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Energy Conservation

Dáil Éireann Debate, Wednesday - 26 October 2016

Wednesday, 26 October 2016

Questions (19)

Eamon Ryan

Question:

19. Deputy Eamon Ryan asked the Minister for Communications, Climate Action and Environment the stage at which the development of smart metering for every home is; and the way such a scheme will be funded. [32081/16]

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Oral answers (8 contributions) (Question to Communications)

The Minister is right that in some areas we are leading. There are not many, and I am not too sure whether we are leading in some of the areas he mentioned, but an area where I know we are not leading but falling dramatically behind is that of demand management efficiency and domestic home management energy systems. We have no smart metering programme roll-out ready. We have been working on this. I remember working on it seven or eight years ago, when it was first thought about and ready to go, but for five years nothing has happened. Demand management and efficiency saving is the first step. What are our plans for smart metering? When will we roll it out? I am very much conditioned by the fact an opportunity is opening up to us. Yesterday the climate committee heard interesting figures, that the UK received £3.5 billion in funding-----

The Deputy is only introducing the question.

When will we start putting smart meters into homes? When will we lead in this area, which is the most important area for leadership to save energy?

The national smart metering programme, which includes electricity and gas meters, is managed by the Commission for Energy Regulation, CER. The EU's third energy package sets out the need to roll out smart meters based on economic assessment and provides that in the case of electricity, "where roll-out of smart meters is assessed positively, at least 80% of consumers shall be equipped with intelligent metering systems by 2020". In the case of gas, there is no specific target, but any roll-out is subject to economic assessment.

The key determinant of the scale, scope and timing of the roll-out of smart meters is a cost benefit analysis that is being developed by the CER. The results of this cost benefit analysis are expected in the first half of 2017.

Previous statements had indicated that the roll-out of smart meters would likely commence, at the earliest, in late 2018. The go-live date of smart services would follow once a significant number of smart meters have been rolled out.

The Commission for Energy Regulation commenced a replanning process of the national smart metering programme in July 2016 with ESB Networks, Gas Networks Ireland and other relevant stakeholders in order to bring more clarity and certainty regarding the timelines for implementation of the programme. This replanning process, which will conclude later this year, may lead to the timelines being extended.

The costs of rolling out smart meters will be included in the costs of distribution networks in the same way as other infrastructure investments are paid for. These costs are approved by the regulator and charged by ESB Networks and Gas Networks Ireland to energy supply companies. The energy supply companies generally include these costs in the standing charges on customer bills.

We did that analysis seven or eight years ago. We rolled out a very large testing scheme and the ESB had all the factual analysis. There is an endless amount of economic analysis. It needs leadership now. It needs political leadership to kick the system out of the inertia, conservativism, lack of ambition and lack of energy and start making this happen. We are in severe danger. We were ahead of the game seven or eight years ago but we are now falling way behind. It needs more than just waiting for the energy regulator to do yet another study to assess another study. This has been studied to death, internationally and here at home, for the past five or six years. There is an opportunity for us to get the funding that will not now go to the UK. The European Investment Bank and others spent approximately €3.5 billion in clean energy lending to the UK which will now not go there. If we had ready-to-go big scalable projects in clean energy and efficiency we could get funding from the EIB. We could kickstart our economy and save our emissions but we are not doing it. We are falling way behind. A country that has all of the IT businesses and a good distribution and transmission system should be ahead of the game on this. It is not good enough to say we have to do more studies. It is time for us to start doing something.

The cost benefit analysis available to me was completed by PricewaterhouseCoopers in September 2013. The results of the updated cost benefit analysis, which are available on the CER website, show that net present value is minus €59 million for electricity meters only.

Where electricity and gas meters are included, the net current value is estimated at minus €54 million. The most recent cost benefit analysis, therefore, was marginally negative. Technology has changed. One of the most significant changes which was not envisaged when the Deputy was Minister is the Internet of things. Only last month I launched one of the first national networks in Kilbegley, south Roscommon, in my constituency. It will dramatically change how we consider smart metering and smart devices. I had an interesting conversation with Glen Dimplex - I am sure the Deputy had one also - about the way it was developing products. All this needs to be considered before a decision is made. There is no point in using yesterday's rather than tomorrow's technology.

The Internet of things has been coming for years and was known about. The cost benefit analysis that was finally dragged out of the system in 2013 was known about as far back as 2009. A greater cost benefit needs to be taken into account. We are breaking through the ceiling in the context of our emissions and nowhere near our targets, but we are missing out on an economic opportunity. The big message for those who always engage in the cost accounting analysis on every line is that they should think of the bigger picture. The technological industrial revolution is taking place in the interface between digital and clean energy technology. We have every reason to be the best in the world in this area and sell that expertise to the rest of the world, but that cannot be done if the basic technological elements such as smart meters are not in place in order that other companies can use their products in innovative ways and the Internet of things can kick off. If the State is not monitoring or measuring or putting a price on products, it will not happen. We will probably not do it until the next decade, which will probably be a decade late in grabbing the opportunity. That is what the Minister needs to overcome. He should tell the regulator and the Department to make this happen.

The Deputy is correct that the interface between digital and clean energy technology needs to be examined. It has changed dramatically in the past decade. I want to be sure that if we charge every ESB customer €400 for a smart meter that, first, they will benefit from them and, second, that it is the most cost effective way of making this investment. I want to establish whether there are other more efficient ways by using new technology. That analysis will be completed in the next few weeks. When the commission publishes the findings, we can examine the approach we are taking. The Deputy is also correct about the investment being made. I want an answer to the question of whether it should be used for this or some other technology before I proceed. Smart metering could provide huge opportunities and the type of meter is crucially important to the decisions we will take not just for now but for the next decade and the following decade.

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