Vol. 652 No. 3
70 Deputy Brian O’Shea asked the Minister for Communications, Energy and Natural Resources his views on IBEC’s concerns regarding potential loss of competitiveness in view of the renewable energy sector here; and if he will make a statement on the matter. [14675/08]
Our capacity to deliver a secure energy supply at competitive cost is critical for Ireland's ability to attract and retain foreign direct investment. It is also critical for all sectors of indigenous Irish enterprise competing in global markets. Increasing the contribution of indigenous renewable energy will improve security of supply by substituting for expensive and volatile fossil fuel imports. It will also enhance environmental sustainability by reducing CO2 and other emissions. Renewable energy contributes, therefore, to the creation of a long-term, secure and stable energy investment framework and to competitive energy supply.
The exponential rise in gas, oil and coal prices on global markets during the past 12 months is the key factor in increased energy costs for Irish business and consumers. In an era of high fossil fuel prices, the competitiveness of renewable energy technologies will continue to grow demonstrably. Ireland is a price taker in terms of fossil fuels. Indigenous renewable energy sources will progressively reduce our dependence on fossil fuels. Some renewable technologies are already at or near market competitiveness and their relative position will only be improved in the face of increasingly expensive fossil fuel prices.
Some international experts are of the view that increasing renewable energy usage also helps reduce overall prices by reducing the fuel risk exposure of companies to volatile fossil fuel price rises. We are investing significantly in national energy infrastructure, which is critical for social, economic and regional development. IBEC has endorsed the priority need for investment in transmission and distribution networks, power generation capacity and electricity interconnection. This investment will underpin economic competitiveness and enable the integration of renewable energy on to the grid.
This question was tabled in the context of job losses and the concerns expressed by the business community and Forfás regarding inflation and the high cost of services, not only in the energy sector but in the extremely expensive area of telecommunications. I fully endorse what the Minister stated. The business sector and IBEC support the policy he promotes. However, questions arise as to how that policy will be paid for. When one considers the extent of infrastructural investment required, one must also ask how we will get from here to there. The ESB referred to an infrastructural investment of €22 billion and the relevant report indicates that an investment of approximately €800 million will be required in respect of the grid. These are enormous commitments.
Apart from a notional commitment in the Department's Vote, which was discussed, in the context of the Revised Estimates, at this morning's meeting of the Select Committee on Communications, Energy and Natural Resources, the Government is offering nothing in respect of the developments to which I refer. I presume consumers will be obliged to pay the bill. The latter is the issue that concerns those in business and the people who are paying these bills at present. During this morning's debate at the select committee, it emerged that the dividend paid by energy companies to the Government is not included in the figure for appropriations in aid. I presume that money could be invested in infrastructural development. Will the Minister clarify how he envisages how the bill will be paid?
As I understand it, the dividend is paid to the Department of Finance. Our overall budget allocation is then given to us by that Department.
The issue of high energy prices is crucial. We are engaged in a retreat from fossil fuels. At the same time, my Department is promoting an advance in digital technologies. The latter requires a great deal of electricity. As the advance into such technologies proceeds, it is a real competitive issue to have good, clean, green electricity available for use. There were several reasons electricity prices here were so high in recent years. However, the key reason was our exposure to fossil fuel as a percentage of our fuel mix.
Those prices were artificially managed for reasons of competition. What the Minister is saying is not strictly true.
It is my opinion.
I do not believe the Minister is correct.
The second reason related to very poor performance by a number of ESB plants during peak periods. We have, therefore, an urgent need to keep electricity prices here low. By investing in renewable sources of energy, we can do so. The fuel price is free. As already stated, renewable energy often provides a good hedge against varying gas prices and brings the overall cost of electricity down. It also subvents the public service obligation to support peat power plants. It is open to us to develop a renewable energy industry that will bring about price competitiveness rather than increased costs.
We must, however, consider the long-term position. We are approaching a peak in global oil production and we are also at the end of the gas supply lines. If we continue to rely on fossil fuels for 90% of our needs, we will be placed in an increasingly poor competitive position. It makes economic sense to switch to renewable sources of energy because they are cheaper and represent a direct return for the people.
No one is arguing about the need to move to renewable sources of energy. I wish the Minister would not give the standard reply on each occasion these issues are raised. This matter revolves around businesses surviving in an extremely difficult economic climate. The Minister must respond in respect of the difficulties businesses have at present in the context of paying high energy bills. I presume those businesses will also be obliged to pay for the infrastructural development required to move to renewable sources of energy. This is a practical and short-term issue and concerns have been expressed about it by IBEC. Who is carrying out the economic analysis required to ensure that people who can pay the bills relating to the development of our infrastructure are employed here?
There is no need for the Minister to convince us on the merits of the shift to renewable energy. The issue at hand is how we are to adapt existing infrastructure to facilitate that shift. One of the factors in the increasing price of energy is that we are required to factor the cost of carbon into the price of electricity. Is the Government examining ways in which some of that money can be recouped? Electricity producers such as the ESB are given their allocation of carbon for free but they factor the cost of carbon into the price they charge to consumers. Is the Minister considering introducing something similar to, for example, a windfall tax which could create the type of fund, to which Deputy McManus referred, that is needed to facilitate competitiveness and infrastructural development?
Yes. I explicitly support the development of the emissions trading scheme in such a way that rather than giving free allocations, energy providers will be obliged to auction in order to purchase. I look forward to the introduction of such a change to the scheme so that we can obtain greater efficiencies in our electricity system. This change will also deliver funds that will help develop some of the infrastructure we need.
That will not happen until after 2014.
No, it will be 2012. If possible, we will do it sooner. However, it must be done within the European Union context. We will need to develop the infrastructure, particularly that relating to the grid, and this will help us deliver some of the technologies to which I referred earlier. That will probably be one of the biggest constraints.
I replied to Deputy McManus's original question in the context of IBEC's concerns. While we may agree regarding the wisdom of switching to renewable energy sources and the competitive advantage that comes therefrom, it is clear that work remains to be done with IBEC in this regard.
IBEC supports the Minister.
Perhaps what we should do is cite the work of the CBI — IBEC's counterpart in the UK — which has drawn up a very progressive and ambitious programme of change.
The Minister is being very unfair. I do not normally defend IBEC because it is not my role to do so. In this instance, however, he should listen to what IBEC has to say.
I listen with due consideration and every respect to IBEC. However, I cite the CBI's recent report as a best case example of industry groups seeing the opportunities as well as the challenges that exist in the context of our new energy future.
71 Deputy Noel J. Coonan asked the Minister for Communications, Energy and Natural Resources if he plans to introduce compensation for people suffering health problems as a consequence of working in underground mines in the past; and if he will make a statement on the matter. [15455/08]
I have no plans to introduce a specific scheme to provide for compensation to people suffering health problems as a consequence of working in underground mines. While mining requires a State mining facility lease or licence under the Minerals Development Acts 1940 to 1999, it is undertaken in this country by private enterprise. Accordingly any issue of compensation would be a matter between the relevant employees and their employers.
Former miners who suffer health problems as a consequence of working in underground mines may be entitled to disability or occupational injuries benefits under the social welfare code. It is now a standard condition of any mining lease or licence that the holder take out and maintain both employers' and public liability insurance for the duration of the term of the lease or licence. Employers are also required to comply with the Safety, Health and Welfare at Work Act 2005.
I thank the Minister of State for his reply. I am disappointed he is not prepared, or is indicating an unwillingness, to introduce a scheme for miners who kept the industry going during the so-called bad times and who now suffer from an extremely debilitating disease, pneumoconiosis, which affects their respiratory systems, particularly their lungs. A similar scheme was introduced in Europe, particularly in Britain by miners there, but they were stronger in numbers and had more power. We are ignoring them here. The Minister, Deputy Eamon Ryan's party leader, expressed concern about human rights in Tibet but one does not have to go that far. The human rights of people in Ballingarry, Arigna and Castlecomer are being denied by this Government and have been denied by previous Governments. Last year, the Minister's former ministerial colleague indicated publicly on radio that the Government had settled on a compensation scheme for those miners, but an election came up. I call on the Minister to honour the commitment of his colleague who did a lot of work for this country and for the Minister's party. During the term of the previous Government, he said that a scheme was ready to be introduced. Why is the scheme not being delivered now? Why is the Minister ignoring the matter now that he is in a new Administration? I welcome the Minister's commitment to meet the miners. I would also like to hear the Minister, Deputy Eamon Ryan's comments on this matter as he is the Minister with responsibility for it. Is he prepared to introduce this scheme?
Deputy Coonan is correct in saying that previous Ministers have grappled unsuccessfully with this matter. I am not familiar with whatever undertakings he is referring to prior to the election, but I am sure he will make that information available to me at some stage. The fundamental difference between the situation in this country and in the United Kingdom is that the British mining industry was nationalised. Clearly, in that instance, the government was de facto the miners’ employer and ultimately responsible for whatever occupational ill health, including respiratory difficulties, they suffered from. If we want to progress this issue seriously I am more than happy to meet the people involved. It will be necessary, however, in conjunction with the Department of Social and Family Affairs to come up with an innovative scheme that will successfully ring-fence these people and distinguish them from others. The Leas-Cheann Comhairle will know, more than most, that quite a number of others suffer from workplace-related illnesses or disabilities. Ultimately, if there is to be success in this area, such an innovative approach will be required. I am more than happy to meet those involved and to discuss the matter with the Minister for Social and Family Affairs.
I thank the Minister of State for his reply and I look forward to working on the matter with him. From a political viewpoint there is nothing to be gained from it for any of us, but it is important to look after the well-being and welfare of miners and their families. These were State mines. They were leased by the State to people who ran them for the State. In effect therefore it is not true to say that the State can wipe its hands of the matter. These people must be looked after.
I will certainly examine that element. There is a short time period within which the State had some responsibility in this regard — a more direct responsibility than employers in other instances. Unfortunately, if a solution is to be found on that narrow point, the information I have is that it would benefit no more than a handful of people, perhaps as few as two or three. Deputy Coonan and others who have raised this issue have a slightly larger number of people in mind.
72 Deputy Shane McEntee asked the Minister for Communications, Energy and Natural Resources the progress on the National Broadband Scheme; his views on whether it will achieve 100% coverage; and if he will make a statement on the matter. [15454/08]
78 Deputy Eamon Gilmore asked the Minister for Communications, Energy and Natural Resources the position regarding the commencement of the national broadband scheme; the qualifying criteria and application process for areas currently not served by broadband; and if he will make a statement on the matter. [14640/08]
I propose to take Questions Nos. 72 and 78 together.
The role of the Government is to formulate regulatory and infrastructure policies to facilitate the provision of high quality telecommunications services by competing private sector service providers. The widespread provision of broadband services continues to be a priority for the Government. In that regard my Department has undertaken initiatives to address the gaps in broadband coverage. These included providing grant aid under the group broadband scheme and ongoing investment in metropolitan area networks.
There are still some parts of the country where the private sector will be unable to justify the commercial provision of broadband services. Accordingly, the procurement process for a national broadband scheme, NBS, is under way. The NBS will provide broadband services to areas that are currently unserved and will ensure that all reasonable requests for broadband are met. Homes and premises that are more difficult to reach are also being examined and potential solutions are being considered. Consequently, it is expected that all homes and premises in currently unserved areas will be offered a broadband service.
The first phase of the procurement process — the pre-qualification questionnaire — is now complete and four candidates pre-qualified to enter the next phase of the procurement process. The four candidates were, in alphabetical order: BT Communications Ireland Limited Consortium, Eircom Limited, Hutchinson 3G Ireland Limited, and IFA-Motorola Consortium.
Following the withdrawal of the IFA-Motorola Consortium as a candidate, the remaining three candidates participated in competitive dialogue with my Department and are developing their proposed solutions to meet my Department's requirements for the delivery of broadband to the unserved areas of the country. It is anticipated that a preferred bidder will be selected and appointed in July 2008, with roll-out to commence as soon as possible thereafter.
While I feel like something of a broken record on this issue, there is nonetheless a number of questions I would like to ask the Minister about recent events. We know now that there will be a judicial review following a challenge taken by a satellite broadband company to the terms of reference for the national broadband scheme. Can the Minister outline what the basis of that challenge is? He obviously cannot get involved in making the case one way or the other because that is for the courts to decide, but he can certainly give us an outline as to the basis of the concern behind that legal challenge. Do the Minister and his Department anticipate that this will delay the national broadband scheme proceeding? The scheme was due to start from June onwards.
Perhaps more importantly, can the Minister clarify how an area qualifies to be part of the national broadband scheme? The Minister seems to be suggesting that they are areas where the private industrial sector says it cannot provide broadband under normal market conditions — in other words, there is market failure. However, the areas the industry says it cannot cover do not tally accurately with areas where consumers say they cannot get broadband. What will happen in small pocket areas after July when consumers contact me or the Department to complain that they cannot get broadband facilities, but the industry does not necessarily agree? A map on the Minister's own website marks in red areas of the country that supposedly cannot currently receive broadband but which will be covered by this scheme. Those areas do not tally with the reality of many parts of the country which cannot get it. Will the Minister clarify how areas qualify to benefit from this scheme?
First, I am reluctant to say anything in terms of anyone's court challenge, and particularly not to outline the case for someone from the other side. If the Deputy does not mind, I will restrict my comments in that regard.
Perhaps the Minister can comment on the timetable.
The timetable is that there is a hearing for a judicial review on 10 June. My expectation and hope is that it will not unduly delay the development of the completion of contracts and the roll-out of the programme. That is something that will be subject to judicial decision but my firmly held expectation is that we will continue this project on time and deliver as soon as possible because we do need it urgently as a piece of public infrastructure.
As regards how an area qualifies, the only way is to see what services are available at present. The nature of the scheme is designed to concentrate on areas that do not have coverage, which is exactly what it is doing. This is a changing area and broadband penetration has effectively doubled in the past year. Nine months ago we did not have a single customer on mobile broadband, while now there are 129,000 such customers. Therefore the facility is rolling out and changing in an evolving process about which we cannot be exact until we actually set the deadline. Even in the two or three months between now and that time we may see technology being rolled out. It is right for us to concentrate on areas that do not have coverage.
Is it the industry or the consumer that makes the case?
It is the technical and scientific assessment. There will always be houses that cannot be covered for a variety of reasons. Even in our current system under the universal service obligation, which we discussed earlier, there are houses that the fixed-line provider cannot get to. In such circumstances alternatives will always be put in place. In terms of broadband, the most likely development is the use of satellite to connect such locations if they cannot be connected by any other means. We are not leaving any houses behind. The aim of the scheme is to ensure that areas currently without broadband get it by whatever technology is selected by the winners of the competitive tender — whether it is Y-Mex, wireless, 3G or fixed-line. That is something the winning company in the tendering process will have to decide. The design of the scheme is to get to those areas that are not covered. One must use a map to decide what those areas are. The only way of deciding it is on the basis of scientific analysis of what is available.
I refer to the idea that the consumer will be facilitated where it is technically possible. There is a stipulation that the scheme will provide for the consumer on reasonable request. That seems like a lot of wriggle room for a company to say that this is an unreasonable request and that it will not be provided for even though, from the point of view of the individual, it may be reasonable in enabling him or her to work from home in a rural area. Who will arbitrate on whether a request is reasonable? If we are dependent on the private company to provide, and it is allowed this wriggle room, it seems very easy to cherry-pick.
Does the Minister accept it is curious that he says satellite is the option in exceptional cases that cannot otherwise be provided for when the satellite providers are seeking a judicial review?
I said I am reluctant to discuss the details of the judicial review but there will always be exceptions, no matter what technology we deliver and what country one is in. By dint of geography there will be houses that cannot be covered as there are in the delivery of the universal service obligation with regard to fixed lines. In those circumstances, it is right for us to allow for an alternative technology. The companies have an interest in attracting customers — it is a way of building a customer base. Whatever technology is used, it is likely to involve masts and an extensive network of radio connectivity in some areas. One does not want to leave those customers behind. The specific decision on any individual house is a technical decision. Currently, ComReg, in conjunction with the companies, determines how the technical term of all reasonable requests is defined. That will continue as it works at present with Eircom or a fixed line provider.
Continuing in the same vein as Deputy McManus but bringing it to a local level, let us consider a small dispersed community with a small population, outside the unbundling loop and for whom fibre optic technology and wireless solution is not available. This is not hypothetical; I refer to places such as Meenletterbale, Leckemy and places like north Inishowen. Will there be a facility within the national broadband scheme to ensure that communities that are not profitable for a satellite solution are part of the 100% access? Hypothetically, if Eircom does not win the contract, will it be favourable to unbundling the exchanges?
Just as I do not wish to talk about a legal case, we are in the middle of a tendering process so I will not speculate on what a company might do.
Is it likely to?
The principle here is to get to those communities and the definition used is the areas that do not have coverage at present under mobile, fixed line or other wireless services. Satellite covers most of the country so that exists as a covering system but was not what we were examining in the mapping process. It was to do with the communities that do not have other technologies. There may be exceptions such as houses that are always difficult to get to. We must allow flexibility in that regard but the principle of the scheme is to get to communities with a new technological platform. To a certain extent, whatever company wins, the benefit from this process will be that it will increase competition and encourage other companies not involved in this scheme in rural Ireland. It is no harm to have competing platforms to get better coverage.
What is the penetration rate when the mobile broadband subscribers are stripped from the figures? How often is the broadband providers price comparison section of the Government's broadband website updated?
I understand from the programme for Government that there is a promise to extend the current free schemes to provide free broadband for older people. What progress has been made on the initiative and what timescale can we expect?
I have a question that will require a short answer. What will households be asked to pay under the national broadband scheme? Will it be an average market price, such as €15, €20 or €30 per month? Will it be the same across the country? How is the price determined per household or per business for the provision of broadband under the broadband scheme?
The intention is to replicate what is available in the rest of the country in these areas, in terms of speed and other conditions——
And on price.
——across a range of service issues, as I understand it. I am reluctant because one cannot be precise in terms of contracts when one is in the middle of a tendering process.
Surely they know what they are tendering for.
It is a competitive tendering process and the issue of tender documents is due on 28 April, as I said earlier at a committee meeting. I do not wish to be specific because I do not wish to restrict anything. In general, the principle is to have the same service as is available in the rest of the country.
I must revert to Deputy Stanton in respect of the penetration issue in terms of mobile providers. Up to the past month the OECD did not allow mobile figures to be included in penetration rates and this disadvantaged Ireland relatively because we have a high level of mobile penetration or mobile take-up compared to other countries. The size of households was another issue that disadvantaged us.
I must revert to Deputy Stanton in respect of updates on the price comparison website. The broadband for older people scheme is primarily an issue for the Department of Social and Family Affairs and I apologise for not being in a position to give more details. I will revert to the Deputy with specific details from the Department.
73 Deputy Ciarán Lynch asked the Minister for Communications, Energy and Natural Resources if there are plans to invest in seaweed being used for bio-fuels; the situation in relation to using seaweed for bio-fuels; and if he will make a statement on the matter. [14659/08]
The programme for Government commits to the development of an Irish bio-fuels industry and to the sustainable development and deployment of indigenous bioenergy resources. In the context of our renewable energy ambitions we need to mobilise as yet untapped biomass resources, including the potential offered by marine algae or seaweed. Work is under way to determine what the marine environment might contribute to developing the national bio-fuels capacity. The analysis will include identifying the necessary research, development and demonstration projects to realise any such potential.
Sustainable Energy Ireland, SEI, is therefore commissioning analysis of the potential of marine algae as a source of bio-fuels for Ireland. This work will provide a comprehensive basis on which to inform research and development work on the potential use of marine algae for renewable energy. It will also provide data on the bio-fuels capacity that could potentially be derived from the marine environment. Tenders for the study are currently being evaluated by SEI.
I am advised that the study will take up to six months once the tender is awarded. In light of its findings we will be better equipped to quantify the scale of the potential marine resource for bio-fuels development and to develop a strategy. I expect SEI to work very closely with the Marine Institute on this initiative.
I welcome the initiative taken by SEI and the Minister to explore this particular possibility to use seaweed or algae for bio-fuels. A source, where there is a nutrient rich environment, is available to us and regrettably we have had problems in respect of agricultural run-off. Is it possible for the Departments of Communications, Energy and Natural Resources and Agriculture, Fisheries and Food to undertake a joint project when the research is complete? It may be limited in its application but it is a source that creates no problems with regard to the production of food. As in other areas, second generation bio-fuels can deal with a form of waste or the result of contamination that can be put to productive use.
I agree with the Deputy about the potential benefits in this area. We have a fundamental problem regarding energy in that we will never get anything as good as petrol. I saw an analysis recently which showed the return on energy investment. For exploration petroleum which is extracted and processed, there is a return of 20 units of energy for every single unit of energy put in. The difficulty we have with biofuels and other new replacement technologies is that the energy return can be of the order of one or two to one. For every unit of energy put in, one might only get one unit of energy back. The real potential from second generation biofuels is the technology which allows that leap forward. Biodynamic biological processes are being used to get a greater return.
There is a close connection between the Irish Marine Institute and our Department in this area, and with Science Foundation Ireland. Many of the research projects our Department set up in the Beaufort and geoscience area were targeted at this issue. Many of the marine projects now come under the remit of the Minister for Agriculture, Fisheries and Food, but there is still a significant connection, in tandem with a strong working group. Our renewable energy development group met for the first time three weeks ago and it includes representatives from the Department of Agriculture, Fisheries and Food and the Irish Marine Institute as well as our own Department officials — recognising that the initiative must be interdepartmental.
What degree of international liaison is going on in this area? Is the Minister aware of some very exciting research in the United States, for example, where they are producing biodiesel from algae not in the marine environment, but in tanks onshore using light energy? It is very exciting and advanced. Rather than reinventing the wheel, what type of international liaison is going on?
When we speak of using other materials for biofuels, has the Minister's Department or the Government looked again recently at sugar beet to produce ethanol? This crop was grown widely in Ireland and the technology and expertise exists. Does the Minister agree that it produces a very high return and it would be very worthwhile to investigate its possibilities?
This is an international issue because all the main energy companies are now investing in what is called clean energy finance. Investment in this area has gone from about €24 billion in 2006 to roughly €110 billion last year, a massive growth. There is enormous interest where any research initiative is exhibited by international financial people to determine who gets the technology to develop it. We are keeping our eyes on what developments are occurring internationally.
In terms of sugar beet and the use of ethanol as a development technology, this again is a highly scientific area and one must comply with the conditions the EU is seeking, namely, an assessment of the emission returns, which can otherwise be defined in terms of the return on energy investment, and the source. The Brazilian Government maintains ethanol produced in Brazil gives a much higher return in terms of the reduction in emissions than similar Irish technology. That has to be proven and tested.
Going back to what we discussed earlier in terms of the food price rises that are occurring, the real problem is developing around ethanol because the use of corn and maize for its production in the mid-west of the United States in particular is driving up prices, as well as oil prices generally, since oil is an input for food production.
This is something we can discuss in more detail when we come to debate our biofuels obligation, but I am reluctant to hang my hat on any single technology at present, particularly where one is competing against Brazil directly. The Brazil technology is based on sugar cane, which fits the sustainability criteria, as long as rain forests are not being knocked down, and they have a much higher return on their energy inputs. However, that is not to rule it out. Where we had the infrastructure in place, it made sense to use it. Whether it may be retrospectively introduced is something we have to look at in more detail.
Written Answers follow Adjournment Debate.
