Dáil Éireann Debate, Tuesday - 26 February 2013
97. Deputy Sean Fleming asked the Minister for Communications, Energy and Natural Resources if he will provide details of his proposal to establish a €70 million energy efficiency fund; and if he will make a statement on the matter. [10084/13]
Amharc ar fhreagra133. Deputy Sandra McLellan asked the Minister for Communications, Energy and Natural Resources the private sector resources he expects to match Government funding in the energy efficiency fund; and if he will make a statement on the matter. [9983/13]
Amharc ar fhreagra140. Deputy Mary Lou McDonald asked the Minister for Communications, Energy and Natural Resources the way in which he expects the €70 million energy efficiency fund to be spent; and if he will make a statement on the matter. [9982/13]
Amharc ar fhreagraI propose to take Questions Nos. 97, 133 and 140 together.
Energy efficiency is internationally recognised as the most cost effective means of delivering greenhouse gas abatement. It is equally important in the current fiscal climate that energy efficiency offers an opportunity to stimulate economic activity and employment and improve national competitiveness. Extensive studies undertaken by the European Union and the International Energy Agency have demonstrated the positive environmental and economic impact of energy efficient measures.
For several years the Government has invested nearly €250 million of Exchequer funding in energy efficiency programmes in the domestic and non-domestic sectors. While this approach has leveraged a significant additional spend in the economy of more than €250 million, it requires continued Exchequer support. This is neither necessary nor sustainable as a funding source. The programme for Government commits to a transition from Exchequer funded grants to sustainable financing initiatives. My Department, with the Sustainable Energy Authority of Ireland, is working intensively to create innovative mechanisms by which energy efficiency projects can be financed. These mechanisms must deliver demonstrable energy bill savings to incentivise individuals and entities to avail of them.
Last week the Taoiseach launched the 2013 Action Plan for Jobs. The energy efficiency fund is one initiative in the plan that will help to deliver jobs not just this year but also in future years. In broad terms, the fund will be established with the aim of providing at least €70 million to finance energy efficiency initiatives in the public and private sectors. Some €35 million of the fund is being provided through residual moneys arising from the closure of the carbon windfall levy account. Matching funding in excess of €35 million is being sought from private investors. Investments by the fund have the potential to create significant employment across a broad range of construction related sectors. Experience from the existing grant schemes suggests that based on an induced labour spend almost 450 jobs are directly supported for a year for every €10 million of expenditure, rising to 675 jobs when indirect employment is included. This is before competitiveness impacts owing to reduced energy costs are taken into account. NewERA has been asked by the Government to facilitate the creation of the fund and has been actively meeting potential investors and fund managers in the past few months. At this juncture I am not in a position to indicate who the investors will be so as not to prejudice the discussions.
The State is investing in the fund for a number of reasons. First, there is a well established shortage of finance in the market. The fund will be set up to bridge this gap. Second, where finance is available, the process by which moneys are lent can be extremely complicated, in part owing to the nature of the projects but also a lack of knowledge within the financial sector. The fund will redress this scenario through the development of expertise in financing energy efficiency, ideally becoming the lender of choice for such projects. I anticipate that the fund will lend to all sectors.
The fund will be supported by the creation of a national energy performance contracting policy framework which will standardise energy performance contracting in Ireland and provide a robust process for establishing investment ready projects. Work on the framework is well advanced, with a public-private group established late last year. I intend to launch the details of the fund alongside the second national energy efficiency action plan later this week, but first I wanted to mention it in the House.
The Minister and others have indicated that they plan to move away from grants that were administered by the Sustainable Energy Authority of Ireland, but they have been very beneficial in terms of what they set out to achieve. There is a significant need for energy efficiency and greater efficiencies across the spectrum. I referred earlier to biomass. Some of the power stations are waiting for correspondence or the go-ahead from the Commission for Energy Regulation to connect to the grid. Jobs are waiting to be created in this area. Perhaps the Minister might comment on that issue. In any replacement of the grants administered by the SEAI I am concerned to ensure ordinary punters or householders will not lose out.
They need energy efficiency just as much as commercial companies. Whatever system is in place, it should target ordinary punters also.
These are good schemes and every euro spent on them is spent in and provides work in local economies. They provide for energy efficiency in houses and businesses. However, there is scope to look further at the possibility of providing for small area power supplies. EirGrid, for example, besides looking at national and transnational areas, needs to explore further the use of small area power supplies that would benefit smaller communities, as this issue has been neglected. We fully support this scheme.
In response to Deputy Michael Moynihan, I should clarify that the energy efficiency fund has not been set up to replace the retrofit scheme but is in addition to it. The difficulty in respect of domestic retrofitting - I agree with the points made by Deputies Michael Moynihan and MichaelColreavy - is that it is a grants-based incentive, but in the programme for Government we have committed to making the transition from a grants-based incentive scheme to a pay-as-you-save model. Work is well advanced on it and the scheme will be announced later in the year. As the focus of the energy efficiency fund is on public and commercial buildings, clients may bid to join the fund to have public buildings, for example, hospitals, refurbished and retrofitted, bringing a big saving in energy costs and a big employment spin-off. I appreciate the welcome of colleagues in the House for this initiative.
On domestic grants, houses all over the country have benefited hugely from insulation measures taken under the various grant schemes. However, outside of the housing aid for older people scheme, changing from single glazed windows to double or triple glazed windows is not covered by the SEAI. Will the Minister look at this for the future? Many houses are well insulated, apart from the windows. Providing grants for double glazed windows would be sensible and provide an economic stimulus for that sector.
I will be happy to bring that proposal to the attention of the SEAI.
