Energy Strategy: Motion.

Mr. Quinn

I move:

That Seanad Éireann recognises the need to develop a national energy strategy that will address Ireland's over-dependence on oil and replace it to the largest possible extent by energy derived from renewable sources.

I deliberately worded this motion in what I call non-confrontational terms, in the hope that it would not provoke the usual knee-jerk amendment from the Government and that the House would have a mature and thoughtful debate on this most important national issue. I would like to avoid the kind of partisan mud-slinging that characterised a debate on the same subject in the Dáil last week. I was disappointed when I discovered that the knee-jerk reaction from the Government had occurred. My motion was worded in a manner which I hoped would be non-confrontational.

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. B. O’Keeffe)

That is a subjective view on the part of the Senator.

An Cathaoirleach

Please allow the Senator to speak without interruption.

Mr. Quinn

I appreciate the Minister's decision.

Mr. B. O’Keeffe

We take the objective view.

Mr. Quinn

One of the reasons I like this House is because it avoids the confrontational issues that often occur in the other House. I went to some pains to word the motion in that manner.

Energy is an issue that is far too important in national terms for us to allow it become a political football. We have a serious problem with energy and if we do not get it right we put at risk our entire future as a modern, prosperous society.

In 2003 I went to Dubai for the first time. I had not been there before and I did not really want to go there because it sounded like Las Vegas. When I got there I discovered this wonderful tourist and sporting resort which has the best hotels in the world. The reason this all happened was that Sheikh Mohammed had identified that oil and the production of oil would run out at some point in the future and decided to make plans to prepare for that day. Dubai decided to become the best tourist resort in the world. I can understand the reason it did that. The authorities in that country were sufficiently far-sighted to recognise that it is likely that the supply of oil will run out at some future date.

Around that same time I picked up the June 2004 edition of National Geographic, a publication with which I am sure the Minister of State is familiar. That edition included a smashing article entitled The End of Cheap Oil. When I read it I wondered how dependent we are on oil and I subsequently raised this subject on a number of occasions. I was jolted to discover only this year that we are the most dependent of all the European nations on oil. We do not seem to have taken the first steps countries such as Dubai and others have taken.

It is not true to say, as some might argue, that we are not doing anything about addressing this problem. I am sure the Minister of State will say what we are doing. We are moving forward strongly on a number of different fronts. I would like to acknowledge that progress, to recognise what has been done and I give full credit to those responsible. No doubt we will hear more from the Minister of State along those lines.

However, it is true to say that we are not moving forward anywhere near fast enough. Our response to this issue is not commensurate with the size of the threat we face. What I am arguing for is a strategy that will take this issue by the scruff of its neck and push it up the list of national priorities — which it is currently nowhere near -such that it becomes not merely another task of Government but one of its most important projects. That is my purpose in tabling this motion.

We are in the position we have reached today where Ireland is the most oil-dependent country in the world mainly because we do not have the kind of strategy that we should have in place. We have reached the edge of this particular precipice because instead of a strategy we have simply muddled along while being caught up on the tide of our newfound prosperity, which seems to make possible all things for which we wish.

Members may have read the heading "Britain goes nuclear to beat energy crisis" carried in today's edition of The Times of London. I know France quite well and when I have travelled there, particularly to the north of that country, I have noted the level of energy produced from nuclear power. I am not arguing for following the nuclear energy route by any means, but merely pointing out that France thought this issue through. Britain also thought it through and faced up to it, albeit with its policy posing potential grave dangers for us. We have not yet faced up to this issue but we must now do so. This motion is being debated on the day this issue hit the headlines in Britain after Tony Blair spoke on it and decided the direction Britain will take in the years ahead.

ln today's Ireland, we have codded ourselves into thinking we are so well off that we can have anything we want whenever we want it. Sadly, this is not the case. Due entirely to circumstances outside our control, we are in danger of finding ourselves unable to guarantee the constant and uninterrupted energy supply our economy demands and which our people have grown to expect. Even more important, by our thoughtless over-dependence on oil we have lost control over a key element of our cost base, thereby putting our future competitiveness at the total mercy of external forces. We saw what happened earlier this year in the Ukraine and Belarus in eastern Europe, which rely on Russian oil.

We could have avoided this situation if we had in place a proper national energy strategy. If we had such a strategy, we would not have ended up where we are now, but that is water under the bridge. I do not want to waste the time of the House in wringing my hands about what might have been. The important point is what we do from here. I hope to learn something from the Minister of State in that respect.

Our first task is to realise the seriousness of the problem we face. If we persist in our denial and continue to persuade ourselves that the tiny steps we are taking now will make a serious impact on the challenges we face, then we condemn ourselves to a bleak future. I do not exaggerate or overstate the problem. Considering the issue in purely economic terms, it is a cliché that we have a serious competitiveness problem. Many elements add up to make that problem, which we are addressing with perhaps something short of the right degree of seriousness.

The issue of competitiveness is important. However, even if we were to get everything else right, and still did not grasp the nettle on energy costs, that single element alone is enough to fatally undermine our competitiveness on world markets. This is because we are more oil-dependent than any other country. The price of oil if it continues to increase, as it surely will, will increase in every country but the economic impact the price rise has in a particular country will be a function of the level of that country's oil dependence. The more oil dependent the country, the greater the impact on it of a further rise in the price of oil. The equation is a simple one, and the outlook for our country is nothing short of catastrophic.

That view simply considers the picture in monetary terms. It assumes, which is certainly not the case, that the only challenge we face is paying a higher price for the oil we use. The truth is that an equally important problem may well be the difficulty of getting supplies. Currently, there is enough oil in the world to meet everybody's needs providing they are willing to pay for it, but if we look ahead to the future — on which the article in June 2004 to which I referred focused — we have no guarantee that this will remain the case. Oil is a finite resource and its reserves are limited. In the not too distant future, we can easily envisage a scenario in which demand from fast-developing countries such as China will outrun supply. There simply will not be enough oil to go round, and the people who will get supplies will be those who can afford to pay the most.

Where would that leave Ireland? What would happen to our prosperity and way of life if daily power cuts and load-shedding became the norm, as happens today as a matter of course in many Third World countries? Anyone who has travelled to such countries will be fully aware of how constrained all aspects of life become under such circumstances, particularly economic activity.

To sail into that future without an effective strategy would be exceedingly foolish. That is why I welcome the Government's intention to produce a Green Paper on energy later in the year but I look forward to it with more than a little trepidation. We have had so many examples over the last decade of grandiose Government plans that were either fatally misconceived or good in themselves but never carried through to implementation. Members know the kind of strategy planning to which I refer. This is emphatically not what we want need now if we are to correctly address our energy problem. Any national strategy for energy must take as its starting-point our over-dependence on oil. The whole strategy must develop out of that reality; that is the threat we face, and which we must work to counter.

ln addressing the threat, our policy must rest on two pillars, each of which must be pursued with equal commitment. The first pillar is one we tend to forget, namely, energy conservation. The energy we do not consume is energy we do not have to find or pay for. Part of our national energy problem is that we are recklessly profligate in the way we use it. It is an unfortunate side effect of our current prosperity that we behave almost as if it were a virtue to waste energy. It applies to the way we build our houses to the way we get around, even to the way in which we do not bother to switch off lights or appliances that we do not need. Everywhere one turns one will observe the waste of vast amounts of energy. Today that is foolish, tomorrow it will be madness. Energy conservation is a matter that a national strategy must address before we think of anything else.

Only when we have developed a full-scale strategy for energy conservation should we begin to address the question of producing the energy we need. This is where the issue of renewable energy sources comes into the picture. All I want to say on this aspect is that we must pursue not one or two but all possible alternative sources of energy. Wind power, biomass, wave power and other energy sources all have their devotees. We need a contribution from them all if we are to build a strong portfolio of energy sources that will make a dent on our present over-dependence on oil.

Above all, where renewable energy is concerned, we must not fall into the trap of what has been called the pilot scheme trap. Too often in this country, across a wide range of activities, we cod ourselves into thinking we have solved a problem when we have got a pilot scheme up and running. Some pilot schemes have been running for 20 years or more and have never progressed into the mainstream. If we persist in treating our energy challenge on a pilot basis, we will never get anywhere.

I look forward to hearing what the Minister of State has to say on this issue. Bringing it to the forefront at this stage, particularly on the day that Britain indicated it will take steps to address it, makes us realise its importance.

Dr. Henry

I thank Senator Quinn for asking me to second the motion. This is an area which has sadly been neglected by the Government. Senator Quinn was tactful in the wording of his motion. I am only sorry that an amendment has been tabled.

As Senator Quinn was reading the article on oil in the National Geographic, I was reading a book which was colourfully called The Party’s Over. This is about the fact that oil and gas are running out on this planet and that oil and gas reserves have probably been overestimated. It is interesting to see how cagey many countries have become about their oil reserves. We hear that places such as Saudi Arabia are re-estimating them. However, we do not hear what the re-estimated figures are, but there is little indication that they will make us feel jolly. There appears to be a dramatic change in the amount of reserves being held as well as a great increase in the use of oil, as Senator Quinn pointed out, not just by Europe, North and South America but by China and India as well, which were not major consumers until recently.

Senator Quinn has rightly pointed to our enormous dependence on oil and said that replacing it by any renewable means is extraordinarily important. I support his point that we ought to conserve whatever energy we acquire from the oil and gas we are using. Any gas we may have around our coasts is now even more valuable than it was a couple of years ago. We mostly use oil and gas to generate electricity. This is not a very efficient way to make electricity as an enormous amount of heat is lost. We need to make more of an effort as regards the conservation of this heat.

Heat energy converts chemical energy into work, but unfortunately most of it is thrown away in the form of heat. The figures for a typical spark ignition engine, running on natural gas, show that only 25% to 30% of the energy input is converted into electricity. I am grateful to my research assistant, Mr. Niall O'Brien, for these figures, because I am not a great expert on the spark ignition engine. Some 10% of the heat produced in fact goes up the flue. If we put forward combined heat and power systems, to deal with the remaining 50% to 60% of heat produced, it can be recovered and not wasted.

This technology has been in existence for decades and has been promoted since the early 1980s. It was not commonly used until then, but the last oil crisis in the 1970s probably encouraged people to modernise the technology. It is now being used on a relatively wide scale on buildings in many countries. I am delighted to say that some of these buildings in Ireland have proven that they can very successfully lower the amount of fuel they require, which of course means great savings. A good example of one of these units is the Jurys Doyle-owned Burlington Hotel. This hotel, which has 500 bedrooms and a large conference facility, has been running on a Limerick-supplied technology unit for many years. The installation takes advantage of the ESB's maximum demand tariff. That means that as well as saving the heat from its engines the hotel can reuse it in its grid when tariffs are high in the ESB system.

They have a large diesel engine which has been converted to burn gas, and it does two jobs. It heats the buildings and provides hot water for the guests and the cooling water is then fed into a heat exchanger which passes the heat into the boilers to warm the rooms. The savings are of the order of €100,000 a year, which is a substantial contribution to the group's profits. The group has the same technology in the Berkeley Court Hotel and I know there is a similar system in the Davenport. I hope that other hotels which have this technology will forgive me for not mentioning them.

Some of our hospitals have this technology, too, for example Our Lady's Hospital for Sick Children, Crumlin and the Blackrock Clinic. One must ask why other hospitals are not using such technology. In both of these hospitals some of the fuel to run the system comes from the burning of clinical waste. We have to think more imaginatively and ask our institutions to examine the way they deal with fuel. In the educational sector, the King's Hospital is a school which uses this technology. As well as heating the rooms, hot water is provided and the swimming pool is heated in this way. This technology should be promoted. It is being much encouraged in the United Kingdom. It is interesting that Prime Minister Blair did not promote this initiative, rather than the nuclear one, last night. It would have been received far more favourably.

We have seen that this system can be used by councils. Local authority representatives from Ireland can go and look at schemes in Britain, for example in Woking where a local authority supplies customers with electricity on a private wire combined heat and power exchange and renewable energy network. As well as energy generation, there is an enormous environmental impact. Other councils are following suit. We are all well aware of global warning by now. Scorn was poured on this when it was first mooted in the 1970s, but now we know that any unnecessary escape of heat into the atmosphere must be halted. There are difficulties involved in calculating the carbon emission accuracy, as we have recently seen publicised within the EU. Anything that can be done to prevent further atmospheric pollution is important as well. If we bring forward this technology we can reduce our fuel costs and promote environmental issues at the same time.

Mr. Kenneally

I move amendment No. 1:

To delete all words after "Seanad Éireann" and substitute the following:

"welcomes the Government's intention to publish a Green Paper on Energy Policy which will address the key challenges for Irish energy to 2020 including strategies to reduce Ireland's dependency on imported fossil fuels through the accelerated development of renewable energy sources and enhanced energy efficiency."

I accept what Senator Quinn said earlier as regards his motion, but the amendment is non-contentious in that we all welcome the intention to publish a Green Paper. I hope we can all be positive in this debate. I had called for a debate on this matter on the Order of Business within the last couple of weeks as I believe it is a very pressing matter for this country in particular, which has little in the way of natural resources and is 100% dependent on imports for our oil supply. Accordingly, I am glad the Independent group tabled the motion.

The first reaction of most people when faced with how to reduce dependency on fossil fuels is to look to the motor industry to develop alternative ways of fuelling cars. There is no doubt that there is much scope for savings in this sector, but it is not the only area which needs our attention. Renewable sources of energy offer sustainable alternatives to our dependence on fossil fuels, a means of reducing harmful greenhouse emissions and opportunities to reduce our reliance on imported fuels. For these reasons, Irish and European policies support the increased used of renewable energy from such sources as wind, solar power, wood, waste and water, as these are abundantly available in Ireland. Several renewable energy technologies are now economically viable and capable of supplying clean, economical heat and power. Indeed, the higher the price of oil, the more economically viable previously unviable sources will become. Alternative energy must be further developed and positively encouraged through substantial assistance to the industry. The growing of rapeseed and other crops should be actively promoted among a farming population which is finding itself increasingly isolated, with reduced income and disused or underused land. That is not a natural condition for good farmers and I am sure they would welcome any positive measure which would bring them back into productive and useful farming again.

In his 2006 Budget Statement, the Minister for Finance, Deputy Cowen, introduced excise relief for biofuels in order to achieve a target of 2% of the fuels market to be taken up by biofuels by 2008, with a targeted five years excise relief starting this year at a cost of €20 million. That will be increased to €35 million in 2007 and to €50 million in each of the following three years. This relief, when fully operational, is expected to support the production in Ireland of some 163 million litres of biofuel every year. This is 20 times the current level of biofuel that qualifies for excise relief, so it should make a significant difference over time. We must remember this is only a start but it will establish valuable precedents and give positive indications of the direction in which this Government wants the country to go.

We should think of setting even more ambitious targets because, like the Members who have framed this motion, the public also know that the writing is on the wall for oil supplies and it is only a matter of time before they run out. This is currently suggested to be 50 years hence, but in view of the rapid development of the economies of countries like China with its huge potential for energy usage, we must realistically revise this figure downwards.

We may all be wrong and I hope we are, but it is only prudent to provide for a reduction in the use of fossil fuels due to the potential shortage of supply and environmental considerations. Again, being realistic, we know that we have done great damage to the environment. We have jeopardised the health of future generations and we must begin to row back some of the negative legacy we have generated for our children.

The time is right for initiatives within the alternative energy field. Members of the public are thinking of ways to reduce their energy costs and the growing number who are so minded are looking at ways to help the environment and meet our requirements in the reduction of harmful emissions. On Monday evening last, "Nationwide" on RTE featured people who are installing their own small wind turbines on the roofs of their houses. I know this has yet to be developed in any meaningful way but it does show a mindset which was not present before.

A constituent of mine who has a stream running through his land has set up a company to develop a hydroelectric scheme with a view to selling the energy created to the national grid. This is not pie in the sky; the excavators are already working and power will be generated within months. This must be replicated on a large scale and the ground must be properly prepared for such development. I get very annoyed with people who use blanket arguments against the use of wind power. Whether their point is that such turbines are noisy or that the towers impinge on the landscape, we have to face up to the fact that we must find an alternative to oil and the wind option is especially suited to this country.

It will take a large investment and may mean hefty subvention by the Government but unless we promote these cleaner forms of energy we will leave the door open to those pushing the nuclear option. This would be disastrous and regardless of what official agency might suggest it, or how many experts support it, we must not consider nuclear power. If our resolve ever flags in this regard then we need only look at Chernobyl, or invite Adi Roche to address the Oireachtas.

There is some drawback attached to every means of generating electricity. When the first Ardnacrusha hydroelectric station was set up three quarters of a century ago, the landscape had to be changed radically to allow for the new route of the headrace and tailrace to accommodate the assisted flow of water. When the Turlough Hill project was suggested and constructed over 30 years ago, many environmentalists condemned the interference with the mountain and surrounding countryside. That pumped storage station soon became a showpiece and while small enough by today's standards, it still represents go-ahead thinking in the power and energy industry.

Wind energy is not perfect but it is way ahead of other forms of electricity generation. It has been argued that Ireland has the most abundant and reliable supply of wind in Europe. It is bordering on the sinful that we are not using it to its fullest effect. I accept that wind turbines are not silent but the perception that wind farms are noisy developments is not necessarily an accurate one. As the technology gets better, so too the disadvantages and misgivings reduce and I believe that in time we will come to look on wind energy as our saviour.

We are also best placed in Europe to take advantage of wave power, the returns for which are enormous. I am sure the technical people will readily tell us just how many megawatts can be generated by a single wave, but I know from reading and from watching television programmes that wave power also has much to offer our country.

It would be easy to despair about the future of oil but I have every confidence in the motor industry to come up with an alternative fuel for vehicles and we have clean and bountiful natural resources on our side to tackle domestic and industrial requirements.

As I pointed out previously in this House, Cork local authorities have shown the way ahead in the use of alternative vehicle fuels at moderate cost and the investment in converting fleets is not enormous. Unfortunately, time does not allow me to develop this further. We must make a start in these new areas. We must encourage further investment and development where a start has already been made and we must do it now. We are on notice that oil supplies will become scarce and common sense tells us we must look to the welfare of our environment. That is why we must develop alternative energy and do it soon. As much as it grieves me to quote Winston Churchill, his wartime motto holds good in this debate: "Action this day."

Mr. Finucane

I wish to share time with Senator Bradford.

Acting Chairman (Mr. Leyden)

Is that agreed? Agreed.

Mr. Finucane

I welcome the Minister of State, Deputy Batt O'Keeffe, to the House. This debate is timely and I compliment the Independent Senators on tabling this motion. The joint committee, of which Senator Kenneally and I are members, has been debating energy for a period of time. I hope we will soon publish a document on energy policy for the future. However, I wish to express my disappointment with one aspect of the approach taken by the committee which has put a great deal of work into this matter and has employed a consultant. Unfortunately, we are doing our work very much in a vacuum. The most definitive document that has emerged on energy policy in recent times is the Deloitte & Touche consultants report which was published before December last and remains an ongoing secret to the Minister and his senior officials, as well as to the wise men within the energy regulator's office who tell us their lips are sealed in terms of revealing the contents of the report.

In framing a policy document for the future, it would be interesting if the committee had access to that definitive report because it parallels what we are doing. It is unfortunate that the Minister is producing his own policy on energy up to 2020. One should not forget that it is taxpayers' money that is paying for this consultant's report which cost in excess of €1 million, and, accordingly, it should not be regarded as a secret document——

Mr. Ryan

Hear, hear.

Mr. Finucane

——for the Minister and his officials. It belongs to all of us who are trying to do something about the concerns on energy.

I am one of the many people around the country who have embraced wind energy technology. Many people who are enthusiastic about the possibilities in this area and who have sought to advance private wind energy developments have met with disappointment due to the bureaucracy that appears to retard such developments. In many cases these people have paid substantial money upfront to the ESB in order to connect them to the national grid at some future date. That future date causes me some concern because there appears to be many impediments to getting connected to the national grid. This is probably due to the monopoly situation that exists whereby if a company seeks access to the national grid, it must gain the consent of the ESB. If the Minister is serious about energy policy, he should ensure he expedites the process to connect wind energy operators, who have received approval, to the national grid. Much of the enthusiasm for such projects when they were launched has dissipated because of the ongoing delay.

We are all conscious of the increasing cost of oil and the corresponding increase in the cost of electricity. Liberalisation of the market has been a joke as far as the domestic consumer is concerned because when he or she receives a bill, he or she does not have the liberty to shop around for an alternative supplier. Successive Ministers have been cocooned by a regulator who has protected them. When there is odium among the public about increased costs, the regulator is blamed and it is deflected from the Minister. It has suited the powers that be, therefore, to appoint a series of regulators. The overall target for wind energy production should be increased and the impediments removed. I will hand over to Senator Bradford who will refer to biofuels.

Mr. Bradford

I thank Senator Finucane for the opportunity to support the motion. I am disappointed the Government felt obliged to table an amendment because every Member recognises the need to develop an energy strategy to address our dependence on oil and to replace oil with renewable resources.

Significant research is available on alternative energy sources but I will concentrate on the production of ethanol and biofuels generally. I have become more interested in this subject because of the scenario that has arisen in north Cork. As a result of a decision taken at European level, our sugar industry has been shut down. The sugar factory in Mallow could be demolished but if a different set of circumstances prevail, it could be converted to produce ethanol from a variety of crops, including sugar beet and wheat. I call on the Minister of State to enter into urgent negotiations with all those involved in the sugar industry, including Greencore, the beet growers, the Minister for Agriculture and Food and EU Commission officials to ensure the compensation package resulting from the cessation in sugar production is not dependent on the factory being demolished.

At the most recent European Council meeting, Heads of State declared energy policy to be their main political priority for the next 12 months and declared their intention to work towards the development of renewable energy production. However, the Agriculture and Rural Development Commissioner appears to have signed a directive indicating that compensation to the Irish sugar producers will not be paid in full unless the former factory in Mallow is demolished. The cessation of sugar production at Mallow should be enough. The plant should not be demolished because a number of organisations and companies are considering whether to use it to produce ethanol. This technology is in use worldwide and it is not rocket science. Large volumes of ethanol are produced in north and south America.

The factory in Mallow could produce fuel for cars throughout the State with minimal adjustment needed to the plant and it could also play a major role in keeping the tillage industry alive. It is a win-win scenario and I appeal to the Minister of State to discuss with the Minister for Agriculture and Food the need to review the fine print of the EU sugar proposals agreed last November in Brussels. The aim of the proposals was to cease sugar production in Ireland and other member states, which has been achieved. Why is it necessary to demolish the plant in Mallow, which is 75% ready to produce ethanol? A minor adjustment is needed to enable the plant to produce ethanol to run cars, vans and trucks. This opportunity is staring us in the face and it would be disappointing, and politically wrong, to fail to secure the plant for the future needs of the ethanol industry.

The production of biodiesel should also be encouraged. I welcome the incentives proposed by the Government in this year's budget but, as a first step, a minimum of 5% of all diesel sold at the pumps should contain biodiesel and 2% of all petrol sold should contain ethanol. This is not rocket science and Fine Gael and others have made this proposal. Germany and Italy introduced these thresholds at their pumps this week. They will have no impact on the price of the product or on engine performance. A minor legislative amendment in this regard would produce an overnight demand for biodiesel and ethanol. Incentives are needed to ensure farmers produce the necessary crops and to ensure people use alternative fuels. Oil supplies will not increase, prices will continue to increase and oil will become scarcer over the next 25 years. Ireland has an opportunity which should be grasped with both hands to incentivise the growing of crops to produce biofuels. The Government needs to address the incentives required to produce biodiesel, notwithstanding the positive step taken in the budget.

However, in the short term, the sugar plant at Mallow could easily be converted into an ethanol plant. While there is commercial interest in the plant, many issues still need to be addressed but it would be a shame and a sad reflection on all of us politically if its demolition were permitted. An opportunity exists to build a renewable energy industry for the State in Mallow and that plant needs to be retained because it could play a major role in an alternative fuel industry.

Mr. Minihan

I welcome the Minister of State and his officials to the House. The recent EU Council meeting in Brussels, our recent annual party conference and the previous two Private Members' debates in the other House have all had discussions of energy policy at their heart. It was also the subject of a recent major policy discussion document published by my party. Energy policy finds itself in an unusually high position on the political agenda for obvious reasons, including concerns about security of energy supply, ensuring the continuing competitiveness of our economy and promoting environmental sustainability. How best to make progress on these issues is still far from settled and, in this context, I welcome the topic chosen by the Independent group. The Minister has spoken at length about the steps the Government has taken to promote renewable energy, so I do not intend to repeat them. Rather, I wish to focus on a few specific points and break the motion into its constituent parts, namely, our national energy strategy and renewable energy sources.

The Government intends to publish an energy policy consultation paper before the summer to set out medium and long-term perspectives for our national energy policy. There is no doubt this is needed, but the paper also needs to take account of the considerable and complex challenges for our energy policy into the future. The Minister has said it will deal with all aspects of the energy sector, including alternative energy.

The views of the Progressive Democrats are set out in Deputy Fiona O'Malley's discussion paper published last month. It deals with the most pressing energy issues in a seven-point action plan designed to develop Ireland's renewable energy supplies, protect the environment, thus fulfilling our obligations under the Kyoto Protocol, secure our fossil fuel supplies and minimize the overall cost of energy to the economy, thus maintaining Ireland's competitiveness. This plan requires the following: that we promote the development of renewable energy for power generation; the use of renewable energy for space and water heating; the production and utilisation of biofuels for transport; energy conservation; fossil fuel exploration, production and supply security; the creation of new market structures and improved regulation; as well as the research and development of energy technologies of particular importance to Ireland.

We hope that all interested parties will read our paper and engage in this discussion process. Ireland is the last stop on an extremely long oil pipeline and our dependency on imported sources cannot continue in this way. We have set our policy for discussion and refinement, but I wish the same clarity were forthcoming from the Opposition. This is a pity, given the importance of the topic.

During the first week of Private Members' time in the Dáil on this issue, Fine Gael failed to devise a counter motion of its own on energy policy. It aligned itself with a madcap protectionist motion on energy resources, a motion its own spokesperson described as crazy. In week two, to make amends for the previous shambles, the party proposed a hurried motion of its own. This contained a less than nuanced approach to the promotion of indigenous biofuels production. In its contribution to the motion, the Labour Party confined itself to knocking the policy and progress of the Government, while conveniently neglecting to mention any of its own policies. I am not sure what is at the end of the rainbow, but there is no energy policy. The Independent group is at least making a good fist of opposition this evening.

The second issue is renewable energy. My own party's discussion paper, notwithstanding the obvious potential of biomass and biofuels, refers to Ireland having some of the best wind and wave energy potential on the planet. It discusses how Ireland could aim to produce 30% of its electricity supplies from renewable sources by 2015. Ireland is fortunate to have the expertise of the sustainable energy research group, based in University College Cork. The group was formed in order to investigate and promote the efficient use of renewable and non-pollutant energy sources. It carries out extensive research into energy policy, wind and hydroenergy systems, wind energy conversion systems and energy storage. The group has experts such Professor Tony Lewis, Brian Ó Gallachóir and Eamon McKeogh, researching and writing on the very issues at the heart of this debate. In an article published last month, the group stated:

In the long term, with fossil fuel reserves depleting, the key component of improving Ireland's security of energy supply is to gradually diversify completely from gas. Given that oil is in shorter supply than gas and the environmental concerns associated with coal and nuclear energy, including safety in the case of the latter, this points clearly to the increased penetration of renewable energy. Wind is the lowest-cost electricity source for the foreseeable future for Ireland. There is also significant potential for biomass energy in the first instance, as co-firing within the existing peat-fired power plants. Wave and tidal current energy also offer significant resource potential and require significant development and deployment effort, with potential export spin-off benefits.

We have the experts in Ireland. We should utilise and listen to them as they are a resource. They make reference to Ireland's utilisation of other resources and the potential export spin-off benefits, such as wave energy. Wave energy has possibly the greatest potential for energy production in Ireland, given our location, but many of the wave technologies are still at prototype stage.

The Progressive Democrats Party is a small party specialising in big challenges, and in the 21st century energy is the big challenge. Tony Blair exemplified the complexity of the debate on nuclear energy by saying yesterday that new nuclear plants were back on the agenda with a vengeance. Today he said nuclear energy is not the sole answer to meeting UK energy needs, but that failing to consider it would be a dereliction of duty. That is three views in two days from one individual.

Ireland rejects nuclear energy production here, but may benefit from its production elsewhere, if we are to be linked to interconnectors. We must get real about our discussions. The Progressive Democrats support the efforts undertaken by those in UCC and elsewhere to research and develop renewable energy sources. We support the greater use of biofuel, onshore wind and wave energy, which given recent oil and gas prices is very much an economic proposition. In the longer term, we believe that offshore wind and wave energy can make a major contribution to our energy needs.

Irish engineers are also working to develop technology that would allow us to anchor windfarms off the west coast and out of sight of land to exploit the wind resources of the north Atlantic. The Government will soon publish an ocean energy strategy that will set out a development path for ocean energy technology in Ireland. The Marine Institute and Sustainable Energy Ireland, in conjunction with the Government, recently opened a wave energy test site a mile and a half off the coast of Spiddal, County Galway. The 37-hectare site will be open to entrepreneurs and engineers to test prototype ocean energy generators. The first wave energy generator, the ‘WaveBob', has been deployed on the Spiddal site. When such technology becomes commercially available, Ireland could become an exporter of energy to Europe. It is in this context that the construction of the interconnector becomes increasingly important, the planning for which has begun. We must be very serious about the contribution we can make to a European grid and we should not become dependent on what could ultimately be nuclear energy.

The potential market for commercial wave energy is very large. Denmark established itself as the world leader in wind energy production in the 1990s. Perhaps Ireland might do the same with wave energy, which could have spin-off benefits for other less obvious industries such as barge-making, since barges are submerged to harness tidal energy. When one thinks of Ireland's ship-building industry, it becomes apparent that we have the skills. This could be a whole new generation of skills to export. We have new initiatives such as biofuels, mineral oil tax relief schemes, the five-year package of excise relief valued at €250 million announced in the budget, and many other support schemes. Most of all, the initiatives, talents, and research and development skills of Irish and international experts are being brought to bear on this scientific field.

Significant progress is being made in the two areas highlighted by the Independent group. Both the energy consultation paper and the ocean energy strategy are on the way. As the Minister has set out extensively, much has been done regarding renewable energy generally. The Progressive Democrats support those and further measures.

Mr. Ryan

I might mention CIT, which has been doing those things for longer than UCD.

Mr. Minihan

It is partnership.

Mr. Ryan

It is a pity that Senator Minihan decided to make unnecessary party political points. I am really not interested in what happened in the Dáil, which can be a place of irrational confrontation and perhaps not the right setting to discuss political or other major strategic decisions.

Energy is not the only issue about which we should concern ourselves. There has been a great surge in the price of a whole range of commodities. The British Royal Mint is in something of a tizzy, since any penny or two pence piece made before 1992 is now literally worth twice its nominal value. The copper content of a twopenny coin made before 1992 is worth approximately three pence or four pence, and the mint is genuinely worried that millions of its coins will be melted down and sold for the sake of the 100% profit to be made from them. It has warned people of the illegality of the practice.

However, that is only a symptom of a problem. Owing to the welcome spectacular economic growth of China — and India, which we sometimes forget when we discuss the former — there is surging demand for oil commodities. What we are going to say about energy and the need to identify new sources could be said of copper, aluminium and all other commodities. The idea that even an ounce of any of the basic metals could go to landfill is economic nonsense, and it is time for us to face up to that.

There are two issues regarding hydrocarbon fuels and the apparently permanent fact of higher prices, the first being the environment, as this is not the cleanest way to supply energy. There are few people, even in the White House, who do not accept that human activity has caused a potentially catastrophic increase in global temperatures, the outcome of which we are far from clear about. No one disputes the fact of the problem.

The second question is not directly related, although there are overlaps. It is the strategic issue of our extraordinary dependence on one form of energy. Ironically, that oil has become more expensive does not mean that it is about to run out. I saw an advocate of nuclear energy on "The Late Late Show" trying to give people the impression that, some Monday morning in 2049, someone will announce that there is no more oil. It will never be like that. Rather, there will be a gradual transition to an ever higher price.

Questions arise regarding existing sources of poor quality hydrocarbon fuels and at what price they become economically attractive. One need not envisage an absolute end to hydrocarbon oils on any foreseeable horizon. It is a matter of relative and comparative choices, and the price alone is what should trouble us. Oil will become more expensive but will not disappear. Some people say that if the price of oil settles at $50 per barrel and people can be guaranteed that it remains there, Venezuela will become the biggest oil producer in the world, since it has enormous supplies of heavy oil that it is currently uneconomic to break down chemically in order to produce lighter, commercial oil. However, it would become economic if the price surged and stabilised sufficiently to justify the long-term capital investment.

That issue is more complicated, but there are good environmental arguments against taking that route, as well as profoundly important strategic reasons for not relying on it, in addition to its becoming extremely expensive. There is a great need for the Government to develop a strategy, and I am more than a little disappointed in its failure to deal with it. In this country of all places, there has been toing and froing regarding biofuels in recent years. We all know that the huffing and puffing about alleged problems with the EU originated in the Department of Finance's resistance to moving away from traditional sources of revenue through taxing petrol and diesel. There had to be an economic incentive, and because oil was unnaturally, artificially and unrealistically cheap we delayed when we could have been world leaders. We are failing ourselves strategically in becoming excessively dependent and in not becoming the innovators and leaders of change.

The same is true of wind and wave power, seen in the saga of problems that generators of wind energy have had with the regulator regarding cost and instability. The storage of energy is a very important issue. Energy is difficult to store, and the electricity that we use is not stored, except in Turlough Hill. It is generated, transmitted and used. However, those problems are not insurmountable, since they all depend on the economic choices that we make.

It is worth mentioning for all of us who are profoundly hostile to nuclear power that, were it not for the ultimate nuclear power of continuing fission in the sun, we would all be dead. The sun is a source of nuclear energy on which, together with gravity, we rely for all our energy. Gravitational and nuclear energy are our two primary sources of energy. Hydrocarbons store solar energy from millions of years ago, while wind, solar and wave power are influenced either by gravity or by the sun. We have only a limited number of choices.

We must make choices and to do so we must make alternatives economically attractive. If that means restructuring the tax system so that biofuels become as attractive as traditional petrol and diesel, let us do so now. Sooner or later, we will need to do it. We must accept that, despite what is being said, there is no guarantee that oil prices will remain at current levels. If there were an outbreak of stable democracy in Iraq, a resolution to the crisis in Iran, and a recession in China or India, it is conceivable that oil prices would fall considerably, before inevitably rising again. If we do not create a climate in which those who take the risks of beginning to move to alternatives are secure, there will be a great move away from alternative energies and into what is stable and reliable. We need to build a strategy based on the best estimate of where oil prices are going. Is it our strategic belief that a barrel of oil will cost $50, $70 or $100 in five years time? Until recently, our strategy was based on the assumption that oil would cost $20 per barrel and only three years ago, I read a lot of nonsense from commentators who assumed that oil prices would remain low and stable forever.

It is a matter of regret that, when the European Council decided to reopen the issue of nuclear energy, our Government remained silent. Only the German and Austrian Governments raised concerns about the issue. Given the passion with which the Taoiseach and Ministers have denounced the idea of nuclear energy, it is a pity they sat silently in Europe. We could be put under considerable pressure from France, in particular, to make greater use of nuclear power. I have no problem with living next door to a nuclear power plant because the background radiation is probably higher from Moneypoint than from a nuclear facility but I have significant concerns about the ethics of producing waste which will remain dangerous for 50,000 years. In addition, the economics of nuclear power are false because the development costs are not considered.

Mr. MacSharry

I welcome the opportunity to speak on this important issue and support the amendment because, as Senator Kenneally noted earlier, it is non-contentious. We are all aware that continued dependence on fossil fuel is unacceptable in this country and our combined efforts will be required if we are to develop a more sustainable future.

Ireland's 90% dependency rate on fossil fuels compares unfavourably with the EU average of 50%, which itself is too high. With regard to the EU targets for renewable energy of 13.2% by 2010 and 20% by 2020, it could be argued that we are not ambitious enough and should set the bar much higher. While I commend this and previous Ministers with responsibility for energy on the initiatives they have taken, we are not doing enough in this regard. Senator Ryan pointed out that nobody will turn off the tap overnight but supplies of fossil fuels will only last a few more decades and we need to be more imaginative on this issue.

It is inconceivable that we can continue to be 90% dependent on fossil fuels when mother nature has provided us with so many possibilities in terms of wind energy. It is unacceptable that a queue has formed for connection to the grid, although the announcement by the Minister of a renewable energy feed-in tariff represents progress on this issue. Senator Kenneally discussed his constituent, whose wind turbines face planning objections. We should encourage rather than impede these developments.

We should also encourage the development of ethanol plants in the former sugar factory in Mallow and elsewhere, not least because the increased production of rapeseed and sugar beet would throw a lifeline to farmers. These crops would not grow well in my part of the country but farmers there have other options, including willow and miscanthus. I am not sure if we are regarding these matters with the importance they deserve. They must go to the top of the Government's agenda. Other welcome initiatives include the greener home scheme but we should give people incentives to do more.

Senator Minihan discussed the ocean energy strategy, which was published some weeks ago and has massive export potential. However, I cannot overemphasise the need for investment in research and development so that projects can come onstream as quickly as possible. Instead of merely trying to meet our European commitments, we should strive to become leaders in the field.

In terms of security of supply, we have storage for 100 days of oil but no large-scale storage facility for gas supplies. This issue needs to be addressed.

As Tipp O'Neill said, all politics are local, so I want to discuss the supply of natural gas to the north west. I have it in writing from the former Minister of State at the Department of Public Enterprise with special responsibility for energy, Deputy Jacob, that gas would be supplied to the region. In a debate some weeks ago, I inquired about advertisements for tenders for a feasibility study on the construction of a gas pipeline to County Donegal via County Sligo and was told that the study was to be made available in early 2007 and would comprise a cost-benefit analysis and an examination of the possibility of connecting a gas-fired electricity generation plant to the pipeline. However, that is unacceptable because it was announced in the past that gas would be supplied to the region. I have claimed on a number of occasions that the people of the west of Ireland feel that the Corrib gas field belongs to them. The great British colonists came and took resources back to their motherland without sharing the benefits with local inhabitants. There are no natural gas facilities north of a line between Dublin and Galway and west of Mullingar. We do not want any more feasibility studies. DKM already carried out a study for Bord Gáis and, in any event, it should not require one and a half years to complete.

Without Government subvention, a cost-benefit analysis will indicate that the construction of a pipeline to County Donegal is not viable. However, a true spatial strategy requires the building of capacity to create demand and correct regional imbalances. It is a no-brainer. The people and the industries of that region feel they are entitled to it. There have been announcements in the past. Why is there another feasibility study? What will it show that we do not already know? Can we not proceed, make the subvention available, remind Bord Gáis Eireann that the subvention allows it to be true to its commercial mandate while supplying natural gas to the people of the north west? The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, in a contribution on a Private Members' motion in the Dáil some weeks ago mentioned in his opening line: "The Government has one aim in managing Ireland's oil and gas resources, to benefit the citizen." I could not agree more, but the citizens of Sligo, Leitrim and Donegal are no less citizens than those in Carlow, Mallow and Cork city. I am deviating slightly from the motion but I appeal to Deputy Fahey, while it is not his Department's direct responsibility, to talk to his colleagues and encourage them to move it forward. It is in the national development plan and is one of the recommendations of the Joint Oireachtas Committee on Communications, Marine and Natural Resources. Let us dispense with reports and feasibility studies and move forward. Like Senator Kenneally I will paraphrase Winston Churchill and say action is needed now.

Minister of State at the Department of Justice, Equality and Law Reform (Mr. Fahey)

I thank Members of Seanad Éireann for raising the important issue of energy policy and the role of renewable energy in addressing Irish energy needs. This motion has given the Government a valuable opportunity to set out the range of initiatives under way to drive forward the sustainable energy agenda. Irish energy policy belongs in the global and EU context. Global demand for energy is growing faster than ever and we are in an era of sustained high oil and gas prices. Growing energy demand coupled with a decline in new oil and gas reserves will keep prices high for the foreseeable future. Security of supply concerns are not helped by supply disruption and instability. Energy policy for all economies must address environmental challenges, notably climate change.

The European Union is the second largest energy market in the world. Europe has a growing dependency on energy imports. The sharp rise in oil and gas prices also has an impact on jobs and economic growth. Europe has been to the forefront of the climate change agenda, setting ambitious targets for emissions reductions, promoting new and renewable energy sources and developing new technologies. The Government welcomes the renewed focus at EU level on energy issues. The Commission's Green Paper on energy policy sets out the framework for a common energy strategy encompassing security of supply, sustainability and competitiveness. The Government is working positively with Europe to address the collective energy challenges. We welcome the strategic focus on infrastructure, renewable energy, energy efficiency and research and innovation. We also welcome the explicit recognition by the Commission and the European Council that certain decisions including energy mix remain the prerogative of member states.

Ireland's strong economy gives rise to increasing energy demand. Our distance from the main EU market and small scale present challenges in security of supply and competition. We have few domestic fossil fuel resources and no significant hydro resources. We have opportunities also. The all-island energy market will increase the scale of the market and improve competition. We are well placed to develop renewable energy with consequent economic, social and environmental benefits. We intend to give particular focus to energy efficiency over the short to medium term with direct benefits for consumers, the economy and the environment.

I can advise Senators that the Government intends to publish an energy policy Green Paper shortly. This will set out the framework for national energy policy and will address the challenges of security of supply, competitiveness and environmental sustainability. Senator Finucane mentioned the Deloitte & Touche report, which will be published in the context of the forthcoming energy policy paper as an input into the process of reviewing the electricity sector. Working together, ministerial colleagues have developed a series of integrated and innovative programmes that are addressing energy production, supply and demand across the entire economy, from the farmer in the field to the electricity supplier, the business community and the private individual, all of whom have an interest in the strategic development of this resource.

I would like to set out the Government's key priorities and achievements to date. We have doubled our renewable electricity capacity in the past two years and are on track to meet our 2010 targets, if not exceed them. Our current capacity is 846 MW. A further 630 MW has signed connection agreements. To ensure that these projects are delivered, we have launched the renewable energy feed in tariff, REFIT, programme. This programme, which will cost in the region of €119 million over 15 years, will underpin the viability of these projects by offering 15-year contracts to developers. In addition to these initiatives, a further 1,300 MW of wind projects were released into the connection process in the last few weeks. Recognising that bio-energy offers particular benefits for electricity production and dispatch is of increasing importance in terms of security of supply, environmental objectives and development of the rural economy. We have provided for a significantly higher biomass feed-in price in the REFIT programme. Biomass will attract a tariff of €72 per megawatt hour, compared to €57 for wind-powered plant.

In addition to our renewable electricity programme, we have rolled out a series of initiatives to stimulate the development of a renewable transport fuel market, which will further develop Ireland's bio-energy sector. In 2005 we launched an innovative pilot biofuels excise relief programme, which has resulted in eight biofuels projects coming on stream, and 16 million litres of biofuels being placed on the Irish market over a two-year period from 2005 to 2007. Building on the success of the pilot programme, we have put in place a new five-year excise relief package of €205 million which will see Ireland exceed 2% market penetration of biofuels by 2008 and will result in 163 million litres of biofuels being placed on the Irish market by 2008. The programme will be underpinned by capital grant aid for biofuels facilities and will be rolled out this year.

We are delivering an ocean energy strategy, which will put Ireland at the forefront of ocean energy development and position us to capitalise on this resource. The programme, which was developed by the Marine Institute and Sustainable Energy Ireland, was launched last month in Galway. As the first stage in implementing this strategy, we have opened an ocean energy test site a mile and a half off the coast of Spiddal, County Galway. This 37-hectare site will be open to test prototype ocean energy devices. The first wave energy device, WaveBob, has already been deployed on site. We have also upgraded the Hydraulics and Maritime Research Centre in UCC. SEI and the Marine Institute are currently supporting a number of other ocean energy research and development initiatives. Ireland has one of the most promising ocean energy resources in world and we are positioning ourselves at the forefront of development of this resource. The wave power off the west and north-west coast is the second most significant wave power in the world.

We are supporting important EU initiatives in energy efficiency, energy research, biomass and biofuels, including the Green Paper on energy policy, biomass action plan, biofuels communication and the Commission paper on energy efficiency. We are establishing an Irish energy research council to advise on energy research priorities. Our objective in this area is to ensure that research policies and programmes are fully aligned with overall energy policy as well as with policies for transport, environment, agriculture, enterprise, science and education. We have launched a €27 million domestic renewable heat grants programme, which has been greeted with enthusiasm by the public. Some 1,100 grants have already been approved in just over a month since the programme was launched. The five year greener homes grants programme provides grants of up to €6,500 for renewable heat technologies, including wood pellet boilers and stoves, solar heating and heat pumps. Our aim is to provide renewable heat systems for at least 10,000 homes. This is a real boost for individual householders who face rising fuel bills and are anxious to play their part in developing a sustainable energy economy.

We are launching a major grant aid package for commercial-scale wood chip and wood pellet boilers. The scheme builds on the success of the pilot bioheat programme which Sustainable Energy Ireland launched in 2005. It will allow businesses to avail of lower-cost heating and is designed to facilitate the development of a biomass sector in Ireland. Energy crops and energy from waste materials and the forestry sector comprise a growing part of Ireland's renewable energy mix and are providing new opportunities for both farmers and foresters.

We will launch a combined heat and power programme, which will provide funding for commercial interests to install their own electricity generation and heating systems. The programme will include funding for combined heat and power generated from natural gas, as well as from biomass, reflecting our ongoing policy to promote market penetration of biomass technologies.

To complement the demand-side initiatives for bio-energy, we are introducing a number of initiatives on the forestry and agriculture side of the supply chain, which include a grant scheme to promote and develop sustainable forestry. We are finalising a scheme of supports for the purchase of specialist wood biomass harvesting equipment and we are considering proposals to reactivate establishment grants for SRC. We are undertaking research trials on miscanthus and providing direct funding, to support priority research projects on biofuels through the Department of Agriculture and Food's research stimulus fund programme.

We are developing renewable and sustainable energy policies on an all-island basis. The 2004 all-island energy market development framework sets the blueprint for the achievement of an all-island energy market. The all-island 2020 Vision, published as a consultation paper last July, will also culminate in an agreed joint policy paper later this year, with a particular focus on renewable electricity and generation. To ensure the implementation of the strategy for renewables, we have commissioned a joint all-island grid study into the accommodation of different renewable technologies in the electricity grid systems.

We are supporting the deployment of renewable and sustainable energy through a range of innovative programmes delivered by Sustainable Energy Ireland. These are aimed at the industrial, commercial, public and domestic sectors and we have achieved significant results in this regard. For example, Sustainable Energy Ireland's large industry energy network currently has 80 members, representing 51.3% of the total primary energy requirement for industry in Ireland. In total, the emission of over 580,000 tonnes of carbon dioxide has been avoided by this group since the scheme commenced. In addition, Sustainable Energy Ireland's low-income housing programme has addressed fuel poverty in almost 8,000 homes. The agency's public sector programme has seen the building of several superior-quality, energy-efficient public buildings across the country. It has also included an initiative in which four Dublin colleges have been assisted in cutting their energy bills by 6.3%.

Sustainable Energy Ireland's house of tomorrow programme, which complements the greener homes domestic grants programmes, provides funding for housing developers and for the development of superior energy-efficient homes. Some examples of typical energy-efficient refurbishment projects last year include an energy-efficiency retro-fit of 100 Dublin city flats, the development of 100 low-energy houses in Castleblaney, County Monaghan, and the Elm Park development, which comprises hospital consulting suites, a day-care centre, a residential block of 110 apartments, a crèche, a leisure centre, a pool and 100 senior citizen apartments.

Sustainable Energy Ireland is also critically involved in energy research and development and runs extensive programmes to increase awareness of energy efficiency. In addition to these programmes, we intend to launch a major national energy-efficiency campaign targeting individual consumers as well as specific economic sectors through industry, SMEs, schools and the public sector. This multi-annual campaign aims to persuade consumers of the benefits of more efficient use of energy, thus changing behaviour and reducing consumption through more energy-efficient equipment and processes.

These existing and proposed policy actions will be set out in the energy policy Green Paper which will provide the framework for national energy policy for the medium to long term. The Government has adopted a cohesive and dynamic approach to delivering on our sustainable energy agenda, the fuel diversity imperative and the national potential for renewable energy. The Government is working as a team to deliver on the cross-cutting issues, including bio-energy and biofuel strategies. We are working with colleagues in the North to progress the all-island energy market and in Europe to optimise benefits for Ireland under EU energy initiatives and to play our part in addressing the energy challenges for Europe. This constructive, forward-looking approach will continue to be the hallmark of the Government's energy policy. I commend it to the Seanad.

Mr. Norris

This motion is very timely. It addresses one of the burning issues of the day in a non-aggressive, non-confrontational way and I do not understand why every Member of this House cannot support it as originally placed on the Order Paper. It states: "That Seanad Éireann recognises the need to develop a national energy strategy that will address Ireland's over-dependence on oil and replace it to the largest possible extent by energy derived from renewable sources." Nobody could argue against this. It involves no confrontation and no attack on the Government and therefore I want the Government side to explain to me — an Independent Member — why it was necessary to table a totally fatuous amendment full of exhortation and pious good wishes but without the slightest bit of strategy. The year 2020 is invoked as a kind of visionary date but there is not much vision. The Swedish Government, on the other hand, has committed itself to putting a total end to its dependence on fossil fuels by 2020. This, rather than the pathetic statement made by the Government tonight, is what I call real 20:20 vision.

The Minister of State's contribution contains some facts but so much of it refers to the vision for renewable energy, the consultation paper of last July, the agreed joint paper due later this year and the intention to launch a national energy-efficiency campaign. This is all pie in the sky and it is a little too late for this kind of stuff. Let us have a real, substantial plan and an environment in which we are friendly towards this sort of development.

Instead of taking the advice in the motion in a non-argumentative, non-confrontational way, the Government sought, in its ridiculous amendment, to dilute it so it could produce this waffle, a paean of praise for itself. It alludes to its ambitions, hopes, consultation papers, Green Papers, White Papers and intended plans for this, that and the other, yet we know perfectly well that we will not meet our targets under the Kyoto Protocol. We are well short of meeting them already. We may be reducing the rate at which we are exceeding the thresholds but that is about all. Even the Kyoto Protocol will do very little to address global warming, the effect of which we must now all acknowledge. All in all, the Government's response is pretty pathetic.

The Minister of State referred to an initiative in which four Dublin colleges succeeded in cutting their energy bills by 6.3%. More power to them — it was their initiative and it did not come from the Government. I launched the initiative two years ago during Green Week and went back this year to Trinity College to look at the results. I am very proud of what the colleges are doing. The Government should follow their example instead of quoting them as an easy example in which they can idly luxuriate.

We have not met our Kyoto goals and we will have to buy carbon credits in the market.

There will be a cost for this. We need to provide an environment that is friendly to the development of alternative fuel sources. I am not convinced this has been done.

The matter of wind power has been ventilated today. The manner in which Airtricity was hamstrung by legal red tape and the constraints of the ESB grid does not suggest the Government has managed to create an environment that is friendly to the development of alternative fuel sources. We know that wind farms are successful. The first one was started in Bellacorick, County Mayo over ten years ago. We now have 186 wind turbines in 45 locations throughout the country. These contribute 500 MW to the grid system, the equivalent of 315,000 households. Removing that many households from fossil fuel use is a significant achievement. The Government should assist where these developments are being hampered by red tape. The latest figures available, from December 2004, indicate that 5.2% of our electricity is supplied by wind power.

Many of my colleagues will remember former Cathaoirleach Charles McDonald. Ten years ago he drove a very nice Mercedes car fuelled by rapeseed oil. He took me for a drive around Merrion Square and it drove perfectly. The only downside was that it smelled like a chip van. He was able to sustain his fuel needs from one acre of rapeseed.

In the nature of economic cycles one market, namely sugar beet, has disappeared but farmers affected by this could diversify into growing rapeseed for the purposes of producing oil. I listen to agricultural programmes on RTE because they are very interesting. The woman who presents them has a lovely midlands voice and is a joy to listen to. She interrogated a farmer who stated that there are two varieties of rapeseed that can be sown in spring or in October. The yield and profitability of rapeseed are equivalent to barley and, in the better seed, wheat. The profitability they provide is not far from that of sugar beet. This would provide a method of reducing dependence on fossil fuels.

I strongly support this motion. I understand my colleague Senator Quinn may not put this motion to a vote. If it were me I would do so to show up the Government side. Every time a motion is put down by Members on this side, particularly by the Independents who are distinct from the Opposition, the Government gets hoity-toity and insulted and puts down a fatuous amendment. Perhaps a wind farm could be created on the Government side. I am irritated by this politically irresponsible behaviour, a real error of judgment. The Government has exposed the weakness in its argument.

Mr. Scanlon

I commend the Independent Senators on proposing this motion on an important issue. The increasing price of oil, the need to significantly reduce our carbon and greenhouse emissions and the growth of dynamic new economies has placed the need for alternative energy firmly on the Government agenda. The Government is aware of the importance of the matter and has made progress on it. The €27 million greener homes initiative launched by the Minister for Communications, Marine and Natural Resources has been a major success. The scheme allows individual householders to receive grants for the installation of renewable technologies including wood pellet stoves, boilers, solar panels and geothermal heat pumps. Grant aid of €1,100 to €6,500 is provided, depending on the technology used. Some 1,600 applications were received in the first month. Of these, 1,100 have been approved. The scale of this programme and the level of grant available, typically 40% of the capital cost, underlines the Government's commitment to encourage people to install renewable heat technology in their homes. The programme will support the conversion of renewable energy in more than 10,000 homes.

Biofuels are being developed because we need to decrease our dependence on fossil fuels. Growing energy crops for the development of biofuels offers new opportunities to rural communities and economies. Irish agriculture has a major role to play in the development of a sustainable bio-energy industry. I commend the Ministers for Agriculture and Food and Communications, Marine and Natural Resources on pursuing a coherent approach. Agriculture and forestry have the potential to be the source of many feedstocks for biofuels. Rapeseed oil, wheat and sugar beet have the potential to be used for the manufacturer of liquid transport biofuels. Forestry, farming and food by-products such as meat, bonemeal and tallow can be used for heat generation. Tallow can also be used for biodiesel production.

Brazil has processed sugar beet and sugar cane into ethanol since the 1980s. Today, it is the lead producer of ethanol. Recent tax breaks and technological advances have provided the industry with greater impetus. In 2003 the Brazilian Government cut tax to 14% for cars using ethanol compared to 16% for those using petrol. Flex fuel cars have been developed that can run on alcohol, petrol or any blend of the two. Drivers can fill their cars with ethanol at 29,000 locations. Last year flex fuel cars accounted for 50% of the market of new cars.

Many countries can see the wisdom of the Brazilian approach. British Sugar has signed a contract with Green Energy, a private company, to produce bioethanol blended petrol to retailers in England, including Tesco. The US is producing almost as much ethanol as the Brazilians, although the raw material used is maize rather than sugar cane.

Support for energy crops may only be granted to farmers in accordance with EU regulations. Such support is currently provided by the energy crop scheme, introduced under the CAP reform programme and administered by the Department of Agriculture and Food. Under this scheme energy crops may qualify for aid of €45 per hectare if they are intended primarily for the production of biofuels and electric thermal heating produced by biomass. The EU has agreed that sugar beet will be eligible under the scheme and may also be grown as an energy crop on setaside land. This may not be seen as a great deal of money but the Minister for Agriculture and Food assures me that the European Commission has undertaken to review the operation of the scheme. The commitment was reiterated by the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, in Dáil Éireann last week. Ireland has an excellent climate for growing a supply of raw materials for wood fuel. Wood residues are used to produce heat for sawmills across the country. The wood energy market is poised for growth with the emergence of new commercial start-ups and supply chains. The €27 million greener homes grants will help to drive demand for wood biomass. The levels, which will be announced in the coming weeks, will stimulate demand further. The Department of Agriculture and Food is actively promoting the use of wood biomass through grants to promote and develop sustainable forestry, including alternative timber uses. The Department of Agriculture and Food, in conjunction with Teagasc and COFORD, has examined the potential of energy crops, wood biomass and farming food bi-products. Last year it started to provide direct funding on a competitive basis to support priority research projects relating to biofuels. Three of the projects selected in 2005 contained proposals relating directly to biofuel energy crops. They received grant assistance of nearly €900,000. The funding available under the programme has been substantially increased. A further call for projects was recently advertised in the national press. This call also relates to non-food uses of agricultural land.

The Government's policy to integrate renewal energy with the development of the rural economy is particularly evident in the development of renewal transport fuels. Biofuels offer major potential to support the development of the rural economy. In the Finance Act 2004, the Minister for Finance introduced a relief for mineral oil tax for biofuels produced or used in certain pilot projects. The relief has been granted to eight pilot projects for a period of two years. In this year's Finance Bill, the five-year scheme of mineral oil tax relief to commence in 2006 and end in 2010 was greatly expanded. The scope of the relief now extends to projects which are not of a pilot nature. This relief scheme, when fully operational, is expected to support the use and production of 163,000 million litres of biofuels per year. In budget 2006, provision was made for VRT relief of 15% for flexible fuel vehicles. The scheme is intended to encourage the purchase of a series of production flexible fuel vehicles able to use bioethanol — a blend of a minimum of 85% bioethanol and 15% petrol.

The Minister of State referred to ocean energy, which is important. Much work is taking place in Galway. The hydraulics at the marine research centre in UCG have been significantly upgraded and it has developed a 37 hectare site in Galway Bay to ensure that devices can move up to the next level of testing in their development and cycle.

The Corrib gas field was mentioned. I was heartened to hear the Minister for Communications, Marine and Natural Resources state yesterday that a feasibility study will be done on the Corrib gas and on supplying the north west through Sligo to Donegal. We should support the Government in every way we can in that regard.

Mr. Browne

I welcome the Minister of State, Deputy Brendan Smith. It is like musical chairs here with Ministers of State coming and going. I hope this Minister of State shows more enthusiasm for this topic than the previous one who looked bored out of his mind. If the Minister of State and the Government could pick up on the energy from Senator Norris's contribution, perhaps we could have a more comprehensive debate on this topic.

It is time for a real debate on this issue. Everyone agrees we need to reduce our overdependency on oil. This country is very vulnerable in that regard. We all agree that if energy costs go up, it has a major effect on the economy. If the cost of transporting goods goes up, shops must up their prices and the consumer must pay more which adds to inflation.

Sweden is cited as a country which will reduce its dependence on fossil fuels but I understand that it will still depend on nuclear energy. It is, therefore, important to compare like with like when we debate this issue. I am not hung up on nuclear energy. It is a little farcical and represents gombeen politics for us to go on about Sellafield every day of the week because we have achieved nothing in that regard. Prime Minister Blair has indicated that he will revitalise Britain's nuclear industry and will shut down the current phase but will construct new nuclear energy power plants. I accept as opposed to welcome that because it is more realistic. Every few months we see the Minister for the Environment, Heritage and Local Government of the day go to the UK beating his chest and demanding the closure of Sellafield. That will never happen. At least what Prime Minister Blair has said he will do is more feasible and realistic. Ideally, it would be better if there was no nuclear energy but there is and we must be realistic. Unfortunately, the UK has a major problem with energy and it views the nuclear option as its best avenue. It is important we adopt a practical and realistic approach to that. It would be more realistic for us to argue for the closure of the current phase of nuclear plants and for their replacement with modern, safer plants.

Senator Scanlon referred to Brazil. Iowa in America has led by example as well. Biofuels must to be freely available at petrol stations. We can talk until we are blue in the face about this issue but until biofuels are freely available at petrol stations, we will achieve nothing. Ireland should continue to set an example as it has done with the smoking ban and the tax on plastic bags. We should lead the way in Europe in regard to alternative fuel.

This issue was brought home to me lately with the closure of the Carlow sugar factory. We need to address the production of biofuel, possibly using the Mallow plant. The EU Commissioner indicated the Mallow plant could be used without affecting the compensation scheme. I welcome the grant for thermal heating in houses, which is a good idea. We should continue to move in that direction. We should also consider capping the amount of VAT on fuel as it is adding to inflation as fuel prices increase.

Mr. J. Phelan

I welcome the Minister of State and his official. I am delighted the Independent Senators tabled this motion, which I fully support. I am surprised an amendment has been tabled. I did not hear all the debate or the Minister of State's contribution but I heard some of the Government speakers. I have been calling for a debate on energy for a long time, so this one is timely.

Senator Browne is right that we need to reduce our dependence on oil but I do not share his enthusiasm for nuclear energy.

Mr. Browne

It is not enthusiasm; it is acceptance.

Mr. J. Phelan

I do not share his acceptance of nuclear energy. We must examine every other renewable energy option. The Government has taken tentative steps towards examining those options but it has not done enough. The two principal issues are the cost of energy and the problem of supply into the future. If we cannot resolve those two problems, consumers will continue to find their ESB and gas bills increasing. Businesses will suffer an even greater competitive disadvantage than at present in terms of our energy costs vis-à-vis some of our neighbours. We need to tackle this issue.

Renewal energy is a win-win situation. From the consumer's point of view, it provides the possibility of some stability in fuel supply and fuel price into the future. From an environmental point of view, the reduction in our reliance on fossil fuels has obvious benefits. There are also benefits for producers, on which Senator Browne touched. I do not need to tell the Minister of State, Deputy Brendan Smith, of the difficulties in farming at present. This is an alternative enterprise for farmers in the aftermath of the destruction of the sugar beet industry by this Government. This alternative enterprise could be viably developed and expanded into the future and it should be done as soon as possible.

I also welcome the Government's announcement of the green energy grants for the installation of pellet burners, solar panels and renewal energy appliances in homes. It is a step in the right direction. On the Order of Business this morning, a number of Senators raised the issue of wind energy. They referred to planning problems in different parts of the country but that is not the problem in my area. In my parish, approximately two fields from where I live, a wind farm with five turbines has been granted planning permission. A quarter of a mile away another small wind farm with three turbines has been granted permission. Those permissions have existed for over two years and neither wind farm has been constructed because the ESB continues to place every possible obstacle in the way of the developers. Unlike some, I have no problems with wind farms. They look well and if they are correctly situated in the landscape they blend in well and are an excellent, readily available renewable source of energy.

I urge the Minister of State and the Government to do what they can to ensure that the ESB is not allowed to monopolise the electricity supply situation particularly with regard to wind energy and that the obstacle is removed at the earliest possible opportunity. The ESB does not wish to face any significant competition from other suppliers in the wind energy sector. That is why people have a problem connecting to the grid.

Mr. Quinn

I thank all those who spoke tonight, and the Minister of State for attending the debate. I spent most of my life in the business world where, if one sees a crisis coming one panics and does something about it. I fear that I do not hear that sense of urgency coming from the Government. It happens that this motion which I put down over a week ago, overlaps with the headline in The Times today: “Britain goes nuclear to beat energy crisis”. I do not get a sense of that crisis here. As I said in my opening proposals, this was already headline news in 2004, and even ten years before then. This applies to Ireland much more than elsewhere.

Forfás published last month an interesting document, which was not mentioned today, on our oil dependency. This country is more dependent on oil than any other country in Europe. Another figure in that document is that we are the third largest consumer of oil per capita in the 25 EU countries. This Government does not recognise that sense of urgency.

This has been a good debate in which we have learned about several initiatives, including alternative sources, such as ethanol. I read recently that Richard Branson is investing $400 million in ethanol in the belief that it represents an opportunity. A hero of country music fans some 20 or 30 years ago, Willie Nelson——

Mr. J. Phelan

He is still on the go.

Mr. Quinn

He is still going although he is in his 70s. He advocates biofuels which he uses in his car and has started a company to produce them around the United States. There is a recognition of the problem and the opportunities but too few people are taking steps to deal with it. Three American states, Minnesota, Montana and Hawaii have legislated to the effect that 10% of all gasoline and diesel must contain ethanol or some biofuels.

It is not understood here that there is a crisis. I quoted James Lovelock saying that civilisation is in imminent danger. He also said biofuels will not solve the problem, they are part of the solution but would require areas of land that the world cannot spare if it is to feed its population in the future. Although he is anti-nuclear energy, he has decided there is a need to investigate the nuclear option. I do not know enough about the subject but I hope today to progress the debate a little further, not just on nuclear energy. We have a crisis and must solve it one way or another but the Government does not seem to recognise this. Some of the steps taken are correct and the Government says that it has a plan.

A few weeks ago I mentioned on television my interest in sustainable energy and have been very impressed at the number of people who have contacted me since then in Ireland who are doing interesting things with wind, waves and biofuels. Much is happening. The Government said it will encourage this area but we have not tapped the resource of manpower and inventiveness, by giving people incentives to think their way through this problem.

One of the mistakes we have made in the past is to try to invent something new. We do not always need to reinvent because developments are taking place around the world that we can copy. Some were mentioned tonight and from that point of view it has been a useful debate. I am disappointed, however, in the Government's insistence on tabling an amendment to the motion. I have said I will not call a vote on this. Of course I support what the Government is doing but it is not enough.

The Minister's speech included the following phrases: "We are well placed . . . I can advise Senators that the Government intends to publish an energy policy Green Paper shortly . . . we have rolled out a series of initiatives we have put in place a new five-year excise relief . . . We are delivering an ocean energy strategy . . . We will launch a combined heat and power programme. . . we are introducing a number of initiatives. . . will also culminate in an agreed joint policy paper . . . The Government is working as a team . . . ". There is no sense of urgency in these words. I urge the Minister of State and the Government to recognise that sense of urgency.

Alfred Cavallo, a physicist, said "People should be doing something now to reduce oil dependence and not waiting for Mother Nature to slap them in the face". The Government must act much more quickly or it will not be mother nature who will slap it in the face but the voters who will say the Government let them down because it did not move fast enough or with enough determination.

Amendment put and declared carried.

Motion, as amended, put and declared carried.

An Cathaoirleach

When is it proposed to sit again?

Mr. Kenneally

Next Tuesday at 2.30 p.m.

Seanad Éireann díospóireacht - Wednesday, 17 May 2006

Energy Strategy: Motion.

Seanad Éireann díospóireacht -
Wednesday, 17 May 2006