Dáil Éireann Debate, Thursday - 31 January 2013
16. Deputy Catherine Murphy asked the Minister for Communications, Energy and Natural Resources if he will outline the terms of the negotiations that have taken place between him and his British counterpart on the development of a Memorandum of Understanding on trade in renewable energy; if said memorandum is close to being finalised; the main aims of the memorandum; and if he will make a statement on the matter. [4601/13]
View answer27. Deputy Michael Colreavy asked the Minister for Communications, Energy and Natural Resources the Exchequer funds that will be provided for the construction of wind turbines following the signing of a Memorandum of Understanding between his Department and the British Government; and if he will make a statement on the matter. [4677/13]
View answer43. Deputy Joe Higgins asked the Minister for Communications, Energy and Natural Resources his views on the agreement with the UK to export wind energy from Ireland. [4763/13]
View answerI propose to take Questions Nos. 16, 27 and 43 together.
On 24 January 2013, UK Secretary of State for Energy and Climate Change, Ed Davey, and I signed a Memorandum of Understanding (MoU) in Dublin on energy cooperation. A copy of the MoU is available on my Department’s website. The MoU we signed affirms the two States’ commitment to maintaining a strong partnership on energy issues, to achieving closer integration of electricity markets and to maximising the sustainable use of renewable energy resources. Ireland has the potential to generate far more wind energy than we could consume domestically. This MoU gives us an opportunity to fully consider how Irish renewable energy resources, onshore and offshore, might be developed to the mutual benefit of Ireland and the UK.
The Renewable Directive provides a number of mechanisms that can be used by Member States for the trade of renewable energy, including joint projects and statistical transfer. Joint projects are where specified projects located in one country may be counted towards the renewable energy target of another. Statistical transfer is where the excess relating to an overachievement of the target by one country may be sold to another country that has fallen short of its target. The mechanisms require an Inter-Governmental agreement to be put in place. Up to now, while electricity could be exported between jurisdictions, the renewable value in terms of target compliance remained in the country where the renewable energy was produced. The Directive, for the first time, introduced the concept of the trade in the renewable value of electricity.
The opportunity to export green power presents an opportunity for employment growth and export earnings as well as increased investment for Ireland. There are and will be no Government funds allocated for the construction of wind turbines whether output is for internal or external consumption. In particular, Irish consumers cannot be required to finance electricity that is destined for export. The price that the UK is willing to pay for the renewable power will need to be sufficient to cover any support mechanism needed by project developers and to finance the new transmission infrastructure required.
It is important to note that the MoU is an important signal of intent and an interim step. There is no formal Inter-Governmental agreement under the Directive in place yet. There are many complex engineering, market, regulatory and policy issues that need to be teased out, discussed and considered prior to making an Inter-Governmental agreement that provides a formal basis for energy trading. The cost benefit analysis must support that the trading proposition makes sense. Nevertheless it is clear that there are significant potential economic and employment benefits arising for both jurisdictions. Both countries have accordingly agreed on an urgent programme of work over the next year to determine the final contents of any formal Inter-Governmental agreement.
