Dáil Éireann Debate, Thursday - 21 October 2004
6 Mr. Stanton asked the Minister for Communications, Marine and Natural Resources his further plans to support the development of the renewable energy sector; the details of the most recent developments in this regard; and if he will make a statement on the matter. [25751/04]
View answer13 Mr. McCormack asked the Minister for Communications, Marine and Natural Resources his plans to provide alternative energy at a competitive price; and if he will make a statement on the matter. [25821/04]
View answerI propose to take Questions Nos. 6 and 13 together.
The promotion of renewable energy technologies is a key priority of this Government. The Green Paper on Sustainable Energy, published in 1999, established a target to add 500 MW of new renewable energy based electricity generating plant to the electricity network by 2005. Further proposals in the course of the most recent support programme, AER VI, are being implemented to support the construction of a further 140 MW generally, an additional 50 MW in an offshore wind category and an additional 28 MW specific to biomass powered combined heat and power, CHP, plants. This represents an increase of more than 40% on the original target and is evidence of the growing importance the Government places on renewable energy technologies.
AER VI brings to a close an initial programme to add renewable energy technologies to the electricity network at a level which does not raise serious technical issues. However, planning for future programmes at increased penetration levels raises significant technical issues which must be addressed to maintain system security for electricity customers. This plan may in turn require a revision of the current support programme to embrace changes required to allow higher levels of wind energy penetration in particular.
At the end of last year a consultation document, Options for Future Renewable Energy Policy, Targets and Programmes, was published. The document and its supporting annexes, which examine in detail support mechanisms and renewable energy policies in Ireland as well as in other European countries, were published on my Department's website and examined key challenges in the future, including policy, future green energy markets, how to overcome barriers to the deployment of renewable energy, and future options for market support mechanisms.
In May of this year, a renewable energy development group, chaired by my Department, was established. The group comprises relevant experts from the administrative and scientific sector and it will advise on future options on policies, targets, programmes and support measures to develop the increased use of renewable energy in the electricity market to 2010 and beyond. The group's report, which is due before the end of this year, will form the basis of my future policy proposals to Government.
The AER VI programme is primarily about supporting renewable energy in the electricity market. Biofuels are also renewable fuels which can be used as alternatives for fossil fuels in vehicles. Earlier this year, my Department secured an amendment to the Finance Act 1999 which allows the Minister for Finance to apply a relief from mineral oil tax for biofuels essential to a pilot project to produce biofuel or to research aspects of biofuel production and usage as a motor fuel. My Department is in discussions with the Department of Finance about the final design of a proposed scheme under the measure and expects to be in a position to announce details of a scheme under the Finance Act provision shortly.
In tandem with these programmes, Sustainable Energy Ireland, the independent non-commercial State body focused exclusively on sustainable use of energy, including deployment of renewable energy sources, has commenced a challenging work programme to increase energy efficiency and to promote renewable energy technologies. In the renewable energy field specifically, SEI has opened a research, development and demonstration programme for renewable energy technologies. This programme is open to a wide range of proposals, including policy studies, field research, feasibility studies and technology research and development.
I wish the Minister well with his new brief and thank him for his interesting and comprehensive reply. He stated that 500 MW are due to be in place by the end of 2005. What will be the position at the end of this year and will the target be met by the end of 2005? What percentage of our overall energy needs will be met by renewable energy sources by that date? I welcome that he is involved in discussions with the Department of Finance but has he had discussions with the Department of Agriculture and Food or people in the agriculture sector who are interested in growing crops for bio-energy use? He stated that, at present, this represents 40% of the target. What will be the position at the end of the year? Has he considered other sources such as tidal and wave energy and what progress is being made in that area?
I hope that the programme we have put in place with Sustainable Energy Ireland will lead to an increase in research in the various types of alternatives, such as tidal and wave energy, biofuels etc.
I have not yet had discussions with the Department of Agriculture and Food or anyone in the sector in respect of biofuels. In the current context, however, there is a great opportunity for us to engage in joined-up thinking with the Department of Agriculture and Food in respect of this matter. I will certainly take action in this area.
The Deputy inquired as to what will be the figure for the end of 2005. I do not have that in my possession. He will be aware that the target for the use of alternative energy sources to be reached by 2012 is 13.2%. The indications are that we will achieve this. In the context of some of the research being carried out, I would favour looking at ways of trying to increase that figure in the coming years. We have made great progress but there are technical difficulties with almost all these alternative sources, especially wind energy. However, I am of the opinion that these can be overcome. We should aim to use much higher levels of sustainable alternatives.
I wish the Minister well with his new brief which I am sure he will find interesting. Unfortunately, I will not be present to offer my tuppence worth. I will, however, try to do so from time to time.
Is the Minister in a position to indicate, if he has the figures in his possession, the number of megawatts being produced into the national electricity grid from contracts awarded under AER VI? The major criticism of AER schemes up to now is that contracts have been awarded but that nothing has been delivered. Is it possible to provide a figure regarding the number of megawatts being produced by those who have already been awarded contracts? In some instances, nothing has been done about those contracts since they were handed out under AER VI. There is a long list of substitutes who are waiting to obtain contracts and who believe that they could produce electricity in a short period if they were awarded those contracts.
The Minister stated that he is anxious to see research being carried out in the area of biomass technology. We will not be obliged to reinvent the wheel in this regard. Most European countries, specifically those located on the north of the Continent, have active biomass programmes — especially those involving the use of wood biomass — in operation as part of their renewable energy plans. I appeal to the Minister to get things moving in Ireland in that regard. We have the best weather conditions in Europe to produce fast-growing plantations.
Supplementary questions are limited to one minute.
I urge the Minister to work with the Department of Agriculture and Food to move quickly in terms of replacing peat, which is a very dirty fuel source, with wood biomass, which is carbon neutral and which will make a significant impact in respect of reducing carbon emissions, over a phased period.
The Deputy asked about the number of megawatts produced under contracts awarded under AER VI — and even AER V — but I do not have that information in my possession. I am aware, from meetings with officials in my Department, of the problem the Deputy highlighted.
Zero megawatts have been produced.
I do not know if that is true but I will accept the Deputy's word.
There has been a problem with the megawatts produced under contracts awarded under AER V and VI and their transfer into the system. Approvals and planning permissions have been issued to certain contractors but operations have not commenced. Some who received approvals——
They have contracts and are ready to proceed.
A problem exists but there is not a great deal I can do about it at present because of the terms of the contracts that are available. However, I will take current difficulties into consideration if there is an AER VII programme and I will ensure that start-up dates are included.
To date, a total of 43 non-wind renewable energy projects have been supported covering biomass, hydro, ocean energy, heat punts and geothermal technologies. This is all done through SEI. I accept the Deputy's point that biomass is well developed in some countries. While I do not intend to reinvent the wheel, we must try to establish a regime which will encourage the use of alternative energies. The Department will not do this on its own but must work with the Departments of Agriculture and Food and Finance to encourage the process.
Deputy Coveney already asked a question I intended to put to the Minister regarding the volume of renewable energy. What is the position regarding those whose applications to provide wind energy failed? Many farm-related, small groups were aggrieved that they were not able to obtain a licence during the previous round of the licensing process. I understand they received a promise that the matter would be reviewed. The Minister partially addressed the matter. Will he provide a timeframe for dealing with the people in question?
We have gone to enormous cost to export meat and bonemeal which is used as a major energy source on the Continent. Have alternatives to exporting this product been considered? Is it possible to use it as an energy source rather than incurring considerable cost?
That is a matter for private industry or other interested parties. I am aware that the idea was floated on several occasions, even in the Deputy's constituency, although it related to waste from poultry. The use of meat and bonemeal or similar products for these purposes does not generally meet with favour in local communities. It is a logical course of action, however, given that it costs approximately €60 million per annum to deal with it, including for export. A number of facilities could burn it and generate energy but we have not yet proceeded to that stage.
Deputy Crawford's first question referred to the AER VI programme and the additional 110 MW made available under my predecessor. I hope to make decisions in this regard soon. The reason bids were not accepted was not that they were inadequate. I understand the system entailed ranking the applications on the basis of how good they were. The 500 MW was then distributed from the top of the list. The additional 110 MW will be allocated in a similar manner and I hope the decision on the matter will be made soon.
Is the Minister considering the possibility of issuing policy directives to the Commission on Energy Regulation, CER, on market support and market trading mechanisms as they do not appear to have worked to date?
Why did the Minister state wind energy creates problems when it creates solutions? The technical issues to which he referred arise at the point at which around 3,000 MW of renewable energy is being generated, rather than 200 MW as is currently the case. What are the problems the Minister has indicated?
Why has the reduction in mineral tax for biofuels approved a year ago not been finalised? Does the Minister agree that in the context of cost implications of billions of euro arising from the near doubling of oil prices in the past three years, a budget of €7 million to investigate alternatives such as tidal power and biomass is on the small side?
I have not formed any view on whether I will issue further directions to the energy regulator on this area, as it would be premature to do so. Nevertheless, that mechanism is open to me.
Discussions with the Department of Finance on biofuels have been ongoing since the budget and I understand they are nearing completion.
When does the Minister expect the reduction in mineral tax to be finalised?
I hope it will be finalised in the next few weeks.
Is he satisfied with the length of time required to reach agreement with the Department of Finance on such a minor issue?
Having been described as an impatient Minister, I would never be satisfied if it took so long to reach a solution.
I also asked a question on the €7 million research budget.
The size of that budget is a matter for the Estimates. The figure in question was procured last year and the Department will have to work within that budget. Other research is also being done in this area.
