Vol. 433 No. 3
11 Ms. McManus asked the Minister for Transport, Energy and Communications his views on the annual report of the ESB published on 16 June 1993; if the Government has sanctioned the construction of a new power station at Poolbeg; and if he will make a statement on the matter.
16 Ms. O'Donnell asked the Minister for Transport, Energy and Communications if his Department was consulted in the decision-making process at all stages of the design of the new power station in Poolbeg.
I propose to take Questions Nos. 11 and 16 together.
I have noted the contents of the Electricity Supply Board's Annual Report for 1992.
The issues raised in the report will be subject to separate discussion and examination as appropriate under the powers assigned to me under the Electricity Supply Acts.
Under section 2 of the Electricity (Supply) (Amendment) Act, 1982, ESB's capital expenditure programme is subject to ministerial approval. Approval has been given for the construction of a 150MW combustion turbine at Poolbeg. ESB has sought approval for the installation of further capacity at the Poolbeg plant but no decision has been taken on that application.
In considering ESB's capital expenditure proposals my Department examines the economic justification of such investments. Detailed design of the generation plant is a matter for the ESB subject to planning permission.
Arising from the ESB annual report and the discussions between the ESB and the Minister's Department, is the Minister in a position to say when he intends to make an announcement about the ESB's request to increase electricity charges for its customers, reported as being imminent?
I answered questions on 27 May on the ESB's application for a price increase. Briefly I repeat that my approach to examining its request for an increase is to strike a balance between the obvious benefit to consumers and the economy of making the smallest increase possible and the need to maintain the financial stability of the ESB. I put particular emphasis on the need to fully evaluate the cost and timing of the proposed capital expenditure programme. The ESB has not increased its prices since 1986 and consumers have benefited from the decision to hold prices at current levels. I hope it will be possible to avoid an increase this year. While I am anxious to defer increases for as long as possible I have to consider the overall financial position for the company.
As part of the price evaluation process my Department has been discussing a framework with the ESB to assess the need for price increases which distinguishes between the various cost factors involved in the ESB's application for a price increase. Work to date has highlighted the importance of the proposed capital expenditure programme and external factors such as exchange rates and fuel costs in determining the ESB's financial position. Achievement of internal productivity improvement will contribute to moderating any necessary price increases. I will be expecting considerable efficiency improvements throughout the ESB to reflect improved technology and generally better management of resources.
(Limerick East): What progress has been made in assessing the viability of a high technology peat burning station in the midlands, as recommended in the Culliton report?
A feasibility study has been completed on this matter. In the first instance this is a matter for the board of Bord na Móna to consider and thereafter evaluated by the Department. I assure the Deputy that I will give the matter urgent and careful examination.
I am pleased the Minister indicated that there will not be bad news for ESB customers this year.
That is my hope, but it is not definite.
The Deputy should not take the Minister's remarks out of context.
I am trying to help the Minister but now he is again worrying me. Is the Minister planning to change the method by which ESB price increases are approved? Is it his intention to divest his powers and responsibilities in that area to the ESB to enable it to increase charges as it sees fit? Is that what is planned in terms of rebalancing ESB charges?
That is certainly not my intention. The opposite is the case.
I put it to the Minister that whereas the power station at Poolbeg referred to in the two questions would have to be largely built from scratch, there is already a partly build unit of 300 megawatts at Moneypoint on which the ESB in the early eighties spent perhaps tens of millions of pounds. Why not complete that unit rather than build a new station in Dublin?
I understand the Deputy's geographical concern but why not provide for new peat fired generating stations which, as a result of new technology, would compare favourably in terms of efficiency with imported fuels such as coal or oil? That matter is important in terms of the strategic energy policy that will be pursued. When the Kinsale gasfield reserves expire at the end of the century the only indigenous fuel available will be peat. Given the major restructuring in Bord na Móna without assistance from anybody, which has resulted in huge job losses but increased efficiency, it is time that careful consideration was given to that part of the country so that it can make a contribution to future energy policy. That is a very competitive proposal, particularly in view of technological advances. In that context I look forward to the feasibility study on a new peat fired station for the midlands.
It is remarkable that a supplementary question relating to a coal fired station on the west coast should get an answer dealing with peat fired stations in the midlands, which has nothing to do with the matter.
There must be a balance.
In view of the fact that the additional unit in the coal fired station is already partly built would it not make economic sense to complete that unit rather than build another unit from scratch in Dublin, the midlands, or anywhere else?
It may not make economic sense to complete that unit; indeed it may not have made economic sense to start it.
In evaluating the need for extra electricity in the midlands, will the Minister or the ESB take into account the availability of an existing generating station in Allenwood? Will it be taken into account in further discussions on the provision of another peat generating station in that region?
As the Deputy is aware the board has put a proposal to me for the immediate closure of Allenwood power station because it has outlived its design life. My chief executive advisers have to finally advise me on the proper decision to take in that context. I take the point that the region on the North Offaly-Kildare border is where there is greatest peat availability. While we await the feasibility study, one could expect, as the new peat fire station will consume something like one million tonnes of peat per year, that the generating station will be located in the area with the greatest peat resource to add to its efficiency prospects. We must await the details of the feasibility study before any final decisions are made.
Will the Minister reconsider his comment that peat is our only indigenous fuel? Notwithstanding the fact that we have gas, will the Minister consider the renewable energy sources which are far more plentiful than any of the fossil fuels? I was interested to hear that a decision on Poolbeg will be based on economic considerations. Will that also include ecological considerations? I asked the Minister if he was aware that many of the objections to the Poolbeg plan lodged with the local authority related to the absence of a combined heat and power facility which, in today's technology, is standard. Not only would it prevent waste water flowing into the bay, it would be used for heating glass-houses or for domestic heating. This would ensure that the price would not be increased because the heat would be more efficiently used.
I agree that ecological considerations must also come into the equation and renewable energy is actively being considered in my Department. We must try to get renewable energy products going. I want to meet European guidelines in this area. Combined heating power is extensively referred to in the Programme for Government and is being actively promoted. I hope to be down in Mallow next week to open such a project.
Will the Minister confirm that the first phase of the Poolbeg plan has been approved by the Government and that the ESB is proceeding with it?
The first stage only was approved prior to my coming into office.
