Dáil Éireann Debate, Wednesday - 19 October 2011
1 Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources when it is expected that the European Commission will give state aids permission to the REFIT scheme; the reason for the delay in approving same; and if he will make a statement on the matter. [29908/11]
Amharc ar fhreagraUnder Directive 2001/77/EC, Ireland was assigned a renewable electricity target of 13.2% by 2010. Following extensive public consultation and consideration, it was decided that to reach the 2010 targets, a new scheme was necessary to deliver the build rate required to meet the renewable electricity directive target level. Experience across Europe clearly showed that feed-in tariffs were proving the most successful of the options available to member states in terms of encouraging new build. It was for this reason that the renewable energy feed-in tariff, known as REFIT, was announced in 2006 for certain categories of renewable energy, including wind and hydro power. It received state aid clearance in 2007, and the REFIT scheme has achieved its goal in that, at the end of 2010, Ireland had succeeded in surpassing the 2010 target.
The planned extension of the first REFIT scheme is designed to support up to 4,000 MW of onshore wind, landfill gas and hydro technologies. The new REFIT scheme for biomass technologies is designed to support a range of technologies, including combined heat and power, CHP, and anaerobic digestion, as well as co-firing of biomass in the peat power plants. Separate state aid applications are being progressed with the European Commission in regard to these schemes. The Commission is finalising its assessments on both applications.
Does the Minister agree, in view of the European Union's stated objectives in regard to renewable energy, that there is a contradiction between the huge delay in giving these state aid permissions and the targets of the European Union itself? Will the Minister explain whether he believes the time it is taking is reasonable? Will he further clarify when he believes the permissions will be given?
I broadly agree with the Deputy in that the time taken is longer than I would like. I was in Brussels last week on a number of different issues, and the same question was raised with me by our own MEPs. The latest information I have as a result is that the biomass REFIT is likely to emerge as early as next week, which is welcome because I am aware of a couple of tangible projects that are in the offing and others which are queued up. On the question of the renewal of REFIT for onshore wind, this might still be a few weeks down the line.
Will it be three or four weeks?
It is impossible to say. Once it goes through the system, we have complied by providing the information required from us. After that, it goes through the system in the Commission and, like everywhere else, that system has its own bureaucracy.
I find it extraordinary that the Union has been lecturing us about our public service yet it cannot deliver something that is of vital European as well as Irish interest. I understand 1,000 MW of power is ready to proceed.
As I understand it, under the REFIT scheme, as proposed, a generator — in other words, the person who owns the windmill — gets €66 per MW hour produced, whereas the supplier — in other words, the middleman — gets just under €10 per MW hour. I further understand that in the event of the price of electricity rising dramatically, which could easily happen as oil becomes scarce, all of the upside goes to the middleman — the supplier — rather than to the generator. Is my understanding correct? Does the Minister consider this a reasonable balance? Should that balance be more in favour of, first, the consumer, in that when the price goes over a certain limit there would be a rebate to the PSO, and, second, the generator — in other words, the person who invested in the windmills — rather than the middle group, namely, the network which delivers the electricity?
I view this from the point of view of the targets we have to make. It is clear from the experience across Europe that without some kind of a feed-in subsidy, it would not happen.
Then make it higher.
I believe we are agreed on that much.
It should go to the generator.
Yes, but only the supply company is prepared to take it on. Otherwise, there would not be the extent of progress that has been made in terms of building out the capacity. Only the supply companies would take it on.
With regard to REFIT 1, as we have known it, a number of changes have been introduced to the mechanism that tighten up some of the Deputy's concern, and they are with the Commission at present. As the Deputy knows, the problem with wind is one of intermittent supply, and we have to try to build in for that. Where the market price goes above a certain limit, it falls out. There are recent studies on this point which the Deputy might be interested in following up in the Oireachtas Library, in particular a study by EirGrid and the SEAI which addresses the particular issue he raises.
We move to Question No. 2.
With no disrespect to the Minister, it does not address the balance between the generator, the supplier and the consumer. I know the study to which he refers and while it deals with the cost to the State of REFIT, it does not address the issue that——
We must move on.
