Noel Treacy
Ceist:13 Mr. N. Treacy asked the Minister for Transport, Energy and Communications the energy policy of this Government under the programme A Government of Renewal; and if he will make a statement on the matter. [3770/95]
Ceisteanna—Questions. Oral Answers. - National Energy Policy.
Eric J. Byrne
Ceist:29 Mr. E. Byrne asked the Minister for Transport, Energy and Communications the proposals, if any, he has in relation to the formulation of a sustainable national energy policy co-ordinating the activities of the State utilities; and if he will make a statement on the matter. [3765/95]
I propose to take Questions Nos. 13 and 29 together.
The primary focus of the Government's energy policy is to ensure that a secure supply of energy is available at competitive prices while minimising the impact on the environment, to consume this energy efficiently and to produce as much energy as is economically possible from indigenous sources.
A key element of Government energy policy, as set out in the agreement, A Government of Renewal, is to ensure a coherent national approach to guide the activities of the State energy utilities — the ESB, Bord Gáis Éireann, Bord na Móna and the Irish National Petroleum Corporation. This includes the restructuring of the electricity sector and providing for the efficient operation of the utilities. On the demand side our policy places considerable emphasis on energy conservation. In addition, we will promote the development of renewable energy sources and contribute to European policy on carbon dioxide emissions.
These objectives are the driving force behind this Government's energy policy and we will work to develop the elements necessary to meet them.
What forecasts can the Minister give of energy demand in the next five years vis-á-vis economic growth and what importance does he attach to a clear, efficient energy policy for continued economic growth?
The primary focus of the Government's energy policy is to ensure that a secure supply of energy is available at competitive prices while minimising the impact on the environment. This requires restructuring of industries, including the ESB, and improvement in infrastructure, including interconnection and the promotion of important aspects such as energy conservation and renewable energies. Energy is an essential requirement for activity in all sectors of the economy and its efficient use can only serve to increase the competitiveness of industry in general. By using energy wisely businesses can reduce their costs, thereby improving their competitiveness and the potential for job creation. Of course, there are obvious environmental benefits to that. In terms of the energy supply available, I am satisfied that it is in line with the requirement and that all necessary efforts are made to ensure a sufficient percentage is available for emergencies.
What importance does the Minister attach to the use of alternative energy sources? Why has there been a delay in the announcement of the recent AER competition?
A separate question has been put down on that subject which my colleague, the Minister of State, Deputy Stagg, will deal with.
What about alternative energy sources?
In relation to energy policy, the Minister referred to restructuring the electricity industry and the need to ensure security of supply. What work has been done on obtaining final approval for a 120 megawatt peat station in the east midlands region? What indigenous fuel policy does the Minister intend to pursue in terms of further investments in indigenous fuel as part of his energy portfolio?
The principal question asked by the Deputy is in respect of the peat fired power station. As the Deputy is aware, that proposal is at present with the Commission. It is undergoing a cost benefit analysis and I am anxious to ensure that an early decision is made by the European Commission. To that end I have been in contact with the incoming Commissioner. I have made arrangements to meet with her at an early date with a view to emphasising the importance of this project to regional development in the east midlands area and to maintaining and expanding employment prospects for people in that area.
My question was already asked by Deputy Cowen so I will ask another question. In regard to participation by the private sector in the future generation of electricity, will the Minister outline his proposals?
This matter is under discussion in my Department. I have had discussions with the ESB and various interest groups in this regard and I am anxious to introduce competition in this area. I hope to be in a position to bring forward proposals at an early date in line with the suggestions made by the Deputy.
(Laoighis-Offaly): In the context of the Government's energy policy, will the Minister assure the House that it will continue to be Government policy that peat should be used in electricity generation? Will he ensure that that view is communicated strongly to the ESB and other potential power providers? Will he inform the House when he expects to meet the new European Commissioner to advance the progress of the new 120 megawatt peat station for the midlands?
In answer to the final part of the Deputy's question, I have been in telephone contact with the Commissioner's chef de cabinet and I expect to meet the Commissioner within the next three weeks. It is Government policy to promote the use of indigenous energy resources as far as is economically practical. I am committed to the construction of a new peat fired station in the east midlands. I recognise that some ESB peat fired stations are old, have low conversion efficiencies and are unreliable. The cost of electricity from these stations is high due to these factors and the high cost of peat. Some stations are reaching the end of their operational lives and over the next number of years will face closure in part or in full.
Some areas may have peat which will allow for further electricity generation. A feasibility study of west Offaly is under way to maximise the economics of further generation in the Boora region and the proposal in the east midlands will contribute to peat generation there in the future. Some existing stations will merit investment to prolong their operating lives and where economic to do so such investment will be undertaken. I acknowledge that closure of stations in certain areas will have serious job loss consequences and it is my intention to minimise them if possible.This information is not new. Any decisions taken in respect of the old stations will be taken in the context of the EU and the Government supporting a new peat fired power station for the midlands.
Will the Minister confirm that he has received an application for an increase in electricity charges to householders and industry? Has he made a decision on whether to grant that price increase sought by the ESB?
An application for a price increase has been with my Department for more than seven years. No decision will be taken on price increases until the necessary restructuring and rationalisation of the ESB has been undertaken.
When does the Minister envisage he will be in a position to make a decision?
Considerable progress has been made. There is tremendous co-operation between management, workforce, unions and my Department. I would like to bring it forward as soon as possible. However, it is important not to have a time-scale but to allow the meaningful discussions which have taken place to continue until they reach a satisfactory conclusion.
So householders can relax?
As regards the new power station will the Minister confirm that all necessary documentation was submitted prior to him taking office and that the only outstanding issue is Commission approval. I encourage the Minister to seek that approval given that a positive cost-benefit analysis was submitted by his Department in respect of further clarification sought by the Commission.Will he confirm that the only outstanding issue is the decision? Will he confirm that the economics of existing peat fired stations would be much improved if agreement can be reached on the necessary work practices required in those stations and that any future investment in existing stations will be greatly enhanced by a successful conclusion of the cost competitiveness review within the ESB? Will he confirm that, in looking at any prospective investments in future peat fired stations of whatever magnitude, he will take the long term view in terms of the economics of an indigenous fuel policy which will benefit the country rather than the short term price comparisons between peat and other imported fuels?
An application for funding for peat fired stations was made to the EU Commission. A submission was made and a cost-benefit analysis conducted.There are a number of outstanding queries, some of which are serious. Some question the viability of and necessity for the project. I received a number of queries from the Commission which I addressed and I would like to take up the two outstanding matters directly with the commissioner. I agree with the points made by the Deputy regarding work practices and the criteria which would be used to determine the location of the new station. Obviously, the first matter is to secure European funding and a Government decision on whether a peat fired station will be put in place. I have a positive attitude to it and will bring it before Government. A project of this magnitude, costing in the region of £90 million will need EU assistance. Such funding has not been forthcoming and I will avail of every opportunity to exercise my ministerial authority to emphasise the importance of the project and secure the necessary resources to enable it come on stream.
I have been consulted on this issue by Deputies and Senators, including Deputies Gallagher and Flanagan and Senator Enright who consulted me yesterday.
Does the Minister agree that indigenous semi-State energy companies have made a unique contribution to the country? Can he assure the House that the flexibility they exercised in the supply of energy and job creation in different parts of the country will not be curtailed in any changes that may be effected in the future?
I agree with the Deputy's sentiments.