Mr. David Taylor kindly circulated background information on this presentation which I assume members have had an opportunity to read. They may ask questions, if they have any, but we will allow the guests to make their presentation first. I welcome Mr. Leo Crawford, CEO, GT Energy, and Mr. Padraig Hanly, development director.
Renewable Energy: Discussion with GT Energy.
Mr. Leo Crawford
I am CEO of GT Energy and Mr. Padraig Hanly is the development director. I thank members for giving us the opportunity to appear before the committee to discuss the unique opportunities geothermal energy presents to Ireland as an abundant and renewable energy resource. I also hope to identify some obstacles that need to be tackled in order that Ireland can fully realise the potential of deep geothermal energy and I will detail some of the key regulatory and legislative challenges that need to be dealt with to secure investment in this area.
GT Energy is an Irish-owned and Irish-funded company. We also have a presence in Great Britain and Northern Ireland where we have a portfolio of projects under development. We concentrate on the development, generation and distribution of renewable and sustainable heat using a number of renewable technologies but primarily deep geothermal. We have first mover advantage and hope to be the first deep geothermal company in the Irish and UK markets to explore with the intention to develop, own and operate deep geothermal plants.
Geothermal energy is an abundant resource of naturally produced energy which radiates daily into the atmosphere. The earth's core has a temperature of 6,000 degrees which is caused as radioactive elements radiate towards the surface of the earth's crust where it heats deep underground aquifers which are large basins or reservoirs of water which were formed during the melting of ice age glaciers and the gradual build-up over time of rainwater percolating to the surface. In Ireland this heat energy can be harnessed by drilling to depths of 2 km and beyond.
The harnessing of geothermal energy is not new internationally but is a well developed and commercially proven technology. It is also widely used. In Iceland 87% of heat is provided by geothermal energy and Reykjavik boasts the longest district heating network in the world. An area outside Paris is heated by 50 well-doublet systems which heat in excess of 350,000 homes. In Germany there are plans to have 150 geothermal systems in the future and the total industry is conservatively estimated at €4 billion. Licences for geothermal systems are currently oversubscribed. In the Cooper basin in Australia an area the size of Munster has the potential to deliver 500 MW of heat. In Idaho the first geothermal plant was built in 1892 and is still in existence and functioning today.
How do we harness this heat? Geothermal energy delivers renewable heat. A district heating system consists of a closed loop of insulated pipes that supplies heat to energy users via heat exchanges and returns cooled water to the centralised heating unit where it can be reheated and explored again. On slide No. 6 members will see a diagram of the drilling of two wells to 2 km — one a production well extracting the hot water for the heat to be harnessed at the surface, and one an injection well for the water to be reinjected, reheated and circulated around the closed loop system. At the surface these well heads are no more than 7 m apart and have a low visual impact.
Each energy user connected to a district heating network will have a heat exchanger installed. Energy users that currently have fossil fuel boilers as their heating source can be easily retrofitted with a heat exchanger without having to change the internal heating pipes in their premises. The district heating networks can be fuelled predominantly by geothermal but can be supplemented by biomass and recycling waste heat energy. There are a number of complementary renewable technologies in the energy mix required to heat water in a district heating system. They can be geothermal, residual or biomass or a combination of the three. Insulated pipes circulate heat around the network and the heat is harnessed to a heat exchanger, ultimately providing heat for homes and businesses.
Up until now, countries such as Ireland and the United Kingdom have not had to consider the development of district heating networks as the cost of gas and oil has remained relatively low. This, however, has now changed and there are supply risks, as well as price volatility with oil and gas. Furthermore, EU renewable energy targets mean that Ireland and the United Kingdom need to look at alternative technologies for heat supply. However, due to the current economic climate it is unlikely that the Governments of these countries will be able to afford the development of district heating networks. Initially, it is more likely that private sector investment will develop district heating networks with the support of local and national governments.
Geothermal systems require other technologies to meet peak and back-up load demand; this is where residual heat and biomass can complement the heat energy solution. GT Energy is committed to developing, operating and facilitating district heating networks and renewable technologies in Ireland and the United Kingdom. Ours is the first company in Ireland or the United Kingdom to focus on the harnessing of deep geothermal heat. We are exploring a number of joint venture structures to finance and implement projects both in Ireland and the United Kingdom. We have completed the first geothermal project in Ireland at Newcastle, County Dublin, where a number of boreholes were drilled to examine the geological structure of the Dublin basin and identify the presence of a deep geothermal aquifer along the Blackrock to Newcastle faultline which we have done successfully. Hot water at 43° Celsius was achieved at 1.4 km which, extrapolated to 3 km, gives heat at 100 degrees Celsius. We are also looking at a number of deep geothermal-led district heating projects outside Ireland and the United Kingdom. In the light of our discovery in Newcastle, we intend to expand on geothermal exploration not just in Dublin but also in other parts of Ireland, Northern Ireland and Great Britain.
Coupled with the efficiency benefits of district heating, this geothermal energy has huge potential to assist Ireland in achieving the targets set in the Kyoto Protocol and the renewable energy directive. Other benefits associated with geothermal include the fact that it is unaffected by changing weather conditions and is available 24-7, 365 days a year. Geothermal systems are also fully reliable as each system will have an installed backup facility. Production from individual geothermal fields can be sustained for centuries. It is a low operating cost technology and, through advancements in these technologies, we are also exploring the possibility of using geothermal energy to generate electricity. The development of geothermal systems leads to direct investment in the Irish economy, the creation of jobs through the construction and operation of plants, the development of district heating systems, the construction of energy-efficient buildings and the movement of manufacturing companies into Ireland due to the availability of cheaper and greener energy.
I have slides which illustrate a case study. Looking at one geothermal plant with a 20 MW to 25 MW potential and considering the economic benefits, we can see that it has the potential to heat 300,000 average three-bedroom homes. At a conservative estimate, it will invest €50 million in the local economy in terms of infrastructure build and it will create 100 permanent jobs and ancillary employment. Importantly, it will reduce dependency on fossil fuels by approximately €80 million and reduce carbon emissions by more than 500,000 tonnes per annum.
The potential for the development of geothermal as a renewable energy source is immense. In circumstances where it seems the State will not have the resources to develop geothermal in Ireland, it is important to ensure private sector investment is given the confidence and support to commit funds to the development work required to underpin such investment. Currently the private sector is reluctant to commit funds to the development of geothermal in Ireland not because of any hesitancy about the lack of resources here but mainly because there is no proper regulatory structure in place today.
We have been engaged with the Department of Communications, Energy and Natural Resources in this respect for well over 12 months. So far there is no sign of legislation or a timeline in which we might expect new laws to be enacted, and this is deeply frustrating for our company and investors. There are a number of significant regulatory and legislative challenges to secure investment in this area, as I have outlined. There is also a need to recognise geothermal energy as a renewable and sustainable energy indigenous to Ireland, which can be used to assist RES directive targets for 2020.
Outside private sector investment there are other issues to address in the development of this technology. There is a lack of specific heat feed-in tariffs for renewable and sustainable heat production, which are common in other jurisdictions to encourage take-up by customers during the roll-out of district heating systems. We also want to ensure the necessary changes in planning and development laws in a manner which addresses other equivalent utilities such as electricity and gas. Until a clear regulatory regime is established to provide private sector investment with the certainty required to underwrite investment in this green technology, we will never have the levels of investment to bring geothermal to the mainstream in Ireland. I would be grateful for whatever support this committee can provide to ensure this regulatory imperative is delivered without any further delay.
I thank Mr. Crawford. Will he outline the types of regulatory structures currently acting as a barrier? What exactly is the company up against? Taking Newcastle as an example, it has been confirmed there is potential there, so where does the company go with that and what does it need?
Mr. Leo Crawford
We are asking of the Department that legislation be put in place to allow us to explore this resource further in the Dublin area and specifically the south Dublin area. With regard to exploration, licences should be put in place to ensure our investors have certainty. After a period of exploration we would also like to develop these resources and have a licensing structure in place.
On top of that we are looking for changes in planning legislation to allow us to drill directionally to a depth of 2 km or 3 km, not just in this location but in other parts of the Dublin basin and the country in general. For that to happen we need changes in the planning laws to have us treated like any other utility. This would allow us drill, lay pipes and build strategic networks.
In the case of Newcastle, I presume the company has had dealings with South Dublin County Council. Will the witnesses give an example of the barriers it has met?
Mr. Padraig Hanly
Newcastle was an exploration project consisting of a number of single boreholes which went straight down within the confines of land we controlled. We met representatives of South Dublin County Council on a number of occasions in this regard and they were aware the project was ongoing. Mr. Crawford mentioned earlier that we would have two wells directionally drilled from 7 m apart on the surface and eventually 2 km apart at the bottom, but that is not available to us currently because there is no regulatory system in place.
There is also an issue of ownership of the energy. We argue that no one owns it because it is like the sun or the wind, but a regulatory system must be put in place to create security of tenure for investors because it is expensive to drill these wells. We would be looking at €15 million or €16 million for a well doublet system which may have a 20 MW thermal capacity for an infinite time. Until that security of tenure is in place for an investor, that level of investment will not be reached.
The wells in Newcastle were only to 1.4 km because of the technology available in Ireland within the allowed budget. The project was only for exploration purposes. We intend to drill to in excess of 3 km for a production-scale project.
The map we have been provided with is quite startling because we can see so much of the west coast of America with 25% of its electricity requirements generated from this technology. To reflect the Chairman's question, where is the blockage and what is wrong with the technology? Mr. Hanly has explained that there are planning issues. Am I correct in understanding that a regulatory structure is required to overcome the planning problems which may arise along with ownership and other issues? Certainty is required for investors in that way.
I presume the witnesses have met officials from the Department and the Minister. Will they give members some feedback on how they have been getting on with the Department or how long it has been meeting its representatives? The delegates have indicated how we can assist them but is it for this committee to be helpful like we were with foreshore licences and draw up our own legislation? Where exactly does the company see the Department having a serious delaying tactic or problem with this proposal?
Mr. Leo Crawford
We initiated discussions with the Department of Communications, Energy and Natural Resources 12 months ago. We submitted our thoughts on the legislation that should be put in place to support the development of this resource.
Was legislation drafted?
Mr. Leo Crawford
We drafted a policy document to be incorporated as part of mineral legislation progressing through the Department at the time. We suggested to the Department that our policy document of legislative changes could be an addition to the minerals Bill and in the 12 months since we have had numerous meetings with the Department and participated in a number of workshops.
We have been given commitments on an outline timetable on when we might see this legislation. We were originally told the legislation would be out this autumn as a tag to the minerals Bill. As recently as June we have been told that no commitment can be given on a timetable. In all likelihood the minerals Bill will be stand-alone legislation and the geothermal legislation will be separate. We have received no feedback on a timetable and no commitment on the resources being in place to progress this legislation and see it through to completion. We continue to engage with and ask questions of the Department but we have received no commitment on timetables. We have no visibility on the blockages holding up the introduction of the legislation or how we as a company can assist with removing these blockages.
Will the witnesses send the committee a policy document for the benefit of committee members?
Mr. Leo Crawford
We would be glad to do so.
The investors will clearly be getting uneasy at this stage because of the climate we are in. Surely they will not wait around forever. Will the witnesses indicate if they are uneasy because of the delay in this important legislation?
Mr. Leo Crawford
Our investment focus is in the UK and Northern Ireland where we have a number of projects and the regime with regard to planning and legislation is more forthcoming in the development of geothermal legislation. Our priority from the investment side of the company is to focus on Great Britain and Northern Ireland.
There is a nervousness in our board of directors and investors and we are going through a round of fund-raising. We expect to follow with significant fund-raising once we bring one of these projects to a financial close. However, there is a nervousness around having drilled and proved the existence of this resource in the Dublin basin — a significant area with regard to population and commercial industry — and a reluctance to spend tens of millions of euro without having certainty regarding the legislation, and without knowing that we can drill and explore and have some security with regard to licensing to utilise and maximise the potential of this resource.
I welcome the delegates. It is a year since I accepted an invitation to go to Newcastle. On that occasion the presentation was clearly centred on the need for legislation, so it is extremely disappointing to find, 12 months on, there has not been the development of legislation and statutory framework one would expect. I am not entirely surprised because I tabled a parliamentary question in March. Although a working party was set up in the Department and many meetings were held, as Mr. Crawford noted, I found the Minister's answer to my parliamentary question to be disturbing. It stated that complex legal issues arise, which is fine, but continued, "I will decide on the need for legislation when I have considered the report coming from the working group." It seems the Minister has not even committed to having legislation, which signals to me that we have a real problem.
It is extremely important we progress this issue. We all understood that geothermal energy is not the kind of energy source we can develop on the scale that Austria has done but it is fortuitous that the delegates have proved there is great potential very close to a major conurbation. From that viewpoint there are many positives regarding renewable energy. The urgency which still obtains is increasing because there is a lack of basic principled acceptance that we need to do this. There must be legislation and regulation. I am sure complex issues arise. They always do in any important legislation but the fact we do not yet have even political commitment is something this committee must pursue and progress.
I have two other questions. Concerning the mapping of other possibilities, does Mr. Crawford see this as something the Department would carry out? Is it within its capabilities or is it a matter of leaving the private sector to go and drill holes wherever it wishes? Perhaps Mr. Crawford might talk about how we can regard the limits and extent of this energy source.
With regard to a district heating network, which is not common in Ireland, and considering that one rich source in Dublin basin capable of heating 300,000 houses, I presume that figure refers to existing houses that would transfer to this new source of heating. What kind of cost is involved in such infrastructural development? Who would do it? Do the delegates expect there would be a partnership with the State? How might it be done otherwise?
Mr. Padraig Hanly
On the mapping issue, it would be a perfect situation if the State were to pay for the funding to drill all the holes and find all those resources. I do not think that will happen because of the current economic climate. If, however, the regulatory system and the proper legislation on security of tenure for investors are put in place, we will see many investors and companies coming in to explore because they would have security of tenure of their investment. Germany put a regulatory system in place in 2001, not having had a geothermal industry before then. The industry is now worth about €4 billion which is quite a considerable industry to have in a country. That has happened only since 2001 and there are continuing developments. Once one starts developing, new technology comes on board and there is more efficient use of the energy. Electricity can now be generated from temperatures as low as 74° Celsius. That temperature is available more or less anywhere in Ireland and is easily accessible with the technology we have available.
The ideal situation would be for the State to put funding towards the mapping of the resource. I cannot see this happening at the moment but if a regulatory system were put in place I believe we would see an influx of many geothermal companies to investigate the potential.
Regarding the technology, is drilling the only way to find out a source? The delegates obviously had some information to go after the Dublin source.
Mr. Padraig Hanly
No, all that is needed to map this is simple off-the-shelf technology, the same as that used in the oil and gas industries, namely, seismic and gravity surveys. There will be some test drilling but it is all established and proven technology. There is even technology to develop the drilling. We can drill in excess of 14 or 15 km now, if needs be. The technology is on the shelf. Everything else is pipes and pumps and no rocket science is involved. It is very simple and proven technology. We are not bringing something completely new here. This has been done across Germany and Austria. Most of eastern Europe is district-heated already, with lots of geothermal energy. The same applies to Turkey.
If one looks at this in geological terms, where else is there the same geological setting as Ireland? We can pick Germany which has the same kind of temperature grading per kilometre drilled. For every kilometre one goes down there the temperature is about 30 degrees hotter. The economics that work there will definitely work here.
On the second issue——
Mr. Leo Crawford
I will add to that answer and try to answer the Deputy's second question. In 2004, the Geological Society of Northern Ireland, with assistance from Government, commissioned a geological or mapping survey which has enabled us to look at the geological profile of Northern Ireland and identify a number of hot spots that are suitable to develop this technology. On foot of that, as a company we are now in strategic partnership with Ballymena Borough Council to bring forward this technology and develop with the council a district heating system for the town which will be fuelled by a combination of geothermal biomass and residual heat.
Concerning the investment for this technology, we see it initially as private sector investment. There is an appetite across Europe, especially within banks and specialist banks, to invest in municipality-run or council-based systems where there is the heat density, the key off-takers of industry and the residential users who will commit to taking or buying heat. In itself, that will give the banks the comfort that these systems can pay back over a period of time, perhaps in under ten years. That is a common model around Europe.
Outside that, what we are seeing in our conversations, particularly in Northern Ireland, is an interest being expressed in partnering with a company in joint venture arrangements or public private partnership to roll out these networks in Northern Ireland. In the longer term I would not rule out a situation where councils and boroughs will take an interest in the running and operating of district heating systems.
I have a few brief questions. I know we are under pressure of time. Can I hear some detail of what the delegates describe as heat feed and tariffs? I have a very clear understanding of how these apply in the electricity market but as far as I am aware there is no tariff for heat in Ireland because heat is provided by gas, electricity or oil. Fuel is pumped into a building and is then turned into heat by combustion or some other method in the case of electricity. Are the delegates proposing that we would have a similar type of feed and tariff system as is in place in the combined heat and power plants that feed back into the electricity network when there is surplus electricity or power? Is something similar proposed for heat? I do not understand how that structure would work. Perhaps we might hear a quick explanation.
We have met before and I am impressed by this proposal. Like others, I am frustrated that more progress is not being made. Have the delegates spoken to some of the other State agencies such as Sustainable Energy Ireland, SEI, for example, whose responsibility it is to develop new technologies such as this, or Science Foundation Ireland, SFI, which might provide funding for research and development into such areas? Where do those negotiations stand? It seems that since the last time we met the arguments and frustration are still the same and there is no movement forward. There is not only policy but also a public relations initiative coming from Government and a certain Minister to constantly promote wind and wave technologies to produce power. However, there seems to be absolutely no drive whatsoever to support this technology and I am trying to get an understanding of why that is the case.
I refer to the issue of planning regulations and amendments. Does the delegation envisage this being listed as part of the critical infrastructure? Will whatever is combined with geothermal technology have to be dealt with too, whether biomass or otherwise, because that is an area which might cause problems? Is it the case that GT Energy at present does not produce electricity as such and that it needs power to drive the whole system? Does the company propose to get it from swapping the combined heat and power plant? If there is a hold up on the Department's side it might be an idea for us to get an update from the Department or the Minister on where they are going at present and the nature of the proposal. In the first instance and on foot of the response to Deputy McManus's question, will there be a commitment to introduce legislation and regulation? It seems there has been a working group and workshops, etc., but there is no report. Since last March there has been no report for the Minister to even consider where he is going. The committee should write to the Minister and the Department and if needs be call them before the committee to explain what is going on.
This is deeply frustrating. Some 11 months ago we produced legislation related to offshore renewable energy and the Department appeared before the committee. I refer to item No. 9 on the agenda. There is a reply from the Department of the Environment, Heritage and Local Government informing us that the Minister has asked officials to explain that while responsibility for foreshore functions currently resides with the Minister for Agriculture, Fisheries and Food, his colleagues will shortly introduce the necessary primary legislation to transfer these functions. This is what is taking place. The committee was set up to deal with climate change and energy security, which means trying to find alternative sources of energy to replace fossil fuels and reduce CO2 emissions. We go to the trouble of producing legislation and we get nowhere. From the reply we have just received from the Department of the Environment, Heritage and Local Government it is as if we never produced that Bill. Here is another renewable source and the Department is dithering with studies and so on. We should make up our minds whether we are serious about this and the process becomes very frustrating.
In case we are cut off because of bells ringing I assure the delegation we will write to the Department and ask it to come before the committee. I assure the delegation of this much at today's meeting. We will follow up this matter as we did with offshore renewable energy. I call on the Government representatives here to apply pressure to try to get some movement. I have heard so many statements from the Minister for the Environment, Heritage and Local Government and the Minister for Communications, Energy and Natural Resources about CO2 emissions and what we must do. Here we are presenting opportunities and no one is grasping them. We are told there is €16 billion in offshore investment ready to go into offshore wind projects. We are looking for jobs and investment. The delegation has informed us there are millions of euro ready to go into such projects and there are jobs to be created. I wish to put on record on behalf of the committee, such that the delegation will understand, the frustration of the committee and that we will follow up on this matter. I call on the delegation to answer the questions raised.
I forgot to ask one question concerning the 300,000 homes mentioned. Has the company carried out an exercise on the resulting carbon savings?
Mr. Padraig Hanly
I refer to the first question from Deputy Coveney on renewable heat incentives. There are a number of systems which could be worked upon. There could be a feed-in tariff for renewable heat produced which could be levied on oil and gas supplied for the same purpose, or simply some incentive to energy users to connect up to renewable energy systems. It will have to be defined. The UK is examining renewable heat incentives and hoping to have them in place by next year. As in the case of the feed-in tariff, if one produces renewable heat one will receive a base market price, yet to be decided but approximately four cent per kilowatt hour. That remains to be decided but it is an incentive to get people and customers connected to these systems. There is a level of commitment and cost to connect up to these systems, no greater than that required to connect up to a gas network or anything else. However, something is required to get people to connect up and to increase utilisation. This makes it cheaper for everyone else too.
I refer to the question of whether we have spoken to SEI. We have and there has been very good communications with SEI. It has grant aided a small part — I emphasise a very small part — of our exploration work in Newcastle related to the research findings at the very end and the testing of the borehole. We have an application in for the next segment of work which is to map the greater Dublin area for geothermal potential. We are currently awaiting a response on that matter.
Mr. Leo Crawford
At a recent meeting, SEI informed me in no uncertain terms that the funding is not within SEI today to assist us in exploring the full geothermal potential for the Dublin basin. We asked for assistance to carry out a full seismic study for the Dublin area but SEI is not in a position to commit any funding.
No funding at all.
Mr. Leo Crawford
None at all.
Chairman, I think we are wasting our time and it is inexplicable and embarrassing. I do not know what the committee is doing. We are doing all that we are set up to do. Every time we get to a certain point on an issue we come to a blockage and it comes from the same place, namely, it is legislative and otherwise. People come before the committee and indicate what they could do if the legislative blocks were lifted and if the planning regulations were approved. We must have a serious meeting with the Department and indicate there is no point in the committee being a front or a fig leaf for Government if we are not allowed to have implemented, or at least processed, the proposals that come through and such issues as those with which we are dealing today.
Mr. Padraig Hanly
I refer to the questions on planning issues and district heating. We maintain it should be treated the same as a utility. One must apply for planning permission for every single connection. If Mrs. Ryan on the road seeks a connection to the pipework a separate planning application is required every time. This is not a good way to operate. Who would do this work? There are plenty of construction firms in Ireland which would love to do this work and they are all trained for digging up roads and putting in pipes.
Mr. Leo Crawford
I refer to the planning side and Dublin County Council. We have asked about and submitted our thoughts on the possibility of district heading systems becoming a part of the process of their development plans for the next five or ten years. We would like to see district heating systems as part of that infrastructure and as part of that solution.
That is a good idea.
Some of the questions I wished to put have been answered but I wish to hear more on technical matters. Can the delegation provide some idea of how the option compares in terms of the cost using some of the international measurements such as the cost of heating one cubic metre of house space per year, etc? I would like to see this compared with the cost of electricity and otherwise. The delegation has given us a run through of it at a top level but when one includes piping, pumping and distribution as well as the comparison in emissions, what efficiencies would this bring? I would appreciate hearing from the delegation on this matter.
I always shiver when I hear words like "infinity" and "infinite" and I could never believe it is like perpetual motion as it is a scientific concept. There must be some element at some stage where the heat supply changes. I speak as someone with no knowledge whatever of this area because I have no idea what is going on 3,000 m below. The delegation gives the example of plant that has worked for more than 100 years in Idaho. I would like to hear more from the delegation on this issue. The other issue is the distance potential in terms of piping. What is the size of a district? Is this something that would serve a provincial town or part of a city? What is "infinite", etc., in that general area? These are technical matters.
Our guests provided an example where the heating level was 42° Celsius and extrapolated that this would rise to 100° Celsius at 3,000 m. Is it always the case that if one digs deep enough, the temperature will always reach boiling point?
I am of the view that the Minister and his departmental officials should come before the committee. We need to go through our checklist of the matters in respect of which we, other groups and the economy are waiting. I get the impression that the committee is merely being used as cover for a lack of progress in other places. We should articulate that fact in some form or other.
I thank Mr. Crawford and Mr. Hanly for an extremely helpful presentation. A good way to start this parliamentary session is to restore some level of reality to matters.
I would welcome a meeting with the Minister and his officials. Deputy McManus referred to a parliamentary question tabled last March. We do not know whether the group to which the Deputy refers has reported in the intervening six months but we must presume that it has not. We must discover from the Department the position with the group, whether it is meeting and the timeframe for delivery of its report.
I thank our guests for their presentation. Mr. Crawford referred to the fact that in discussions with the Department on this matter in the past 12 months it was initially revealed that this issue might be dealt with in the minerals development Bill but that it later emerged that it would probably be dealt with in separate legislation. There is a need for clarification from the Department as to why the matter will not be dealt with in the minerals development Bill. With regard to the statement that it will probably be dealt with in separate legislation, we must discover whether there are plans to introduce such legislation.
We must discover whether legislation is going to be introduced at all.
That is exactly the point I am making. As Senator O'Toole observed, there is a need for the committee to meet the Minister and his departmental officials in order to discuss the overall issues involved. If, however, we obtain specific answers from our guests to the questions we have posed, we might have an idea of how to proceed in respect of the matter under discussion. This is an issue we should progress to the next stage.
I apologise that I was not here for our guests' presentation. I read the documentation provided but I am slightly frustrated that I missed their explanation. I am disappointed that, in the context of the subsequent dialogue, I also missed what was said with regard to the legislative barrier. Deputy Doyle referred to the critical infrastructure legislation. When the latter was being drafted, I was of the view that we would be obliged to look beyond current uses and to ensure the legislation was not overly prescriptive, particularly in the light of the development of new technology. I am glad our guests are to exploit the available opportunities.
Why is it not possible for our guests to use existing legislation in order to proceed with what they wish to achieve? I do not know what is the position vis-à-vis land and what would be our guests’ rights if they were to drill a certain depth below ground, etc. I also do not know whether existing legislation would cover their operations in that regard. That which we are discussing could be of assistance in so many ways. It is crazy, therefore, that the Department does not appear to be remotely interested in pursuing new initiatives that would be of benefit from a climate change, economic and social point of view, particularly in the context of the jobs that could be created and the innovations that could be introduced.
Even though I am a member of one of the parties in government, I am as determined as any member present to discover what is the actual position. What has happened is outrageous. To be frank, it is a mess. To what extent are our guests — because they have right on their side and as a result of the fact that they know all of the problems will eventually be solved — able just to proceed with what they are doing?
I wonder why I was not invited to make the trip to Newcastle with Deputy McManus. I would love to travel there to see what is being done with the site because I would obtain a much better understanding of what is happening. We are all extremely interested in this matter and I would welcome the opportunity to visit the site.
Mr. Hanly referred to planning permission and utilities and stated the company was seeking to obtain the same status as a utility for its project. Is he sure a legislative process must be undergone in this regard? Would primary or secondary legislation be required? Is the technology only really useable in respect of future construction or would it be possible to retrofit it to existing structures?
Mr. Padraig Hanly
The proof in respect of prices is already available. Part of our team was involved with one of these plants in a town in Germany where the geothermal plant is competing with a gas provider and has always maintained cheaper prices; hence everyone in the town has changed over in respect of their energy supply.
Geothermal energy will be available for as long as the Earth's core remains warm. I was asked about the effects our current activities would have. It would be like putting an ice cube in the Atlantic Ocean — it would make no difference. Approximately 4,000 times our current energy demands are stored underground and we could actually use it to meet all of the Earth's energy needs.
Mr. Leo Crawford
What this comes down to is where this resource has been proven. It involves simple well management. If one has identified a hot water source at a depth of 3 km, we are suggesting we extract the heat energy from the water, maintain a closed loop system and replenish the water to be reheated and brought up again. We would not, therefore, exhaust the supply. This is why these systems have been in existence for the past 100 years. It is purely a case of proper well management. It is indigenous, untapped and green and we merely want to tap into and exploit it.
Mr. Padraig Hanly
We have been informed that it will not be dealt with in the minerals development Bill. The Department wants to publish the legislation in the autumn but the part dealing with geothermal energy will not be ready. We have been informed, however, that the minerals development Bill will form a large part of the legislation relating to geothermal energy.
Mr. Leo Crawford
Ours is the only commercial deep geothermal company participating in the process relating to this legislation and in the workshops. No one other than shallow geothermal players are involved in this. The proposition we are putting forward is quite simple and was put forward 12 months ago by way of policy changes that could be added to the minerals development Bill. The latter would provide our investors who are investing tens of millions of euro with a degree of certainty and give them a guarantee to the effect that they could exploit the resource without having issues around compensation or without being challenged in the next ten to 15 years while the company developed the available potential.
As part of its examination of this matter, the committee will consider what has been done in other countries and attempt to discover the legislative changes, if any, needed.
Mr. Padraig Hanly
Deputy Doyle referred to critical infrastructure. This would probably address many of the works that need to be carried out on the surface. However, it would still not provide adequate security of tenure in respect of investment relating to the drilling of wells to a depth of 3 km or 4 km below the surface. There are still many issues to be addressed which this could not actually cover.
I was asked about retrofitting. What we do is based on existing energy demands. We would not be able to obtain investment to build something that might be in place in the future. We do not know what is going to be built in the near future; it is possible that nothing will be built in this country for quite a long time. We always proceed on the basis of existing demands but we also make provision for future demands.
Do our guests have a figure in respect of the carbon savings for the 300,000 houses?
Mr. Leo Crawford
We estimate that there would be over 500,000 tonnes of carbon per annum on just one 20 MW terminal.
What would be the floor price?
Will Mr. Crawford repeat that figure?
Mr. Leo Crawford
It is over 500,000 tonnes.
On what is that based?
Mr. Padraig Hanly
Based on 300,000 homes, there would be approximately 600,000 tonnes of carbon savings.
The floor price of carbon credits is €20 a tonne. It will possibly get dearer. That is simply to put the matter in context.
Have we answered all the questions?
We should write to the Minister and invite him to appear before the committee. The Chairman has made a point about legislation. We should seek an answer on it.
We are tied to time because of the Dáil sitting. I thank members and delegates most sincerely. The meeting has been most stimulating. This issue is part of our remit. Despite all the frustrations, we will follow up the matter and I hope we will get movement, not only for the delegates' projects but also for the country.
Let me ask an additional question about the UK renewable heat incentives. To what extent can formulae in other countries be applied here in order that we do not need to reinvent the wheel?
We will examine what has been done in other countries.
Can I have my invitation to visit Newcastle?
Mr. Leo Crawford
We have developed, with our partners, a full district heating network in Germany, whereas the site in Newcastle merely has test wells. If members wish to see a fully commercially developed site in operation, retrofitted to existing homes and supplying commercial users, we would be delighted to have one or all members of the committee to view the site in Pullach. One can talk about it but one has to see it in action.
I thank the delegates very much.