I propose to take Questions Nos. 12, 21, 25, 58, 66, 72, 89, 143, 144, 145 and 157 together.
The promotion of renewable energy technologies in electricity production is a key priority of this Government. This priority is shared by EU Community institutions which have addressed a directive, the renewables directive — Directive 2001/77/EC, to all member states to increase the consumption of green electricity by 2010. The obligation addressed to Ireland is to deliver a programme capable of increasing the amount of electricity from renewable energy sources to 13.2% of total consumption by 2010.
Existing hydro facilities together with the current AER support programme operated by my Department and activity in the liberalised green market are capable of delivering significantly on the target in the directive. Additional capacity will be supported under a new support mechanism which I announced recently. I will return to this point later in my reply.
In 2003, the latest year for which figures are available, 1.7% of the total electricity consumed came from wind powered electricity generating plant. At that time there was 189 MW of wind power connected to the electricity network. This figure is growing and of the 624 MW of renewable energy sourced electricity generating plant currently installed, 362 MW is wind powered. This is an increase of 173 MW, or over 91%, since the latest statistics were calculated.
The target of 13.2% approximates to 1,400 MW to be connected to the electricity network by 2010. It is acknowledged at EU level as a challenging target. It will require us to more than double existing capacity within five years. This is the minimum target I am demanding. My overall target is to optimise the amount of renewable energy technologies which can be connected to the network while maintaining safe and reliable supply and reasonable retail charges for consumers.
The amount of wind powered stations which can be usefully connected to the network in ten years' time is dependent on future technological developments within the technology, future electricity demand, the size and future mix of technologies on the electricity network and the development of interconnectors. It is only by monitoring these variables over time that realistic further targets can be set for 2015 and beyond.
In addition to the environmental benefits, it is important the State reduces its dependency on fossil fuels, the prices of which are subject to the vagaries of the global markets and geopolitical developments which can adversely affect both the price and availability of supplies. From a national economic perspective and not just an energy policy perspective, increasing the amount of renewable energy in the system will be helpful in substituting costly fuel imports and in dealing with levels of uncertainty in the future evolution of energy prices.
Wind powered plant is currently the most competitively priced of all renewable energy technologies. It is, therefore, the dominant renewable technology at this time. However, as wind is an intermittent fuel source, it presents particular challenges for the networks operators as penetration levels grow.
Future challenging targets to increase wind powered stations will require co-operation and co-ordination between my Department, Sustainable Energy Ireland, SEI, the market regulator, the electricity networks operators and developers. I am happy to report that all these key players, and more, have participated in a consultation process launched in December 2003 and in the work of the subsequently established renewable energy development group.
The group's report will form the basis of my future policy decisions on the increased penetration of renewable energy technologies in the electricity market and will seek to ensure that developers can make a reasonable rate of return on renewable energy projects while ensuring that the interests of national competitiveness and the ultimate burden of cost to the final consumer are all fully taken into consideration.
In addition to the formal communications within the renewable energy development group, my Department has also had several bilateral meetings with the company mentioned by a Deputy and with other energy producers. Deputies can be assured, therefore, that there have been ample opportunities for both developers and suppliers to influence the future policy direction.
Although the report of the renewable energy development group is not yet completed, I have received updates on the work in progress. On 7 April last, I was able to announce the outline of a future support mechanism, AER VII. This revised system will move away from competitive tendering to a fixed price proposal. In addition, the support which was previously tied to contracts with the ESB will now be available for supply contracts with any licensed supplier. I also indicated in my announcement that wind powered technology will remain the dominant technology in delivering this target.
AER VII will contain a quantitative limit and a competitive element therefore remains. The actual capacity limit in AER VII will be a specific term of major interest to all potential applicants. It is appropriate that it is made accessible to all potential applicants simultaneously. I am not in a position, therefore, to announce a specific quantitative target until AER VII is formally launched. Currently, my Department is in consultations with suppliers about the practical implementation of the new arrangements announced on 7 April last. I expect these consultations to conclude shortly. Publication of the detailed terms and conditions of the future support mechanism AER VII will be published shortly after those contacts with suppliers finish.
There is, therefore, no reluctance on my part to support continuing growth in the amount of any renewable energy technology including wind connected to the network even if that requires fundamental changes of the type I have outlined for AER VII. From my point of view, we must optimise the contribution of renewable energy based electricity to the national supply on a basis that is fair to all parties, including consumers, and that it can be integrated safely and easily into the national network. The time which has been invested by my Department, SEI, CER, the network operators and developers within the REDG will, I am confident, result in accelerated development of new plants in the short term.