Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I thank the Vice Chairman and the joint committee for organising a series of hearings on this issue and inviting me to address them on the generation and use of electricity in Ireland and the potential export of surplus electricity to the United Kingdom.

First, I need to distinguish between different types of development connected with power generation and supply. These are often rolled up together and presented as one, but there are at least three types of development we need to consider: wind farms to generate power; transmission lines to carry power from where it is generated to where it is consumed; and the infrastructure needed to export to another country any renewable electricity surplus to our requirements. What is driving all of this is the pressing need to transform the energy system in order to reach the goal of decarbonisation. The committee will not need to have explained to it the shocking implications of this week's latest instalment of the UN report on climate change. Therefore, renewables will continue to form a hugely significant part of Ireland's and Europe's energy portfolio.

I will begin by dealing with the issue of electricity generation. Ireland's immediate goal is to achieve its EU 2020 target of 16% of energy coming from renewable sources. This imposes challenges for us in terms of rate of build. These challenges will endure for the remainder of the decade. Specifically, we must move from an average historical build of approximately 170 MW per year to 250 MW. We have made significant progress to date. The contribution of renewable energy to overall energy demand rise from 2.3 MW to 7.1 MW between 1990 and 2012, with renewable electricity contributing 4.1 MW to the overall energy demand in 2012.

It is not enough to build renewable generation facilities. The power produced must be transported, often from remote locations, to where it is needed. EirGrid's Grid25 project is its strategy for Ireland's future electricity transmission network and it is a long-term strategy for the development of a network that will provide a safe, secure and affordable electricity supply throughout the island. This strategy is crucial in planning for the new infrastructure needed to cater for growth in demand on the island, for economic recovery and fresh growth, for balanced regional development and for the integration of additional generation facilities, both conventional and renewable.

Renewable generation requires new infrastructure and the transmission system requires new infrastructure. This reality raises planning and other environmental questions. In July 2012, at my request, the Government approved a policy statement on the strategic importance of transmission and other energy infrastructure. That policy restates in clear terms the need for development and renewal of all of our energy networks in order to meet our economic and social policy goals. It is the planning process that provides the framework for ensuring all necessary standards are met and that comprehensive consultation is built into the process. In our policy statement we formally mandated the State companies not simply to plan their developments safely, efficiently and economically, but also to address and mitigate any human, environmental and landscape impact in delivering the best possible engineering solutions.

The review by the Department of the Environment, Community and Local Government, in conjunction with my Department and the Sustainable Energy Authority of Ireland, of the existing wind energy planning guidelines is key to ensuring wind farms do not impact negatively on the environment. Responses to the public consultation are being considered, with a view to the final guidelines being published in mid-2014. In regard to transmission, last January I established an independent panel of experts, chaired by Mrs. Justice Catherine McGuinness, to decide terms of reference for comprehensive, route specific studies of overhead and underground options for both Grid Link and Grid West. The outputs from these studies which will be required to be complete, objective and comparable will be published before proceeding to the next stage of public consultation on these two projects.

The two studies will take account of environmental, including visual, amenity impacts, technical efficacy and cost factors. The panel has now commenced its deliberations, including considering what work, if any, it might usefully undertake on the North-South transmission line.

There is potential for Ireland's excellent renewable energy resources to be developed for export. Last year I signed a memorandum of understanding with my opposite number in London as a first step towards an intergovernmental agreement to facilitate trade. From an Irish perspective the potential benefits examined include jobs, community gain, interconnection benefits, corporation tax receipts, a dividend on value, and local authority rates. Significant employment can be created, for example, employment arising from a 3GW project would be expected to be in the order of 3,000 to 6,000 job years in the construction phase, with the actual number dependent on the construction schedule to 2020. The New Economic and Recovery Authority, NewERA, advised that there would be approximately €1 billion worth of construction spending on civil engineering over two to three years. Additional jobs will also be created in the ongoing maintenance of turbines over a 20 year operating life. Further employment opportunities would arise if turbines or components were manufactured in Ireland.

On the Irish side, we have done immense preparation towards concluding an intergovernmental agreement, IGA. The prize is a big one, including holding out the prospect of a new mission for Bord na Móna, a State company that controls tens of thousands of acres of unencumbered cut-away bog in the midlands. Over recent weeks, however, it has become apparent that the economic policy and regulatory complexities involved and the key decisions yet to be taken by the UK would make 2020 delivery very difficult to achieve given project lead times. At the Anglo-Irish summit in London in March, the Taoiseach and the Prime Minister agreed that the exploration of a possible new architecture was required if an intergovernmental agreement on the export of renewable electricity was to work to the benefit of both jurisdictions. My Department and the Department of Energy and Climate Change in the UK have been examining the outcome of the London meeting. It is clear, however, that key policies and regulatory design decisions remain to be taken by the UK Government, which means that we are still a considerable distance from settling on the specifics of what the Irish Government and the renewable generators believe must be the basic components of any intergovernmental agreement. Even if the timeline for the commercial opportunity to deliver renewable energy to the UK by 2020 cannot be met, the long-term opportunities to export renewable energy will endure as Europe moves to an increasingly interconnected electricity market, supporting increasing amounts of renewables to achieve sustainability and to enhance security of supply.

In realising our renewable energy potential for domestic and export purposes, and its inherent economic benefits, we must ensure the concerns of communities and citizens are properly addressed. The concerns of communities must be at the heart of the move to renewable energy. The environmental and economic benefits of renewable energy are real. Early ongoing and transparent communication is critical, if we are to deliver vital energy infrastructure and to ensure this benefit is realised for all citizens.