Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Electricity Generation

Darren O'Rourke

Ceist:

1. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications if he will provide assurances that the State will not face blackouts in winter 2021 as a result of the demands on the electricity generation and transmission network, including from data centres; the steps he is taking to address the increasing number of amber alerts and supply and demand challenges; and if he will make a statement on the matter. [44107/21]

Can the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, as Minister with responsibility for energy and electricity, provide assurances that the State will not face blackouts this winter as a result of demands on the electricity generation and transmission network, including demands from data centres. Will he outline the steps he is taking to address the increasing number of amber alerts and supply and demand challenges? Will he make a statement on the matter?

I thank Deputy O'Rourke. The Commission for Regulation of Utilities, CRU, has statutory responsibility for monitoring and taking the measures necessary to ensure the security of electricity supply in Ireland. It is assisted in this statutory role by EirGrid, which is responsible for the day-to-day management of the electricity transmission system.

CRU has advised me that it has identified challenges to ensuring the continued security of electricity supply. It is in the process of addressing these. They include lower-than-expected availability of some existing power stations; anticipated new power stations not being developed as planned; expected growth in demand for electricity, including through the growth of data centres, as mentioned by the Deputy; and the expected closure over the coming years of power stations that make up approximately 25% of conventional generation capacity.

There is a range of actions being taken by CRU and EirGrid to ensure security of electricity supply. These include maximising the availability of existing generators; the development of new generation capacity, including temporary generation capacity in advance of winter 2022; making changes to the grid connection rules for data centres; and working with large energy consumers to reduce, where possible, their electricity demand during peak periods.

While a number of system alerts have been issued over the past year, including two last week, they have not affected the supply of electricity to customers. I am advised by CRU that owing to the expected return of two key gas-fired power stations by November, the outlook for the coming winter has improved. However, it does not eliminate the potential for further system alerts. My Department is supporting CRU and EirGrid as they progress the actions necessary to ensure continued secure electricity supply.

The prospect of blackouts is quite incredible. In my area, County Meath, and in Dublin West, there are particular pressures. I am aware of this from having spoken to people in the sector. We have noticed a significant increase in outages. Whether they are related to the issues under discussion is a separate matter but there is certainly a coincidence, at the very least.

We are hearing from a range of people about the prospect of blackouts. This is in the public discourse. I heard Professor John FitzGerald on the radio over the summer talking about going back to the 1970s, when we faced the reality of blackouts. There is genuine mismanagement and policy incoherence. On the one hand, there is the shift towards renewables but, on the other, there is increasing demand for data centres. What assessment has been made of current and future demand from data centres? How has this been factored into our energy policy?

This is a complex situation. There is multi-annual complexity. We have to look forward to the next decade and beyond, but particularly to the next three to four years. Our expectation is now that we will not have outages this winter but we never know. There could be a power station breakdown, or something similar to the loss of the two large gas power stations that went offline early this year. There are always developments that cannot be completely predicted but, subject to the return of the two gas power stations, we expect to be able to get through this winter period. However, no one should underestimate the scale of the challenge we will face in the coming winters, particularly the three or four after the coming one. We have to retire, by 2025, some large generators, such as those at Moneypoint coal-fired power station, Tarbert and Edenderry, or at least switch them from being high fossil fuel generation stations to low fossil fuel generation stations.

The demand side is very much a part of the equation. Data centres are only one element. CRU has produced a major study and has engaged in public consultation on how it will work with data centres to make sure they complement our electricity security system.

I might get the Minister to expand on his point on how data centres will be factored in. He will appreciate that there are those who would use this opportunity to try to make the case for increasing our existing dependency on fossil fuels. The Government needs to be very clear on its position on that. In that regard, I would make reference to the existing planning permission application by Shannon LNG, among others.

The point I want to raise is on the impact of the challenges on the cost of electricity. We are facing another winter at a time when costs are increasing continually. From one supplier, there has been a 50% increase over the past 12 months. It is having a huge impact on families. How is the Minister going to address it for families?

To go back to the last point I was making, the data centres have to fit in with our decarbonisation plans. We can achieve this by considering their demand response and whether location can vary demand. Many data centres have been located in the Dublin area. EirGrid has been doing a lot of work on the question of bringing the generation to where the power is used so our grid will work better. It is also a question of ascertaining whether the centres can have their own backup power, and work within a system of backup power, so they can contribute to system security.

Deputy O'Rourke is right that there is a significant issue over increases in energy prices. The increase affecting gas has had consequences for electricity. It is primarily subject to international factors. It is an issue right across Europe and most of the world. It is a complex situation but it is primarily driven by a massive increase in gas prices. It is occurring because last winter was very cold. There is a very low level of gas storage and the price of carbon on the international carbon market is very high. It is an issue of switching off coal plants internationally and switching on gas plants. The circumstances I have described, and a huge increase in demand for gas in Asia, are leading to a spike in gas prices, which is the primary cause of the increase in electricity prices.

I hate to interrupt but there is a time limit. Could we all just work within it? I am aware it is not perfect.

Climate Change Policy

Ivana Bacik

Ceist:

2. Deputy Ivana Bacik asked the Minister for the Environment, Climate and Communications the steps he plans to take to ensure that Ireland will have a just transition towards meeting Ireland's international emissions reduction goals in advance of the 26th UN Climate Change Conference, COP26, and in view of the recent report by the UN Intergovernmental Panel on Climate Change on the climate crisis. [44137/21]

I welcome the Minister to the House. What steps does the Government plan to take to ensure Ireland will have a just transition towards meeting its international emissions-reduction goals in advance of COP26, which is due to take place in Glasgow at the end of October. In advance of this event and in light of the alarming content of the recently published report of the UN Intergovernmental Panel on Climate Change, IPCC, we need to take the necessary steps urgently. I would like the Minister to outline those steps.

I formally welcome Deputy Bacik to the House. Well done to her on her election. I wish her the very best and look forward to working with her as a constituency colleague.

We have to make sure our transition is just. Social justice must be achieved in the wake of addressing the ecological crisis. There are so many different parts to that. The Government and its predecessor have done a lot of work on the establishment of a just transition commissioner, Mr. Kieran Mulvey, who has been working very specifically in the midlands. The midlands is our first example of determining how to transition a community in genuinely difficult circumstances. We have to switch off the extraction of peat and the use of peat in power generation and other areas and create alternative employment.

I believe that work is starting to bear fruit. We are starting to see a significant number of new jobs as Bord na Móna switches from brown to green. There has been significant investment of €100 million in the rehabilitation of bogs. More than 200 people are now employed to work on bogs. Those are the same people, using the same skills, who were previously involved in peat extraction. I could go into the details of how those projects are being rolled out and creating real employment. Bord na Móna is expanding, as is employment in the midlands. The retrofitting of social housing within local authorities is also occurring and that is an example of what we need to be doing. That is only the start and there are many sectors in our society that we need to start thinking about and planning their transition. We need to start considering how to manage the transition of the agricultural, forestry and car sectors.

I am engaged in ongoing work with the National Economic and Social Council. Its secretariat has done a lot of good work and thinking around structures for just transition. Work in the midlands is ongoing. We need to work with the European Commission to use European funds to build on the work that has already been done. I will come back to the Deputy with further measures in which we are engaged.

I thank the Minister for his warm welcome. I appreciate that, as a constituency colleague. I was thrilled and honoured to have been elected this summer to represent the people of Dublin Bay South.

I also thank the Minister for his response on the just transition point. There is a broader issue here, however, about the dangers of unregulated free markets and untrammelled economic growth. There is a need for us to look at how we can address climate change, the climate emergency and crisis. We must build an economic and class analysis into our response so that we do not see green policies in a silo. I know the Minister agrees with me on that point. Those policies do not exist in a vacuum and must include an economic and class response.

I have seen a very scary map of what Dublin would look like - what a rise in sea level would mean for us as citizens in Dublin - if COP26 does not hold back global warming. We know that COP26 is seen as the last best chance of keeping global warming to 1.5% above pre-industrial levels. If it does not succeed in doing that, we know the consequences for all of us.

Interventionist measures are required and the State is going to have to play a significant role to subsidise and support the retrofitting of social housing and the provision of the fuel allowance. We will have to use a sufficient amount of the carbon tax revenues we are going to raise to make sure that people are protected from fuel poverty, particularly in this time of rising international gas prices. I will also make the broader point that many of the measures associated with the transition will bring with them a more balanced, more equitable and fairer economic system. I will offer a basic example. The transport area is a huge part of the emissions problem. A major part of the solution is going to be the development of active travel and public transport. I have always seen that as a social justice project as well as an environmental project because those on the lowest incomes tend to have the least access to cars. Active modes of transport are often the most economically efficient, in that they cost the least. We need to think of the co-benefits of some of the environmental measures that will deliver social change.

I agree with the Minister on the issue of cycling, in particular, and the need to invest in public transport. That is more than a transport matter; it is a social and economic justice matter.

We were disappointed that the Minister did not accept the amendments we submitted to the climate action Bill but we very much look forward to working constructively, as part of the Opposition, with him on the upcoming publication of the climate action plan to ensure real commitment across all sectors and Departments to ensure we meet our emissions targets. As I said, the consequences are too dire for all of us if we do not do that. I look forward to working with the Minister. My party leader, Deputy Kelly, yesterday spoke about the dangers of short-termism in politics. As the Minister has said with regard to this issue, we must move on a multi-annual basis to take account of long-term thinking and to work constructively together to ensure that climate change is addressed and that we meet these targets. As a constituency colleague of mine, the Minister will appreciate the consequences for Dublin Bay South, where there is the prospect of flooding. There will be consequences of a rise in the Grand Canal and the Liffey and Dodder rivers. We can see the consequences starkly across Ireland and the world.

I agree with the Deputy and the Labour Party leader, Deputy Kelly, that we need to think long term. I also believe that the response to the climate challenges requires a politics of collaboration and co-operation. This is not an issue that should divide us. It is not a party political issue. It is an intergenerational issue but it is one we must tackle together.

Probably the most contentious area of the just transition is agriculture. I am firmly of the view that we need to start paying a new generation of young farmers and foresters to be part of this transition. One of the benefits, as we pay for nature-based solutions, will fall to the poorer areas of our country, which are often are more regional and rural areas distant from the major cities. The climate response is going to require massive investment and redistribution, as it were, through carbon taxing and other measures, including via the Common Agricultural Policy, whereby we invest in those areas for the restoration and protection of nature as part of our climate adaptation and mitigation strategy. That will be a part of our just transition.

Climate Change Policy

Darren O'Rourke

Ceist:

3. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications the status of the process and timeline for the introduction and implementation of carbon budgets in view of the recent IPCC report; and if he will make a statement on the matter. [44108/21]

In light of the recent IPCC report, can the Minister provide an update on the process and timeline for the introduction and implementation of carbon budgets? Will he make a statement on the matter?

The recent IPCC report is an important statement on international science's understanding of the climate system and climate change. Its publication could not be more significant or timely. It details the increasingly dangerous future that is ahead of us unless action is taken by all of us now. The Climate Action and Low Carbon Development (Amendment) Act, which was passed in July 2021, requires the Government to adopt a series of economy-wide, five-year carbon budgets, including sectoral targets for each relevant sector on a rolling 15-year basis, starting this year. The next stage of the process will be the preparation of regulations and carbon accounting, in consultation with the Climate Change Advisory Council, CCAC, and consistent with the Paris Agreement and EU rules. This will be followed by the production of carbon budgets by the CCAC. These carbon budgets will be presented to the Oireachtas and then approved by the Government. The Government will then set sectoral emissions ceilings, determining how each sector of the economy will contribute to the achievement of the budgets.

In response to my previous question, the Minister mentioned the price of electricity and the issue of wholesale prices. I would also make the point that the public service obligation, PSO, levy and the carbon tax have direct implications for the cost of electricity for households. The Minister has an ability to address at least those measures.

I will ask about the timeline in respect of this question. I heard from the Minister earlier in the week that the new climate action plan will be announced in the coming weeks, likely in early October. What relationship does that have with carbon budgets? What is the timeline for the carbon budgets? They are significant outworkings of the climate action Bill and we want them to be considered.

I will make one comment on the point the Deputy made about the PSO and carbon tax. The PSO was always a protection, in a sense, against volatile markets. At times like this, when the price of gas is very high and the price of electricity is driven up, the PSO falls away and drops dramatically. The PSO is having the opposite effect. It is being taken out at the moment and that is reducing the price increase effect. It is doing what it was designed to do. It provides a floor at times when gas prices are low. When gas prices are high, the PSO drops. That is helping to cut prices or abate the cost increase. Similarly, the carbon tax we have does not apply to the electricity sector or the emissions trading system, ETS. The international price of carbon does apply but our own carbon tax system does not. That is having no effect on the electricity price increases we are seeing.

We are on a tight timeline because we want to include this year in our plans and we want to get as much done as we can before we go to Glasgow.

The Climate Change Advisory Council is expected to deliver its budget before this, and then we will respond with the revised climate action plan. We expect all that to take place in the first week in October.

Perhaps the Minister might comment on when we in the Houses of the Oireachtas might see the carbon budgets. Also, I ask him to reference the opportunity there will be for stakeholders to engage in the process and when they might have that opportunity.

On the broader question, and I am not entirely clear in relation to it, of the relationship between the fiscal, economic and climate objectives, are there conversations at governmental, ministerial and departmental levels as to how we are going to square all of that? My understanding is there is a McKinsey report that has not been published. Is that being factored into considerations? How are we going to align, because it is essential we do, the climate objectives with the economic and the social objectives?

As I have said, I expect the Oireachtas committee, the House and stakeholders to be able to see these carbon budgets when the Climate Change Advisory Council delivers them at the end of this month or the first week in October at the latest and then very much to get engaged. On the alignment between economic, social and environmental objectives, the way the Bill was passed was to allow for all stakeholders, particularly Members of the Oireachtas, to make their contribution and for us to debate within this House how we get that balance right. We will have to do that in terms of the sectoral targets we will set, the budget in terms of how we manage it, and the Common Agricultural Policy budget. We will then review it every year. There is an ongoing review of the climate action plan, which is an evolving and iterative plan, and the Oireachtas has a central role. The plan is to get that balance right.

Renewable Energy Generation

Jennifer Whitmore

Ceist:

4. Deputy Jennifer Whitmore asked the Minister for the Environment, Climate and Communications the analysis his Department has carried out to date regarding the use of energy by data centres, including their effect on energy prices and the impact their energy demand will have on Ireland’s capacity to reach renewable energy targets; and if he will make a statement on the matter. [44120/21]

I would like to ask the Minister what analysis his Department has carried out to date on the use of energy by data centres, including their effect on energy prices and the impact their energy demand will have on Ireland's capacity to reach our renewable energy targets.

The Government Statement on the Role of Data Centres in Ireland's Enterprise Strategy 2018 acknowledged the role of data centres as part of the digital and communications infrastructure for many sectors of our economy. The statement also noted that data centres pose considerable challenges to the future planning and operation of Ireland’s power system.

In 2020, data centres accounted for approximately 11% of the total electricity used in Ireland, demonstrating that the impact of data centres on Ireland’s energy demand and the related electricity emissions is significant. EirGrid, in its Generation Capacity Statement 2020-2029, project that demand from data centres could account for 27% of all demand by 2029.

Electricity and gas retail markets in Ireland operate within a European regulatory regime, wherein these markets are commercial, liberalised and competitive.  The Commission for Regulation of Utilities, CRU, is responsible for ensuring all electricity customers and network users receive value for money within a transparent, fair and equitable charging regime. The costs of renewables are supported by the public service obligation, PSO, levy which is charged to all electricity final customers in Ireland, including large energy users.

Operating within the overall EU framework, responsibility for the regulation of these matters is solely a matter for the CRU. In June 2021, the CRU published a proposed direction to the electricity system operators related to data centre grid connection for consultation. This included a number of options for managing data centre connection demand.

Earlier this year, EirGrid carried out a public consultation entitled Shaping our Electricity Future. The aim is to make the electricity grid stronger and more flexible so that it can carry significantly more renewable generation as well as meet increasing demand from high-volume energy users such as data centres. This may include potential geographic restrictions or incentives of large demand customers closer to the generation of power, potentially giving a more regional balance of data centres.

The Minister referenced the Department of Business, Enterprise and Innovation's 2018 strategy. My fear is we have two arms of Government that are pulling against each other when it comes to this policy. We have the Department of Enterprise, Trade and Employment that is promoting data centres from an economic perspective, despite the fact it does not collect any information on the number of jobs created by these data centres, and the Minister's Department, which obviously has obligations, as does the entire Government, to meet our climate and renewable energy targets.

The Minister has talked about changes that may happen and how geographical changes may be required and conditions put on data centres. The reality is that 30% of our electricity use will be data centres. It could potentially be 50% if the current applications are approved. These data centres are applying for permissions now, they will be conditioned now and there will be no retrospective ability to change their location or the conditions that are placed on them. Therefore, the risk is those data centres will impede our ability to meet our targets by 2030. Would the Minister agree with a moratorium on data centres until there is specific analysis done on that to show the exact impact?

There is no division in Government in policy terms on this issue. We all agree that meeting our climate targets has primacy. Every sector and industry is going to have to contribute to that. At the same time, as Deputy O'Rourke said in the previous question, we need economic and social balance. The digital industries we have in this country play a huge part in providing us with the finance to be able to achieve many of the social objectives we have. We all use mobile phones daily and everything goes through data centres.

As I have said in respect of the policy work being done in the CRU and EirGrid, we have the means to manage this, through both the planning and grid connection systems, and to set conditions so that we bring in data centres but they contribute to our electricity security and decarbonisation plans and do not hinder them. That is clear. First and foremost, the policy objective is the decarbonisation plan. These companies understand that. They are international operators who have committed themselves to decarbonisation strategies. When we are saying that, it is not going against what international investors or others would expect in a modern country.

The question is how we balance that huge balancing system. The EirGrid study from March this year, Shaping our Electricity Future, was asking the right questions. Do we bring the usage to where the power is? How do we manage the grid? The grid is central and key in this. The CRU is asking if the data centres can be flexible within a system and if they can have their own backup power we can use to help give us stability. Can we take the waste heat and use it to meet some of our climate targets?

Climate comes first. Digital industries and others have to fit in within decarbonisation plans. We are good at balancing renewable powers in this country. We are probably the leading country in the world in that respect. EirGrid has more expertise than any other transmission system operator, TSO, so we can and will be good at this. The data centres fit into climate, not vice versa.

I must respectfully disagree with the Minister. Climate is not coming first in this regard. While it is positive the CRU and other agencies are looking at the issue, coming up with questions and looking at potential solutions such as the geographical distribution or conditions being placed on data centres, they are not there yet. In the absence of those rules being determined and put in place, the data centres are applying for planning permission and getting the planning permission. They will be entitled to operate under the planning permission they receive. Therefore, we will have a disparity. We will have a significant number of data centres that will be drawing off our electricity and renewable electricity resources and the systems are not in place. I understand there is a commitment in the programme for Government to bring in efficiency standards for data centres. I am wondering where they are up to and what the progress is on that.

The main question is, how many data centres is enough? At what stage do we say we have met our responsibilities from a data perspective? We will have potentially 50% of our electricity being used by data centres compared with 3% across Europe. Do we as a country have to take on Europe's responsibility here too?

I do not believe we will have 50% of our power going to data centres. I do not believe the attention going to this one issue, and it is one we have to manage, is reflecting the real challenge.

One of the challenges at present is that we need new backup generation to help manage not just data centres but also our use of electricity for transport, heat and a range of different areas. We have 2 GW of old conventional plant that we need to switch off in the next five years. We need to replace this with balancing capability plant that will help us run this renewable-dominated system. That is one of the biggest and most immediate challenges. There are also other demand issues. How do we power our fleet of electric vehicles, EVs? That is more of a grid management issue on the distribution side but balancing that is also a significant issue, as are district heating and a range of other demand issues. The data centre sector is one which must be fitted in but it is a complex problem and challenge. The biggest immediate issue is the question of how to get flexible backup generation not only to power data centres but to manage and power the whole system. The question of data centres will be easier to manage than that issue in the coming years.

Renewable Energy Generation

Darren O'Rourke

Ceist:

5. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications the status of the introduction of the microgeneration scheme; when the scheme will be in operation; the way it will operate; and if he will make a statement on the matter. [44109/21]

Will the Minister provide an update on the introduction of the microgeneration scheme? When will it be in operation and how will it operate? Will he make a statement on the matter?

The programme for Government commits to expanding and incentivising microgeneration to help people generate renewable electricity for their own use and to sell excess electricity back to the grid. My Department outlined proposals for a new microgeneration support scheme in a public consultation that closed in February last. A summary report of the submissions received has been published on my Department's website. While the primary aim of a microgeneration scheme is to enable a household to meet its own electricity needs, it is intended that a suitable payment for excess electricity generated on site and exported to the grid will be available to all renewables self-consumers later this year, subject to regulatory arrangements, in line with the transposition of Articles 21 and 22 of the recast renewable energy directive.

It is expected the CRU will publish a draft framework in the coming weeks outlining the details, including eligibility criteria and timescales for introduction, of the clean export guarantee payment for exported renewable electricity. This framework will introduce an obligation on all electricity suppliers to offer remuneration to their customers, by way of a clean export guarantee payment, for excess renewable electricity exported to the grid by eligible micro and small-scale generators.

Further to the public consultation mentioned previously, my Department is developing a final scheme design for the microgeneration support scheme which incorporates feedback from the consultation and subsequent additional analysis. It is envisaged a proposal on the supports to be offered to homeowners, farms, schools and businesses under the scheme, which may include grants or premium tariff payments, will be submitted to Government later this year.

I thank the Minister for the update. This is one of those areas in which all of us can see opportunity. We are all frustrated with the rate of progress in this area. My party colleague, Deputy Stanley, published legislation four years ago which would have introduced a scheme, had it been adopted. There are great opportunities in this area. Any of us who have seen similar schemes in operation elsewhere know the potential of it. My colleague, Senator Boylan, and I made a submission to the public consultation and highlighted numerous areas of concern and a number of opportunities and barriers that could be addressed. There was a concern about the scheme with regard to the building energy rating, BER, that applicants would have to meet. Is that going to be part of the new scheme? That would exclude a lot of schools, community groups, farm buildings and that sort of thing. Will they be included?

Many of the grant schemes we have in place are associated with higher BER standards. This is because, for example, if a building is not properly insulated, the use of a heat pump can be very wasteful. We want to incentivise retrofitting and to make sure there is efficiency in electricity use and in every other area first. There is always a desire to connect efficiency with any grant system. The microgeneration support price will be subject to the CRU details which are to come out in the coming weeks. It needs to be much simpler. It needs to be much easier to implement and straightforward and should not necessarily have so many conditions and complexities. The electricity supply company serving a household will be obliged to pay it. It has to be standardised. There cannot be conditions and complexity. I am very frustrated at the delay in this area. We are going to be delayed by months rather than years but it will be in place this winter and by the end of this year. It will be critical to help farmers and householders sell power back.

By way of follow-up question, another group which is falling through the cracks in all of these developments, and there are a range of developments although they are not happening nearly as quickly as we might like, is renters. We have the prospect of an increasing number of renters living in private rented accommodation or, it is to be hoped, social rented accommodation. Will there be specific measures for private landlords to ensure renters are not left behind in terms of the opportunities for microgeneration and that they are not left in poorly heated and poorly insulated properties?

The Deputy is right. To go back to the just transition we were talking about earlier, no sector should be left behind. That is why there is a commitment in the Housing for All strategy, published two weeks ago, that we would put in place conditions, over a suitable time period to give landlords advance notice such that those rental properties would have to meet a rising BER standard so that the renter would not be disadvantaged and left paying very high energy bills and having an unhealthy apartment. That has to be done carefully over time so that landlords are not forced out of a market that is already short of supply, but it was absolutely appropriate for the Housing for All strategy to use that measure to protect renters and make sure they have an energy-efficient place to live, just like everyone else.