Dáil Éireann díospóireacht -
Thursday, 2 Mar 2000

Vol. 515 No. 5

Adjournment Debate. - Electricity Generation.

Mr. Flanagan

I am grateful for the opportunity, however brief, to raise this matter and I am very appreciative of the Minister's attendance in the House. I realise the Minister is very busy but the fact that she has not asked another Minister to deal with the matter is significant and indicative of her concern about this issue.

The consequences of the closure of the three peat-burning power stations in County Offaly have not been fully realised throughout the community. A question mark now hangs over the relationship between the ESB and Bord na Móna. The House will be aware of the huge importance of those twin industries to the provision of employment in County Offaly in recent decades. Towns such as Kilcormac, Daingean, Ferbane, Banagher, Shannonbridge, Rhode and Edenderry have relied almost exclusively on Bord na Móna and the ESB for employment since the 1940s and 1950s. We are now witnessing, through the stroke of a pen on the part of the ESB, a huge change in that relationship and in employment patterns throughout the county.

The ESB has announced the closure of Ferbane power station, and the closure of Rhode power station is beyond doubt although the date has not been finalised. I understand that the closure of the stations in Shannonbridge and Lanesboro, County Longford, is also imminent, although the exact dates on which the gates will close have not been announced. These closures will adversely affect more than 1,000 employees and their families who have depended on the ESB and Bord na Móna for their living.

The Minister, in a statement last week, stated that the ESB had informed her of its intention to build two new peat-burning power stations to replace the four which are being decommissioned. While that news is to be welcomed, it is cold comfort for the people of County Offaly. Only last week a national report revealed that income levels in the county are the second lowest in the country, with Roscommon at the bottom of the league. There is a clear need for all Government agencies and for the Minister and her colleagues to ensure that employment creation ventures are targeted towards the reduction of unemployment levels in County Offaly in an attempt to soften the blow of the huge changes which are to be carried out by the ESB and Bord na Móna.

The announcement of the two new power stations has occurred in a climate of uncertainty. We do not know where they will be located, how many people they will employ, the timescale for their start-up or their completion dates, nor are we certain of the ESB's future in regard to electricity generation from peat-burning stations. I hope the air can be cleared on this matter. I challenge the Minister to make a categoric statement in regard to the Government's future policies and the ESB's future plans in regard to peat-burning electricity generation.

The consequences for Bord na Móna are also quite bleak in so far as it seems that some of the plant in mid-Offaly will have to shift to the west of the county to accommodate a new station if or when one is built. That will result in redundancies and other problems in the middle and north of the county.

Bord na Móna will shortly announce a rationalisation plan which will affect the peat briquette stations in Offaly. While I understand two new stations are being built – although I await clarification from the Minister – nothing is planned for north Offaly consequent on the closure of the Rhode station which will add to the problem.

Mrs. O'Rourke

I thank Deputy Flanagan for raising this matter. All the Deputies in his constituency, including my Cabinet colleague, Deputy Cowen, and Deputy Enright have raised this matter with me. The Deputy asked about the future of peat-burning power stations in Offaly and the Government's policy on the use of peat. Peat plays and will continue to play a strategic role in Irish energy policy. There is no change in Government policy on the continued use of peat on security grounds in the generation of electricity. The bulk of the peat used in electricity generation is taken from the large peat reserve in the midlands, which includes large tracts of County Offaly. That will continue to be the case in the future.

Our energy policy has three primary objectives; the supply of a choice of fuels to consumers as efficiently as possible at internationally competitive prices; the consumption of this energy as efficiently as possible; and the production of as much of national energy requirements from indigenous sources as is economically possible. Our natural gas reserves off the south coast will run out in the next few years. The Corrib gas discovery off the west coast is the subject of further exploration to test its commerciality. In the meantime, peat will be our only native source of fuel. Ireland is almost totally dependent on imported fuels to meet its energy needs.

Security of supply is, therefore, a very important consideration. Imported fuels are subject to international fuel price volatility. Peat, as an indigenous fuel, offers certain advantages in this regard in that it is produced domestically. The value of peat was particularly noticeable during the oil crises of the 1970's and 1980's when it was cheaper than oil, at times significantly so, for many years. Security of supply is also one of the main planks of the European Union's energy policy. It recognises the need for diversity of fuel supplies and has accepted that account must be taken of the need to develop indigenous energy sources. This is reflected in the EU electricity directive which provides that up to 15% of the fuel mix used in electricity generation can be reserved for indigenous sources. The directive also makes separate provision for a public service obligation mechanism relating to security of supply.

As Deputy Flanagan said, on 17 February I announced a new milestone framework for the electricity market in Ireland. I indicated that, following consultations with the EU Commission in Brussels, two new state of the art peat stations, to be owned by the ESB, would be built over the next few years in addition to the state of the art peat-fired plant currently under construction in the east midlands by Edenderry Power Limited. In the meantime, those existing peat stations currently producing electricity will operate on an increasingly efficient basis under an interim PSO arrangement to facilitate orderly closure, dovetailed with the coming on stream of the new stations.

The ESB has informed me it intends the new stations will be at Shannonbridge and Lanesboro. I spoke to them this afternoon and they said this will be announced before the end of March. They will also announce the establishment of a project team to plan the two new plants. The scenario I outlined is an optimum one which guarantees the continued use of peat as a fuel in the generation of electricity, provides necessary environmental and efficiency improvements and underpins longer term employment in the production of peat. The effect of the foregoing framework is that the country will continue to have a dynamic peat industry contributing to electricity generation with a corresponding social and economic spin-off in the midland region, particularly in County Offaly. The unions, management and Department officials signed the framework document in the belief that the ESB and Bord na Móna have a viable future in the midlands.