We were so long waiting for the introduction of the Bill, which is not a slur on members or the chairman, that people were excessively zealous in tidying up the legislation.

It was similarly defined in the directive.

The words are included in the directive.

The Minister does not need to check it. She can pretend I am right.

It is excessive tidying up.

Amendment agreed to.

I move amendment No. 9:

In page 6, subsection (1), to delete lines 37 and 38 and substitute the following:

" 'generate', in relation to electricity, means to produce electricity;".

What else did it mean? It is probably wise to have a definition, but it is going a little far when it is necessary to say "generate" means "to produce".

I agree, but I have put my name to it.

Is there any reason——

I do not want to hear about it. Do not bother me. It seems like an excess of zeal.

Perhaps the Minister might examine it again for Report Stage.

No, it is only a definition.

At worst it is superfluous.

Amendment agreed to.

Amendments Nos. 10 and 151 are related and may be discussed together by agreement.

I move amendment No. 10:

In page 6, subsection (1), after line 42, to insert the following definition:

" 'Indigenous Energy Sources' means all sources of energy, including peat, which originate within the State where it is discovered or exists;'.

There is a need for a definition of "indigenous energy sources". Peat should be included because it is the main indigenous energy source. Wind is another. There is a range of them. I am open to withdrawing the amendment and letting the experts in the Department find a more detailed definition of indigenous energy sources if they believe it is necessary.

Indigenous energy sources means all sources of energy, including peat, which originate in the State. However, the word "indigenous" means "within the State". Indigenous industry, for example, is an industry within the State.

That may be right, but there is a greater need to define "indigenous" than "generate".

The Deputy could well be right.

Two wrongs do not make a right.

It would be a positive thing for a bog trotter such as me, to have peat included.

The inclusion of peat could be exclusive.

That is true, but I have no objection to broadening the definition. There should be a definition so that there is no argument. Indigenous industry sources could be specially treated.

Under the EU directive, does indigenous mean EU resources within the state of Europe or the State of Ireland?

It means native, except for coal.

The definition in the amendment is permitted then?

It should be defined. I presume Kinsale gas is indigenous.

Indigenous is native so it is understood to be part of the State. It is a good encapsulating word rather than part of a definition which might exclude a certain source of fuel or energy.

I accept that but I believe it is a broad area which should be defined because indigenous fuels are or may be specially treated.

In what way?

They could be given preference.

Does the Deputy mean for the purposes of public service obligations?

Yes, so arising from that, we must be clear what they comprise. If coal were to be found outside Athlone——

No chance of that.

——and if it were to be mixed with American coal, that would be an indigenous fuel.

I presume when he raises the matter of the special treatment of indigenous fuel the Deputy is referring to section 38 where the Minister has the power to make a public service obligation order in respect of the use of peat for electricity generation. The Deputy's amendment states that "indigenous energy sources" means all sources of energy, including peat, which originate within the State, but "indigenous energy sources" means all sources of energy which originate within or are native to the State. If the Deputy seeks to isolate one fuel and say——

That is my bias showing up.

I know. I too am a bog trotter. "Indigenous" is the best inclusive term.

I withdraw the amendment. I have no idea why amendment No. 151 is tied in with amendment No. 10 because it bears no relation to it. Can it be separated so that it can dealt with in turn?

Yes. Is that agreed? Agreed.

Amendment, by leave, withdrawn.

I move amendment No. 11:

In page 7, subsection (1), between lines 6 and 7, to insert the following definition:

" 'Public Service Obligations' means a requirement which considers social and general economic factors, which may not be commercially advantageous to the undertaking, to provide for the production of electricity from renewable and alternative and indigenous energy sources and for its distribution throughout the State to final customers;".

The amendment defines "public service obligations".

Is this the Deputy's definition of PSO?

Section 39 deals with the Minister's power to make orders imposing public service obligations. The general power set out in section 39(1) is based on the provisions in Articles 3(2) and 8(4) of the Electricity Directive. According to the directive, which we are in the course of transposing into law, the obligation in such an order may be based on security of supply, regularity, quality, price, environmental protection and the use of indigenous energy sources. It is a deliberately wide range of topics as the provision for PSOs will have to deal with situations which might arise in future as well as existing policies. Deputy Stagg's definition would create uncertainty. Section 39, which deals with the power of the Minister to impose public service obligations, defines PSOs in line with the Electricity Directive which we are in the process of transposing into law.

Is the Minister saying she will introduce her own definition?

Section 39 allows me to make an order imposing public service obligations.

Does the Minister accept it would be desirable to see that there is no definition of public service obligation and——

Yes, but in the directive the obligation in such an order may be based on security of supply, regularity, quality, price of supply, environmental protection and the use of indigenous energy sources. They are all in the directive and in the section enabling me to make orders about public service obligations. The obligation in such an order is to be based on those points.

That is missing the point.

I know the Deputy's point is to define public service obligation.

We should do so, otherwise somebody will have to define whether, at the point of implementation, something is a public service obligation area or not. My proposal is relatively simple and means that the requirement considers social and economic factors, which may not be commercially advantageous to the undertaking. That is the core of what I am saying. Perhaps that needs to be expanded upon and I am willing to accept additions to it. It is critical that we have a definition of public service obligations because very few people will know what that is, although they may know what "indigenous" or "generating" mean. We have defined a lot less than that and in any future debate on the Bill I am prepared to look at any definition the Minister or her Department produces.

A public service definition?

We will leave it at that for the minute.

I agree with Deputy Stagg that public service obligations are often talked about but I do not know if many people are aware of the definition read out by the Minister.

It was in the electricity directive.

In general, the words "public service obligations" are heard by people more often than they have an opportunity to hear the definition. It is important that people are reminded of what "public service obligations" means. Deputy Stagg's amendment contains much of what I would like to see but it must also address something that is very slow to dawn on people.

Our obligations under the Kyoto Protocol are far from being complied with and this will land us with huge fines. We have already breached the 13 per cent increase of greenhouse gas emissions. We were meant to work until 2010 before we came near the 13 per cent increase. The public or private sectors - it has yet to be determined - are storing up enormous fines, which will clearly have an impact on the country. Figures in the billions have been mentioned but the Department of the Environment and Local Government is busy trying to work out just how much.

This must be clear to people when making policy and deciding on commercial criteria. This is an opportunity to insert a public service obligation and state it clearly. It will remind people and they will not be able to make short-term decisions.

That is precisely the point but Deputy Sargent is trying to translate that into power stations nearing the end of their working life. Deputy Sargent's aims are worthy but he should try to translate that into local situations where power stations are clearly in breach of the guidelines we should all aspire to. That is a different matter altogether.

It is grand to talk like this but implementation is a different matter. I agree on the Kyoto obligations. We have discussed this matter at Cabinet and the Minister for the Environment and Local Government has made strong points on it. One deals with emissions from stations under the peat review plan from the Labour-Fianna Fáil Government and then apply them to particular stations.

We are talking about decisions on new stations.

I am referring to old stations.

I am not.

If one is interested in the Kyoto obligations one must also be interested in the reduction of emissions as of now, not just in 2010.

I live in the real world.

It is important if one is asked to set up another IVO, which is proving to be a very good project. However, it has emissions and when Bord na Móna asks for an equivalent to the IVO, putting such in place may breach many emission thresholds and safeguards. I am just putting out my ideas.

It is a challenge.

I do not expect the Minister to respond to this now but I notice that as we move into the new world of competition, in terms of aviation and telecommunications it is in the public interest for lower prices. However, some things fall off the back of the bus, so to speak. Aer Lingus could afford to run services to regional airports because it had a monopoly and could afford a little loss. The telephone directory is something Telecom Éireann used to do for free——

I have answered that.

Yes, but it is a little tighter now. Perhaps it feels that because it must compete it should not subsidise a big, fat directory.

It is miserable at present.

The ESB will continue to have a monopoly in the area of supply. I understand it to be a PSO to supply every house in the country with electricity, whether it is economic or not to do so. I am afraid as we move into the bold new world of competition that the ESB will change the ground rules. Consider a house in Donegal that needs an electricity supply. The ESB may decide to impose a capital charge because it is uneconomic. What is the legal basis under which the ESB must provide electricity to everyone who demands it? With regard to the PSO, can we ensure that the ESB cannot wriggle out of existing commitments to supply because it may not suit them commercially to do so? The goalposts have shifted and perhaps we need to strengthen this aspect.

That is intrinsic in what Deputy Stagg said about what may not be advantageous to the undertaking. This can be made a feature of supply. I take the Deputy's point generally, as distinct from that in the ESB context. The idea that in the move to the competitive world the weakest will be overlooked is a matter for regulation by the various regulators. For example, Ms Etain Doyle is to make her views known quite soon on the issue of deflectors. I understand she will have regard to the smaller areas and community groups as distinct from those making a return. Regulators will have to take such matters into account. There is a danger that when one moves from a monopoly where the State is the arbiter of the distribution this will cause problems. The regulator, in the exercise of his duties, must ensure there is no cherry picking in issuing licences and authorisations.

I would like to concentrate on the amendment. It is very important to have a definition of "public service obligations" because of the implications of the use of these terms and their application, not just in the Bill in the future but in practice, and the implications of the renewable or alternative forms of energy.

Part VI deals with public service obligations.

It does not define "public service obligations".

There is a definition of this.

It is precisely because there is a section entitled "Public Service Obligations" that I want a definition of the term.

We could include a definition in the section.

It would be better to include it in the definition section. I am prepared to withdraw the amendment and allow the experts to define "public service obligations" in the definition section. If this is not satisfactory, I will table an amendment on Report Stage.

I would like this to be included in the definition section. Nevertheless, I will await what is decided.

On the problem of emissions, these occur regardless of what type of energy is being used. It is expected that the new station in Clonbullogue will result in drastically reduced emissions. It is important to have the emissions from existing stations reduced also. Concern has been expessed in relation to Moneypoint that not enough resources were provided by the ESB to reduce emissions. It is essential that every effort is made in the future to reduce emissions to comply with the Kyoto agreement. I await the definition of "public service obligations".

On Moneypoint, I raised this matter during the Second Stage debate in the context of proceeding with the fourth phase of Moneypoint. The Minister will be aware that it is in this context I wished to see that phase being proceeded with. There are various technical and economic reasons why the fourth phase should be completed

Amendment, by leave, withdrawn.
Amendment No. 12 not moved.

I move amendment No. 13:

In page 7, subsection (1), line 12, after "one" to insert "or a combination of more than one".

The section reads "renewable or alternative forms of energy". This means energy used in the production of electricity which uses as its primary source one of the following: wind, hydro, biomass, waste, tidal, solar, wave. The amendment proposes to insert one or a combination of more than one of these energy sources. There are plenty examples, particularly in the experimental stages, of using more than one of these energy sources, for example, wind and hydro are regularly used together. I hope the Minister will accept the amendment.

Amendment agreed to.

Amendment Nos. 14, 15 and 16 are related and will be discussed together by agreement.

I move amendment No. 14:

In page 7, subsection (1), line 17, after "waste," to insert "including waste heat,

(e) geothermal,

(f) fuel cells,".

The amendments relate to the definition of "renewable or alternative forms of energy". This means heat will be generated from under the ground. My amendment adds heat, geothermal and fuel cells. Deputy Yates's amendment proposes adding combined heat and power in conjunction with district heating. Deputy Stagg proposes to add biofuel, which is fuel converted from alcohol.

Since I tabled amendment No. 15 I am having second thoughts about it. The first point I want to mention is the district heating system. When I attended a function in Dublin I was approached about the building of the national convention centre. This person said they were having a great problem with the ESB in getting a proper electricity requirement. This is a huge complex. I was in a hurry at the time and I did not absorb the full details of the problem because it sounded horrendously complicated. This person wanted to have the Bill amended and I asked him to suggest an amendment. He said the economics of the national convention centre would not be viable unless they were able to combine the heating system as part of the deregulated ESB system. This seems to be a national priorityper se. Is the Minister aware of a row between the proponent of the national convention centre and the ESB? As a result of this row these people cannot get the KV lines in. However, I do not have the full details. Would it be possible to produce a legal resolution to that problem? Perhaps I should ask these people to write to the Minister. Deputy Stagg has tabled a similar amendment.

Renewable and alternative forms of energy, as defined in section 2, go on to reap certain benefits and have conferred upon them certain supports in terms of liberalisation of the electricity market. CHP is included in other countries. We then come to what I call the green point - fossil fuels which are not renewable. I have been lobbied to the effect that if one includes CHP they will gobble up the quota of AER equivalents and therefore elbow out all wind and other projects. If that was to be the case, I could see a case for not accepting CHP as part of the group. By putting CHP as a stand-alone, would that essentially mean the other projects would be muscled out? Could we safely include CHP and let wind projects be submitted on their merits and get their slice of the action that way?

If CHP is included the tone of the Bill, as now amended, has to be read in the context of the stated attitude of the regulator. At a recent meeting with IBEC it was stated that no special provisions would be made for renewables, that producers of renewable energy given a benign regulatory environment in a Bill which was favourable to them could make a dramatic impact on Ireland's pollution burden, the balance of payments, the imports of energy and employment. It was also stated that these provisions have the effect of negating in its entirety the original Government decision of April 1996 that provided for third party access for renewables.

Where did the Deputy get that information.

From the people involved in wind projects who fear they will be muscled out.

At a recent meeting with IBEC?

The point is that renewables are being given special preference because they are pollution-free. That is the policy. In CHP as defined here, does that mean that CHP which is based on fossil fuels would muscle them out? My view as to whether we should include CHP would depend on the answer to that question.

I welcome the inclusion of geothermal energy, fuel cells and photovoltaic cells.

Chemical batteries - hydrogen or alcohol as a fuel source.

Are photovoltaics included?

Fuel cells refer to power generated from chemical batteries typically using hydrogen or alcohol as a fuel source.

So solar is already included?

I welcome that. I have added in bio-fuels. Experiments are taking place on the use of biofuels. Some of our buses in Cork are operating on biofuels. They grow a rape seed and extract the oil from it.

They were trying to use setaside land before biofuels.

There is quite a bit of growth of rape seed in Cork for that purpose. It does not have any odour. It is not like Charlie McDonalds product which he got from the chip shops. While one got a very odd smell from his car if you were driving behind him, he should be praised for his initiative.

Some of the lorries and buses in Dublin do not smell so sweet.

Deputy Enright is standing up for his constituency.

Combined heat and power have been included in the list at Euro level as alternatives to the norm because it is a very fuel efficient system.

Combined heat and power. The reason it is fuel efficient is it collects the heat going up the chimney and turns it down again and re-uses it for heating.

They collect waste fuel.

Heat normally goes up in the atmosphere. They collect it and use it for heating thereby rendering it efficient. They can achieve a fuel efficiency rating of up to 95 per cent. The normal rate, even combined with recycled gas turbines is about 35 per cent. This is hugely efficient in comparison with any other system. That is why it is included at European level and why when we held the Presidency of the EU it was one of the things definitely included. Representations were made to me not to have it included for the reasons outlined by Deputy Yates. I did not agree. I also received representations from the ESB on the same point. I did not agree to their request either. We included it in the European Green Paper when in Government and we had promoted it and we should continue promoting it.

We will come to deal with sections later where we can determine whether CHP will muscle wind projects aside. We can ensure it does not do so and table amendments to ensure that does not happen. That was not the intention of section 27. To have a definition of renewable or alternative energy sources and to include it everywhere in the Bill as a fuel source which is entitled to this benefit and not include it in the list is ridiculous.

It is not renewable or alternative. Is Deputy Stagg talking about biofuel?

It is an alternative. We are discussing a definition of renewable or alternative forms of energy.

But it is not renewable.

I am not saying it is. We are discussing renewable or alternative. This is alternative to the norm and is included at European level in the alternative fuel listings. The Bill and the Minister's amendment treats it as an alternative fuel system. Not to include it here is nonsense.

We are coming to deal with that issue.

It will look foolish to list wind, hydro, biomass, waste, tidal, solar, wave, geothermal fuel cells, bio-fuel and omit the one which will take up the biggest share of the market.

It is alternative but not renewable.

We are discussing renewable or alternative forms of energy. I am referring to the alternative part. Combined heat and power is part of that.

There is no doubt there has been a phenomenal amount of lobbying taking place here.

I started by saying that.

I may not have the support of many Deputies but I have a certain amount of logic on my side. When one says "renewable or alternative" what follows has to take into account that title. I think sustainable energy sources were also to be included. I will be pushing for its inclusion on Report Stage. We have to accept that no matter how efficient combined heat and power is, if it is to be distinguished from common or garden fossil fuel energy production it should be dealt with in a separate section which should be called "extremely efficient fossil fuel", or whatever is the suitable scientific title. It should not come under the same banner as the other named sources, including geo-thermo, because it cannot be justified that the same criteria apply to all. CHP has a number of advantages and, as Deputy Stagg said, it would be an attractive proposition for the deregulated market. It is switchable. Renewable energy sources, by and large, have to depend on a random fuel supply, but CHP has a clear advantage from the start. It is capable of being fired with any fossil fuel. Renewables have to harvest natural recurring energy, be it wind, waves, solar and so forth. CHP is capable of dealing with a large volume of megawatts. Renewables generally have to work in reasonably small packages and they can be manufactured from imported fuels, oil being the cheapest. If we include CHP in the list of renewable energy sources, such as wind, hydro, biomass and so forth, we would give it an inflated advantage. It would be illogical to include it in the list.

We must bear in mind that the renewable sector will not reach its potential unless it is able to define the market available to it. In other countries customers are able to insist that electricity should be renewable. That has resulted in the renewable market expanding in a regulated fashion to reach its potential. Up to the late 1980s the Danish Government gave 30 per cent grant assistance towards the installation costs of harvesting wind energy to ensure it reached its potential. Denmark now has 65 per cent of the world market in wind power. The Danes knew what they were doing because they were able to distinguish between a renewable source and other power, which is a fossil fuel source. Combined heat and power belongs to the fossil fuel stable, although it is a most efficient thoroughbred which could win any race from the fossil fuel stable. Perhaps we should ensure it has its own stable. It should not be included in the renewal energy source stable. It would be illogical to do that.

It is already in the stable and the stable door has been closed. It is firmly bedded down in the stable.

Where is the horse?

The horse has long left the stable. Denmark uses a sizeable amount of CHP, which it counts as renewable alternative energy. Another large slice of their electricity - nuclear produced electricity - is imported. It does not count nuclear energy in its system because it imports it. Everything is not as bright in Denmark as Deputy Sargent suggested.

Fossil fuels are not the only ones that can be used in combined heat and power; any other fuel can be used. It is nonsense to say we should dismiss the issue of fuel efficiency. Surely if we can achieve efficiencies of up to 95 per cent in fuel use, that is what we should seek to achieve. That can be achieved with combined heat and power.

Because of its fuel efficiency, combined heat and power has been included with renewables all over Europe, including in Ireland. It is also included with them in this Bill, except in this part. When I read the Minister's amendment I assumed it was a technical oversight that CHP was not included in the list. If it is not included in the list, everywhere the term "renewable and alternative forms of energy" is used, the words "and combined heat and power" will have to be included. If CHP is not included in the list, dozens of consequential amendments will be required.

They will not be required.

There will be required.

Nobody is decrying the merit of combined heat and power. It is a wonderful operation.

An amendment should be tabled that proves that.

It adds to the economic cost and, if it is well worked, it is a very good development. I am not of the view that the words "and combined heat and power" can be added to the definition of "renewal and alternative forms of energy" because CHP is not a renewable.

No one suggested it is a renewable; it is an alternative. It has been accepted as an alternative energy everywhere else in Europe and by the Minister in her amendment to this Bill.

Will it squeeze out the renewables if it is included in this part of the Bill?

Amendment No. 103 to section 27 states:

In page 20, lines 21 to 31, to delete subsections (1) and (2) and substitute the following:

"(1) The Minister, after consultation with the Commission, may, from time to time, prescribe the total amount or amounts of electricity from renewable or alternative forms of energy or from combined heat and power which may be supplied to final customers. . . in any specified period and different amounts may be specified in respect of different types of renewable or alternative forms of energy or combined heat and power or both renewable or alternative forms of energy and combined heat and power.".

In other words the commission, following consultation with the Minister, may define from time to time what the amounts should be. Deputy Stagg said the commission would sweep the land, so to speak, and knock the ground from under the other sources, but I do not agree with him.

It could, given the wording of that amendment.

We can discuss it when we reach it.

Amendment No. 103 outlines how renewables will be bought into the system.

It deals with how they will be used in proportionate amounts.

In what way is amendment No. 103 different from what was amendment No. 127? It seems wind energy suppliers are upset about the Minister's amendments because they believe CHP will take over. Is that lobbying pointwrong?

I will not say whether people's lobbying points are right or wrong.

Have they misunderstood the purpose of what the Minister is trying to do.

Any group who lobbies believes in the point of view it puts forward.

It could be wrong.

It could also be right.

Amendment No. 103 states that the commission, having discussed the matter with the Minister, will have the power to divvy out the other forms of energy which can be used to generate electricity. It refers to the total amounts of electricity from renewable or alternative forms of energy or from combined heat and power which may be supplied to final customers or in any specified period. In other words, the commission can divvy out the other forms of energy which can be used to generate electricity and grant licences in that respect. I believe that is fair enough.

What is the Minister's attitude to these amendments? She spoke about her amendment. Will she accept amendments Nos. 15 and 16?

I will not accept them. Deputies could accept my amendment instead of the other two amendments.

They deal with separate points. We will accept the Minister's amendment. Will the Minister accept the insertion of the category of biofuel?

Deputy Stagg made the point that he thought it was an oversight that CHP was not included as a category, but I understand the Minister excluded it deliberately.

CHP is not a primary source of energy like wind, solar and the other primary sources listed. They use other ways to make energy. CHP is a combination of what has already been used and the waste arising from it. It is an efficient and economic method of making energy.

Is that why it is called one of the alternatives? It is an alternative to the normal.

It should be normal.

It is not fuel efficient.

Both Deputies are incorrect. If the fuel is already used and the waste that goes up the chimney is trapped and used, the fuel has already been used as a primary source of energy. The Deputies are seeking to convert the efficiency element of that into a primary source of energy. Clearly, it is not a primary source of energy. I do not decry the work carried out by scientists. The CHP method used by the Guinness factory at St. James's Gate is fantastic. Guinness was able to achieve a lot of savings using CHP.

Does the Minister mean fuel efficiency?

It is achieving big savings in terms of fuel. Companies or people who use CHP are pleased to be using it.

The reason CHP has been included with alternatives to the norm is its fuel efficiency.

That is a separate economic argument.

There is the economic argument and the emissions argument. Anyone could analyse these subjects separately if they wished. The reason we are involved in this debate is that we have greenhouse gases and we are using fossil fuels, other than CHP, inefficiently. Therefore, we use more fossil fuels and that results in more emissions. All of Europe have included CHP as an alternative energy system. Perhaps "system" is a better word than "source" in this regard. The word "form" is used in the Bill which is appropriate because CHP is an alternative form of energy. Therefore, it is wrong to exclude CHP in that regard. The Minister will be out of step with the rest of Europe if she excludes CHP.

That would be a good thing.

The Minister would also be out of step with her Department and all the arguments it has made in this regard. It is up to her, but I will press the amendment.

The Deputy can press on, but I do not believe he can call it a primary source of energy.

I am not calling it a primary source of energy, I am calling it an alternative form.

It is not an alternative form.

It is different, but it is an alternative to the norm. The norm is to burn the fuel inefficiently and most of it goes up the chimney.

That is a method rather than a source.

We must get a definition of "form" from the Minister. We have a definition of "generate" in the list of definitions, but we do not know what "form" means.

The Deputy knows I am right.

I am beaten when the Minister says that to me.

The Minister did not answer one point. Earlier I referred to a company called Treasury Holdings Limited. Perhaps the Department has been approached by it. Has the company a solution to the problem I mentioned? Has it been resolved?

That problem did not come to my notice. I met Treasury Holdings Limited and we discussed CIE because it has land in that region.

CIE is involved in the deal?

Yes. We had a discussion about that subject almost a year ago. I was fascinated by the problem.

Are officials in your Department aware of a problem with the national convention centre?

No, they discussed CHP with my officials.

Is the company in favour of CHP?

Yes, for that project.

With regard to dialogue, the Minister is conducting two parallel discussions, one of which is about purity and what God gave us. An alternative method of producing waste heat sounds like a bright idea. It would be worthy of support in this Bill. I suggest we support the idea because it is efficient and gives off less emissions. We should, however, deal with it on its own rather than with renewables. With regard to Deputy Sargent's points, is CHP as an alternative energy source being dealt with? If I withdrew my amendment on CHP, would the Minister confer the same benefit on CHP without it being included and defined as a renewable?

Yes, in my amendment No. 59. The Deputy can take the purity argument as being correct because it makes sense in English terms. It is not just because I want to be in with people who support wind energy. The other way is to use energy which has been already used in an efficient and economic manner. CHP is not a primary source.

I am looking at amendment No. 59.

Who said anything about CHP being a primary source?

I am saying it.

Where is the definition of it?

The Bill contains a definition of it as a primary source in line 12.

The primary source of the heating we will get is the waste from a chimney stack. That is why it is called combined heat and power.

That is the first source. That is what we get when we use the CHP method. If the Deputy is saying CHP is a primary source of energy, I can say it is not.

I did not say it was. The Minister is deliberately not listening to me. The primary source of the heat element of combined heat and power is the waste energy which goes up the chimney.

That has already been generated from a primary source.

The primary source of the heat element of CHP is the combined heat and power that usually goes up the chimney and into the atmosphere and is captured. As Deputy Sargent said, the other sources will come from fossil fuels, etc. that are burnt in the generator.

No one disputes that.

The Minister is disputing it.

I am happy to withdraw my amendment on the basis that amendments Nos. 59 and 103 meet the point of giving CHP, because it is economically efficient, a supportive stance in the Bill. That is what the Minister has told me. I will find out if that is the case. I am prepared to accept it. I hope she is not being pedantic.

It is not pedantic.

It is not pedantic because we burn the fire, which is the primary method, and then draw from the stupidity of the waste and make fresh energy the second time around.

The Minister is correct. A lot of that energy is being wasted because it goes up in the air. A study of this area conducted by the ESB would be of immense importance.

The Minister also referred to Guinness and how it utilises waste that is generally lost. Similarly, the use of water supplies could be studied by people with initiative. They could analyse how waste could be utilised.

The Deputy is correct.

Deputy Sargent is strong on this issue. The State could benefit if it had the ability to zero in on a particular area to see how it could be utilised.

Water is one such area.

Waste heat is another.

Europe has a point of view on that issue.

As I saw in Denmark, there is no reason waste heat from the stacks of peat burning power stations in the midlands could not heat water which could be piped to Dublin. Even if it were piped over ground, it would lose only 1 centigrade point of temperature during the journey. Denmark has much colder weather in winter than Ireland and the Danes pipe heated water up to 150 kilometres over ground to towns a long distance from the power stations. There is no reason existing power stations could not be converted to get this added value from the heat which is wasted from chimney stacks. Towns such as Athlone could benefit.

In the first general election I contested in Wexford——

There is no reason a district heating system could not be arranged from any of the power stations around Athlone. A huge amount of energy would be saved by doing that.

On a technical point, the Minister has accepted half of my amendment.

It relates to biofuel, does it not?

She accepted none of it.

How will we deal with that?

The Deputy himself was doubtful about it.

The only way to deal with that is on Report Stage.

I am accepting biofuel.

The Minister cannot accept half the amendment.

The Minister can undertake to table an amendment on Report Stage.

That is my point.

There is much merit in Deputy Stagg's point. It falls into line with the amendment Deputy Yates tabled an amendment regarding district heating systems. A definite policy could be adopted. It would take a lot of initiative, but the opportunity is available to villages and towns within a 20 mile radius of chimney stacks. There is great potential in that. I do not know if the Department has the resources but it has the power to commission a study on it. That would be of immense benefit. The area could also be developed for industrial purposes if given sufficient study.

I accept that. District heating conjures up an image of cities in Russia which have fantastic central heating - which I am sure from nuclear sources - in the scantiest of apartments.

That system is gone now. They are all very rich there now. Since the mafia took over they are doing very well.

Amendment agreed to.
Amendment No. 15 not moved.

I move amendment No. 16:

In page 7, subsection (1), between lines 20 and 21, to insert the following:

"(h) biofuel,

(i) combined heat and power;".

I understand the amendment is to be withdrawn, but the Minister will table an amendment on Report Stage to accept biofuel.

I can table an amendment on Report Stage. I will table two separate amendments and I might win. The Minister is accepting biofuel. I am pressing the amendment. I did not make my argument for nothing.

Does the Deputy not wish to resubmit it on Report Stage?

The Minister has stated she will do that.

What is the position?

If the Deputy puts his amendment to a vote it cannot be resubmitted.

Is amendment No. 16 be pressed?

Amendment put.
The Committee divided: Tá, 5; Níl, 8.

  • Coveney, Simon.
  • Currie, Austin.
  • Enright, Tom.
  • Stagg, Emmet.
  • Yates, Ivan.

Níl

  • Aylward, Liam.
  • Brady, Martin.
  • Daly, Brendan.
  • Doherty, Sean.
  • Haughey, Sean.
  • Lawlor, Liam.
  • O’Flynn, Noel.
  • O’Rourke, Mary.

Amendments Nos. 17 and 18 are related and can be discussed together.

I move amendment No. 17:

In page 7, subsection (1), line 31, to delete "or to any interconnector" and substitute "or to or from any interconnector".

Amendment agreed to.

I move amendment No. 18:

In page 7, subsection (1), line 34, after "system" to insert "but shall include any interconnector owned by the Board".

Amendment agreed to.
The Select Committee adjourned at 5.00 p.m.