Priority Questions

PSO Levy

Leo Varadkar


45 Deputy Leo Varadkar asked the Minister for Communications, Energy and Natural Resources if his Department has calculated or received any calculation from any body under its aegis estimating the increase that would be required in the public service order levy to accommodate 800 MW of additional installed capacity for onshore wind energy and 800 MW of additional installed capacity for offshore wind energy at current fuel prices; if statistics for higher or lower levels of capacity are available; and if he will make a statement on the matter. [38299/10]

Ireland currently has 1,459 MW of installed wind capacity which is estimated to rise to 1,703 MW by the end of the year. We are on track to reach our 2010 renewable electricity target. Ireland's target of 40% renewable electricity target by 2020 will be largely met through onshore wind under the Gate 3 process.

There are three offshore wind projects totalling 800 MW of capacity in the Gate 3 connection process. EirGrid's Gate 3 programme shows these three offshore wind projects having firm access to the electricity system on a phased basis in 2013, 2018 and 2020.

The renewable energy feed-in tariff, REFIT, is paid on electricity generated. There are no payments in advance of projects being built and operational. This means that it is likely to be 2020 before there are 800 MW of offshore wind subject to REFIT support. The connection of onshore wind will continue progressively over the next decade with approximately 4,630 MW needed to meet the 40% target by 2020.

REFIT is funded by the public service obligation levy, PSO, which is calculated on an annual basis by the Commission for Energy Regulation, CER, and which is paid for by all electricity consumers.

The 2010-11 PSO decision was published by CER at the end of August. The total PSO cost calculation comes to €156 million for the next 12 month period. Less than one third of this figure, some €43 million, is in respect of renewable energy support costs, with the balance being mainly peat support prices. Generating plants that are supported by the PSO are typically supported for a 15 year period, so that over time these plants will start to leave the PSO support regime. By 2020 the existing conventional peat and gas plants and most of the alternative energy requirement, AER, renewable energy contracts, which together account for more than €100 million in support in 2010-11 will cease to be supported under the PSO.

REFIT supported renewable generation will come into the PSO calculations progressively over the period to 2020, as renewable capacity is delivered in line with the EU legally binding target for Ireland. The progressive flow of renewable generators coming into the PSO support mechanism will be offset to a degree by the categories of generators exiting the mechanism over the next decade.

The annual cost at current fuel prices of 800 MW of onshore REFIT supported wind generation is approximately €36 million. The offshore REFIT tariff has yet to receive approval from the European Union. It is expected in any case that new offshore wind projects would operate within a more integrated UK and Irish market which would allow for the exporting of such power and would lower the future cost of any such REFIT support measure. Market operators have outlined that the existence of wind generation on our system has had a significant effect in lowering the wholesale cost of electricity as the availability of wind generation has allowed us to scale back the use of more expensive low merit plant. I have asked the regulator to quantify the estimated savings that have accrued from this effect and will revert to the Deputy in due course.

Costs of wind drop commensurately as and when gas prices rise. For example when fuel prices result in a wholesale market price of €100 million per megawatt hour onshore wind would cost zero. The present level of wind on the system is putting strong downward pressure on wholesale electricity prices in the single electricity market. It is estimated that wholesale prices are already 6%, or €120 million less as a consequence of wind. There are many complex challenges inherent in building an offshore wind sector of scale not least of which are the capital costs of the technology and the need for offshore grids. Getting the project costs down and delivering offshore grids cost effectively is a shared challenge for Ireland and the other countries of the North Sea's offshore initiative. We will continue to work with all stakeholders to meet these challenges.

The Government's twin strategies of integrating renewable energy and increasing energy efficiency are the key to reducing Ireland's dependence on fossil fuels. These strategies make absolute sense from an economic competitiveness and environmental perspective. A high level of wind generation provides a hedge against the inevitability of high gas prices over the coming decade. It is worth emphasising that in 2008 when gas prices were high, wind generators received an adequate return at little cost to the consumer. The REFIT scheme is the best way of ensuring that strategically vital investment in wind generation takes place at minimum cost to consumers.

This is probably the answer I was most afraid the Minister might give. The question I asked was whether his Department had calculated or received any calculation from anybody under its aegis estimating the increase that would be required in the PSO levy to accommodate 800 MW of onshore wind, and the same figure for onshore wind. He was able to give me the figure for onshore wind, €36 million, which is acceptable and there is a clear economic case for this. What he was not able to give the House was a figure for the additional cost of offshore wind. The best he could say was that he would ask the regulator to quantify this further. That answer gives me great concern, because it indicates clearly that the Minister has embarked on this policy without calculating or estimating the cost, and he has admitted that.

I have had work done on this by some independent energy economists, which I shall publish in due course, and it is estimated that the cost will be in the region of €2 billion over the 15-year period, €500 million to pay for the energy and €500 million in pure premiums or subsidies. It is very hard to see why there is a case for this because if we can do this onshore, then we do not need to do it offshore. There is no environmental case for it if it can all be done onshore, since this is much cheaper, and we know the Minister has calculated the cost of it. It seems there is no economic case, either, and it would appear the Minister has not calculated that economic case. Perhaps he might tell the House why he has embarked on this policy without calculating up front the costs and benefits. He does not know the costs, and it would appear that the benefits are nil because this could all be done onshore, in any case, as it should be.

I am very glad to hear the Deputy's comments on the sense behind our onshore programme. Would he not agree, on that basis, to change what he has said in terms of stopping the PSO for onshore wind — concerning which he issued a statement in August — and which could create enormous devastation for the wind industry, if put into practice? I ask him to come back to me on that.

As regards offshore, we are looking into the question of costs and have worked out various cost scenarios. First and foremost we would have to get the REFIT scheme through Europe and have absolute confirmation on capacity and payments. In advance of that we cannot be absolutely specific on what the costs would be. Critically, I am very ambitious for the development of offshore resources, but in the context of their presenting an export opportunity for Ireland into the UK and French markets. We are working extensively with our UK and French colleagues as well as other governments across Europe on the development of an offshore supergrid for north western Europe, and it will be possible for us to get part European funding to support such a grid. It is on the basis of that work and plan that I see a future for an Irish offshore grid, and not just in respect of the 800 MW mentioned here. In the medium term we could be looking at a 5 GW development of offshore wind, within the Irish Sea, which we could, perhaps, exploit as an export opportunity into neighbouring markets.

However, that requires further work and analysis, as well as co-operation and trading arrangements with the UK and French Governments. We are working on that under the ISLES project, which is doing exactly what the Deputy is looking for. It is looking for a detailed market analysis as to how this can happen. I see us developing our offshore industry under that structure, as possessing massive economic potential for this country in exporting wind power, something I should have thought Fine Gael would also have been interested in.

It is customary for Opposition Members to ask the questions in this House, not the Minister, but I shall indulge him on this occasion, in telling him what I have already told him, namely, that the party has called for the PSO levy to be suspended for several months, pending a review, and that the moneys be taken away from the hyper profits of the semi-State companies the Minister likes to protect. I refer to the €500 million in profits they made last year which dwarf the money required for the PSO levy. I have already told him that, but obviously he does not want to listen.

I was very concerned at the Minister's answer. I heard him say, "We are looking at the cost." Why is he only looking at it now? Surely he should work out the cost before engaging in this policy. He said they had worked out various cost scenarios. My question specifically asked whether his Department had calculated or received any calculation from anybody under its aegis, estimating this, and he has not given the answer. Why is he concealing that answer? He has just admitted that he has "worked out various cost scenarios". Will he publish them? Why is he concealing them? Why did he deny this in his answer? Why has he misled the Dáil on that point? Why had he not worked this out before applying for new state aid?

My concern is here. I can buy into much of the Minister's ideological vision on this, and I am enthusiastic about much of it. However, one cannot have any ideology, no matter what it is, if one does not test it first with basic numbers and facts. The Minister seems not to be doing this, which is a matter of great concern for the public interest. He might tell us what those cost scenarios are and explain why they were not in his answer. He might also explain why he has misled the Dáil on this issue by concealing information from us and whether he intends to publish the information now that he has admitted it exists. He might also confirm to us that if Ireland does export wind to other countries — I hope we will be in that position if hydrocarbon fuel prices rise to an unsustainable level, and I share the Minister's vision in this regard — we will not be subsidising it before it goes out. In other words, we should not ask Irish people to pay part of the bill of French or British consumers. I ask the Minister to confirm that this will not be the case.

I am afraid I must disagree with the Deputy's claim because it is important in the context of the wider discussion. It is not true that we are going soft on the utility companies. We have taken around €500 million away from the profits of the ESB to bring down transmission prices and therefore prices for all energy users.

Not all — just big energy users.

No, for all energy users. It is important for large users in particular because that is where the jobs are and, yes, we want to support jobs. That is what we have done — not what the Deputy said. Crucially, the Deputy's proposal to stop PSOs for wind — even, as the Deputy said, on an interim basis — would have the same effect as a similar moratorium earlier in the last decade, which sent a message out to the financial community that its members should stop investing in wind energy projects in this country, doing major damage to the country. What the Deputy sees as a light little idea of stopping payments for a while would have a major negative effect in this industry, which creates a lot of employment.

On a point of order, a Cheann Comhairle——

These are questions to the Minister. I asked the Minister a question and he did not answer it. He then asked me a question, which I indulged him by answering. He still will not answer my question. A Cheann Comhairle, would you ask him to answer the question?

I do not have any control over the adequacy or otherwise of the Minister's response.

This debate is about PSO assistance.

No, it is not.

The Deputy is proposing that we stop it.

No. There is a question I asked about the——

It would hugely damage this country and put up electricity prices.

We are on priority questions.

No. This is a serious point of order. I made the mistake of indulging the Minister by answering a question that he asked of me. Yet he refuses to answer my question. He has now admitted that various cost scenarios have been worked out and that he has deceived the Dáil. He has admitted that he will not——

Deputy, let us get back to the issue.

The public interest is not being looked after——

The Deputy may well have to find another way of addressing this. He has made a good start.

——when we have a deceptive, dishonest Minister who comes in here and asks Opposition spokespersons questions but will not answer any question himself.

We will move on.

It is appalling.

Excuse me, the Deputy will have to retract his statement.

No, I will not.

To claim someone is dishonest——

He is dishonest.

I am simply making the point——

He is simply not answering the question.

——with regard to the debate we are having on public service obligations, that his proposal to stop the system would result in higher prices and major economic damage for this country. That is a point that is entirely valid within this debate.

I ask the Minister to answer the question I asked him.

I have to——

To answer the Deputy's question——

I am sorry, Minister.

——although he certainly has not said he would not do it, which is a real concern——

I ask the Minister to resume his seat for a moment as I must deal with something.

This is ridiculous.

The word "dishonest" was used in respect of a Member of the House.

But it is dishonest.

I ask the Deputy to rephrase what he said.

No — I cannot——

I ask the Deputy to rephrase it.

I will rephrase it in this way. The Minister was asked a question by me which he refused to answer. I asked him if his Department had estimated, or received calculations from any body under its aegis estimating the increase that would be required in the PSO levy to accommodate 800 MW of onshore wind energy. He gave the figure for onshore wind but did not give the figure for offshore wind. He then went on to admit that the Department has worked out various cost scenarios. Yet he has not answered the question.

I ask the Deputy to withdraw the word "dishonest".

Without equivocation. He should just withdraw it.

I ask the Deputy to withdraw the word as it is inappropriate.

I withdraw the word "dishonest". However, what is very appropriate is to say that the Minister is not telling the truth. He has admitted that he has worked out various cost scenarios and he now refuses to publish them.

Deputy, we must move on. We are on priority questions.

What I said——

The Minister is not telling the truth.

A Cheann Comhairle, I require an opportunity to reply. I clearly explained about the potential costs for offshore wind energy. First, we would have to send our proposals to Brussels for clearance, and we have not got that yet, so I cannot give the Deputy an answer until that happens.

The Minister said that cost scenarios had been worked out.

Even beyond that, however, those cost scenarios depend——

Will the Minister publish them?

——on the outcome of the——

Will the Minister publish them?

Please allow me to answer the question. The Deputy is throwing out insults and slurs——

So is the Minister.

——but he will not listen to my answers. In answer to his question, as I said, further analysis is required — the likes of the study we are doing in the ISLES project, which requires us to work out what arrangements can be made within the UK market. The Deputy needs to know that before I can give him an answer. Anyone would.

We will have meetings over the next few months with the UK and French Governments on this very issue.


Will the Minister publish the cost scenarios?

I cannot give the Deputy an answer until I have some sense of what they will say——

Will he publish the cost scenarios?

Please, Deputies. We will have to move on.

——because I see this as an export opportunity.


Will the Minister publish the cost scenarios he has admitted exist?

That is straight talking. It may not be the answer the Deputy wants to hear, but it is the truth of what is happening in policy.

Will he publish the cost scenarios he has admitted to, or will he continue to be——

Deputy Varadkar, we must move on.

I wish the Deputy would change his policy, which is in danger of ruining renewables in this country.

I ask the Minister to answer Question No. 46.

I wish the Minister would stop concealing information, which he has admitted now.

The Deputy refuses to recognise that he got it wrong.

Respect for the House, please.

He should stop concealing information.

He is saying in the press that I would stop it, yet in here he says it is actually the right idea.


I never said that. The Minister has admitted he is misrepresenting it.

I will come back to that because it is a problem the Deputy needs to address.

Could we address Question No. 46, please, Minister?

By all means. I am sorry, a Cheann Comhairle.

Electricity Generation

Liz McManus


46 Deputy Liz McManus asked the Minister for Communications, Energy and Natural Resources if he will direct the energy regulator to abandon his plans for the rebranding of the ESB and An Bord Gáis; if his attention has been drawn to the fact that the estimated cost for this measure for An Bord Gáis is €40 million; and if he will make a statement on the matter. [37997/10]

As part of the electricity deregulation process, the Commission for Energy Regulation (CER) commissioned market research which indicates that there is confusion among electricity consumers as to the separate identities and roles of ESB as owner and operator of the electricity network and ESB as an electricity supplier.

This is of concern because ESB Networks must provide, and be perceived to provide, the same level and quality of service to all customers irrespective of their electricity supplier.

It is vital for consumers to have full confidence that they can switch supplier without any impact on the quality of their network service. Therefore, as part of the deregulation process and the delivery of real competition, ESB is required by the CER to rebrand its electricity supply business.

ESB would also in any case be required to engage in some form of rebranding as part of the implementation of EU internal energy market third directive. Member states are obliged under the directive to ensure that there is absolute clarity for consumers as to the separate identities and functions of the energy network operator and a related energy supply company. For this reason, the issue of rebranding needs to be addressed for both ESB and, in due course, BGE.

ESB has advised that rebranding will have an estimated cost of between €6 and €8 million. The CER has also confirmed that there is no plan to include the costs of rebranding in ESB's regulated revenues in the period 2010 to 2012.

ESB has made it clear that the company will introduce its new brand in a practical and cost effective way without causing inconvenience, expense or confusion to customers.

Once full electricity market deregulation has been introduced, expenditure on advertising and marketing, and whether these costs are met from electricity revenues, will be a commercial decision for all competing suppliers including ESB and BGE. The deregulated market will maintain constant pressure on all costs incurred by suppliers, who will be competing vigorously on price offerings to customers.

Turning to the gas market, there is no specific proposal or timescale or firm costings as yet for rebranding. However, with the successful development of competition in the retail gas market, the CER intends to publish for consultation in the coming weeks a roadmap for gas market deregulation. The question of rebranding is likely to be addressed in that context.

In the context of delivering full competition in the gas market and delivering on EU requirements, all concerned are committed to ensuring any rebranding of BGE is done in a fully cost effective and transparent way.

I thank the Minister for his reply. However, it shows a complete lack of understanding of the current situation affecting customers, who are reeling from a 5% increase in electricity prices. Many are experiencing such difficulties that their supplies are being cut off. Almost 2,500 disconnections from the electricity supply are taking place every month. Does the Minister not agree that it is totally unacceptable for the public to discover that millions of euro are to be spent on a costly rebranding exercise that is not necessary and has no justification, and the cost of which will be borne in some way or another by customers? It is unacceptable at a time when public finances are dwindling and most people are desperately afraid of the impact of the economic recession.

Surely the Minister understands that the public mood cannot tolerate the squandering of millions of euro on an exercise that is unnecessary and has not been costed by the regulator. Does he accept, since he is, in effect, the person who regulates the Commission for Energy Regulation, that under legislation he has the power to direct the regulator to desist from embarking on this costly and unnecessary exercise? Does he not accept that there has been no complaint about electricity networks? This is not an issue for competitors who want access. It never has been an issue since competition was introduced.

The Minister has to get a grip on the reality facing people and sort out this costly exercise, priced at €40 million for Bord Gáis. He gave a figure for the ESB that is only one figure bandied about. The regulator made a decision that applies to the retail sector of the ESB without having costed the price of his decision. Surely that in itself requires the Minister to take action.

I am absolutely aware of the disconnection and the fuel poverty issues. I am also aware that competition has helped our consumers by driving prices down and we want to keep that up. We want to see the competition that we have introduced continue to work. Deputy McManus has been saying that we want to see the ESB get into that competition to get these companies fighting each other in order to bring prices down.

In making sure such competition was possible, the ESB and the regulator agreed that they would rebrand the company's supply business as part of that move towards a more competitive market. It is the ESB cost estimate of €6-8 million that I am quoting. Having looked at the estimates, the regulator stated that it would not be put on the price to consumers. The benefits we get in competition are a multiple of any such cost effect.

I do not know why the figure in respect of Bord Gáis came up in the debate held at the committee, but there is nothing in the regulatory process that is forcing a rebranding exercise that would cost that kind of money. That is a matter for Bord Gáis and its representatives, who came out with the figure in the committee hearing. It is not coming from the regulatory process.

Competition works here. It has delivered significant reductions to the Irish public. This will help it further. The regulator is given the job to manage a competitive regulated market. He is doing it well and that is the right approach for the Government to take. We should let the regulators and the company work out the finer details of how competition works.

The cost of electricity has gone up considerably. It is coming down but it still is not coming down as much as it has gone up. The ESB made a strong case to the regulator not to rebrand, but the gun was put to its head. If it wanted a deregulated market, it had to go to 60% and rebrand, or 40% without rebranding, which is the true figure. What kind of a choice is that?

Those decisions were made even though the regulator did not have the faintest idea of the costs involved. He was asked at the joint Oireachtas committee what assessment was done on costs. He said there was no assessment and he did not know.

Deputy, there are time limits on this.

The Minister said he did not know from where the figure of €40 million came. It has come from Bord Gáis repeatedly.

The Minister and others have said that everything is up for grabs now because we are in a completely new situation. Even if it is a small gesture to the hard pressed consumer who will ultimately pay, the Minister should state that he will direct the regulator not to continue on this path of squandering money unnecessarily at a time when everybody is having to watch out how they pay their bills and has to take due to the uncertain times in which we live.

It is not just the regulator. It is also contained within the third energy package coming from Europe.

It is not. Other countries do not do this. That is crazy.

The directive is there. It was negotiated at great length. It was done with the interest of consumers at its heart.

The Minister should not worry about the directive.

It clearly states that such rebranding between supply businesses and network businesses should be done.

I find it hard to understand where the Bord Gáis figure is coming from, given that there have been no negotiations on rebranding, other than what already has taken place under such a European directive system. The creation of Gaslink, which is a separate name and operation to Bord Gáis, came from a European directive implemented by the regulator at very low cost and with little fuss.

The Minister should not hide behind the regulator.

I will not hide behind the regulator. I will continue to push the regulator and the companies in this market towards greater competition, because that is what brings down prices and will get a better service quality. Irish householders know that. They can see it in the 20% reductions in gas offers that have been put out to the market at the moment. We can get those 20% price reductions by pursuing the right competition policy. It is happening, it is working and we will continue with it because we will continue to bring prices down. The 20% reduction is a reality.

It is a 5% increase and the Minister knows that.

That 20% reduction by Bord Gáis is there.

The Minister should have some appreciation of what people are going through.

We must move on to the next question.

I do appreciate it, and the Deputy should recognise that the 20% reduction is also real.

State Assets and Liabilities

Leo Varadkar


47 Deputy Leo Varadkar asked the Minister for Communications, Energy and Natural Resources if he has met with or made a submission to the special group on public service numbers and expenditure programmes that is looking into the sale of State assets; and if he will make a statement on the matter. [38300/10]

Together with officials of my Department I met with the review group on State assets and liabilities on 13 October. The Department, with my approval, made a submission in the matter to the review group in advance of the meeting. The meeting was a useful and wide ranging discussion. The review group is expected to report to the Government by the end of the year. It will then be for the Government to decide on the issue.

I fully agree that given the current economic situation and the severe pressures on the public finances, full consideration must be given to making the best use of State assets. I have responsibility for a considerable number of commercial semi-State bodies. These companies play a critical role in the Irish economy, by providing essential infrastructure and services to consumers and enterprises. They are also significant employers and most of them contribute significant dividends to the Exchequer.

The principal bodies under my remit are the State energy companies, public service broadcasters and An Post. I also have policy responsibility for the exploitation of spectrum and a number of natural resources.

The major energy utility companies, namely, ESB, Bord Gáis, Bord na Móna and EirGrid, are pivotal contributors to the achievement of Government energy policy objectives. They ensure security of supply to the economy and consumers through investment programmes in the national energy networks and power generation including major renewable energy investments. They are collectively committed to decarbonising the energy system in support of the smart economy. The supply companies, ESB and Bord Gáis, have also contributed to the much more competitive regime now operating in the electricity and gas markets.

I would expect that the review group will take strong account of the major contribution made by the State companies at both sectoral and national economic levels. As I stated already, any decision on disposal of any State assets will be a matter for the Government.

The work of the review group also presents an opportunity to examine existing structures and practices within the State ownership model, and to assess how best these valuable assets can contribute to national investment priorities and help restore growth. I believe for instance that the review group should give consideration on how best to extract further sustainable value for the State by exploring innovative ways to secure investment, including new private sector financing models, in renewable energy sources. There is major untapped potential in the national forestry sector, and in the energy biomass and environmental sectors. Both Bord na Móna and Coillte, with their core skills and resources, and considerable landbanks, are well placed to develop these sectors further and I have raised this specifically with the group.

There is a tied theme between Deputy McManus's last question and my previous question. The Minister is just not interested in working out the cost of anything. During the boom period, "Champagne Charlie" gave tax cuts, pay increases and tax shelters to everybody, and during the bust, "Easy Eamon" is prepared to sign any blank cheque without ever working out the cost. Ministers may change, but this Minister really fits in with Fianna Fáil. He is more Fianna Fáil than Fianna Fáil itself.

I believe the Minister wants a consensus on a four year budget strategy, and I think we do need such a strategy. It will hopefully be possible to do this within four years. For that to be credible, we need a four year growth strategy. To achieve growth in the economy, we need stimulus and we need competitiveness. My party takes the view that the sale of State assets may form part of that, provided that money is invested in new assets, such as next generation networks, forestry, onshore wind and other forms of renewable energy.

Does he have any principled objection to the sale of State assets or can he agree to them if they add up? What strategic benefit does the State have in owning three generation companies and two supply companies?

I do not have any principled objection; I treat each question on a pragmatic basis, looking to see what value we can get. In response to the Deputy's second question, I see the energy companies group slightly differently. I see Bord Gáis and ESB competing in the electricity and gas markets and they will probably become increasingly integrated. I also see them managing our electricity distribution network in ESB's case and the gas network in Bord Gáis's case, which they do in a very effective way. I believe they can compete with each other while still having a common owner. I do not see that impeding competition; in fact day in and day out they are competing very effectively against each other and bringing benefits with it.

They are also bringing great benefits to the State in that they are able to raise funds, which is difficult for certain companies in the State at present, and spend it very effectively. They are providing a very significant stimulus, along with EirGrid, in terms of developing our transmission and distribution networks that will be of long-term economic value to the State. Those companies are continually able to raise funds and spend large amounts of €1.5 billion to €2 billion each year in this country, which provides a major stimulus for the country and I want it to continue. The greatest value we can get from those companies is through the economic lift they give through their competent management and competitive instincts.

I would put Bord na Móna and Coillte in the same space although they have a slightly different energy space. While to date Bord na Móna's generation has been from biomass, from peat, I see that changing and moving away because the PSOs we are reviewing will come to an end in the latter part of this decade so those companies are already on a path towards seeking alternative markets and alternative space in the energy side. Bord na Móna in particular has a great opportunity in a range of environmental services and bio-energy businesses that are different in nature from the work that Bord Gáis and the ESB would do. They may well develop wind farms and their landbank may be very useful for the development of such resources, but I would imagine that would be done as it has been to date whereby they contract with other energy companies and in that collaborative basis get facilities built.

I believe Bord na Móna has great opportunities in its logistics skills and its ability to handle biomass and also its skills in providing environmental services in waste, water or energy services. It is quite different from a gas or electricity utility service, where there is a supply company, a network company and an energy company. That is a very different market and a very different business.

Coillte has a similar opportunity. This State asset review group could help us with working out the links between Coillte and Bord na Móna or the competitive market we want to create. It could help us to ascertain how we might access long-term finance, through pension funds and so on, to fund some of the forestry applications that could then provide material for such a bio-energy industry. That is where there is an opportunity to raise finance and generate economic activity that does not come from the State but from private finance sectors using the expertise of State companies.

EU Directives

Liz McManus


48 Deputy Liz McManus asked the Minister for Communications, Energy and Natural Resources to provide an update on the report from an independent consultant into free-to-air rugby matches; the timeframe for publication of this report; when he expects to make a decision on this issue; when he expects to make a decision on this issue; the cost of this report; and if he will make a statement on the matter. [37998/10]

The audiovisual media services, AVMS, directive provides that member states of the European Union may designate sporting and cultural events of major importance to society as free-to-air. The Broadcasting Act 2009, having transposed the AVMS directive, sets down the statutory process for designating events free-to-air.

On 30 April, I set out proposals for a limited extension of the sporting events which are designated free-to-air and invited submissions on those proposals. I also decided that the final decision on this matter will be informed by an independent analysis of the financial and other impacts of listing each event. Indecon International Economic Consultants have been commissioned to do this report and are currently finalising the report for me in this matter. I expect that this report will be delivered to me before the end of the month. The value of the contract is €73,387.

After consideration of the Indecon report and other submissions received, I will revert to Government with definitive proposals. Subsequent to Government consideration of the matter I am required under the audiovisual media services directive to inform the EU Commission of any change to the events to be designated. The Commission has a period of three months to verify that the list is compatible with Community law, to notify other member states and to seek the opinion of the committee established pursuant to the directive. Any designation will only be effective after the Commission has published the list in the Official Journal of the European Union.

I am surprised that the Minister has still not received the report; in fact I find it hard to believe. The Minister made this announcement in April, appointed consultants at the beginning of August and promised that the report would be completed within eight weeks and would be followed by a debate. He has now told us that the report has not even been completed, which is the Minister's responsibility. For a job that was supposed to take only eight weeks, €73,000 is good money. When one looks at the Estimates for the Department of Communications, Energy and Natural Resources, the Minister seems to be very flaithiúlach when it comes to employing consultants. One of the few items in the Department's Estimates that increased was the cost of consultants. I believe it increased by 140%.

It appears that the Minister commissioned a report after an announcement he made to make certain events free-to-air, but at the time he made the announcement he did not indicate he would need to employ consultants. Why has it taken so long? How far has it got? Has the Minister or any of his officials seen a draft report? Has any of that work been done? Will it deal with the IRFU concerns about the cost? The IRFU has stated that it will cost between €10 million and €12 million. Does the Minister have any comment to make on that? He seems to be walking backwards rather than walking forwards on this matter. Concerns have been expressed about costs to be incurred, for example, by RTE in the context of the Minister's decision. Since we do not have a report, perhaps he might tell us where we are, considering the promises and undertakings he made to the public who have an interest in the matter, but are not getting answers.

I expect to have the report very shortly and will then bring it to Government to allow my Government colleagues to share their views at which point we will make a call on it and present it to Brussels as set out in the legislative process. This is always a process that takes time, which is right because it is important. I am very confident that the consultants who are being very thorough and exacting in their work are providing very good value for money. It is important to get it right in terms of getting the Irish public's position to ascertain the real importance of these sports in our cultural life. While that takes time and a certain amount of money, it is important to get it right because they are important events. It is important that we do it in a proper process that is legal and that we can bring to Brussels as the final arbiter. We need to be confident that we have followed the correct legal process, which takes time and costs a certain amount of money, but is a process over which I would stand as it is serving us very well.

The Minister has not answered the questions I asked him.

That makes a change.

He has talked about a process he created in order to give himself some cover and now he will not give any answer. Has the draft report been seen by him or the officials in his Department? That was my first question. Does it deal with the IRFU's concerns and the RTE issue? I will quote the Minister as he seems to be suffering from amnesia. On 25 August he said he expected to come back to his Government colleagues early in the autumn with the analysis done followed by a further lengthy debate on the issue and a decision fairly quickly. He is no longer talking about a lengthy debate but going straight to Brussels. It seems the Minister is wavering on this. He made a decision and an announcement but he has been rowing back from that decision. He should answer the questions that people want answered.

First, I have not seen that report nor, I understand, has my Department.

Nobody has seen it.

It will be one or two weeks late but once we have it I will then bring it to Government and then, as appropriate, bring it to Brussels. That is the process upon which we are set. The report is a week or two late but that is a timeline I am happy to bear——

This is not early autumn.

——to get it right.

We are moving on to the next question.

On a point of information for the Minister——

We must move on.

——this is mid-October, not early autumn.

The Minister appointed the consultants and, at the very least, since they are being paid nice money——

The Deputy will have to find another way to revisit this matter.

——to produce a report, they should do so on time.

Telecommunications Services

Michael D'Arcy


49 Deputy Michael D’Arcy asked the Minister for Communications, Energy and Natural Resources the way this country will achieve its target for a high-speed Internet access without significant Government capital investment; and if he will make a statement on the matter. [37814/10]

Government policy on the development of the electronic communications market, including next generation broadband services, is set out in "Next Generation Broadband — Gateway to a Knowledge Ireland", which I published in June 2009. The policy paper was developed in accordance with various key principles, which are crucial to the development of the market including: competition, at platform and service levels, which drives innovation and investment; investment certainty for service providers considering investing in network infrastructure; investment intervention by Government to bridge any digital divide in cases of market failure and to meet the State's own communication needs; and also appropriate regulation.

This policy has facilitated significant progress in rolling out broadband services, including increased speeds, over recent years. For example, at the end of June 2010, Ireland had in the region of 1.48 million broadband subscriptions. The year-on-year growth in subscriptions over the preceding 12 month period was over 16.5%. Internationally, Ireland ranks 11th of the EU 27 for per capita broadband penetration in composite fixed and mobile services, fourth for mobile only penetration, and 14th for fixed broadband penetration.

This progress, measured in international comparisons, is also demonstrated in a recent study of broadband services in 72 countries by the University of Oxford and the University of Oviedo, Spain, which ranks Ireland 13th of the 72 countries studied, ahead of France, Canada, the United States and the UK. The study considered broadband quality, that is, download speeds, upload speeds, and latency, and broadband penetration to map the world's broadband leaders. Ireland is also grouped among the top ten broadband movers since 2009 with 88% broadband penetration, or 11% increase on the previous year.

More generally, of the homes with broadband connections, 77.8% of them and 85.8% of small businesses are using broadband speeds between 2 Mbps and 10 Mbps. UPC is providing speeds of up to 30 Mbps and is rolling out speeds of up to 100 Mbps under the new DOCSIS 3 platform. Eircom and the Vodafone/BT alliance are both rolling out speeds of up to 24 Mbps using vDSL technology. In the wireless market, Imagine have launched WiMAX, a broadband product with speeds of up to 8 Mbps available. In addition, Eircom has recently launched an Ethernet product offering speeds of up to and exceeding 1 Gbps to wholesale customers and to high-bandwidth users.

The next generation broadband policy paper also proposed the establishment of a next generation broadband taskforce comprising industry, Government and ComReg. The task force can facilitate a collaborative approach to investment in the development of high speed and high quality broadband in Ireland to meet the demands of Ireland's smart economy by enabling wider customer access to next generation networks. I signalled earlier this month that I now propose to establish the taskforce and the first meeting of the taskforce will be held shortly.

A number of important national and EU developments have come to pass since the next generation broadband policy paper was published. These developments will underpin and inform the work of the task force. They include greater clarity from the EU Commission on the regulation of next generation access; revised guidelines from the EU Commission on state aid for broadband; an outline radio spectrum policy programme from the EU Commission; and completion of the roll-out of the national broadband scheme. These developments provide greater long-term clarity to investors on the regulatory rules which will apply to next generation networks.

I am confident that the clarity provided by the EU Commission on the long-term regulatory environment for investments in next generation networks will enable our task force to explore investor co-operation in the market in Ireland to deliver an efficient next generation access network.

It is a pity the Minister did not answer the question I tabled. He read out a list of what other people have done. My question was clear. I asked, "the way this country will achieve its target for high speed Internet access without significant Government capital investment".

The Telecommunications and Internet Federation, TIF, has bluntly said that achieving the EU target of 30 Mbps for 100% of the population by 2020 and 100 Mbps for 30% of the population will cost €1.5 billion. When will the Minister realise that the State will have to put its hand in its pocket at some stage to provide connections for those additional areas? It is easy for the industry to provide broadband connections for the urban areas but it will not do so for our population distributed in rural areas. The Minister can make a decision not to fund such connections but he is prepared to fund other aspects of his brief. He does not seem to be prepared to fund any aspect of this brief.

I again ask the Minister, at what stage and by how much is he prepared to fund the area of next generation broadband for the areas the industry will not reach?

With respect, Deputy, in this area of my brief, a major international study has just recognised that we practically doubled our broadband speeds in the last two years. We have practically tripled the number of broadband connections in the past three and a half years.

I asked a question on——

We have improved year on year to the point where we are 13th in its rankings of countries.

The Minister is referring to another matter.

When the Minister concludes I will call the Deputy to ask a supplementary question.

Therefore, when it comes to my record in this brief, I will stand proud of those achievements and getting the policy approach right.

That is not the question I asked.

To answer the Deputy's question directly, we have and will intervene where there is market failure. We did that with the national broadband scheme, the value of which was approximately €250 million. The Government and the company, 3, worked together and that scheme has been delivered on time and is working.

We have invested in schemes such as Project Kelvin, which is another major scheme which will ensure there is fast connectivity between North America and Ireland. We have invested in our schools and under the commitment given in the programme for Government we will ensure there is 100 Mbps connectivity in every secondary school in the country because that is the type of investment that works. It is market neutral, it helps various different players, it is technology neutral and it lifts the ability of our students to use this axis network. Therefore, we will invest. We will sit consult with the industry to work out what is the best way of doing that. This will also free up the industry's investment potential because it has a large amount invested on an ongoing basis. That is what we have to keep doing because this is working.

The Minister is a wonderful bluffer — there is no getting away from it. He did not answer the question I asked. The TIF has calculated that €1.5 billion will be required. Two thirds of such funding will be required for civil works which will involve guys using diggers and shovels. Such funding will result in work for such people and when that work is done it also will provide jobs for this country. The Government and the Minister's Department seem to be allergic to providing jobs. I ask the Minister again, this being my third occasion to do so, at what stage does he expect to intervene, given that the industry has said it will not provide all the funding required? It will provide some of the €1.5 billion required but it will not and cannot provide it all. At what stage will the Minister intervene and how much funding will he ensure is provided?

The figures I quoted were from a major international study. Those are not figures I have given, rather they have been cited by an outside group which noted that we had doubled our speeds, tripled our broadband penetration and that we were consistently going up the league table.

Second, in terms of jobs, last year in the depths of our recession, when the overall e-economy fell by 8% or 9%, jobs in the ICT industry in this country went up 6%, which is 6% of 75,000 jobs. Therefore, we are achieving in terms of turning policy in this area into jobs. Last week I was in my area of Sandyford where the company Salesforce employed an extra 150 people. I can refer to other such companies.

The Minister should visit rural areas.

That is the reality of what is happening on the ground. That is what the University of Oxford noted in its study, which was an independent process.

The Minister should travel to rural Ireland.

Allow the Minister to conclude.

I have answered the Deputy's question and gave examples of where we will invest, namely, where there is market failure, particularly if a certain area or sector is left behind. We will invest because we want to get ahead of the game and we will provide public service ICT infrastructure in our schools in particular but also in other areas. That is where the State can invest to create the demand for these services that will create efficiencies. We do this in our own business by cutting our costs by improving our own ICT services. Those kinds of investment are the ones that help lift demand and make this happen.

That completes priority questions. We will move on to Other Questions.