I welcome the Minister of State, Deputy Ossian Smyth, and his officials. Before we begin to consider the Bill, I invite the Minister of State to make an opening statement.
Gas (Amendment) Bill 2023: Committee Stage
Good morning everyone. I thank the Cathaoirleach for inviting me to appear before the select committee today to take Committee Stage of the Bill.
The purpose of this Bill is to rearrange the corporate structure of Gas Networks Ireland. Gas Networks Ireland is currently a subsidiary company of Ervia, which was also the parent company for Irish Water. Irish Water has been moved out of that structure since the start of this year and is now called Uisce Éireann. This is a final housekeeping task whereby Gas Networks Ireland will become the gas company and Ervia will be retired as a legal entity. This law is a transfer of functions to make sure that every power Ervia had in the past is being devolved to Gas Networks Ireland. It is a technical piece of work to ensure continuity in order that Gas Networks Ireland can continue to function as it did in the past as a stand-alone entity and not as a subsidiary of Ervia.
I thank the Minister of State. We will commence our consideration of the Bill.
Sections 1 to 3, inclusive, agreed to.
NEW SECTION
Amendments Nos. 1 and 7 are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 1:
In page 6, between lines 19 and 20, to insert the following:
"Saver for certain business activity
4. Notwithstanding the repeal of section 17 of the Gas (Amendment) Act 2000 by subsection (2) of section 3, Gas Networks Ireland may engage in a business activity in accordance with any approval given under the said section 17 in effect immediately before the commencement of subsection (2) of section 3 insofar as the activity relates to the performance by Gas Networks Ireland of its functions for telecommunications purposes.”
The purpose of amendment No. 1 is to insert a saver provision to maintain the existing ministerial consents that were given to Ervia to carry out telecommunications related functions. Such ministerial consents were previously granted under section 17 of the Gas (Amendment) Act of 2000. However, section 17 of the Act is being repealed by section 3(2) of the Bill because its scope is considered to be too broad. The inclusion of a saver is necessary to ensure that the consents previously granted under section 17 of the Gas (Amendment) Act 2000 remain in place for Ervia and that this telecommunications related work can continue post integration into Gas Networks Ireland.
Amendment No. 7 inserts a new section 8B into the Gas Act of 1976 to provide for the conferring of telecommunications functions on the board that is Gas Networks Ireland post integration. This amendment is a future-proofing provision. It provides that where the existing ministerial consent is deficient in any way, the majority shareholding Minister may make in order to ensure that Gas Networks Ireland has the necessary ministerial consent for the future development of telecommunications business. Previously, these functions were confirmed under section 17 of the Gas (Amendment) Act 2000 but section 17 is being repealed by section 3(2) because it was considered too broad in scope. This is similar to what is happening with amendment No. 1.
Section 8B(1) provides that the majority shareholding Minister may confer on Gas Networks Ireland the function to develop, maintain and operate telecommunications infrastructure by way of an order. This power to make an order includes the power to amend and revoke it.
Section 8B(2) provides that such an order can only be made subject to the consent of the Minister for Finance following consultation with the Minister for the Environment, Climate and Communications, the Minister for Public Expenditure, National Development Plan Delivery and Reform and any other relevant Minister, having regard to their functions.
Section 8B(3) provides that a draft of the order shall be laid before each House of the Oireachtas and is subject to a positive resolution being passed by each House.
Section 8B(4) provides that for the purposes of section 8B telecommunications infrastructure means infrastructure and equipment which permit the conveyance of signals for telecommunications and electronic communications. The issue of the telecoms function was further developed with the Office of the Attorney General, the Department of Housing, Local Government and Heritage of the potential legal and policy issues that were to be considered. The section provides that the future development and telecommunications business is undertaken in accordance with ministerial consent. This specifically corresponds with the intent behind head 14 of the general scheme of the Bill, which was approved by the Government. On this basis, I propose to make these amendments.
Amendment agreed to.
Sections 4 to 9, inclusive, agreed to.
Amendment No. 2 has been ruled out of order as it is outside the scope of the Bill.
Amendment No. 2 not moved.
Sections 10 and 11 agreed to.
SECTION 12
I move amendment No. 3:
In page 9, line 29, after “arrangement” to insert “(including any wayleave)” .
Amendment No. 3 relates to section 12, which deals with the transfer of rights and liabilities and the continuation of leases, licenses and permissions granted by a dissolved body. While this section is a standard technical provision to transfer land and any other property and all contracts agreements and arrangements, a technical amendment is required to include all interests in lands and all rights, powers and privileges relating to or connected with such lands currently held by Ervia. For the avoidance of doubt in the specific property matter, the inclusion of the term "any wayleave" was deemed necessary. On this basis, I propose that the select committee approve this amendment.
Does any member wish to speak to amendment No. 3? No.
Amendment agreed to.
Section 12, as amended, agreed to.
Sections 13 to 17, inclusive, agreed to.
SECTION 18
As amendment No. 4 is in my name, I cannot sit in the Chair. I ask Deputy Bruton to take the Chair.
Deputy Richard Bruton took the Chair.
Amendments Nos. 4, and 8 to 13, inclusive, are related and may be discussed together.
I move amendment No. 4:
In page 12, to delete lines 25 and 26 and subsitute the following:
“(ii) by the insertion of the following definitions:
“ ‘Act of 2014’ means the Companies Act 2014;
‘carbon budget’ has the meaning assigned to it in section 1 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the total amount of greenhouse gas emissions that are permitted during the budget period;
‘climate action plan’ has the meaning assigned to it in section 4(1)(a) of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the annual plan prepared by the Minister to pursue the national climate objective;
‘emissions’ has the meaning assigned to it in section 1 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means in relation to greenhouse gases, emission of those gases into earth’s atmosphere attributable to industrial, agricultural, energy or other anthropogenic activities in the State;
‘greenhouse gas’ has the meaning assigned to it in section 1 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means—
(a) carbon dioxide,
(b) methane,
(c) nitrous oxide,
(d) hydrofluorocarbons,
(e) perfluorocarbons,
(f) sulphur hexafluoride, or
(g) nitrogen trifluoride;
‘National Climate Change Adaptation Framework’ has the meaning assigned to it in section 5 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the plan prepared by the State which specifies the application of adaptation measures in different sectors and by a local authority in its administrative area;
‘National Climate Objective’ has the meaning assigned to it in section 3(1) of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the State’s obligation to reduce the extent of further global warming, to pursue and achieve, by no later than the end of the year 2050, the transition to a climate resilient, biodiversity rich, environmentally sustainable and climate neutral economy;
‘National long term climate action strategy’ has the meaning assigned to it in section 6 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the long term strategy which specifies the manner in which it is proposed to achieve the national climate objective;
‘sectoral adaptation plan’ has the meaning assigned to it in section 6 of the Climate Action and Low Carbon Development Act 2015 (as amended), and means the plans made by each Minister of the Government for which each such Minister of the Government has responsibility;
‘sectoral emissions ceiling’ has the meaning assigned to it in section 6C of the Climate Action and Low Carbon Development Act 2015 (as amended).”,”.
Some subsequent amendments are contingent on amendment No. 4, which seeks to insert new definitions into the Bill. This is about updating interpretations of a section of the Bill to include various terms that are defined in the Climate Action and Low Carbon Development Act 2015, as amended. It makes sense to do this in the context of the subsequent amendments I have proposed. The Minister of State will see the language is consistent with the climate Act the Government passed in 2021. It is critically important that we have an alignment of our gas Acts with that highly significant legislation we passed two years ago.
Amendment No. 13 is also in my name so I will speak to that. This amendment would update sections 10A and 10B of the Gas Act to give both the Commission for Regulation of Utilities, CRU, and the Minister additional power to issue a direction to the board. The proposed updates to section 10A of the Gas Act 1976 are related to the powers of the CRU, and would allow it to assess gas connection applications in the context of that expected emissions profile for connections and its contribution to the decarbonisation of Ireland's economy. This is proposed in the context of the recent advice to the joint Oireachtas committee from the Climate Change Advisory Council, CCAC. That advice recommended amendments to section 10A of the 1976 Gas Act to allow for refusal of connections for fossil fuel generation for data centres. The committee sought this advice from the CCAC following communication from the Minister, Deputy Eamon Ryan, and Gas Networks Ireland, GNI. Following the Minister's recommendation to GNI to stop issuing connections for data centres, it stated it was obliged to offer all third-party connection applications to the network.
The first set of proposed updates outlined in paragraphs (i) and (j) of amendment No. 13 are considered necessary to enable the CRU to issue a future direction to the board following its recent publication of Review of Large Energy Users connection policy: Call for Evidence. That call for evidence from the CRU suggests it will be necessary for systems operators, and that is all system operators of both gas and electricity, to "consider the expected emissions profile of the facility proposed under the connection application and ... its contribution to the decarbonisation of Ireland’s economy". The proposals outlined in the amendment are designed to ensure the legislative provision is provided for in the Gas Act. The proposed change to section (7B) simply includes a provision to allow the system operator to refuse a gas connection, if it is considered to not be in the public interest to provide the additional capacity.
Is there a provision in law already for either the State or one of its agencies to decline such a connection?
I support the amendment but I am interested in the Minister's response.
I thank Deputies Leddin and O'Rourke for tabling these amendments. As Deputy Leddin said, their aim is to broaden the functions of GNI to extend to new gases, such as biomethane and things beyond traditional natural gas, and give it a path to decarbonisation. It is also about preventing large energy users, including data centres, from directly connecting to the gas grid. I am interested to hear these proposals. I have not had sufficient time to accept these amendments on the basis I have not had time to legally check them through to make sure they are the right thing to do, but I will discuss them with members today. They can resubmit them on Report Stage. The reason for that is we will be in a better position to discuss the amendments on Report Stage because I will have had more time to legally assess them.
In the meantime, between now and Report Stage, the EU gas package is likely to have been agreed. That package is a combination of regulation and directive on the future of gas in Europe. It very much includes these considerations on decarbonisation and the use of biomethane. The Spanish Presidency expects to conclude the gas package by the end of this calendar year. I understand that it has gone through trilogue and is now at the stage of the very final technical issue being ironed out. I expect it will be ready by the end of the year. That is a European decision by member states on decarbonisation of the gas networks that considers how biomethane, hydrogen and other gases are worked into the grid. It would be unwise for us to legislate for that weeks before an EU decision comes out. If it does not happen in the meantime that is another question, but I expect that when we reach Report Stage in January we will be much better informed on that and I will have had a chance to discuss it. I thank the Deputies for tabling it.
Is the Minister of State in a position to comment on Deputy Farrell's question on whether there are provisions elsewhere, or whether GNI has compliance obligations under carbon planning and carbon-----
I will address Deputy Farrell's question. He asked whether we had a legal power to prevent connections to large energy users, or to data centres, directly from the gas network. I do not believe we do. However, my Department issued a policy statement disallowing direct connections by data centres to the gas network or, in other words, so-called islanded data centres. These are data centres that set up with a direct gas connection, which they then use to generate electricity. It is worth looking at whether we need a legal underpinning for this, but we will not legislate for it today.
I also want to discuss the question about the climate Act and whether its provisions will apply to GNI following this reorganisation of the structures.
Gas Networks Ireland, GNI, is a semi-State public body. Its shares are 100% controlled by Ministers, and it is therefore subject to the same criteria as other State bodies regarding its climate obligations. In particular, Gas Networks Ireland is a relevant body under the Climate Action and Low Carbon Development Act 2015, as amended by the Climate Action and Low Carbon Development (Amendment) Act 2021. The term "relevant body" includes a public body that is defined by reference to the Freedom of Information Act 2014, which GNI is subject to and will continue to be subject to with the passage of this Bill. As it is a relevant body, GNI is obligated to perform its functions in a manner consistent with the most recently approved climate action plan, the most recently approved national long-term climate action strategy, the most recently approved national adaptation framework and approved sectoral adaptation plans, the furtherance of the national climate objective, and the objective of mitigating greenhouse gas emissions and adapting to the effect of climate change in the State.
Our policy is that by 2030, 80% of our electricity will be generated from renewable sources. Clearly, that means a large reduction in the volume of gas being used. At the same time, we are building new gas power stations. In other words, we are going to have more capacity to burn gas at peak times to make up for times where we do not have sufficient renewables to power the grid.
Gas Networks Ireland does not get a free pass on its decarbonisation. It has to have a decarbonisation strategy, even though its function up to now has been burning fossil fuels. A lot of that will be based on how Gas Networks Ireland manages biomethane and hydrogen. As those decisions are being ironed out in the EU in the coming weeks, I would suggest that we discuss this on Report Stage. As a result, I am not proposing to take these amendments.
I alert Deputy O'Rourke that his amendments Nos. 8 to 12, inclusive, are in this group, which the Minister of State is proposing not to accept at this stage but to reconsider on Report Stage. Deputy Alan Farrell has offered but I will bring in Deputy O'Rourke first, in fairness, and then I will bring in Deputy Farrell.
I am sorry I was late. I was caught on a Topical Issue which was also on climate-related matters. It is the nature of the Oireachtas schedule.
There is a clear pattern in the amendments that are coming from both Government and Opposition in this case. It is about the future of the gas network, what drives the decision-making of Gas Networks Ireland, and how aligned that is with what should be overarching Government policy, including the climate Act, carbon budgets and the climate action plan, and to try to ensure, in legislative terms, that there is a primacy there. We acknowledge the important role Gas Networks Ireland plays and will continue to play, but it is really important there is a consistency across Government. It is a very important actor in our energy transition and our energy system. While on the one hand we are pushing for reductions in emissions, it would be perverse to have a situation where there was any sort of incentivisation for the expansion of the natural gas network, for example. I think that is the thrust of a lot of the amendments.
I ask of the Chair of the committee, Deputy Leddin, what to his recollection was the deadline for these amendments, just before I say anything more?
I believe it was Thursday or Friday.
Thursday or Friday. I thank Deputy Leddin. I accept the Minister of State's point with regard to reserving his right to view these at a later date, but four days is a sufficient period of time for his Department to have done the background work on the proposed amendments. It is particularly appropriate given it is one of his party colleagues who brought it to him, in part. I am a little confused that we are not in possession of a ministerial response at this time. It is not a criticism. It is more the process. The Minister of State knows the process. I find it a little bit concerning that the Department, for instance, does not have an answer to the question I posed. I know the Office of the Parliamentary Counsel, OPC, is busy but we should be able to get these answers pretty promptly. I ask that the Minister of State and the Department have an appropriate level of response available when we return. These things should not be a surprise and four days is ample time for the Department to prepare when it knows it is coming to this committee for Committee Stage.
Obviously we are going to return to this on Report Stage but I have related questions on foot of which I may or may not table amendments on Report Stage. Would the Minister of State be open to an amendment to say there would be no use of gas by the gas network from any LNG terminal? We should not be investing in further fossil fuel infrastructure, given the scale of the climate crisis. Would he support legislating for there being no further connections to the gas network by data centres, which is kind of related to what we are getting at here? Finally, is there a date on which the Government will commit to phasing out all use of fossil fuels by GNI and the gas network?
I will go to Deputy O'Rourke first. I absolutely agree that decarbonisation is going to be a critical function for Gas Networks Ireland. It has a critical role to play because it is providing sometimes up to half of the country's electricity. It has historically been a fossil fuel company and now it is moving away from that. We are reducing our gas use in the future and we are moving towards hydrogen and biomethane. It is essential it has a clear strategy for that.
Deputy Farrell feels that he has not got a response from the Minister. I have given a response to the questions.
That is not what I said.
I think what the Deputy is saying is that he feels that I have had sufficient time to give a formal response.
Yes.
I am giving him a formal response. The formal response is no, I am not accepting these amendments. The reason I am not accepting these amendments is that it would be unwise to legislate for something at national level weeks before it was being agreed at European level. Legislating on the meaning of biomethane, hydrogen and decarbonisation strategies for gas companies, when that is being agreed at European level, would not make sense. I want to be very clear on that. It does make sense to come back when we have had that ruling at the end of the December and discuss it on Report Stage. If the Deputy wants to ask more questions about these amendments he is welcome to.
I will move to Deputy Murphy, who asked if I am open to an amendment to ban the use of gas from LNG in Gas Networks Ireland. I am happy for Deputy Murphy to table an amendment like that if he wishes on Report Stage. Bear in mind that up to 80% of our gas supply comes from the UK. The gas we get from the UK has been sourced either from the North Sea, Norway, Qatar or other sources that are delivered by LNG. How that would be implemented in practice and how we would ban the use of gas imported through LNG terminals in the UK, I do not know. If the Deputy would like to table an amendment that explains how that can be done, I would be interested to see it.
Do I get to press the amendment or can I come back in on the debate?
The Deputy can certainly press it but the Minister of State has indicated his opposition.
Okay. At this point I will not. To respond to the Minister of State's comments, I accept at the outset that the intent of this Bill is about dissolving Ervia.
The intent of the Department and the Minister at the outset was not to do wholesale revision of the Gas Acts. Having said that, I am hearing from the Minister of State that we need to wind down the use of gas in this country. That would be consistent with the objective of net zero. In that regard, it is reassuring to hear from the Minister of State that Gas Networks Ireland is a relevant body under the climate Act. I suggest it does not act as a relevant body in the sense that its current strategy document sets out increased use of gas, which is concerning. It is reassuring that the Minister of State has clarified the alignment of gas legislation and Gas Networks Ireland with the important climate Act we passed two years ago.
I agree with the Minister of State that in the context of the European Union publishing the gas package, which we hope will happen in the next few weeks, it might be premature to do these revisions at this point. However, it would be good to hear a commitment from the Minister of State that the sentiments expressed through the amendments brought forward by me and Deputy O'Rourke are critically important and should be taken seriously by the Minister and Department. We need to reduce our use of fossil fuels and that includes reducing gas in this country in the coming years and decades. There needs to be an orderly wind-down of gas as we go through to 2050.
The issue raised by the Climate Change Advisory Council is serious. It has been well publicised and highlighted in this committee and across the media. It needs to be addressed. The intent of my amendment No. 13 was to address the issue accordingly. I accept, however, that the Minister of State needs to look at the issue. I welcome his commitment to come back on Report Stage. It is not something we can put on the long finger. There is an issue there with respect to connection. Gas Networks Ireland has been obliged to connect large energy users to the gas network. I welcome the Minister of State's comments that he will come back on Report Stage in that regard.
Is Deputy O'Rourke proposing to amend this Bill or a different Bill? One of his amendments refers to "the Commission". Is that the CRU?
I am proposing to amend this Bill. I will pick up on some of the points made by Deputy Leddin. I welcome the opportunity to come back on Report Stage and I expect I will. It would be important from my perspective that we get a sense or indication, perhaps not at this Stage or even on Report Stage, of an intention for the direction of travel and an understanding of the intent from this side of the table, if you like, in respect of the proposals here. I will run through some of my proposals. Amendment No. 8 intends to give CRU powers over the connections and disconnections policy.
Amendment No. 9 requires greenhouse gas emissions to be a consideration in policy and would give the CRU some authority in that regard.
Amendment No. 10 requires the climate action plan and carbon budgets to be specific considerations with regard to connections policy.
Amendment No. 11 is similar to Deputy Leddin's amendment No. 13. It intends to give the transmission system operator the power to refuse connection on the basis of climate and greenhouse gas emissions. That is relevant to, for example, islanded data centres.
Amendment No. 12 requires consideration of upstream pipelines and the impact on greenhouse gas emissions.
As I said in my previous contribution, there is a theme to these amendments. They are seeking to do similar things in different texts. I expect we can find compromise texts if the Government and Ministers were of a mind to move in that direction. The main thing I am looking for is some sort of indication in that regard. As I said, I do not intend to call votes on my amendments. I can reintroduce them on Report Stage and reconsider the situation at that stage. I am interested in the willingness or not of the Government to move in this direction.
I thank the Deputy. I agree with what he is trying to do here. I want to see a clear and legal path towards decarbonisation for Gas Networks Ireland. It is worth examining and clarifying the powers of the CRU to direct gas connections and so on. However, this Bill is a simple transfer of functions from Ervia to Gas Networks Ireland. That is the scope of the Bill. We can discuss these issues at more length and in a much more informed way when the gas package is agreed by the EU at the end of the trial process before the end of December, which is the intention of the Spanish presidency. We will be in a much better position when we come back in January to discuss how we are going to achieve our objectives.
Amendment, by leave, withdrawn.
Amendments Nos. 5 and 6 are related and will be discussed together.
I move amendment No. 5:
In page 12, between lines 27 and 28 to insert the following:
“(i) in subsection (1)—
(I) by the substitution of the following subsection for subsection (1)(a):
“(1) (a) The Board shall own, operate, develop and maintain a system for the transmission and distribution of natural gas being a system that is both economical and efficient and in so far as practicable perform its functions in a manner consistent with—
(i) the most recent approved climate action plan,
(ii) the most recent approved national long term climate action strategy,
(iii) the most recent approved national adaptation framework and approved sectoral adaptation plans,
(iv) the furtherance of the national climate objective, and
(v) the objective of mitigating greenhouse gas emissions and adapting to the effects of climate change in the State.”,
and
(II) in subsection (1), by the insertion of the following paragraph after paragraph (b):
“(c) nothing in paragraph (a) shall be construed as imposing on the Board, either directly or indirectly, any form of duty or function to promote, advertise or incentivise new connections to transmission or distribution gas systems.”,”.
Amendment No. 6 is in the name of Deputy O'Rourke. Amendment No. 5 is in my name. This amendment intends to amend the functions of the board, that is, Bord Gáis Éireann. The first element of the amendment intends to require the board to own, operate and maintain a system for the transmission and distribution of natural gas in a way that aligns with section 15 of the climate Act. I referred to this in my earlier contribution. Section 15 of that Act requires the relevant bodies, the majority of which we would call public bodies, to perform their functions insofar as practical in a manner consistent with the climate Act. This would include the climate action plan, the long-term climate action strategy, the most recently approved national adaptation framework and approved sector adaptation plans in furtherance of the national climate objective, the objective of mitigating greenhouse gas emissions and adapting to the effects of climate change in the State. As it is a State-run organisation, it should not be at all controversial to align the functions of the board in this way.
The second aspect of the amendment further updates the functions of the board to ensure there are no requirements on the board to promote or advertise new gas connections. The Minister of State has largely addressed this point during our previous discussion. He has reassured us that Gas Networks Ireland is a relevant body under the climate Act. It is good to have that on the record. it is important that we remind Gas Networks Ireland it is a relevant body and the Minister of State has done that, which is welcome. This amendment is related to my earlier amendment No. 4. Those two amendments intend to do the same thing. I accept that the Minister of State has addressed the point. Perhaps he wishes to speak again. I do not intend to press this amendment.
Amendment No. 6 amends the Gas Act 1976 by mandating the board to maintain a natural gas system that is aligned with the carbon budget and is economical and efficient. The amendment is similar to that proposed by Deputy Leddin.
Taking these two amendments together, I remind the committee that Gas Networks Ireland is a relevant body under the climate Act and will continue to be. That should not be changed by this transfer of functions from Ervia to Gas Networks Ireland. As a relevant body, Gas Networks Ireland is required to perform its functions in a manner that is consistent with the most recently approved climate action plan, the most recently approved national long-term strategy, the most recently approved national adaptation framework and approved sector adaptation plans.
It must also perform its function in a manner consistent with the furtherance of the national climate objectives including mitigating greenhouse gas emissions and adapting to the effects of climate change in the State.
The role, functions and mandate of Gas Networks Ireland going forward will be considered further in the implementation of the gas package and the directive of the European Parliament and the Council and common rules for internal markets in renewable and natural gases and hydrogen, which is amending directive 2018/2001. I do not propose to accept the amendment as the implementation of the European directive on common rules for internal markets in renewable and natural gases and in hydrogen is a more appropriate legislative vehicle for consideration of the decarbonisation of the gas grid in Gas Network Ireland's role functions, as provided for in the Gas Act of 1976, as amended.
Deputy Leddin has indicated that he is withdrawing his amendment.
I will come back in briefly, if I may. In the second part of my amendment I wanted to clarify in law and make sure, essentially, that the board is not required to promote or advertise new gas connections. I will not be pressing my amendment but this is an issue that needs clarity. I would welcome the Department looking at this and coming back to us about it on Report Stage. If it is the case that Gas Networks Ireland has to actively seek new connections and new business under law, that is not where we want to be. It is completely opposite to the direction of travel that this country needs to take. I would welcome the Minister of State taking the opportunity on Report Stage to clarify the situation in that regard.
I thank Deputy Leddin. We can look at that. It is a novel proposal that Gas Networks Ireland would be banned from advertising or promoting new gas connections. I will look at it and come back to the Deputy on it in January.
Amendment, by leave, withdrawn.
I move amendment No. 6:
In page 12, to delete lines 28 to 30 and substitute the following:
“(i) by the substitution of the following subsections for subsections (1) and (2):
“(1) (a) The Board shall own, operate, develop and maintain a system for the transmission and distribution of natural gas being a system that is carbon budget-aligned, economical and efficient and appears to the Minister to be requisite for the time being.
(b) Nothing in paragraph (a) shall be construed as imposing on the Board, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court to which it would not otherwise be subject.
(c) Nothing in paragraph (a) shall be construed as imposing on the Board, either directly or indirectly, any form of duty or function to promote, advertise or incentivise new connections to transmission or distribution gas systems.
(2) The Board shall carry out its obligations under this Act in accordance with the Natural Gas Market Directive and carbon budgets and sectoral emissions ceilings under the Climate (Amendment) Act 2021 and having regard to the need to ensure the safety and security of the transmission, distribution and supply of natural gas and having regard to the decarbonisation of the energy system.”,”.
I will withdraw this amendment. I reserve the right to reintroduce it on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 7:
In page 13, between lines 5 and 6, to insert the following:
“(c) by the insertion of the following section after section 8A:
“Conferring of functions in relation to telecommunications infrastructure on Board
8B. (1) Subject to subsection (2), the majority-shareholding Minister may by order confer on the Board the function to develop, maintain and operate telecommunications infrastructure, where the majority-shareholding Minister thinks proper and specifies in the order, and any such order may provide for the performance of the function subject to conditions specified in the order and may contain such incidental and supplementary provisions as the majority-shareholding Minister thinks necessary or expedient for giving full effect to the order.
(2) An order made under subsection (1) shall be made subject to—
(a) the consent of the Minister for Finance, where the majority-shareholding Minister is not the Minister for Finance,
(b) the consultation of the Minister,
(c) the consultation of the Minister for Public Expenditure, National Development Plan Delivery and Reform, and
(d) the consultation of any other Minister of the Government (other than the Minister for Finance where the consent of that Minister is required in accordance with paragraph (a)), who in the opinion of the majority-shareholding Minister having regard to the functions of that other Minister ought to be consulted.
(3) When an order under this section is proposed to be made by the majority-shareholding Minister, a draft of the order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving the draft has been passed by each such House.
(4) In this section, ‘telecommunications infrastructure’ means infrastructure and equipment which permit the conveyance of signals for telecommunications and electronic communications.”,”.
Amendment agreed to.
I move amendment No. 8:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10A, in subsection (3), by the substitution of the following paragraphs for paragraphs (b) and (c):
“(b) the Commission shall have the power to examine the reasons for making an offer under paragraph (a) and to give appropriate directions with regard to the volume and rate to be offered and with regard to future disconnection, decommissioning or repurposing in accordance with carbon budgets, without prejudice to any direction given under subsection (4),
(c) where connection to the facility of the operator is required by the applicant or enhancement of that facility would be necessary to grant the application, an offer made under that subsection—
(i) shall include the terms for such a connection or enhancement including any charges for connection or enhancement, an assessment of green house gas emissions, and details of all technical aspects relating to the connection or enhancement that might be reasonably required by that person, and
(ii) at the request of the applicant, may be on the basis that the applicant constructs, or that either or both the applicant and the operator make arrangements to have constructed, the connection to the facility, and the ownership of any such connection constructed or arranged to be constructed by the applicant shall, subject to subsection (10), be a matter for agreement between the parties.”,”.
I will withdraw all of my amendments in this grouping. I reserve the right to reintroduce them on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 9:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10A, by the substitution of the following subsection for subsection (4):
“(4) The Commission may by direction provide for—
(a) the matters to be specified in an agreement for third party access, including terms and conditions relating to price, GHG emissions, disconnection, decommissioning or repurposing in accordance with carbon budgets,
(b) the matters to be specified in an agreement for connection to or enhancement of the facility of the operator,
(c) the terms and conditions, including terms and conditions relating to price of the connection or enhancement, upon which an offer for connection to or enhancement of the facility of the operator is made,
(d) the methods for determining the proportion of the costs to be borne by the person making the application for connection to or enhancement of the facility of the operator and to be borne by the operator being costs which are directly or indirectly incurred in carrying out works under an agreement or making an enhancement or connection or modifying an existing connection,
(e) the terms and conditions upon which applications for an agreement are to be made and the period of time within which an offer or refusal pursuant to an application is to be made by the operator,
(f) publication by a storage operator of information on the specific storage facility, or the parts of the storage facility, or the ancillary services to which access is offered,
(g) publication by an operator of information on the access procedure proposed, (h) any other matters which the Commission considers necessary or expedient for the purpose of making an offer for third party access, or connection to a facility, and (i) terms and conditions in order to ensure consistency with the State’s carbon budget programme.”,”.
Amendment, by leave, withdrawn.
I move amendment No. 10:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10A, by the substitution of the following subsection for subsection (7):
“(7) Subject to subsection (7A), an operator may refuse to enter into an agreement under subsection (2)—
(a) on the basis of a lack of capacity in its facility save where it is economical for the operator to make the necessary enhancements to the capacity of the facility in accordance with such conditions as may be specified by the Commission in a direction made under subsection (4),
(b) on the basis of a lack of connection to that facility save where the person making the request is willing to pay for such a connection in accordance with such conditions as may be specified by the Commission in a direction made under subsection (4),
(c) where, to enter into an agreement under this section would be likely to involve the operator in a contravention or a breach of—
(i) this Act, the Electricity Regulation Act 1999, the Gas (Amendment) Act 2000, or the Gas (Interim) (Regulation) Act 2002,
(ii) regulations made under any of the aforesaid Acts,
(iii) the conditions of any licence granted or consent given to the pipeline operator under this Act or the Gas (Interim) (Regulation) Act 2002,
(iv) the code of operations (within the meaning of section 13 of the Gas (Interim) (Regulation) Act 2002) of the operator, or
(v) a public service obligation imposed on the operator by an order made under section 21(1) of the Gas (Interim) (Regulation) Act 2002,
(d) the person making the application does not undertake to be bound by the terms of the code of operations of the operator referred to in paragraph (c)(iv) in so far as those terms are applicable to that person, or
(e) the carbon budget programme or sectoral emissions ceilings as made under the Climate (Amendment) Act 2021.”,”.
Amendment, by leave, withdrawn.
I move amendment No. 11:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10A, by the insertion of the following subsection after subsection (7A):
“(7B) The transmission system operator and distribution system operator shall be entitled to refuse connection on the grounds of long-term Green Houses Gas emissions or inconsistency with the carbon budget programme or sectoral emissions ceilings as made under the Climate (Amendment) Act 2021.”,”.
Amendment, by leave, withdrawn.
I move amendment No. 12:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10B, in subsection (2), by the substitution of the following paragraph for paragraph (c):
“(c) where connection to or enhancement of the upstream pipeline of the operator is required by the applicant, an offer made under that subsection—
(i) shall include the terms for such a connection or enhancement, including any charges for connection or enhancement, and details of all technical aspects relating to the connection or enhancement that might be reasonably required by that person,
(ii) shall include details of GHG emissions associated with the development and operation of that connection or enhancement
(iii) on request of the applicant, may be on the basis that the applicant constructs, or that either or both the applicant and the upstream pipeline operator make arrangements to have constructed, the connection to the pipeline, and the ownership of any such connection constructed or arranged to be constructed by the applicant shall, subject to subsection (8), be a matter for agreement between the parties,
(iv) the conditions of any licence granted or consent given to the upstream pipeline operator under this Act or under the Gas (Interim) (Regulation) Act 2002,
(v) the conditions of any licence, lease or permit granted to the upstream pipeline operator under the Petroleum and Other Minerals Development Act 1960, or
(vi) the upstream pipeline operator’s code of operations, being a code, approved by the Minister for Agriculture, Food and the Marine, in respect of all technical design, operational and other requirements relating to operation of the upstream pipeline in respect of which the holder has been granted a consent by that Minister under section 40(1), or”,”.
Amendment, by leave, withdrawn.
I move amendment No. 13:
In page 13, between lines 5 and 6, to insert the following:
“(c) in section 10A— (i) in subsection (4), by the insertion of the following paragraphs after paragraph (h):
“(i) the terms and conditions upon which applications for new connections or expansion of the gas network must be assessed to consider the expected emissions profile of the new connection, and of its contribution to the decarbonisation of Ireland’s economy;
(j) the terms and conditions upon which an application may be refused if it is considered not to be in the public interest to provide additional capacity to meet the requirements sought.”,
and
(ii) by the insertion of the following subsection after subsection (7A):
“(7B) The Board shall be entitled to refuse connection on the grounds of the expected emissions profile, long term carbon emissions or inconsistency with the carbon budget programme or sectoral emissions ceilings as per sections 6A and 6C of the Climate Action and Low Carbon Development Act 2015 (as amended).”,
and
(d) in section 10B, in subsection (3), by the insertion of the following paragraphs after paragraph (f):
“(g) the terms and conditions upon which new connections or expansion of the gas network may be refused on the grounds of the expected emissions profile, long term carbon emissions or inconsistency with the carbon budget programme or sectoral emissions ceilings as per sections 6A and 6C of the Climate Action and Low Carbon Development Act 2015 (as amended),
(h) the terms and conditions on large energy users to facilitate accurate hourly emissions reporting, grid carbon intensity transparency and optimisation of computing loads to maximise use of renewables and minimise carbon emissions, and
(i) on undertakings on organisations operating in the gas sector in the general economic interest, public service obligations which may relate to security, including security of supply, regularity, quality and price of supplies, and environmental protection, including energy efficiency, energy from renewable sources and climate protection.”.”.
Amendment, by leave, withdrawn.
Amendment No. 14 has been ruled out of order as it is deemed to be outside the scope of the Bill.
Amendment No. 14 not moved.
Deputy Brian Leddin resumed the Chair.
Thank you, Deputy Bruton, for taking the Chair.
I move amendment No. 15:
In page 14, between lines 12 and 13, to insert the following:
“(f) by the insertion of the following section after section 17:
“Reporting
18. (1) A pipeline operator shall on an annual basis prepare a statement for the approval of the Minister setting out—
(a) areas of the gas network for disconnection, decommissioning or repurposing in accordance with carbon budgets as set out in the Climate (Amendment) Act 2021,
(b) gas supply and demand reduction plans and scenarios and targets in accordance with carbon budgets as set out in the Climate (Amendment) Act 2021, and
(c) conditions on large energy users to facilitate accurate hourly emissions reporting, grid carbon-intensity transparency so as to maximise use of renewables and minimise GHG emissions.
(2) The Minister may give directions to an upstream pipeline operator from time to time in respect of operations in accordance with carbon budgets as set out in the Climate (Amendment) Act 2021.”.”.
This amendment relates to reporting obligations on the pipeline operator. It sets out a number of requirements in terms of gas supply and demand reduction plans and gives the Minister power to issue direction to upstream pipeline operators as their activities may relate to the climate action plan.
This amendment relates directly to the function and mandate of Gas Networks Ireland. While I thank the Deputy for submitting it, as mentioned previously this is a technical Bill that provides only for integration of Ervia into Gas Networks Ireland. It does not consider any new role or additional functions or mandate for Gas Networks Ireland. The implementation of the European directive on common rules for the internal markets in renewable and natural gases and in hydrogen is a more appropriate legislative vehicle for consideration of the decarbonisation of the gas grid and of Gas Network Ireland's role, functions and mandate as provided for in the Gas Act of 1976, as amended.
As mentioned previously, Gas Networks Ireland is a relevant body under the Climate Action and Low Carbon Development (Amendment) Act 2021 and is still obliged to perform its functions in line with that legislation. As a result, I am not going to accept the amendment as the implementation of the aforementioned European directive is a more appropriate legislative vehicle for consideration of additional functions for Gas Networks Ireland and for reconsideration of its role.
I will withdraw the amendment but may resubmit it on Report Stage, having taken on board the Minister of State's response.
Amendment, by leave, withdrawn.
Amendments Nos. 16 to 18, inclusive, are related and may be discussed together.
I move amendment No. 16:
In page 14, between lines 12 and 13, to insert the following:
“(f) in section 39A, by the substitution of the following subsection for subsection (5):
“(5) Without prejudice to the generality of subsection (4) of this section, the Commission may—
(a) attach to a consent given under subsection (1) of this section for the construction by a person of a pipeline, a condition requiring to be observed, as regards the pipeline, specific codes and standards of safety and efficiency regarding the construction of pipelines, disconnections decommissioning or repurposing, and
(b) by regulations, set out the procedures in relation to the giving of a consent under subsection (1) of this section.”.”.
Amendment No. 16 proposes that as well as during construction, health and safety measures should be accounted for during connection, decommissioning or repurposing of gas network. It emphasises the point that under construction and in use are not the only two states in which pipes can exist. They can also be disconnected, decommissioned or repurposed, and it is important that safety is accounted for in these states as well. This is likely to become more of an issue in the time ahead with reductions in use in line with our greenhouse gas emissions targets.
Amendment No. 17 mandates holders of consent, when constructing pipelines, to ensure that all reasonable measures are taken to reduce gas demand and greenhouse gas emissions in line with the Climate Action and Low Carbon Development (Amendment) Act 2021.
Amendment No. 18 gives power to the CRU to refuse consent for the construction of any new distribution or transmission pipeline in a particular geographical area in order to be consistent with the carbon budget programme and the sectoral emissions ceilings. It is important to emphasise that we need a gas demand reduction strategy as well as an emissions reduction strategy.
These amendments cover matters such as safety standards for pipelines, the effect of gas infrastructure on the natural environment and the decarbonisation of the gas network. Again, we are looking at the path for Gas Networks Ireland to decarbonise in line with other sectors in the economy. It must be said again that this is a technical Bill providing for the transfer of functions from a body that is being dissolved to a new body. We want to make sure that Gas Networks Ireland continues to have the same functions and legal powers as it did when Ervia was in existence. That is really the purpose of this Bill. There is new legislation coming from Europe and that is the appropriate time to consider these issues. For this reason, I am not going to accept these amendments.
I will withdraw the three amendments in the group with a view to reintroducing them on Report Stage, if necessary and in light of what the Minister of State has just said. Hopefully, the gas package will be before us by the end of the year. In practical terms, how does the Minister of State foresee pulling this conversation on these amendments and the gas package together? Will it be done in the context of this Bill?
The Minister of State seems to be indicating that this is a technical, narrow and focused piece of legislation that is not the place to deal with those broader issues. Does he think it is a matter for future legislation? Is that something the Government is actively considering or will actively consider on the back of a gas Bill?
This is a narrow piece of legislation. It carries out a particular function and transfers functions from one entity to another, which is the dissolution of Ervia and the transfer of powers from Ervia to Gas Networks Ireland. I do not think this Bill is the appropriate vehicle for these changes or amendments. The gas package includes regulations and a directive. The regulations will become law automatically in Ireland when they are passed. The directive will require transposition and we will have to bring in new primary legislation to implement it.
In short, the gas directive is trying to reform the purpose of European gas companies so that they can be part of the decarbonisation of Europe, part of the Green New Deal, ensure they can work with hydrogen, biomethane and new technologies, and take on board the new geopolitical reality of not buying gas from Russia. I guess there are huge changes coming there. They need to be legislated for in Ireland. Some changes will be automatically legislated for and some will be decided. New and agreed definitions will come out at European level in the coming weeks. Whichever legislation we put it into, we will be in a better position to do it in January of next year than in December of this year. I do not think we are going to put these changes into this Bill. They will be put into the new Bill.
We had a similar experience with the senior Minister, as Minister for Transport, around the Marine Casualty Investigations Board. That initial legislation - if we compare it with this process - was frustrated and delayed significantly. In fairness to the Minister, a very helpful role he played, and which unlocked the thing, was to give an indication during the deliberations on the initial legislation. A number of people wanted the legislation to do a lot more than the its narrow scope. However, the Minister indicated on Report Stage and in the Seanad as well that there was a serious commitment to take on board the arguments being made and to come back within a reasonable timeframe, which he did. I am just flagging that. It would be helpful for those of us putting forward these proposals if there was positive language in January.
I take that on board.
We look forward to the package coming from Europe in the next few weeks and we will see what is in it. Is the Minister of State open to supplying the committee with a roadmap for the implementation of the new primary legislation that will be required? I ask because primary legislation is no easy task. Everyone in this room understands that primary legislation takes time and a lot of deliberation to get it across the line. I acknowledge the critical importance of this. It would be helpful if we were given a roadmap for the introduction and the process of passing that in legislation. I am not sure if it is realistic but I hope that a lot of that can be done in the time that remains of this Dáil. I do not know if the Minister of State wants to give any indication at this point-----
I agree that we should have a roadmap for the decarbonisation of gas and how we are going to implement the gas package. I am happy to come back in January and do that with the committee.
I thank the Minister of State.
Amendment, by leave, withdrawn.
I move amendment No. 17:
In page 14, between lines 12 and 13, to insert the following:
“(f) in section 39A, by the substitution of the following subsection for subsection (6):
“(6) In case the holder of a consent given under subsection (1) of this section constructs a pipeline the holder shall take all reasonable measures to reduce gas demand and GHG
emissions in accordance with Climate (Amendment) Act 2021, to protect the natural environment and to avoid injuring the amenities of the area and, in particular, and without
prejudice to the generality of the foregoing, the holder shall while constructing the pipeline take all reasonable steps to prevent injury to any building, site, flora, fauna, feature or
other thing which is of particular architectural, historic, archaeological, geological or natural interest, and when selecting the route for the pipeline the holder shall have regard to
any representations made to the holder as regards the route of such pipeline by any local authority within whose functional area a proposed route, or any part of such a route
would, if the pipeline were constructed, be situate, or any of the following on, in or over whose land such route or part would in such circumstances be situate, namely—
(a) a harbour authority (within the meaning of the Harbours Act 1946),
(b) a company (within the meaning of the Harbours Act 1996),
(c) the Electricity Supply Board or any other electricity undertaker,
(d) Córas Iompair Éireann or any other railway undertaker, or
(e) a natural gas undertaking (other than the holder).”.”.
Amendment, by leave, withdrawn.
I move amendment No. 18:
In page 14, between lines 12 and 13, to insert the following:
“(f) in section 39A, by the substitution of the following subsections for subsection (4):
"(4) Where, from the appointed day, the Commission determines that the capacity of existing or proposed distribution or transmission pipelines in a particular geographical area, as specified by the Commission, represents adequate provision for reasonable expectation of demand, or risks inconsistency with the carbon budget programme or sectoral emissions ceiling, it may refuse to give its consent under section 39A(1) of the Gas Act 1976, to the construction of any new distribution or transmission pipeline in that particular area.
(4A) Where the Commission determines that connection to the distribution network risks inconsistency with the carbon budget programme or the revised EU Energy Performance in Buildings Directive or where the Commission determines that zero-carbon energy sources are available in that area, it may refuse to consent the connection of existing dwelling or dwellings to the distribution system or distribution pipeline.
(4B) The operator shall not propose transmission or distribution pipelines in geographical areas eligible for the development of district heating as specified by the Commission.”.”.
Amendment, by leave, withdrawn.
Section 18, as amended, agreed to.
Sections 19 and 20 agreed to.
Title agreed to.
Bill reported with amendments.