Seanad Éireann díospóireacht -
Tuesday, 24 Jun 2008

Vol. 190 No. 5

Electricity Regulation (Amendment) (EirGrid) Bill 2008: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

I am pleased to have the opportunity to present the Electricity Regulation (Amendment)(EirGrid) Bill to the House. The Bill, which was initiated in the Dáil in April, forms a key part of the Government's priority legislative programme and underpins a number of key elements of the Government's energy policy. The Bill provides for an expanded role for EirGrid, the national transmission system operator, as a strong independent State company. It also underpins the development of electricity interconnection generally. In this context, the early enactment of the Bill will facilitate the delivery to schedule of the east-west electricity interconnector with the United Kingdom by 2012 at the latest.

The Bill makes some minor amendments to the Electricity Regulation Act 1999 in this context, which I will refer to as the 1999 Act. To ensure consistency with provisions for other licensing activities, a new subsection is inserted into the 1999 Act to provide that a person operating an interconnector without the appropriate licence is guilty of an offence and liable to a fine or term of imprisonment. For example, it is already an offence to supply or generate electricity without the appropriate licence.

The Bill also provides clarification of the position of interconnectors with respect to the transmission system. The 1999 Act provides that the cost of interconnectors would be recovered through transmission system charges. This Bill provides that those costs are only to be recovered in the case of a regulated interconnector, such as the east-west interconnector, or in circumstances where the Commission for Energy Regulation determines that it is in the public interest to do so.

The new provision facilitates the development of merchant interconnectors, which are privately funded and developed. Merchant interconnection projects are financed through charges for the use of the interconnector rather than being compensated through transmission system charges. These new provisions are in line with the European Union regulations in respect of merchant and regulated interconnectors.

As I have mentioned, the Bill expands the statutory functions of EirGrid in respect of electricity interconnection. I will briefly outline these functions. As the fully independent transmission system operator, EirGrid plc is licensed by the Commission for Energy Regulation, the independent energy regulator. Since it became the licensed operator for the transmission system in 2006, EirGrid has developed into a dynamic player in the Irish electricity market.

EirGrid's current statutory functions as transmission system operator include the operation, planning and development of the Irish electricity transmission system; the development of opportunities for interconnection of the Irish transmission system with other systems, with a view to ensuring all reasonable demands for electricity are met; the critical task of monitoring and reporting on security of electricity supply and generation adequacy; and the independent operation of the single electricity market in co-operation with EirGrid's Northern Ireland equivalent, SONI. This Bill provides that EirGrid may construct, own and operate an interconnector subject to the grant of the appropriate licence and authorisation by the Commission for Energy Regulation.

In addition to the provisions already outlined, on the advice of the Office of the Parliamentary Counsel to the Government, this Bill restates certain provisions of the European Communities (Internal Market in Electricity) Regulations 2000, SI 445 of 2000, under which EirGrid was established. Restating these provisions in primary legislation provides the strongest possible underpinning for EirGrid's new role. At the same time, the Bill revokes the corresponding provisions in SI 445 of 2000 to avoid duplication.

The restated provisions relate to subsidiaries of EirGrid and borrowings and capital expenditure by EirGrid. These provisions are restated in slightly amended form and include an increase in EirGrid's borrowing limit to a total of €750 million. The increased borrowing limit provides EirGrid with the financial leverage and scope to develop its expanded role and progress a challenging agenda. The issues of climate change and energy security are urgent and imperative priorities for Ireland, the European Union and all governments worldwide.

The achievement of the ambitious national targets we have set for ourselves in terms of emissions reduction, renewables and energy efficiency improvements present key challenges for the electricity sector. At the same time, this sector has recently entered a new era with the establishment of the all-island single electricity market. At this time of unprecedented change, EirGrid has an increasingly important strategic role to play.

I look forward to the publication shortly of EirGrid's Transmission Development Strategy 2025, which will be critical in identifying how we can support the increasing penetration of renewable energy generation and address the technical challenges in terms of the development and operation of the electricity transmission system. It will contribute to our continued economic, social and regional development.

For the longer term, I have commenced a process to examine the transfer of the electricity transmission assets. I expect that EirGrid, as a key State stakeholder, will provide an important input into this analysis and process. With regard to electricity interconnection, EirGrid is progressing the development of the second North-South interconnector in co-operation with the Northern Ireland authorities, which is due to be completed by 2012. The publicly expressed concerns in regard to this and other essential transmission system developments underline the complexity of the task facing EirGrid in the coming years. In this context, I commissioned an independent study on the relative merits of constructing and operating overhead transmission lines as compared with underground cables. The study focuses on technical characteristics, reliability, operation and maintenance factors, environmental impacts, possible health issues and the cost of both types of electricity infrastructure.

In anticipation of the enactment of this Bill, EirGrid is advancing the development of the east-west electricity interconnector. The Government attaches the highest priority to this project which will contribute to security of supply and competitiveness as well as providing increased potential for the export of wind-generated electricity. I will expand on just a few of the potential benefits to Ireland from interconnection with the UK market. With regard to the security of our electricity supply, the generation adequacy report is produced annually by EirGrid and sets out the forecasts for both the supply of and demand for electricity over a seven-year period. The most recent report has identified a need for additional generating capacity over the next seven years to maintain security of supply. East-west interconnection will afford Ireland direct and secure access to the British energy market where, I am advised, there is significant generation capacity available to enhance security of supply on this island. In addition, the United Kingdom is developing interconnectors with mainland Europe to contribute further to security of supply and market integration.

In this context, I am pleased to note a breakthrough earlier this month at the Council of Energy Ministers' meeting in Luxembourg, where broad agreement on the essential elements of the internal energy market package was reached. This package will contain new measures to ensure further co-operation among transmission system operators across the EU and for the further development of regional energy markets. Another significant benefit of the east-west interconnector is that it will enhance the competitive environment in the Irish electricity market by allowing third party access in a fair, consistent and transparent manner. This, together with the all-island single electricity market, should, over time, exert downward pressure on electricity prices.

Competitiveness is a primary objective for Government. Reliability and competitively priced energy supply is critical for future economic growth. Government policy is geared towards delivering a supportive, sustainable energy environment for enterprise and for consumers. Structural change in the energy sector and delivering essential strategic energy infrastructure are among the priority commitments for the Government.

In terms of fuel diversity, the introduction of the east-west interconnector will be a major benefit by providing an external source of electricity that will reduce our dependency on gas-powered generation. At present, a significant percentage of Ireland's electricity needs are generated from gas, some 60% overall. The east-west interconnector will help therefore to decrease our exposure to price movements and geopolitical instability factors in international energy markets.

Another key potential benefit of the east-west interconnector is that it will help support the increased penetration of renewable generation, especially non-dispatchable wind generation, in the Irish market. Reserve supply is required to provide backup for wind generation at times when the wind is not blowing. The east-west interconnector will provide the capacity and stability required and will increase the extent to which renewable generation can be accommodated on the transmission system.

The east-west interconnector will offer potential opportunities for export of Irish wind-generated electricity. In times of high wind generation, surplus power would be shared with Britain. In times of low wind generation, power would be imported from Britain.

The Government has set ambitious targets for progressively achieving 33% of our electricity consumption from renewable sources by 2020, with a target of 15% for 2010. The recent all-island grid study shows the possibility of up to 42% of electricity being provided from renewable generation by 2020. The all-island grid study also identifies the east-west interconnector as a key enabler for delivering our ambitious national and European Union renewables targets. It is to exploit these crucial benefits that the Government has attached such a high priority to the delivery of the east-west interconnector.

In this context, I wish to advise the House of the significant progress to date on the delivery of the east-west interconnector. In 2006, the Government requested the Commission for Energy Regulation to arrange the design of a competition to secure the construction of a 500 MW interconnector with the United Kingdom at the earliest possible date before 2012. The Government also decided that the interconnector would, as a national strategic asset, remain in public ownership and would be owned by EirGrid. To oversee and ensure completion to schedule, a high level co-ordination group has been established under the chairmanship of the Commission for Energy Regulation and comprising representatives of EirGrid and my Department. I am advised that work on the project is progressing well. EirGrid, overseen by the CER, is finalising a competition for the design and construction of the interconnector. I am also advised that the contract for design and construction will be completed by the end of September this year when the successful bidder will be announced.

EirGrid is also advancing work on route selection, planning and foreshore authorisation and technical specification of the interconnector. Woodland, County Meath, will be the connection point for the interconnector on the Irish transmission system. EirGrid has also obtained a formal connection offer from the UK national grid for a site at Deeside in Wales, which it has accepted. In addition, EirGrid has carried out a marine survey to determine the most suitable route for the undersea cable. Based on analysis of this work, the final route to link the two connection points will be determined.

This Bill provides a clear signal of the Government's support for the project and I trust I can count on the support of Senators for its provisions and smooth passage. As outlined, the Bill also will provide EirGrid with the legislative underpinning to advance to the next stage of the east-west interconnector project and ensure there are no delays to timely delivery. I am advised that the end of September 2011 is targeted for the completion of construction work, with the end of March 2012 targeted for the completion of commissioning and testing and the start of commercial operations.

In a European context, greater interconnection between member states is a key priority for the European Union to ensure the effective operation of the internal energy market. The importance of the east-west interconnector project has been formally recognised at a European level and it has been designated a project of European interest, which is the category of projects with the highest priority at EU level. The fact that the east-west interconnector is included in the EU trans-European networks priority interconnection plan underlines its strategic importance. The priority interconnection plan proposes specific measures for the progressive completion of critical energy infrastructure projects. As a tangible measure of support, funding totalling more than €2 million is being made available under the EU trans-European networks programme to advance the study phases of the east-west interconnector project.

As a peripheral island nation, Ireland strongly supports the progressive development of European regional electricity markets underpinned by greater interconnection. This project is a natural progression from the development, in co-operation with the Northern Ireland authorities, of the all-island energy market and the launch of the single electricity market in November of last year. My Department, the CER and EirGrid, along with their UK and French counterparts, are actively working towards the development of a regional electricity market as part of the European Commission's initiative to develop regional energy markets. This initiative will be underpinned by greater interconnection. The current focus is on the delivery of the second North-South electricity interconnector and the new east-west electricity interconnector no later than 2012. At the Government's request, EirGrid will also undertake cost benefit analysis and feasibility planning for further interconnection with the UK and potentially with Europe in the longer term. This analysis will take account of any proposals to develop interconnection on a merchant basis.

The Bill is an important measure in the delivery of critical objectives in the energy area, including enhanced security of electricity supply, greater competition and increasing use of renewable energy sources. I look forward to listening carefully to the views of Senators on this important legislation and to their assistance in progressing it into law.

Senator Nicky McFadden

I welcome the Minister to the House to debate the Second Stage of this Bill, the purpose and aims of which must be widely supported. On the enactment of this legislation, EirGrid will be able to construct and maintain an interconnector to transport electricity. The Bill's intent is a simple one. Two interconnectors have been proposed under the Bill — an east-west interconnector and a North-South one. The aim of these is to reduce our dependency on non-renewable sources and to generate more than 40% of our electricity requirements from alternative renewable resources by 2020. EirGrid has two proposals: an 80 km long 400 kV power line between Kingscourt, County Cavan and Turleenan, County Tyrone, and a 58 km long 400 kV power line between Woodland, County Meath and Kingscourt, County Cavan.

The proposed latest completion date of the EirGrid east-west interconnector is 2012. This will link the Irish transmission system to the British system. Under Ireland's energy policy and the European policy, this interconnector will secure Ireland's capacity to reduce our dependency upon other sources of energy as well as promoting the use of more indigenous renewable energy resources, which is most welcome. It is vital that we have in place a viable and sustainable infrastructure to cope with rapidly decreasing non-renewable resources. The Government now has an opportunity to be innovative and forward thinking as globally depleting energy supplies take effect.

The Government must act to ensure Ireland does not become economically isolated. This interconnector would link us geographically to Britain, which in turn would provide us with a connection to Europe. This could be vital to our sustainability in future years. Ireland will benefit greatly from the EirGrid east-west interconnector. Most importantly, it will give us a guarantee of direct supply. As recently as last week there was a threat to our electricity supply, but the interconnector will enhance our growth in renewable energy resources. It could promote greater competition, allowing Ireland access to the larger British market which would have a positive impact for consumers. However, the Government must assure the public that this interconnector is reliable, sustainable and provides competitive electricity supplies.

Currently, Ireland has limited indigenous reserves of fossil fuel and is largely dependent on supplies from Russia and the Middle East. The absence of an interconnector to Britain, however, leaves us at the back of the queue. More is needed immediately. We must be prepared to commit Ireland to a future that ensures our energy security. We must secure our supplies. The Minister must avail of every opportunity to improve our connectivity with the rest of the world and not just Britain. I welcome the fact that the Minister referred to this point in his speech.

These plans have been discussed for more than eight years, yet we are still debating the issue. Surely EirGrid could have these interconnectors finished before 2012. The private sector company building the interconnector between the Netherlands and Norway, which is almost 600 km long, can do it in three years.

The main purpose of this Bill is to give EirGrid the capabilities to undertake and manage projects such as the proposed east-west interconnector and the North-South interconnector. This Bill would also enable EirGrid to own its own assets. In his speech, the Minister referred to company's ability to take out or extend a loan to the value of €750 million. EirGrid itself proposes to take responsibility for running the lines for the east-west connector from Rush to Batterstown in County Meath.

As regards the Bill's overall provisions, the Minister referred to EirGrid being responsible for financing the project. However, I am concerned that consumers will ultimately have to pay the price. I understand that, through this Bill, the Minister is legally providing for EirGrid to borrow to finance the project. At this stage, however, it is unclear how he intends this infrastructure to be funded. Will it be partially funded by money borrowed and raised by EirGrid, topped up by public moneys, or will it be integrated into consumers' electricity bills, thus pushing costs even higher than they already are? I would welcome some clarification of these matters.

It is worth noting that in the past five years UK electricity costs have been consistently 8% to 15% cheaper than here. I would like the Minister to clarify that point also. Many Scandinavian countries have lengthy connections. For example, Norway has 4,000 MW of interconnection with its neighbours and these lines are mostly underwater. This contrasts with Ireland's 400 MW of connectivity, which is unacceptable and appalling. If we want to put Ireland at the heart of the green revolution, it is no use utilising green sources of renewable energy off the west coast if the resulting electricity is then brought to the east and north-east using non-green, outdated technology that puts people's lives at risk.

I am not convinced that EirGrid's performance on the North-South interconnector to date is in any way encouraging. We must carefully monitor and control EirGrid. In the past, EirGrid has shown a serious capacity to delay projects so I ask the Minister to be careful not to create another monster like the Health Service Executive or the National Roads Authority. Will the Minister take total control of this agency and all of its functions?

At this juncture I would like to speak about the ESB, which as we are all aware is in public ownership. As a past employee of the ESB, like my father before me, I regard it as one of the most efficient of our semi-State companies. It has turned around its fortunes in a time of serious competition. Since the ESB's inception more than 80 years ago, the company has been very efficient. We owe it a big debt. I take heart when I note that practically all the personnel in EirGrid are former ESB employees, which is a good omen for the future.

A group called the north-east pylon pressure campaign, NEPP, has been established to challenge and oppose any decision to plant high-power electricity pylons. The group's concerns are serious and ought to be heeded. The route that EirGrid has announced as a possibility would run from the existing substation at Woodland near Batterstown to a new substation near Kingscourt, which would join the Cavan-Tyrone power line. There are two other proposed lines which have also been opposed by local residents who may be affected. These people are voicing serious and genuine concerns which EirGrid must listen to. The primary concern is about health risks which the pylons and power supplies may pose. People are worried about their safety and that of their children while farmers are also worried about the adverse effects on livestock and lands.

We have come a long way since last October when EirGrid first announced this project. The company rejected the option of putting cables underground because, first, it was not technically feasible and, second, it would cost ten or 20 times more than putting them overground. However, the concerns that the north-east pylon pressure group has raised cannot and should not be ignored. As a result of its research and campaigning, the proposal to put the power lines overground has been discredited. It is now accepted that it is possible to carry the electricity over a long distance underground. This is being done in many countries around the world, so there is no plausible reason to prevent Ireland from doing so. The issue of whether that electricity is alternating or direct current is an engineering red herring introduced by EirGrid to muddy the waters in this debate.

The north-east pylon pressure group comprises decent, honest and concerned people. They are representative of the people of the north-east on this issue, yet I am sorry to say that they have been treated disgracefully. Their letters have not been answered nor have they received any response to requests for a meeting. I ask the Minister to address this issue and meet them.

Legislation has been proposed by the EU which would force companies such as EirGrid to put any such power lines underground. While a date has yet to be set for legislation of this sort to come into effect, the Government could and should take the initiative by putting the power supplies underground. In the Lower House, Fine Gael has put pressure on the Government to seek advice from independent consultants on the viability of placing the power lines underground. If the Government had done this from the outset, the concerns of the people would have been addressed and these interconnectors could be built by now. The delay is unacceptable and the approach that the Department has taken heretofore is disappointing.

The consultants, Ecofys, are currently carrying out their investigation of the merits of underground versus overground and I look forward to analysing their findings, which will be published in July. There are serious questions over their capability and their degree of independence from the Department. I await their findings with an open mind. The proof will be in the quality or otherwise of their report.

I will finish because I have run out of time. Overall, I support the Bill but I would ask the Minister to keep a close monitoring eye on EirGrid.

Senator Jim Walsh

Cuirim fáilte roimh an Aire, an Teachta Éamon Ó Riain go dtí an Teach inniu chun an Bhille tábhachtach seo, an Bille um Rialáil Leictreachtais (Leasú) (EirGrid) 2008, a phlé.

This is a very important Bill, as the Minister rightly underlined in his speech to the House. It is interesting that in recent times at committee level, as Senators Joe O'Toole and Martin Brady will be familiar, we have had both EirGrid and IMERA making submissions on interconnectors to us. It is a welcome development.

The Bill must be placed against the background of the energy market. In this country we have had unprecedented economic growth over more than a decade and that has given rise to a considerable increase in electricity demand, which has been outstripping generating capacity. The demand is projected to grow by 4% to 2010. I hope that will materialise even though we seem to be in a period where economic growth has reached a plateau. That is an issue for another debate. In many ways all areas of infrastructure were being stretched when we were experiencing double-digit economic growth and that is the experience of every country that has had a such rapid increase in its economy. It will do us no harm, provided we take the necessary prudent and cautionary measures to ensure that we do not slip into serious recession, for us to plateau for a period and then have more sustainable levels of growth. Of course our growth rates in the future will be from a much higher economic level than we have had in the past and therefore the quantum of the economic growth will be quite significant even if the percentages appear in lower single figures.

We have had a low level of international interconnection. The Minister pointed out that North-South developments constitute a major step forward in creating an all-island electricity market. Indeed, we are developing that in other ways in the economy as well. That will be ultimately to the betterment of the people on both sides of this unfortunate partition on the island. We are seeing the benefits in many areas and that will grow exponentially as it develops in the future.

Historically, there has probably been significant underinvestment in the electricity network. We have a high dependency on imported fuels, which has made us vulnerable to international fuel prices and which has contributed in part to the high electricity costs. Unfortunately, our electricity prices are the second highest in Europe and are 50% above the EU average. That is not a situation with which we should be comfortable or about which we should be complacent, and it is something we need to address. If industry and jobs here are to be maintained and to grow into the future, competitiveness is an important issue for the economy and for many of those industries, not to mention householders, energy costs are a fairly significant factor. The moves we are making in that direction are all positive and the interconnector is an important part of that.

It is significant that Ireland is ranked among the three most expensive countries in Europe in terms of electricity costs for industrial consumers. I hope the steps being taken on the renewable side will generate cost efficiencies. Renewables will be good for the environment, but also it is important that we get a benefit from cost efficiencies in order to achieve the competitiveness to which we aspire.

Our geographic isolation is a significant factor in all of this. There will be not only North-South connection, but, indeed, once the east-west one is established, bearing in mind that England will also be connecting to mainland Europe, it is hoped there will be considerable benefits. I noted that the Minister in his speech spoke of a regional development involving France, Britain and ourselves and that there can be some benefits, and economic savings, arising from that as well.

Apart altogether from the cost implications, the fact that we are a peripheral island and that we are subject to imported fuels makes us vulnerable to security of supply. It is important that steps are taken in that regard as well. We saw within the past few years the issue arising from decisions by Gascom to curtail the supply to Europe of Russian gas being more or less politically rather than commercially motivated. Being on the west coast of Europe, we need to be particularly conscious of that vulnerability and try as far as possible to obviate a situation where we are without supply.

Competition is an essential feature of all of this as well. The interconnector brings that also to the table in that it will allow us trade in electricity. Indeed, the potential for market opportunities for export, should we find ourselves in that position in the future, is also there to be exploited.

I would be hopeful about the growth in wind energy. There must be great potential for wave energy, if it can be harnessed economically and the technical mechanisms necessary can be achieved. On a recent delegation with one of the Oireachtas committees to Brussels, we met a number of EU Commissioners. The Energy Commissioner informed us that off the south-west coast of England there are fairly advanced studies being done. In these Houses Members have raised previously a project off the Galway coast where people are endeavouring to develop technology that can harness wave energy.

Given that the sea is all around us — Dominic Behan was thankful for political reasons for that — for commercial reasons I hope in the future we will look to it as being a great asset. It is not an asset we have exploited to anywhere near its potential. It is totally underexploited, as many of our fishermen will tell us. I listened with interest to what Senator O'Donovan had to say on that earlier. It is an area to which we could give much more emphasis and increased focus. I understand that some part of the technical area surrounding this will entail high-voltage direct current transmission across the Irish Sea and this will involve conversion stations to convert from AC to DC on either side of the interconnector.

EU regulations, as both the Minister and EirGrid pointed out, require full third party access to the interconnector. In recent weeks and months there have been debates on Europe and the pros and cons have been enunciated by the different sides, but this is an area in which the European Union has been a very positive catalyst for generating transnational connectivity. That is required to facilitate the effective implementation of the policy in place and to ensure consumers across the Community, including those on peripheral islands such as ourselves, will be beneficiaries of that common market in the trading of electricity.

The Minister said the development of this interconnector by EirGrid is on target to be achieved by early 2012 and that it will have a 500 MW capacity. It is important we allow private interconnectors. If we can generate competition, there is no reason the public sector cannot be as good and efficient as the private sector. If, however, a public or a private sector monopoly emerges, in general, the public sector will accumulate certain inefficiencies while the private sector will probably involve itself in profiteering. It is essential we have competition in the area. Within the regulations, there is a requirement for third party access on a fair and transparent basis. The Commission for Energy Regulation will regulate and ensure there is a level playing field.

We should try to achieve a less dominant contribution from the ESB to the overall capacity, which we have talked about for some time and which there has been great difficulty achieving. I believe that is due to technical difficulties apart from anything else, and perhaps lack of investment because investment in energy requires significant capital. There might be an opportunity through the interconnector to do that. If it is done on an equal and fair basis, would it fit with that objective?

If my figures are correct, this imported electricity will save us 2 million tonnes of CO2 per annum. That is not an insignificant contribution to what we are trying to achieve in that area and is a very positive aspect. The main thrust, however, should be to try to achieve lower prices for the consumer, whether commercial or private, in order that prices are closer to the EU average.

Some 60% of our electricity is generated by gas, although this move will assist in reducing that. Gas is a very clean fuel to use to generate electricity but it is also a primary source of energy. We are using a primary source of energy to generate another one. On the face of it, that seems wasteful of our energy resources. I welcome the fact it will decrease but we will need to decrease the amount significantly to achieve the benefits we should get from gas.

Senator Joe O’Toole

I welcome the Minister and wish him well with the legislation. I am probably the only Member of either House who has a problem with it. Having said that, nothing I have to say reflects in any way on the excellent people who operate EirGrid, whom I have met. My problem with the Bill has nothing to do with them as I hold them in the highest of regard. They are diligent, decent people who are good at their work. That is not the issue nor is it a reflection on the Minister.

I am looking down the line at what will happens afterwards, as I am required to do as a legislator. I do not trust the unknown people who in 20 years' time will be in charge of what the Minister is now in charge of. My problem with this Bill is that we are bundling up and neatly packaging something which can be sold off the next time a Government has a problem. That will happen and people will regret it.

I saw the Minister nodding in agreement with Senator Jim Walsh on the question of carbon savings. I do not believe the Senator is correct in that regard. It will not be a carbon saving and there will be no gain because it is within Europe and I do not believe it will count. Perhaps the Minister will deal with that issue in his response.

I have seen the development of the ESB over the years. I have been a major supporter and at times a great critic of it. What saddens me about this debate is that I am looking at a company, a management and a workforce which have been extraordinarily flexible. The workforce has been reduced from 14,000 people less than 20 years ago to fewer than 8,000. It did that in the interests of efficiency and of delivering.

It is not that long ago since this was one of the cheapest electricity markets in Europe. Some time after 2002 I argued that the price of electricity was being artificially forced up to invite in Senator Jim Walsh's friends in the private sector and to make it competitive for them. I still have grave doubts about how it works. I do not trust the private sector in this area and believe it will bury us.

I have no problem with the concept of a grid or the authority we are giving to EirGrid. However, I would like to see EirGrid as part of an integrated system within the ESB. The problem with discussing this is that the debate has not moved on. What we are doing today is as important as the construction of the Ardnacrusha power station in the 1920s. However, one would have great difficulty convincing the people of that.

The Minister and I know that generation is no longer the name of the game. We could stop generating as soon as we have this set up. The real issue is that EirGrid will buy and sell. Of course, it is open to the private sector, and so it should be. If the private sector can produce as cheaply as the ESB, then it will be in the marketplace but so far, it has failed to do that and that is why it has not exactly been rushing into it. It is quite extraordinary in that sense why people are missing that point.

There are three aspects to this, namely, generation, the national grid and the network. The network is what I call the bit that brings the power from the grid to houses. In any other country where this has been done, it has created a problem. I said to the Minister last year before he was appointed that in New Zealand, where they did exactly this, the grid company refused to pay the costs of connection to the network in the capital city of Wellington which was left without power, on and off, for approximately six weeks. That happened in the past ten years as a direct result of the privatisation of the grid. I know the Minister for Communications, Energy and Natural Resources is not privatising the national grid, but his actions would allow it to be privatised very easily in future and there is no strategic reason for this. I am not approaching this from any "ism" or philosophy. There can be no strategic reason for letting go the reins on EirGrid. I know the Minister's position and I agree on this point.

This is a significant problem. Throughout Europe, there is a significant concentration of power in the generation and transmission sectors. The big player, effectively, is Electricité de France, EDF. It is buying companies throughout England and the UK and is looking at options here. The company was mentioned in the House several times recently and it is examining developments in north County Louth and so on. There is nobody scrutinising this.

A classic example of this lack of scrutiny is that the people of counties Cavan, Monaghan and north County Meath are concerned about the high tension cable planned for the area. I will return to this topic later. I guarantee that the Deputies and Senators from north County Dublin and north County Wicklow still have not woken up to the fact that similar high tension cables are planned to come across the Irish Sea and will come ashore in north County Dublin and north County Wicklow. There will be a new variation of thought on this matter and I believe it is worth examining.

I do not understand some of the technicalities and I would like to know more. I understand the power in these cables will come across under the sea as direct current, DC, and that it must be changed to alternating current, AC. I previously investigated the possibility of putting underground the remainder of the cable as DC and this requires a substation — I suppose it is called an inverter — to change the current from DC to AC. The substation needs to be very large and many would need to be constructed. In the meantime I have discovered the option of high tension light, which is a lighter version requiring a smaller conversion or inverter substation. I would like this option examined for the people of Cavan-Monaghan and north County Meath.

It seems the conditions required for installing high tension cable in the North are different from here. In the North the distance between private residences and the cable is a certain number of metres whereas, the last time I checked, the required distance here was less, but I am open to correction on this matter. At least, we should not worsen the situation.

I saw people on the 9 o'clock news holding up fluorescent tubes which began lighting up underneath the high tension cable. Any normal person would think it is significant that the tubes are being lit in these circumstances and that there must be implications for him or her. Such a reaction is normal and this issue does not affect me directly. This matter is worth examining. We should put underground any such cables within an agreed distance from private dwellings or from any conurbations or villages and so on. This guarantee should be given and factored into the costing.

I discovered a similar situation recently in the south of France where there are two huge lines under construction between France and Spain over the Pyrenees. The Minister will be delighted as a member of the Green Party to know these huge pylons are being constructed straight over the beautiful mountains up one side and down the other, with nobody being listened to along the way. There has been significant opposition to this by the group, Non à la très haute tension, THT. The mayors of all towns in the affected areas by the Pyrenees are opposed to this. The last time I checked I saw an announcement stating EDF, which is the company involved, is conceding a degree of underground cabling. I wish to know if this is the case because if it is, it undermines some of the arguments that EirGrid and the Minister have been offered to date which make the case that this is the method of choice throughout Europe. We need to be reassured about developments. What we should have is an integrated system, where the generation, transmission grid and the network are all part of one body and that one of these cannot be packaged and let float off.

Irish people do not realise that nearly 2% of power here is nuclear-generated at present. There are people discussing the merits of "Yes" and "No" in the nuclear debate. The Minister, Deputy Ryan, has asked previously for a debate on the nuclear issue and I have no objection to this. However, people should recognise the developments that have been made in the area of nuclear fusion as opposed to fission and the possible options for generating power in the future in a safer way to now.

At present, EDF has been supported by its Government in devious ways and in ways not clearly recognisable. They have done what our Government could not do under European legislation. EDF now owns the two main connections from Russia through to western Europe and extending down to the Iberian peninsula. It is buying and selling power every day at trough rates in eastern Europe and selling it at peak rates in western Europe, because with the two or three hour delay, this is how it works. I do not know whether other members of the House are aware that the price of electricity changes with every hour of the day. EirGrid will buy and sell power hourly, not daily, weekly or monthly. It needs extra power available at various times.

I wish to hear more about the elements of storage. I understand EirGrid will also have responsibility for Turlough Hill power station, which I welcome. The station in Turlough Hill pumps up water during trough times when demand is low. Instead of selling the power to houses it is used to pump water and when it is needed, the water flows down running the turbines and more electricity is created. There is approximately an 80% return on power generated. In other words, for the amount of electricity used to pump up the water, we can sell approximately 80% afterward, so there is a 20% loss. I do not know why more has not been done in the area of hydrogen storage which provides a 100% return and I believe more could be done with storage.

The roll-out of smart metering and the support for micro-generation is not happening quickly enough. I do not understand the reason it is possible to get a grant for installing solar panels but not for a micro-generator or a wind generator. We should examine these options and they should be connected to the national grid. I agree with the comments of Senator Jim Walsh in this regard. Those generating power should be able to supply the grid whether it comes from solar panels, wind generation or other sources. There is much to be done.

It is not the elements in this Bill which concern me but what could be done with our work. This could be a very nasty piece of work allowing for the loss of control of our electricity supply. It does not matter how much power is generated if its flow cannot be controlled. One could own 24 Ardnacrusha-type power stations but if a privatised EirGrid in the future indicated it did not want power from those sources on a given day because it was buying power from EDF in Berlin or Russia or somewhere else, then they are of no use and I do not think people recognise this. This is the reason I want the system integrated so that if we are generating power, we can use it. Senator Walsh may not be aware that the market could be opened to the private sector, but this does not mean the power would be bought. Our sources of power might be connected but there will not be any sale if the EirGrid of the future decides it wants to buy from EDF or from Spain. There has been no debate on this matter. I have not met one person in either of the Houses of the Oireachtas who understands that simple point. Such people think power generation is important, but it is utterly unimportant. When this Bill is enacted we could close down every source of power generation in the country and we would not even notice. I am concerned we are setting up something which would allow this as a possibility in the future.

Senator Dan Boyle

The Minister for Communications, Energy and Natural Resources in his opening contribution stated this Bill was an important part of Government energy policy and an important priority within the Government's set of priorities, and that the existence of the programme for Government shows its commitment towards energy in general.

The Bill is an important one. Some of its general principles have been examined by Senator O'Toole. Its essential principle was agreed in a previous Act which provided for a stand-alone distribution company as opposed to a generation company. Some of the fears expressed by Senator O'Toole continue to be real. I agree that the electricity distribution system is a vital piece of infrastructure. I do not believe there will be any political demand, in the short to medium term, for the privatisation of this country's electricity grid system. Any movement in that regard should be met with great reluctance.

The Bill outlines how the electricity grid can be added to. Some such projects are under way. The development of the North-South interconnector has not been without controversy. The development of an east-west interconnector is being considered. It is possible that an interconnector between Ireland and continental Europe will be developed in the near future. I would like to address each of those three projects.

It makes eminent sense, in the context of the all-island electricity market, that we develop a North-South interconnector. The infrastructure that will accompany the interconnector has been the subject of a great deal of controversy. The Minister acted wisely when he initiated a survey. The survey may not provide the answers that would please the public in the areas concerned. We should constantly strive to ensure there is public confidence in the system. It is no secret that Green Party public representatives in counties like Louth and Monaghan have expressed their reservations publicly. The Minister and the Department face a difficult task in squaring that circle. I am sure the final result will be the development of an interconnector that provides the electricity needed by everyone on this island and an electricity market from which we all can benefit.

We should also look forward to the development of an east-west interconnector. Senator O'Toole's suggestion that Ireland's use of a certain amount of electricity from the British market, a certain percentage of which is generated from nuclear sources, means that we use a certain amount of nuclear-generated electricity each year is based on a mathematical assumption. An alternative way of looking at that equation is used in this country's electricity generation market. Some people sign up to Airtricity services on the basis that they will receive electricity from renewable sources, even though they are aware that the electricity in question comes through an electricity grid that does not distinguish between renewable and other sources of energy.

Matters will become more problematic if a third interconnector is developed, this time between Ireland and continental Europe. It is likely that such a connector would be between Ireland and France, which has an electricity system that is 80% derived from nuclear sources. In such circumstances, we would have to ask ourselves questions of the type Senator O'Toole has raised during this debate. It is much more difficult to distinguish between electricity generated from nuclear and other sources in a country like France in which nuclear power is such a predominant policy choice.

I would like to comment on some other issues relating to the electricity grid. The Minister is still trying to deal with a challenge in that regard, although the ESB's 20-year investment programme might help him to overcome it. I refer to the ability of new participants in the electricity generation sector, especially those producing electricity from renewable sources, to become active participants in accessing the existing grid. Those who are involved in the renewable sector, or want to get involved in that sector, find it difficult to connect the power they produce to the grid. One of the benefits of the quick enactment of this Bill will be the development of a new way of addressing these problems. The past reluctance to facilitate new arrivals on the market seems to be dissipating. Such reluctance, which stemmed from a form of engineering conservatism, should not be part of our energy future. Many people in the system continue to take a conservative approach to new ideas. They feel that systems that worked in the past should continue to be used in the present. They think that any attempt to accept innovation will cause problems in the future.

If we are to develop a post-oil economy, we will have to adopt diverse approaches to technology. Political responses to new technology need to be encouraging and accommodating. While the Minister has been proactive in that regard, much needs to be done to address the deep-seated prejudices that exist in certain organisations. Such bodies need to adapt to meet the new realities. I hope this Bill represents an attempt to address such issues. It has my support, and that of my colleagues in this House, on those grounds.

The final issue I wish to discuss is the ability of EirGrid to meet its infrastructural needs through its own and other resources. It is obvious that decisions about the future of public expenditure are being taken at this time. The Government has prioritised certain infrastructural projects. There are many enabling mechanisms in this legislation that will allow EirGrid, as a stand-alone organisation, to address its own financial needs in the financial markets. That should be encouraged on one level because infrastructure is needed and the company's financial load needs to be organised properly. I am concerned that part of Senator O'Toole's argument will prove to be true if EirGrid does not need to meet a certain proportion of the cost of the infrastructure that is to be developed in the energy sector in the years to come. If the company has the ability to meet the financial commitments associated with the establishment of new infrastructure without assistance from the Government, it will be able to put more distance between itself and the Government and thereby have the ability to control that infrastructure in the future. I ask the Minister to respond to that suggestion at the end of the debate.

Senator Paul Bradford

I am glad to have an opportunity to say a few words on this important legislation. I listened with interest to the Minister's contribution and the subsequent contributions of colleagues on all sides of the House. The Bill, which has been strongly welcomed in general, will continue to be necessary as we make further progress in the interests of securing our energy supply.

It is interesting that we are debating electricity supply and distribution, in the context of our co-operation with other countries, a week or two after the great debate on the Lisbon treaty referendum. It is possible that interconnectors will mean that we get electricity not just from the United Kingdom but also from continental Europe. The debate on the possibility of connecting our electricity system with that of other countries is an indication of our interdependence with our neighbours in the UK and elsewhere in Europe, regardless of our decision on the Lisbon treaty. We must all work together on issues such as energy supply and climate change if we are to make progress.

I welcome the provisions of this legislation. I am pleased that powers will be devolved to EirGrid to allow it to make progress with the system of electricity supply. A limited degree of progress has been made with the North-South system. We are now providing for similar progress to be made with the east-west scheme. The general political consensus in this House in that respect is the sooner, the better.

It is obvious that security of electricity supply is of significant importance to the economy of this island. If we are to preserve and expand economic activity, we will need to have a reliable, consistent and guaranteed source of electricity. There have been a number of stories. Senator McFadden spoke about the most recent threat to our electricity supply. We have to recognise that our electricity supplies have been threatened over the past five or six years, during which time there has been an enormous increase in this country's economic activity. The electricity blackouts of the 1970s resulted from the oil crisis and the lack of generating capacity. It was a question of supply rather than demand. In recent times the threat of electricity blackouts has stemmed from the great physical demand for electricity in this country. It is a good thing that there is such demand but it is worrying that on a few occasions, apparently, we almost reached the point of having the lights literally go out, if I may be excused the pun. Having the interconnector up and running and providing a consistent and constant supply is good for industry and for the country.

This debate is welcome. I support the proposals and acknowledge that the ongoing need for energy security and supply must be addressed but we must also try to keep attention focused on the other side of the equation — energy conservation. That is never as popular a subject for debate as are energy generation or regeneration from renewables, nor does it get the same attention. We could do much more about energy conservation across every institution in this State. We need only look at the 25 light bulbs burning in this Chamber, presumably none being of the modern energy-saving nature. In every house and office much more progress could be made in the area of energy conservation. That needs further attention from the Minister and from the Government because it is a big part of the equation in respect of long-term energy supply. I ask the Minister to address this matter in the future by way of legislation or regulation. We need strong rules regarding saving of energy in so far as it can be done domestically, commercially and in industry.

The Bill mentions the interconnector and I support the concept. The fact that we are now to import energy from the United Kingdom and possibly thereafter from Europe brings to the fore the question of electricity generated by nuclear power. A number of my colleagues mentioned this point. It is good that we have reached the stage of maturity in this country that we can have a sensible debate on nuclear power. Perhaps we tiptoe towards it but the country has changed greatly and so has technology. Our economy and society have changed since the great debate, or non-debate, about Carnsore Point in Senator Walsh's county back in 1977 or thereabouts.

Senator Jim Walsh

It was 1978 to 1979.

Senator Paul Bradford

On that occasion Ireland said a big "No" to the concept of nuclear power but now when we are on the verge of importing further supplies of nuclear-generated electricity from the United Kingdom, it is incumbent on us to have a mature debate on future possibilities in respect of electricity generated in this way. The Minister has indicated on several occasions a willingness to open that debate, which would be helpful and welcome. We cannot run from the issue.

That is one side of the technology of electricity generation. On the other side there is generation from renewable sources and micro-generation, which was referred to by several speakers, including Senator Walsh. We must encourage and facilitate the maximum amount of domestic generation of electricity. I think in particular of farms in rural Ireland where the physical capacity exists to permit a small windmill-type process. I am not an expert in the technology but undoubtedly this capacity exists. Senator O'Toole pointed out that grant aid is available, although now somewhat reduced, for certain energy projects such as solar and geothermal generation of heat. It would be helpful, even if on a trial basis, if the Minister were to consider some type of grant aid to allow a limited number of people and households to generate their own supply of electricity. If electricity can be generated domestically and locally from environmentally friendly sources, which in most cases would be wind, that is a win-win situation. We should welcome it and try to put it in place.

The solution to our broader energy needs will not come from one source alone and the interconnector will play a significant role, possibly the major role, in years to come. There is the possibility to maximise the number of people who generate their own sources of electricity and that should be encouraged.

I know that there has been a difficulty concerning the buying back into the grid of locally generated electricity. I am not entirely up to speed on the regulations and legislation in that regard. Perhaps some progress has been made but if not, we should try to advance that part of the equation. In cases of which I was made aware, a number of people were put off from considering the generation of their own electricity.

My comments are more broad than they are deep but I welcome the legislation and look forward to progress being made by EirGrid. I appeal again to the Minister to scrutinise the issue of energy conservation in a fresh way and also to look at possibilities for local and domestically generated sources of power. Our country is surrounded by waves of a substantial nature and it appears that we are blown away by winds almost every second day. There must be many answers to our energy problems right here and these must be harvested to the maximum extent.

Senator Fiona O’Malley

I welcome the publication of this Bill and am glad to see it going through the Seanad. I especially welcome it because it establishes EirGrid as a separate entity. This was something that had to be done. I listened to previous speakers who worried about the possible privatisation of the power industry. They have nothing at all to fear. That is partly why EirGrid had to be separated from the ESB and established on an independent basis. The grid is vital to the distribution of energy and therefore must remain in public ownership. Although competitive forces have worked in other areas and, by definition, provide better results for us, true competition could not occur in this country until the grid was separated from the generating capacity provided by the ESB.

Others may argue — Senator O'Toole was of this opinion to some degree — that competition has been detrimental to the energy market. I agree with them in some instances. The power market is completely different from any other kind and is not subject to the usual market criteria. I do not believe that what we were required to do in terms of liberalisation as a result of European Union directives has worked in this country. Unfortunately, it has scared off any notion of competition within the power generation sector. That is not a good thing. The Bill gives that strength to a newly established EirGrid. Many players in the energy sector were concerned that it was only lip-service and that EirGrid was not to be separate from the ESB, but it is finally established. I know that EirGrid itself was keen to ensure it would be seen as entirely independent. It is an important step in the future development of our energy market that this should be the case.

I particularly welcome the establishment of an interconnector. I agree with Senator O'Toole's point that this is as significant as the setting up of Ardnacrusha which I believe was in 1923. The interconnector provides us with the ability to develop our wind capacity. Without the required investment, it would not be possible. Having observed the energy market closely over the past five years and noted the moratorium on wind projects, I realise the grid did not have sufficient capacity.

Part of the reason for the increase in electricity prices is the investment required to make up for the lack of investment in the past. Energy prices, including electricity prices, were kept at an artificially low level, which suited us, but this has now caught up with us. We need to make the investments that need to be made in the grid, particularly as we are connecting with Britain and further into Europe through the interconnector. It is a vital infrastructural component because it deals with the big problem of security of supply.

I very much look forward to us talking about having an interconnector extending directly to Europe because this would not only allow power to be supplied to us, as a peripheral nation, but would also allow us to sell power back to Europe, particularly given our wind capacity. I have no doubt that we will be able to generate more electricity and, as a consequence, funds for ourselves. The necessary investment is very timely and particularly important.

The Minister referred in his speech to the forthcoming publication of EirGrid's transmission development strategy to 2025. This is also very timely. The Minister did not refer to micro-generation, of which he is a fan. We are all becoming more energy savvy. I refer not only to farmers but also to those constructing their own houses, on which one can have one's own windmill. We could sell electricity to the grid but we will not be able to do so unless the necessary investment is made in the grid. I hope the transmission development strategy will take cognisance of the considerable possibilities that exist.

The Joint Committee on Climate Change and Energy Security invited EirGrid to a meeting to discuss the interconnector relatively recently. I am worried about the financing of the project. Senator O'Toole alluded to this. It will be more difficult to finance it than originally envisaged but we cannot afford to let it slip. In the past, when economic circumstances were a little tighter, we failed to invest in fundamental infrastructure. I hope we have learned from this and that the interconnector project will not suffer as a consequence.

I am worried about the cost to the end user. Investments by EirGrid have increased the price of electricity. People are very conscious of the increases in their domestic bills and it is also a major problem for industry. I know from multinational companies in particular that the cost of electricity in Ireland is a major worry. It is now higher up on the agenda and we need to be very careful about it. We will price ourselves out of the market if we do not keep an eye on rising costs.

This Bill provides us with an opportunity to consider our direction regarding energy development. It is always good to have the opportunity to think about what we are doing and where we are going. It is regrettable that the Minister did not mention micro-generation in his contribution. I accept the Bill's scope does not extend beyond interconnection but, as is the way, all these matters are tied together. I welcome the Bill and look forward to its swift passage and implementation.

Senator Feargal Quinn

I welcome the Minister of State and the Bill. We can remember the times when electricity supplies failed, not only when I was growing up but also later. In the past 40 or 50 years, we have been very fortunate in that when one turns on the switch one knows there will be electricity available. When one goes abroad one notices the hotels one stays in always have candles beside the beds because they are so used to the supplies failing.

My father had a holiday camp in Skerries and installed a generator in the 1950s because he knew he had to rely on electricity for various reasons. On the odd occasion, when all of Skerries went black and my father's holiday camp had bright lights, it was generally assumed he had some political pull. This was because he was the only person able to have an electricity supply regardless of its availability elsewhere.

Deputy Seán Power

We all believed the candles were for romantic reasons.

Senator Feargal Quinn

Perhaps they were.

The idea of providing for the transfer of ownership of the electricity assets from the ESB to EirGrid is one we must accept on the basis that there will be competition, thus lowering the price, as Senator O'Malley suggested. I am a little confused in this regard. I read about the Competition Authority welcoming the move because real competition was necessary but it seems real competition sometimes becomes almost more important than the price. This has happened in the electricity market recently in that the price sometimes had to increase in order to encourage competition. This seems to be operating back to front. Competition is essential and should lower prices but, in order to attract other operators, we sometimes allow prices to increase rather than decrease. I question the increasing of prices to create competition, of which I am fully in favour and which I advocate. The process should be the other way around.

On Wednesday, 18 June, the European Parliament voted in Strasbourg in favour of legislation to force big power utilities to sell off their distribution networks. The MEPs believe such a move would boost competition in the European Union's energy markets in that taking control away from powerful groups would encourage new entrants. The vote does not mean such a law will be passed but industry sources said some days ago that it could influence the EU Council of Ministers, which has the final say on the issue, to favour introducing such a law. Some member states, particularly France and Germany, which are home to big power companies such as E.ON and EDF, are opposed to the move. If a law were introduced in the Union to make markets much more liberalised, would it not leave utilities in Ireland vulnerable to takeovers by energy companies such as the giant Russian company Gazprom?

I welcome the construction of an interconnector between Wexford and Wales. I was impressed by the target completion date, which I read was originally 2010. The Minister referred to a completion date before the end of 2012. Is this a realistic target? When will it be decided whether the Government plans to permit EirGrid to borrow all the money required? Will it rely on taxpayers' money to partially fund the project as part of an arrangement involving a private operator building an east-west interconnector that will provide an alternative energy source? Will the Government be able to afford the project and how does the State intend to assist in the funding of the interconnector? This will clearly have an impact on EirGrid's borrowing requirements.

Senator Bradford urged that we include nuclear energy as part of the future debate. While it is not under discussion at present, I have a daughter who lives in France and I was highly impressed when I saw her electricity bill because it states the source of the energy and how much of it came from nuclear power. A substantial proportion does so in France, as approximately 70% of its electricity comes from nuclear power. While I do not argue in favour of nuclear power, the debate should be opened. I recently heard the Englishman, Professor Robert Pickard, speaking in favour of the nuclear power although the figures he provided were horrific. As far as can be ascertained, even if one buries nuclear waste in deep caverns, it will last for 300,000 years. Clearly, a major problem exists, not about nuclear power as such, but how one manages to get rid of the waste afterwards.

Like Senator O'Malley, I have been impressed to hear discussions on micro-generators and whether enough is being done in this regard. I heard a man speaking on radio last week about using the water and rivers in County Donegal to produce power. He had three or four sources of electricity coming from micro-generators attached to small rivers and streams in his own locality.

I refer to two other points that were raised. The first pertains to watching our energy costs and the move to more efficient lamp bulbs. As an aside, it is interesting to note that although steps in this regard have not yet been taken in this House, perhaps they will be. However, the trade defence instruments used by the EU have delayed the importation of efficient lamp bulbs from China and elsewhere. This is to protect the lamp bulb industry, probably in Germany or wherever it is located. While I believe we must get that balance right, not enough has been done in the aforementioned area of energy conservation. If that is the case, the trade defence instruments that are in place to protect European industries clearly are not acting in the best interests of such conservation.

As for the other issue I will touch on, I appeared on the "Tubridy Tonight" television show almost two years ago and was asked whether, were I to go into business now, I would go into the same business as I did 40 or 50 years ago. I replied I would not and that were I to do so now, areas I would consider would include energy conservation and the creation of new sources of energy. Having mentioned this, I was amazed by the volume of information that reached me via the post and otherwise. It came from people who were investing heavily, and in a highly entrepreneurial fashion, in wave, tidal, solar, wind and a number of other technologies I had not even thought of previously. Clearly, some will achieve a breakthrough and will enable us to benefit therefrom. I am confident that Ireland should continue to encourage and to invest. Moreover, when investing in education and in science and technology in particular, we must ensure we do so in many different ways.

I was impressed by a company from University College Cork that has developed a lamp bulb with so many benefits that the company has managed to sell it worldwide in different ways. While such enterprises are small, they are based on science and technology and Ireland must continue to encourage that. Our options should include ensuring that we encourage people to take up science and technology. While there has been a drift away from such subjects in schools, it may be possible to so do as I have heard recently that the provision of more points for maths and other subjects might encourage students to choose such options for their leaving certificates.

I am satisfied by the Bill's introduction and believe it constitutes the correct way to proceed. Members should encourage the Minister and the steps being taken in this regard. However, the cart must not be put before the horse, as the objective is to benefit Ireland, its citizens and those who will invest in Ireland in future. It is to ensure the presence of a reliable and price-conscious network with automatic competition that will facilitate price reductions and will encourage industry to come to Ireland and use its electricity. I thank the Minister for his comments and his encouragement.

Senator Martin Brady

I welcome both the Minister of State, Deputy Seán Power, and the Bill. While I agree with the Bill's contents, like my colleague, Senator Joe O'Toole, I have some reservations regarding EirGrid and the ESB per se in the future. Although the Minister indicated earlier there would be no question of privatisation, Members have heard that previously in respect of Telecom Éireann, which is about to gain its fourth owner within the space of a few years. The result has been that customers have received poorer services at increased costs and a considerable number of staff were shed. I am fearful in this regard because as Senator O’Toole noted, when the going gets rough, the easiest thing to do is to sell off the family silver, forget about it and to allow someone else mind the shop. This is one of my main concerns.

Some of the principal benefits of the interconnection include the enhanced security of supply. I believe significant capacity is available in the generating market in the United Kingdom to provide security of supply through the interconnector for Ireland. In addition, the United Kingdom is developing interconnectors with mainland Europe to further contribute to security of supply and market integration.

Senator O'Malley raised the question of prices, increases to the customer and so on and this is a matter about which Members must be highly vigilant. One should put the customer first but there is little if any mention of the customer per se in this Bill. As for customers, the people in counties Cavan and Monaghan and elsewhere in that region who are complaining should be listened to. I concur with previous speakers that they should be listened to because they are customers who believe their livelihoods, in respect of milk supplies from cattle and other animals, will be affected by this issue. If this is the case, they should be facilitated in some way.

While I am not love bombing Senator O'Toole, he mentioned other sources of energy in the House, one of which is water. Years ago mills operated in abundance throughout the country but in the northern part in particular, including counties Cavan, Monaghan and Armagh, which kept going factories, tanneries and mills. This type of energy is available and is ready to go and consideration definitely should be given to harnessing it.

I refer to the long-term sustainability of EirGrid, which is a semi-State company. As Senators O'Toole and Quinn have noted, unless one invests in the infrastructure, customers will receive a poorer service. This happened in other companies, such as Eircom, where the infrastructure has been stripped down and no investment has taken place. Members must be vigilant in this regard. While one could delve into many more aspects of this Bill, in general I welcome it.

Minister of State at the Department of Communications, Energy and Natural Resources (Deputy Seán Power)

I thank Members for the highly constructive debate on this Bill. In particular, I thank them for their expressions of support for the Bill and their appreciation of the significant benefits the interconnector may bring in respect of enhanced competitiveness, improved security of supply and increased penetration of renewable generation, an issue to which a number of Members referred. It is unusual to bring before the House a Bill for which there is such widespread support and this is greatly appreciated. I wish to assure Members that all possible steps are being taken to ensure the east-west connector is expedited and that the costs will be minimised. The issue of increasing energy costs is of key importance and the Government is committed to increasing competition in the electricity and gas markets as the best way to mitigate higher energy tariffs in the long term.

I wish to reaffirm the Government's commitment to retaining State ownership of strategic energy infrastructure, including the transmission and distribution networks and the east-west connector. Senator Brady has expressed some concern in this regard. We had a certain experience with Eircom, to which the Senator referred, but we have no intention of going down the same road this time.

Senators raised technical issues on putting transmission lines underground. The Minister dealt with this. We set up an independent body to carry out a study on this and its report will be published very soon. While the interconnector may not reduce the amount of carbon provided at EU level, it may assist us in lowering the cost associated with carbon. The Bill also provides that the costs may be recovered through transmission charges. Under the oversight of the Commission for Energy Regulation, EirGrid is working to ensure the burden for energy consumers is minimised.

The competitive process to select a developer for this project is not yet complete, so the details of the financial package for the project have not yet been finalised. I hope we can address this issue in greater detail at some stage in the near future.

I thank all Senators for their contributions. As in the Dáil, there is support on all sides for the Bill and Members seem happy to see the Bill go through the Houses as quickly as possible. I am sure they will be co-operative in facilitating that. I look forward to further discussion of the Bill on Committee, Report and Final Stages.

Question put and agreed to.

Committee Stage ordered for Tuesday, 1 July 2008.

An Leas-Chathaoirleach

When is it proposed to sit again?

Senator Jim Walsh

At 10.30 a.m. tomorrow.