Committee of Public Accounts (PAC) criticises State’s failure to meet greenhouse gas emissions and renewable energy targets at cost of €50m to taxpayer in 2020

PAC also criticises the fact that targets for the rollout of the National Broadband Plan (NDP) have not been met and – given the expenditure on consultants associated with the rollout of the NDP – urges the Department to develop in-house expertise to reduce reliance on external consultants for advice relating to the NBP contract.

In its report published today on the Examination of the 2019 and 2020 Appropriation Accounts for Vote 29 – Environment, Climate and Communications, and expenditure on the National Broadband Plan, the Committee makes recommendations on five issues which were discussed with the Department and NBI at a number of meetings in 2020 and 2021. They concern:

• Failure of the State to meet its greenhouse gas emissions and renewable energy targets;
• Clarity on sustainable energy programmes’ expenditure;
• Total cost of landfill remediation;
• Failure of NBI to meet its targets for the rollout of the NDP; and
• Reliance on external consultants for advice relating to the NBP contract.

Deputy Brian Stanley, Cathaoirleach of PAC, said “In order to meet Ireland’s obligations under the EU’s ‘Renewable Energy Directive’, €50 million was spent in 2020 on specified quantities of renewable energy through statistical transfers of renewable energy from other EU member states.

“In its meeting with the Committee in January 2021, the Department stated it had ‘made provision in 2021 for a potential additional €20 million’ on such transfers. The Committee also heard it is estimated that the State will need to purchase an additional 3.8 million carbon credits and a further €8 million has been allocated for the purchase of these credits.

“The Committee is concerned at the level of expenditure in 2020 by the Department on statistical transfers, and the potential expenditure required on carbon credits, as a result of the State’s failure to meet its greenhouse gas emissions and renewable energy targets.”

PAC recommends that the Department takes urgent action to meet these targets going forward, in order to reduce expenditure by the State on statistical transfers or carbon credits. The Department should also provide the Committee with progress updates by August 2022.

Deputy Stanley said: “This should include efforts being made to reduce the State’s greenhouse gas emissions, how the State is increasing its production of renewable energy, and up-to-date figures for the expenditure required on carbon credits and statistical transfers of renewable energy in 2021.”

The Committee also raised concerns with the Department in relation to expenditure on the National Broadband Plan. Based on its analysis of the matters under examination during its engagements with the Department, the Committee highlights issues relating to Exchequer spending on the NDP.

Deputy Stanley said: “In the contract for the National Broadband Plan, the agreed target for the number of premises to be passed by the end of year two of the contract (which was 31 January 2022), was 115,000 premises. In an interim remedial plan submitted by NBI to the Department, a revised target of 60,000 premises by the end of 2021 was agreed. However, the actual number of premises passed by the network by 31 January 2022 was just 34,454.

“During our meeting of 10 February 2022, NBI could not give a specific target for premises passed by the end of this year, but estimated that on-site construction would be completed for between 100,000 and 130,000 premises. NBI also estimated that it is currently running six months behind in terms of the project’s progress. Of the number of premises passed, only 7,000 were connected to the network at that time, which represents an 18.4 per cent take-up rate.

“The Committee is not convinced that NBI’s targeted 85 per cent take-up rate is realistic. Given that NBI has received €132 million in subsidies to the end of quarter three 2021, the Committee is concerned that the progress achieved to date does not represent value for money for the taxpayer.”

The Committee recommends that the Department urgently provides it with a copy of the remedial plan agreed with NBI for the number of premises to be passed in 2022 by the NBP network, works with NBI to minimise the delays to the deployment of the NBP network, and takes a strong oversight role in ensuring that NBI meet its 2022 targets for premises passed by the NBP network.

Deputy Stanley said: “The Department must strive to dramatically increase the take-up rate of the network, given the level of investment by the State in this project. The Committee also wants quarterly reports of the total amount of State subsidies received by NBI, the total number of connections made to, and premises passed by, the NBP network to date, and the total value and nature of any penalties applied by the Department to NBI for failure to meet its contractual obligations.”

The Committee also learned that the Department spent a total of €19 million on external advisory services related to the NBP contract in 2020 and in 2021. While the Department expressed a desire for such consultancy services to move in-house as the NBP project develops, officials did not commit to doing so or indicate how many staff it would need to recruit.

Deputy Stanley said: “While the Committee recognises the importance of seeking advice on a project in which the State is to invest up to €2.7 billion, it is concerned at the level of expenditure in this area. The Department should urgently explore the recruitment of staff to develop in-house expertise with regard to the NBP project and its oversight. The Committee would also like to see any projections the Department has on expenditure on external consultants over the lifetime of the NBP project, as well as an estimate on how much could be saved with the recruitment of in-house staff.”

The PAC is a standing committee of Dáil Éireann which focuses on ensuring public services are run efficiently and achieve value for money. Further information on its role and remit can be found here.

The PAC Report Examination of the 2019 and 2020 Appropriation Accounts for Vote 29 – Environment, Climate and Communications, and expenditure on the National Broadband Plan is available on the Oireachtas website.