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Dáil Éireann díospóireacht -
Thursday, 4 Dec 2003

Vol. 576 No. 3

Alternative Energy Projects.

I thank the Ceann Comhairle for allowing a debate such as this that will be of keen interest to many people around the country, not just for environmental reasons, in the vital role wind power will play in the reduction of our CO2 emissions, but also in the development of an industry that should have enormous potential for Ireland, which we are totally failing to develop.

Some people in the industry lay a lot of the blame at the door of the ESB which, they say, has been reluctant and even restrictive in the development of wind energy over the years. I found this hard to believe given that the ESB is a forward-thinking company. Yet, one has to believe that the conservative approach it has taken, especially the network company, in the development of wind energy bears out those criticisms. Some people have even described Eirgrid as comparable to the supermodels of the renewable energy industry in that they would not get out of bed for less than €10,000 if one wanted a grid connection. Now we see that they do not want to issue another grid connection, as they fear that the grid will not be able to take it.

The question we must ask them, and hope the Minister for Communications Marine and Natural Resources will ask them, is why they differ so much from the contents of the Garrad Hassan report which clearly states that while there may be a need for curtailment of wind farms as they increase generation, that only becomes a significant issue approaching the level of 2,000 MW of power being supplied. Also, on the ability of renewable wind energy to meet the grid code requirements the ESB would naturally want to set for any operators selling into their grid, the report's executive summary states quite clearly that these can be met by renewable speed turbine technology without any significant cost. The real question that should be put to the Minister for Communications, Marine and Natural Resources is why that grid code, which seems to be the key issue, was not agreed years ago. At the very last minute, operators who have gone to enormous expense to obtain planning permission to establish the projects are told out of the blue that there are no further grid connections. The ESB, in its letter to the regulator on the issue, makes the remarkable statement that it thought everything was going wonderfully when Irish wind production was increasing by a nice 20 MW a year. That is an incredible statement when other countries, like Germany and others, have something like 15,000 MW of power and none of the wind power potential we have.

Why has the Minister for Communications, Marine and Natural Resources not compiled a co-ordinated energy policy on this issue? It was remarkable that at the same time the regulator was issuing his press release stating there could be no further wind contracts, the Minister for Communications, Marine and Natural Resources issued a press release trumpeting the budget contents that would allow for further tax breaks on more projects, adding that he hoped to obtain an additional 140 MW from the European Commission. It demonstrates a remarkable lack of co-ordination, on the Minister's part, that he apparently did not know what the regulator was going to say on the matter or what the ESB felt, let alone what is happening in the industry.

The most important question for the Minister for Communications, Marine and Natural Resources, further to the question I tabled, is why, like so many other Ministers, he has failed to implement a European directive on renewable energy sources, that this country was obliged to enforce by 27 October? The directive specifically sets out the requirement on the Government, the industry, the regulator and the network operator to guarantee that we will develop the maximum potential renewable energy that we can.

We have enormous potential in this country for renewable energy. I was at a conference organised by the European Investment Bank in Dublin, attended by all the leading people in the industry throughout Europe. One speaker after another said how remarkable it was that this country, with the greatest wind potential in Europe, was the slowest and worst at developing its wind industry. This was embarrassing and frightening in the context of the environmental and future economic consequence consequences of our failure. I, industry representatives and other Opposition spokespersons will be increasingly asking the Minister for Communications, Marine and Natural Resources what he is doing, why he sat back and did nothing on this issue and why the Government has allowed us to be seen as the laughing stock of Europe in the field of developing renewable energy.

I thank Deputy Ryan for raising this matter on the Adjournment. I welcome the opportunity, on behalf of the Minister for Communications, Marine and Natural Resources, to clarify for the House the factual impacts of the commission's decision. The commission's decision, exercising its functions under section 34 of the Act, was to permit the network operators to withhold formal connection offers for wind farms until the end of the year for reasons set out in the published decision. There is nothing in the decision to suggest wind capacity connected to the network will be limited to 500 MW. On the contrary, the supporting documentation, also posted on the commission's website, indicates that existing wind powered renewable energy plant, and current binding offers for wind farms, amount to 775 MW.

The commission's decision is valid only until the year's end, approximately three weeks from now. There is nothing in the decision to suggest a deferral until 2005. On both these important points, the Deputy is incorrect.

The network operator expressed concerns which are also supported by an independent report prepared for the commission and Ofreg by international consultants. The report, by Garrad Hassan, concluded that the amount of wind generation capacity, which could be accepted on to the network by 2005, is anywhere between 790 MW and 2840 MW. However, if developers continue to self-dispatch, the lower figure applies.

The factual position based on documents published by the Commission for Energy Regulation is that ESB National Grid, ESBNG, wrote to the Commission for Energy Regulation setting out its serious concerns caused by increasing market interest in securing connections for wind farms of the order of 1295 MW. ESBNG stated in its submission that the amount of wind generation, either currently connected to the system or holding binding offers, had reached approximately 775 MW and asked that no further binding wind generation connection offers be made until technical issues are resolved.

The commission in its letter dated yesterday, 3/12/2003, stated that on an exceptional basis it would approve the proposal to cease issuing offers for wind connections until the end of the year. The letter also contains several qualifications and conditions which in my opinion, without commenting on the independence of the commission, is indicative of positive concerns to pursue national and EU policies on promoting renewable energy technologies in the electricity market. The commission decision does not restrict the level of access of wind power at the national level below 500 MW as the Deputy stated. On the contrary, the decision commences a public debate on the issues facing the wind energy market. In this regard, the commission has invited written submissions to be received by 19 December. It has also asked ESB National Grid to host a public meeting with the market players to explain its position and to examine remedies.

The target to increase consumption of renewable energy-based electricity in Ireland to 13.2% by 2010, is an EU obligation under Directive (2001/77/EC) on the promotion of electricity produced from renewable energy sources in the internal electricity market. The Minister's minimum target is to have sufficient renewable energy-based generating capacity in place to generate this volume by 2010. Nothing in the commission's decision will frustrate this objective. The current national target for all renewable technologies is to add a minimum 500 MW of generating capacity to the grid by 2005. In order to ensure this minimum target can be delivered under reasonable assumptions, it is proposed to offer contracts for up to 720 MW in total, under the national support programme, subject to EU state aids clearance. This capacity, together with generating capacity from existing renewable energy plant, as defined in the directive, could increase the percentage of green electricity to more than 12% by 2006 if all projects selected in AER 5 and AER 6 are built. Nothing in the commission's decision frustrates these targets.

On climate change, Ireland has committed to limiting the increase in greenhouse gas emissions to no more than 13% above 1990 levels by 2008-2012. My colleague, the Minister for the Environment, Heritage and Local Government, Deputy Martin Cullen, has primary responsibility to drive the climate change agenda. In this regard he published the national climate change strategy in October 2000. This document provides a framework for the actions needed to ensure that Ireland meets its Kyoto target. The strategy is currently under review with updates expected on emission projections and measures needed. The target set for the renewable energy-based electricity market equates to an additional 31 MW per annum for ten years. The current national support programme is capable of delivering that target irrespective of the commission's decision.

The five year network upgrading programme, costing approximately €3 billion, is well under way. As the network upgrade progresses it will deliver major improvements in the network system, thereby facilitating enhanced capacity and quality of service capability for all users including green electricity producers.

Without prejudice to the actual content or conclusions within the consultation process, already commenced by the Commission for Energy Regulation, I believe the immediate issues facing wind farms are more immediate. They will, I believe, concentrate in the first instance on the technical parameters of turbines connecting to the networks and the interacting operational arrangements with the networks.

The grid upgrade development programme is essential to the future development of the renewable energy sector, but it is not key to the solutions required in the short term to address the immediate concern raised by the network operator on the grounds of system stability. The decision made by the commission is a decision of an independent office. It would not be appropriate for me to comment on it one way or another.

This document provides a framework for the actions needed to ensure that Ireland meets its Kyoto target. The strategy is currently under review, with updates expected on emission projections and measures needed. The target set for the renewable energy based electricity market equates to an additional 31 MW per annum for ten years. The current national support programme is capable of delivering that target irrespective of the commission's decision.

The five-year network upgrading programme, costing approximately €3 billion, is well under way. As the network upgrade progresses it will deliver major improvements in the network system, thereby facilitating enhanced capacity and quality of service capability for all users, including green electricity producers. Without prejudice to the actual content or conclusions within the consultation process already commenced by the Commission for Energy Regulation, I believe the issues facing wind farms are more immediate. The commission will concentrate in the first instance on the technical parameters of turbines connecting to the networks and the interacting operational arrangements with the networks.

The grid upgrade development programme is essential to the future development of the renewable energy sector but it is not key to the solutions required in the short-term to address the immediate concern raised by the network operator on the grounds of system stability. The decision made by the commission is the decision of an independent office and it would not be appropriate for me to comment on it one way or another. However, I am satisfied the decision will not have an adverse impact on the achievement of Government targets.

The Dáil adjourned at 8 p.m. until 10.30 a.m. on Friday, 5 December 2003.

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