Dáil Éireann díospóireacht -
Wednesday, 27 Sep 2023

Vol. 1042 No. 6

Gas (Amendment) Bill 2023: Second Stage

Minister of State at the Department of the Environment, Climate and Communications (Deputy Ossian Smyth)

I move:

"That the Bill be now read a Second Time."

I am pleased to address the House on the Second Stage of the Gas (Amendment) Bill 2023. As Deputies are aware, the Minister for the Environment, Climate and Communications is the Minister with responsibility for gas policy and all legislation relating to gas and energy policy. The European natural gas directive - directive 2009/73/EC on common rules for the internal markets in renewable and natural gases and in hydrogen – in relation to the unbundling of ownership of generation, supply and transmission systems in the energy market prevents the Minister for the Environment, Climate and Communications from assuming the role of majority-shareholding Minister in Gas Networks Ireland, GNI, and its parent, Ervia. As such, the Minister for Housing, Local Government and Heritage is the majority-shareholding Minister for Ervia, which manages national gas infrastructure through its subsidiary GNI. As a consequence, the Department of Housing, Local Government and Heritage has the remit in respect of the governance of Ervia.

The Government decided in 2020 that having two separate State companies to operate the gas network and develop water services provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water services. Therefore, the Water Services (Amendment) Act 2022 was prepared. It was signed into law on 7 December 2022, and on the date appointed in the legislation, 1 January 2023, Uisce Éireann was split from the Ervia group and became a stand-alone company. The Government decided that the most appropriate structure of the remaining gas utility business following the separation of Uisce Éireann from Ervia was the integration of Ervia into GNI so as to become the single entity GNI. The Government's decision to integrate Ervia into GNI is being led by the Minister for the Environment, Climate and Communications, who has responsibility for gas legislation.

Before outlining the provisions of the Bill, I would like to speak on a number of key points relating to it. Ervia's business, in terms of both revenue and activities, is predominantly the operation, maintenance and development of the gas networks and interconnectors in its ownership. Ervia and Gas Networks Ireland are currently operating as a single entity from a structure, strategy and operational point of view.

Ervia was established as a statutory corporation pursuant to the Gas Act 1976, as amended, and its subsidiary GNI was established as a company under the Companies Acts with its own constitution pursuant to the Gas Regulation Act 2013. Ervia is fully State owned and the sole owner of GNI.

It is also relevant to note that the EU is currently in the process of agreeing legislation on the hydrogen and decarbonised gas market legislative package, namely, the European natural gas directive, Directive 2009/73/EC. This will provide for a further consideration of the functions of GNI regarding the decarbonisation of the gas network. The functions of GNI in this legislation reflect the current activities it engages in, and any changes to its function will be addressed in the implementation of the gas package when negotiations have concluded. A priority will be the decarbonisation of the gas network in line with the commitments set out in the climate action plan and programme for Government.

The main purpose of the Gas (Amendment) Bill 2023 is to provide for the integration of Ervia into GNI so as to become the single entity GNI. The Bill provides for amendments to the Gas Acts to facilitate the integration and the transfer of functions, assets, rights, liabilities, staff and records from Ervia to GNI, as well as providing for the corporate governance arrangements relating to GNI in terms of shareholding arrangements, the board arrangements and its chief executive, annual reporting and accounting provisions. These governance arrangements are being provided in primary legislation rather than constitutional documents, enhancing transparency and accountability.

I will now elaborate on the provisions of the Bill. It is a relatively short Bill. It has 22 heads in total and is largely technical. It is divided into two Parts. Part 1 provides for the Title to the Bill, the Bill's commencement and the definitions used in the Bill. Part 2 lists the provisions for the dissolution of Ervia and the integration of its functions, roles, responsibilities and liabilities into GNI. Part 2 also includes the chapters of the Bill that concern the amendment of other enactments to facilitate the dissolution of Ervia and the integration of its functions, properties, liabilities, staff and records into GNI.

I will summarise the Bill's 22 chapters. Part 1 contains Chapters 1 and 2. These are standard provisions that provide for the Short Title to the Bill and the commencement on enactment or by means of ministerial order, as appropriate, of its various provisions, as well as definitions of certain terms referred to in the Bill. Part 2 contains the rest of the chapters, which provide for the integration of Ervia into GNI.

Chapter 3, which provides for the restatement of the definition of the majority-shareholding Minister, which currently is for Ervia, and will be for GNI, the Minister for Housing, Local Government and Heritage.

Chapter 4 establishes a transfer date, which will be set by the Minister by way of an order. Chapter 5 provides for the cancellation of Ervia's shareholding in GNI and for the issuing of new shares to the relevant Ministers.

Chapters 6 to 10, inclusive, cover the transfer of the existing functions, responsibilities, liabilities, assets and so on from Ervia to GNI. This includes the transfer of all functions concerning gas that are statutorily vested in Ervia to GNI, the transfer of land and any other property of Ervia to GNI, and the transfer of rights and liabilities of Ervia resulting from any contract or commitment Ervia has entered into to GNI, including all contracts or commitments involving Ervia. Furthermore, it provides for liability for loss occurring before the transfer date and ensures GNI will assume any liability outstanding from Ervia.

Chapters 11 and 12 provide for the transfer of staff from Ervia to GNI and any records held by Ervia to GNI. Chapter 13 provides that the final accounts and final annual report of Ervia can be prepared and progressed by GNI on Ervia's behalf. Further provision is included to enable GNI to carry out, after the transfer date, administrative tasks associated with the dissolution of Ervia.

Chapters 14 and 15 and Chapters 18 to 22, inclusive, amend a range of legislation to change references to Ervia to references to GNI and, where appropriate, references to Ervia to references to the Minister.

Chapters 16 and 17 provide for amendments relating to the board and constitution of GNI and the preparation of annual reports and financial statements. Chapter 16 provides for amendments relating to the board and constitution of Ervia. The proposed amendments involve the repeal of Schedule 1 of the Gas Act 1976, the substitution of sections 6 and 7 of the Gas Regulation Act 2013 and a number of other minor amendments to the 2013 Act. These deal with directors of GNI. They are being substituted to reflect the revised board structures that will be in place following the integration of Ervia.

Schedule 1 of the Gas Act 1976 is being repealed. Schedule 1 was originally drafted for the Irish Gas Board, Bord Gáis Éireann, which did not have a constitution, unlike GNI which is registered as a designated activity company, DAC, under the Companies Acts. The Schedule of the 1976 Act is being repealed in order to eliminate duplication of the matters that are dealt with by either the GNI constitution or the Companies Act 2014. The revised section 6 reflects that GNI has a constitution under the Companies Act.

Chapter 17 substitutes sections 14 and 15 of the Gas Act 1976 which provide for the preparation of GNI’s annual report and accounts.

Chapters 18, 19, and 20 provide for amendments to the Gas Act 1976 to update terminology to reflect the integration of Ervia into GNI and Chapter 21 provides for a variety of miscellaneous amendments to the Gas Act 1976.

Chapter 22 provides for the repeal of section 21B(1) of the Gas (Interim) (Regulation) Act 2002 which is deemed redundant as GNI cannot take over the function of being a shipper of last resort from Bord Gáis Éireann.

I commend the Bill to the House and look forward to the debate.

Deputy Darren O'Rourke

I welcome the opportunity to speak on the Gas (Amendment) Bill. It is a short, technical Bill that provides for the transfer of all functions for the national gas infrastructure from the current company, Ervia, to a new publicly-owned entity, called Gas Networks Ireland, GNI.

When it comes to the gas market or the energy market more generally, the Government needs to do a whole lot more to deliver the overlapping aims of addressing sustainability and climate change, bolstering energy security and resilience and creating a just and affordable system. The facts, while stark, are simple. The cost of energy is sky high and out of line with the rest of Europe. Arrears are spiking, with the latest figures from the Commission for Regulation of Utilities, CRU, indicating that one in eight households are unable to pay their bills. Energy poverty impacts on one in three homes. Moreover, Ireland is failing miserably to deliver renewables at a pace that would see us reach our 2030 targets, meaning the State continues to be overly reliant on gas imports. This not only impacts on Ireland's capacity to deliver a sustainable energy market, but it also scuppers any hopes of becoming energy independent and a world leader in renewables exports. A brilliant opportunity is at real risk of being completely squandered.

In addition, our security of supply is uncertain. The delay in finalising the energy security review combined with an extremely strained grid and insufficient generation capacity have produced a situation in which there is genuine risk of the lights going out. The fact that ordinary workers and families are paying some of the most expensive energy prices in Europe, yet could be subject to blackouts is frankly outrageous. The fact the risk remains after the unprecedented number of system alerts that were issued last winter makes it clear that Fianna Fáil, Fine Gael and the Green Party have fallen asleep at the wheel. It should be noted that decades of Fianna Fáil and Fine Gael led Governments produced these problems in the first place. I will consider each of these issues in turn because it is essential the Government is held to account. It must recognise the scale of its mishandling of Ireland's energy system and the impact it is having on ordinary workers and families.

I will turn to Ireland's security of energy supply. Last year a number of factors combined to produce an extremely worrying situation for Ireland's energy supply. This was compounded by the fact that successive Fianna Fáil and Fine Gael led Governments have failed to secure Ireland’s energy independence, leaving us overly reliant on gas imports and therefore excessively exposed to shocks in international markets. International shocks can and will happen. Therefore it is essential that policies are future-proofed and that sufficient plans are put in place. Fianna Fáil and Fine Gael seemed to have missed this point.

We do not even have a full picture of the scale of the problem and the range of policy options available to address it. The Government has been promising to publish the long-awaited and much-delayed security of supply review in the next few weeks for more than six months. The McCarthy report, conspicuously, is also yet to be published. The way the Government is acting, one might think everything is under control. This is far from the case. EirGrid issued more system alerts last year than ever before and did so at a pace that was unprecedented and alarming. Another alert was issued in June by EirGrid which warned of temporary electricity supply issues due to the low availability of renewable energy and unplanned outages of a number of conventional generation units. The mismatch between supply and demand is yet another example of the Government’s failure to plan. It is widely accepted that Ireland has a generation capacity issue. The latest EirGrid and System Operator Northern Ireland, SONI, capacity outlook predicted "a challenging outlook for Ireland with capacity deficits identified during the 10 years to 2031” and that “in the short term the deficits will increase due to the deteriorating availability of power plants, resulting in their unavailability ahead of intended retirement dates". Just last week the media reported that industry sources stated that Ireland’s generation capacity on the electricity grid is to remain tight this winter and supply is likely to be stretched. The only reason the Government might get away with this is the milder weather this year. The fact the Minister, Deputy Eamon Ryan, is relying on the climate crisis to avoid catastrophic black outs is frankly astounding.

In terms of a failure to plan, Ireland’s electricity demand is significantly skewed by data centres in the Dublin region. Last year, data centres consumed 18% of all the electricity generated here and increased their power consumption by an astounding 31%. This means they now account for almost one fifth of all electricity consumed. Just seven years ago, this figure stood at 5%. To put this in context, overall energy consumption has risen by 20% in the past seven years, whereas for data centre consumption has risen by an eye-watering 400% in the same period. The situation we find ourselves in is the inevitable outcome of years of reckless mismanagement of our energy system by successive Governments. Runaway electricity demand was accompanied by a failure to deliver much-needed supply.

Ireland’s gas network and our security of supply is also threatened due to the despicable treatment of the ordinary workers given the responsibility of maintaining the network. GMC Utilities Group workers are engaged in industrial action at this time, not because they want to be, but because they have to be. These workers maintain Ireland’s critical infrastructure. They keep our lights on and our houses warm. This is essential work. I stood with them at the picket line in Ballycoolin last Friday and discussed these issues. Make no mistake, these workers are doing the work of Gas Networks Ireland, the body today’s Bill seeks to reform. The fact is, GMC is outsourcing the jobs and refusing to implement agreed pay proposals and GNI and the Minister remain silent. This is unacceptable. What does the Minister of State say about the situation? Will he or the senior Minister intervene? Will the senior Minister instruct GNI to intervene? It is essential that workers are treated fairly and that they are treated with the dignity and respect they deserve. The Government must do all in its power to ensure this issue is resolved immediately, pay proposals are implemented and gas supply is not disrupted.

All these issues point to a Government that does not seem to think it is a priority to ensure that Ireland’s energy supply is secure and that ordinary workers and families can continue to heat and light their homes this winter. That is a major problem. It is also clear it does not think it is a priority to address Ireland’s sky-high costs. According to the Central Bank's quarterly economic bulletin released last week, prices in Ireland are falling more slowly than other EU states. While we have seen some small price decreases recently, they go nowhere near far enough. According to the CRU, the average price increase for domestic customers between 2021 and 2022 was 76% for electricity and 100% for gas. In 2022, Ireland had the third-highest household electricity prices and the seventh-highest household gas prices. The average bill is now more than €2,000. This is astronomically high. A bill of €600 would have been unusual previously whereas now it has become a common occurrence. This is leading to insurmountable levels of debt for people.

Just two days ago the latest CRU figures on arrears demonstrated that there had been a considerable increase between the first and second quarters of this year. The figures are shocking. In the period up to June, 423,889 homes were in arrears. That is nearly half a million homes in arrears. This represents an overall spike of almost 18,000 since May, when I last raised the alarm on this issue. Alarmingly, the percentage of households in arrears jumped from 9% to 12% between the first and second quarters of the year. To put that into context, it means that nearly one in every eight homes across the State is in arrears. The situation is especially worrying for domestic gas customers, with almost one quarter of them in arrears. The figure is up around 8,000 on the figure for the previous quarter. It is important to remember that these increases occurred in the warmest, lightest months of the year and that we are facing into the coldest and darkest. People are rightfully anxious about the period ahead.

The disconnection figures are equally stark. The number of people who had their utilities cut off skyrocketed by 173% for electricity and 97% for gas in 2022 compared with 2021. While the Government is content merely to comment on this issue, Sinn Féin has an actual plan. We have introduced legislation to ensure that the regulator is fit for purpose, giving it additional powers to oversee hedging, which is frequently cited as the reason for the lag in price decreases, and, furthermore, to investigate possible instances of anticompetitive behaviour. Significantly, our legislation would also mandate the CRU to consider specifically the affordability of energy in its policy direction, as well as the power to regulate standing charges, neither of which it is currently mandated to do. I call on the Government to urgently introduce these measures in order that ordinary workers, families and hard-pressed businesses get the relief they so desperately need.

Turning to the issue of sustainability, gas remains the dominant force in Ireland's energy mix. Figures released last month show that 49% of Ireland's electricity was generated using natural gas. Shockingly, that figure represents a 9% increase from the same period last year. This flies in the face of the Government's energy-efficiency plans and targets. How does the Government plan to ensure that Ireland is not locked into gas use in the future? I raise in particular Gas Networks Ireland's latest five-year revenue proposal and I ask the Minister for his response to it, especially given the stated ambition to grow gas demand into the 2030s.

On that, the pace of the roll-out of renewables is just far too slow. This Government lacks the pace and ambition such a roll-out deserves. Yesterday's disastrous onshore renewables auction is further proof that this Government just does not have a clue what is going on in the sector and that Ireland's ambition to become energy-independent is slipping through our fingers. These results are an absolute disaster; there is no other way of putting it. We raised this with the Minister last week. The RESS auctions are a key Government policy to deliver the climate action plan. If this is the level at which they are delivering, Ireland will come nowhere near our 2030 targets. Shockingly, this auction returned the highest bid price yet at a staggering €100.47 per MWh. We are travelling in completely the wrong direction. RESS 1 and RESS 2 returned bid prices of €97.87 and €74.08, respectively. If we compare Ireland in an international context, we are lagging way behind. The most recent onshore auction in Britain, AR5, concluded with contracts awarded, in 2012 prices, for onshore wind of £52.29. Converting that to euro and accounting for inflation since 2012 works out at €82.74. This means that Ireland is woefully uncompetitive in an international context. To add insult to injury, the latest RESS round has delivered the smallest volume of renewable energy of any auction to date. Just three wind farms were awarded contracts in the Government auction at a total capacity of 148.4 MW. Solar did not fare much better, with just 497.6 MW of solar capacity emerging from the process. This represents a significant drop when compared with previous results. In RESS 2, 414 MW of wind capacity and more than 1.5 GW of solar was delivered. In RESS 1, 796 MW of solar was delivered, with 480 MW of wind having cleared. Yesterday's result represents nearly a 28% drop from RESS 1 and a 33% drop from RESS 2.

What on earth is the Government playing at? It is great at setting lofty targets and dressing them up in fluffy rhetoric but it is completely failing to deliver. We urgently need a cost-of-renewables task force to address this issue. That is something industry stakeholders have called for. Sinn Féin produced legislation on this last year, yet the Government has patently refused to adopt our proposals. We have also called for increased resources for An Bord Pleanála to deal with the extensive delays in the planning system. The average time for a decision on an application or appeal related to a wind energy project is now over 90 weeks. Since the end of September 2022, no onshore wind energy project has been granted planning permission by An Bord Pleanála. This is simply not good enough. The people of Ireland deserve better from this Government. They deserve better than what it is capable of delivering. Sinn Féin is ready to deliver. Time and again this Government has proven its negligence and its incompetence. It is high time for change.

Deputy Ruairí Ó Murchú

We all understand this to be a technical Bill involving a transfer of all functions for the State's gas infrastructure from the current company, Ervia, to the new publicly owned company, Gas Networks Ireland. Deputy O'Rourke has laid out some of the issues that arise when we talk about the gas market or energy markets across the board. When people talk about that in this day and age, most of them are just talking about the fact of the cost that comes to them. We have stated explicitly - I think there is a considerable amount of conversation in the public domain at this stage - and people realise that even if the prices from our energy providers are dropping, they are dropping more slowly than everywhere else across Europe. It does not fill us with any great hope when the CRU says there is nothing to see here.

I think there is major agreement that we need to ensure that the CRU, the regulator, has the powers and then has an interest in delivering this. It is no big shock that some of the price drops we saw happened at a point in time when there was considerable conversation in the public domain and even among politicians as to how high prices were. We have all heard the difficulties as regards hedging etc., but we must work on the basis that the providers here were among the worst as regards their particular means of hedging. We need to look at all these parts.

We accept that there is no magic bullet to deliver us the prices that existed a number of years ago, before the Ukrainian crisis. When people go abroad, however, and see the prices people are paying in Spain, Portugal or anywhere else, and see that some countries were faster to deal with the issues of windfall taxes and so on, it raises questions.

I think everybody would agree that there is an onus on the Government to actually do something about this. Obviously, there are the issues we face as regards supply and security of supply. We are still awaiting the security of supply report, the McCarthy report. Deputy O'Rourke is a broken record in talking about that, but the problem with that is that the Government is a broken record in not actually publishing what is needed in order that we can at least have a proper conversation about this. Anyone who has done basic geography at any point in time understands that when there is talk of foreign direct investment or any sort of inward investment to particular locations, one of the vital pieces is secure and safe energy supply. It is hard to believe that we have had question marks in the last while in that regard and that people, alongside paying huge prices, with many of them not fit to pay them, could be facing into blackouts. This is just not acceptable in any way and needs to be dealt with.

I do not know how many times we have been here or how many Members have been here talking about the big advantages we have as regards renewables, particularly when it comes to offshore or even onshore wind.

The RES-3 auction just shows the problems and the pieces that have not been put in place by this Government. We all know there are huge issues and question marks as we move from a developer-led to a planning-led system regarding offshore wind. We still do not know whether we are going to have all those parts of the planning infrastructure, including the Maritime Area Regulatory Authority, MARA, and everything, as resourced as they can be, and that the work on designed maritime area plans, DMAPs, can be provided at least to those people who are interested in investing as soon as possible. This is from the point of view that they understand what the gameplay is going to be. Then we need to make sure we have the pieces regarding community dividend. Many in here have stated how we never got any bang for our buck as a State from our own natural resources. We would like to think that there would be some sort of investment, involvement and payback to the State. First of all, we would need to get those planning pieces in play as soon as possible.

I have two other issues I want to bring up. I have been contacted by people about the registered gas installer, RGI register, and gas engineers from the North having difficulties in getting on this. In fairness, some of the people who have contacted me about the difficulty this is creating in getting them on site for building necessary houses in my constituency and beyond. This is something that will need to be addressed. I will get the details to the Minister of State as quickly as possible, and maybe someone from the Department could make contact with some of the individuals I am talking about.

I am going to revisit the issue of Carlinn Hall in Dundalk, and the communal heating system. On the feasibility study regarding a shallow geothermal heat source, from an answer to a parliamentary question I got over the summer, there are recommendations for the short, medium and long term. The report has been drafted. I think it still has to be published. I would like to be contradicted on that and to be told that it is suddenly up but I do not think that is the case. We need to see it as soon as possible. The answer to my parliamentary question also told me there is a belief that there would be grant schemes already in place that could be used for this. We know those people had to deal with absolutely disastrous and ridiculously high prices of gas. We know that district heating is one of the means by which we can look at decarbonisation. However, communal heating systems are almost the Achilles heel, so there is an absolute requirement on Government to deliver.

Deputy Ivana Bacik

As others said, this Bill is largely technical, and its provisions to integrate Ervia into Gas Networks Ireland make sense. Since Irish Water was separated from Ervia and Uisce Éireann was created at the beginning of this year, Ervia and Gas Networks Ireland have effectively been functioning as one company anyway. This legislation could therefore be described as cleaning things up, to use that expression, or at least cleaning up the corporate structure. It is a measure that can be seen as largely technical.

Despite the lack of direct policy implications contained in this Bill, there are a number of points to be made specific to its provisions. I want to turn to those before speaking a little more about the context in which we are debating this Bill. First, I am glad to see that the terms and conditions for employees will be unaffected by the transfer that is to take place. Whenever there is any sort of corporate restructuring or merger of this sort, the worker must be a foremost consideration in the minds of decision-makers. For us in the Labour Party, as the party of the trade union movement, that is absolutely the case. It is vital that things like pay, pensions and workers' rights more generally are protected, and transitions of this sort must be seamless. That the Bill makes specific provision to ensure workers’ remuneration and superannuation are protected is also a welcome step. Superannuation in particular, as we are all aware, is a real issue for many other workers in different State and semi-State bodies and the private sector, many of whom have contacted my office when less careful consolidations have taken place.

I have some concerns about the constitution of the board of directors of Gas Networks Ireland. When Uisce Éireann was created, we in the Labour Party were pleased to see that provisions were made for a representative of the Irish Congress of Trade Unions, ICTU, to sit on its board. I am left wondering why the same provision has been excluded from this Bill. It is vital that in State-owned and State-run companies workers have a say in the management of the organisation, and it is the responsibility of the State to set a standard for employment rights, pay, conditions and so on, and to be a best-practice or model employer.

Just yesterday, on Leaders’ Questions, I raised the consequences of an abdication of duty in that regard when it comes to the near-collapse of Government-funded care services that are run by the community and voluntary sector. The Taoiseach effectively washed his hands and suggested there was no direct State responsibility to ensure pay parity between section 39 workers in the community and voluntary sector, and workers employed by the HSE and Tusla, who are delivering the same services. As I said, we believe it is an abdication of duty with what may well be very severe and serious implications for service users, and those dependent on care services provided by these workers, if it comes to withdrawal of labour next month. We hope it will not come to that.

Gas Networks Ireland will be a public utility and it is our belief that union representation in such a utility represents more than worker representation. It is also about representing the public interest. It is in the public interest to ensure the protection of the position of trade unions, and to ensure that trade union rights are advanced as communal rights, as well as individual workers' rights. That acknowledgement must first come from the State. Giving workers a say in the day-to-day affairs of the company would have been a more progressive step, so it is disappointing that union representation was omitted. I know that board appointments will be made by the majority-shareholding Minister, that is, the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien. We would have preferred for the Public Appointments Service to be utilised for appointments to the board but given that is apparently not the case, I appeal to the Minister of State to ensure that unions, and therefore workers by proxy and also the public interest, are represented on the board. We would like to hear assurances on that. Otherwise, we may submit an amendment on this, and this may well be raised during debates on Committee and Report Stages.

Before turning my attention to the broader topic of our energy gas networks, I would like to make one final point about the Bill's provisions specifically. I note that the board, in consultation with the majority-shareholding Minister, will appoint a statutory auditor. As a State utility, Gas Networks Ireland will be in receipt of a significant amount of public investment and taxpayers’ money. Given that this is the case, the company should be subject to audit by the Comptroller and Auditor General. I would be grateful if this point could be addressed during the course of the debate.

I will now turn to the broader context of our energy infrastructure. We all acknowledge that a very important part of the rationale for separating the operational management of our gas infrastructure from that of our water infrastructure is to help us meet the challenge of decarbonising our energy supply. That is a really laudable aim and, of course, in the Labour Party we strongly support and encourage that aim. The consequences of doing otherwise are appalling in the face of an existential climate crisis, and we are all very aware of that. The consequences are also very practically felt in other countries. We saw in the news this week that a case has been taken by six Portuguese young people in the European Court of Human Rights, who argue that the Government has breached their human rights by failing to reduce greenhouse gas emissions. Like the climate case we have seen here, we will see more such litigation. Unfortunately, there have been far too many delays and missed targets in meeting our binding climate and emissions reduction targets. I am glad, even in a technical Bill, that we see a small step towards decarbonisation inherent to and underlying it.

The reality is that Gas Networks Ireland must play a crucial role in our transition towards renewables, and towards a carbon-neutral energy infrastructure and a broader green economy and society. Ireland’s gas network is more than 14,500 km long. It supplies more than 30% of our total energy, including 40% of our heat and almost 50% of our electricity. We have debated in this House already the huge burden that is imposed on our electricity infrastructure by data centres, and that is certainly an issue we have raised in the past, as have other opposition parties. It is a real concern. Just imagine the difference we could make in meeting our vital climate targets if we can decarbonise the network. It would be truly transformative.

To achieve this, however, we need to see significantly scaling up of our investment in green solutions, and in renewable gas sources like biomethane or hydrogen, for example. It is incumbent on us all to see the creation of a sustainable, renewable gas industry in Ireland and the State must take the lead. We know that we have the resources to do this and the infrastructure can be there too.

Biomethane, for example, is fully compatible with our current gas networks and, indeed, Gas Networks Ireland has been supplying small quantities of biomethane gas for a few years now. More broadly, this would also bring significant benefit to our rural and farming communities. We often hear a perception that there is anxiety within groups such as farmers around climate action measures. Certain actors would have farming communities believe that the green transition is something to be feared. We know that is not the case and, in fact, the future for farming is through sustainable methods. We have seen wonderful examples of that across the country, such as projects in the Burren and the Blackwater Valley in Cork. Change in the way we farm may be required but there are enormous opportunities and benefits for farming communities there as well. This is one of those benefits.

There is massive potential to create a thriving income source for farmers in selling biomethane produced in the anaerobic digestion process not to mention some of the byproducts, such as the sale of crops fed into the process and the biofertiliser digestate that is produced. There is not only one example. There is a plethora of opportunities to decarbonise our energy supply and provide benefits to rural and farming communities. This sort of benefit is essential to ensuring we have a just transition. For families and households squeezed by the cost-of-living crisis, it is particularly galling to see energy companies making record profits. It is unsupportable that people are facing increased energy costs and fees for energy services when energy companies are making record profits. There has been a slowness and delay in energy companies meeting renewable targets.

We are not seeing the political will to grasp the nettle and take the radical action required to address the climate emergency. While this technical Bill is welcome, we want to take the opportunity to point out the need to do a great deal more. Others have spoken about something I have spoken about many times in this House, that is, the considerable potential for the development of offshore wind in Ireland. There have been delays in the scaling up of infrastructure necessary to develop that potential source of renewable energy. I hear from stakeholders in offshore wind production who are deeply frustrated at delays in enabling the roll-out of offshore wind production. We need to see far greater energy devoted to the development of that source of energy.

In the context of this Bill, Gas Networks Ireland has a vital role to play in our decarbonisation efforts but we need to see it equipped to scale up our transition from non-renewable, carbon-intensive gas sources to greener, renewable sources. The infrastructure may be there but the resources and mandate, as well as the ambition and delivery, are necessary from the Government.

Deputy Brian Leddin

I thank the Minister of State for bringing forward this Bill. I understand it is a technical Bill that transfers all functions for the national gas infrastructure from Ervia to the new publicly owned Gas Networks Ireland. With the transfer of functions, there will be some changes, specifically the inclusion of the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure, National Development Plan Delivery and Reform as minority stakeholders with 5% of the shares each, while the Minister for Housing, Local Government and Heritage will maintain 90% of the shares. This is to be welcomed but my sense is that it should go further simply because of the significant impact of burning gas on our climate objectives. I believe it is right that the Minister for the Environment, Climate and Communications should have a greater stake than the 5% granted in the Bill. The Minister of State, in his closing remarks or in writing later, might clarify why the decision was for 5% and not 10%, 20% or 30%. Is there a particular reason that the Minister for the Environment, Climate and Communications of the day, whoever he or she may be, will not have a stronger voice with respect to Gas Networks Ireland.

The Bill may be missing an opportunity to ensure that our national provider, Gas Networks Ireland, is aligned with the national climate objectives and our legally binding carbon budgets. In this Bill, we must ensure that the functions of Gas Networks Ireland are updated and aligned with the Government's decarbonisation objectives, specifically those functions of the company that relate to expanding the gas grid, providing new gas connections and increasing the demand for gas across industry and the commercial and residential sectors. Within the energy sector, the ability to meet our ambitious climate targets will be determined in part by the uptake of renewable energy and the retrofit of buildings. Ultimately, greenhouse gas emissions will decrease only if we can phase out the use of fossil fuels to power our lives.

Research on the sectoral carbon budgets conducted by University College Cork, UCC, in 2020 revealed that in order to meet our carbon budgets by 2040, significant reductions in gas demand are needed compared with 2020 levels. A 93% reduction is required in the power sector. An 85% reduction is required in the residential sector and a reduction of 67% is required in enterprise. Gas Networks Ireland's most recent five-year revenue proposal, which underwent a Commission for the Regulation of Utilities, CRU, consultation last month, outlines its plans which, if implemented, may not align with the Government's emissions reduction commitments and could potentially compete with the Government's initiatives, such as housing retrofits, the roll-out of heat pumps, district heating projects and the broader goal of reducing our reliance on fossil fuels. In the years 2016 to 2020, Gas Networks Ireland connected 50,000 new customers to the gas grid. Over the coming five years, Gas Networks Ireland forecasts that 17,000 new gas connections, including the connection of 14,000 existing houses, 600 new houses, 36 apartment blocks and 2,600 industrial and commercial units, will be required.

In its 2021 development plan, Gas Networks Ireland noted that the company was actively promoting natural gas systems to builders and developers for new housing. It is also targeting the 300,000 homes currently serviced by oil and seeking to switch them to gas. This is locking in the use of gas in homes, including new homes, right across Ireland for decades to come when we need to be phasing it out.

Gas Networks Ireland's plan is not blind to Government policy. In fact, it clearly recognises that the policy of Government is to electrify heat in domestic buildings. However, the plan asserts a position that decarbonising heat through continued connection to the gas grid is a better way. All of us in the House will rightly see that as the madness it is. For a company that is owned by the State to recognise and disregard Government policy is unacceptable.

Ireland's plans for the decarbonisation of the residential section are outlined in our climate action plan. They are hugely ambitious. By the end of the decade, we need 2.5 TWh of district heating, which will serve approximately 125,000 homes and 11,500 commercial and public sector connections. We need 0.7 TWh of heat from renewable gases. We need 45,000 existing dwellings to switch to using heat pumps for domestic heating by 2025 and 400,000 homes to switch by 2030. To deliver this, we need all arms of the State pulling together. We are all well aware of the benefits to our energy security and energy independence that will arise as our energy system moves away from fossil fuels towards renewable energy.

I am seeking clarification as to whether Gas Networks Ireland will be a public body and, therefore, a relevant body under the Climate Action and Low Carbon Development Act. Until the introduction of this Bill, Ervia was specifically exempt from public body status. I would like Gas Networks Ireland to be a public body subject to the public sector climate action mandate and the provisions of the Climate Action and Low Carbon Development Act.

Deputy Catherine Murphy

I understand this is a technical Bill. It provides for the dissolution of Ervia, the transfer of its functions, assets, records and staff to Gas Networks Ireland. I understand that. The first thing stated in the explanatory memorandum is:

In 2018 the Government decided that Irish Water (Uisce Eireann) should be separated from Ervia and made into a standalone entity. On 20 October 2020 the Government approved the memorandum of the Minister for Housing, Local Government and Heritage, which outlined the plan for the development and drafting of a general scheme to achieve this. The Government also approved the development and drafting of a general scheme of a separate Bill to facilitate the integration of Ervia into Gas Networks Ireland...

It goes on to state:

The establishment of two separate State companies, one to operate the gas network, and one to develop our water services, provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water [network].

I had been engaging with the Office of Parliamentary Legal Advisers, OPLA, for about a year. We had been trying to work on constructing a Bill to try to separate out Irish Water so that it would come under the remit of the Comptroller and Auditor General given the very large amount of money that is under the remit of Irish Water. The level of oversight is not what it should be for the amount of public money that is going into this company. That is very much an understatement.

We also have experience of what happened in respect of the transfer of staff from local authorities to Irish Water. We can see the kind of thing that can happen and what should be avoided. I will go into that in a little while. Irish Water was set up by the then government on the basis that it was going to be full cost recovery from both the commercial and domestic users. That would have created a very significant burden. I never believe that initiative was about water at all or, in fact, it was a reaction to it. I believed it was very much to do with people’s incomes contracting, the universal social charge, the local property tax and other issues, coupled with the loss of services. This was very much the straw that broke the camel’s back as opposed to being about water per se.

We are now at a point where we are undoing some of that and it is quite complex because it is not just one piece of legislation which is required. I want to see a situation where citizens are entitled to a service and pay for that service through their taxation as opposed to being customers, so we have to get away from that earlier model.

We were told at the time that we were going to have a much better system because we would have one operator and were not going to have 31 local authorities. In fact, however, we can see that most of the work was done by staff in local authorities and some of them have transferred.

I refer to the point made by Deputy Bacik on Gas Networks Ireland. Earlier this year, which is not that long ago, strike notice was served in respect of the transfer of staff. The issue went to the Workplace Relations Commission, WRC, and arising from that a framework was developed which is very useful and pertinent in the context of this. There were no compulsory transfers or redundancies and it was about all number of things, incorporating a dozen different aspects which were agreed. The dispute was avoided as a consequence of that. It is very important that we have the kind of oversight one would have when it comes to a public company.

For some time I have been seeking to have Uisce Éireann made accountable to the Comptroller and Auditor General and to have it separated from the Ervia group. Uisce Éireann has to be considered in isolation as a fully State-funded entity and it should be required to be under the remit of the Comptroller and Auditor General, which would then bring it under the Committee of Public Accounts' orbit. One can have real accountability there in a very public way which is very important.

I would like to hear from the Minister of State as there was nothing in his speech about that. I know this is just an aspect of it but it is a very important one because of the amount of money we are talking about here. The total funding requirement in respect of the strategic funding plan sets out a total of source of funds of Irish Water for the years 2019 to 2024. When one goes through this document, one finds non-domestic, new domestic and government subvention, new connection revenues and domestic excess charges, non-domestic borrowings, and capital contribution. In total it comes to over €11 billion. There is no way that this company, if it had been set up as a public company, would not have been under the remit of Comptroller and Auditor General.

It matters how companies or State entities are run. We have seen long delays, for example, in respect of water connections. We talk about housing being the key issue and there could be a blockage there. There is a great deal of development in my area and people are contacting my office when they face delays. For example, last year people contacted me who had a three to six month delay where they had received a mortgage offer but could not get a connection. It is not just what is spent but it is the value we get for it and the functioning of the company which needs that kind of oversight. It is very important the Minister of State comes back to us when responding to deal with the issue as to what exactly the pathway is here and whether this is the last piece needed before it goes under the remit of the Comptroller and Auditor General.

I want to give the Minister of State an indication of some of the kinds of things which one can see are happening. For example, Irish Water will have a contract with a contractor to do a large piece of work where before it used to be the local authority. This is now done by Irish Water, in the case of water and wastewater. The local authority cannot apply penalties, for example, and must have Irish Water do this. It is now a two-stage process.

There is a further example of a big scheme under way in Celbridge. It was supposed to be completed this time last year but it is still under way. People completely expect that one cannot make an omelette without breaking eggs, and that this work will be disruptive, but this work was unnecessarily disruptive and long and it has left quite an amount of damage. The interesting thing is that now that the job is nearly complete, it has been discovered that another pipeline needs to be replaced right through the same location which means that it will have to be dug up again. That is the kind of thing which very much infuriates people. The reason this has to be done now is that for one week the water was off for five days in a row. It was repeatedly turned off and on for these five days. Households, cafés, restaurants and businesses are all wondering whether they can function in that kind of environment. I have to say that I do not believe people have a great deal of confidence when they see a job that has been poorly managed. This job was so poorly managed that for the first time in five years, the local authority withheld or annulled a road opening licence because it was not satisfied with how Irish Water was completing the job. This came to a point where one could not go out on a bicycle on this road as one would be killed because it is so lumpy and bumpy. It will be next year before this is done. That kind of oversight is completely essential.

We were told this sort of dual relationship would be so much smoother when Irish Water dealt with this where. In fact, this it is actually causing some impediments. I acknowledge some, if not much, of the work Irish Water is doing is excellent but the local authority is the roads authority. It has to manage not only the road opening licences but also has to manage the restoration and be satisfied with the restoration, which it is not in this case.

It must also be involved in traffic management. In this particular job, people were nearly killed because the stop-go system failed and we had to get the Garda out late at night. When a job is dangerous, we have to question where the oversight is. Not only does Irish Water need financial oversight, but it needs better oversight as well. I would like the Minister to respond to this. What are the pieces involved? Will it be under the Comptroller and Auditor General? What does this Bill do to bring it closer to that? As far as I can see, we are undoing what was set up for something that was entirely different, which was about the full cost recovery. Now we are trying to undo that and putting in a very large amount of necessary money. We need to make sure it is spent in a way that gets the best value for money. We also need to make sure that the company functions in a way that ensures there is no waste and no unnecessary reduction. We also need to look at how we do that. Some sanctions must be built into tenders to ensure that if something goes off the rails, there is not a duplicate in the cost. When we dig up a road, we need to be doing two things at the same time that need to be done, rather than going back after it has been surfaced to dig it up again. It drives people bonkers. I would like to hear what the Minister has to say about how this gets us to the kind of oversight which is absolutely necessary.

Deputy Paul Murphy

We can see that this Bill limits itself solely to changing the corporate arrangements of Ervia and Gas Networks Ireland. It is a missed opportunity on many levels. Not many people are aware that semi-State bodies like Gas Networks Ireland, Dublin Bus, the ESB and Coillte are not legally subject to the State's emissions reduction commitments under the Climate Action and Low Carbon Development Act 2015. This Bill was an opportunity and still is an opportunity to legislate to ensure that Gas Networks Ireland and other semi-State bodies are brought within the scope of the climate action Act. It is a very deliberate loophole, a mile wide, that they are not included.

Related to this, the current Bill has nothing to say about the climate obligations of Gas Networks Ireland. It has nothing to say about its recent proposals to the CRU to make more than 17,000 new connections to the gas network in the next five years. What impact will all of these new connections have on our emissions targets? Every new connection means locking in fossil fuel use for decades. Gas Networks Ireland should not be increasing the number of connections to the gas network. Instead, it should be working to reduce them massively and then eliminate them entirely. Research from University College Cork has found that in order to meet our carbon budgets, gas demand in 2040 must be reduced by 93% compared to the current rates in the power sector, by 85% in the residential sector and by 67% in enterprise. Why, then, are the Government's own retrofitting programmes locking people into fossil fuel use? Almost all of the homes given new boilers under the free better energy warmer homes scheme in the first half of this year had oil or gas installed. These boilers will be burning fossil fuels for at least the next 15 years.

The new connections that Gas Networks Ireland is proposing will include 14,600 new domestic connections and 2,629 industrial and commercial connections. How many of those connections will be data centres? Faced with a moratorium on connection to the electricity network due to the massive pressure they are placing on our electricity supply, forecast to be 30% of all our consumption by 2030, many data centres have turned to connecting directly to the gas network. They are cutting out the middleman in terms of burning fossil fuels to create electricity to power data centres by going directly to burning fossil fuels to power such centres. Last year the Minister wrote to Gas Networks Ireland asking it not to sign any more contracts to connect data centres powered by on-site fossil fuel generation. Gas Networks Ireland responded by saying it is mandated under the gas Act to supply connections requested by third parties. The Government, and us as a Dáil, should amend the gas Act to ensure that no data centres are allowed to connect to the gas network. The Government has not done that, however. It has not acted. A dozen data centres are in the process of connecting directly to the gas network. Microsoft is building a €100 million, 170 MW gas power plant in Grange Castle. Shame on the Government for failing to stop this. It seems that nothing is more important to this Government, including the Green Party, than sucking up to big tech and big multinationals. The data centres they dump here barely create any jobs and are nothing but a burden on our energy system and our water supply. People Before Profit has introduced a Bill to ban data centre construction and will continue to campaign for this because it is necessary if we are going to meet our climate targets.

We will also propose amendments to this Bill on Committee Stage to oblige Gas Networks Ireland to reduce the number of connections to the gas network, to refuse connections to data centres and to plan for the orderly wind-down of the gas network as soon as possible. The best way to do this would be as part of a fully renationalised, publicly owned energy system, operating on a not-for-profit basis, that can plan for a rapid and just transition to 100% low-cost renewable energy. This would tackle the climate and cost-of-living crises simultaneously. Unfortunately, the neoliberal capitalist ideology of this Government, again including the Green Party, prevents it from considering the radical ecosocialist measures that are necessary to prevent climate chaos and to stop the impact of the cost-of-living crisis on ordinary people. If we are to stop climate change, we need a left-wing Government that is willing to take on big business and the big polluters to bring this about, not a timid Green Party in coalition with Fine Gael and Fianna Fáil that is missing opportunity after opportunity to take action on the climate crisis.

Debate adjourned.