Mr. Michael Manley:

I thank the Chairman and committee members. I am accompanied by Ms Rebecca Minch, head of energy efficiency and affordability; Mr. Frank Maughan, head of climate mitigation and awareness; Mr. Kevin Brady, head of transport energy policy; and Mr. Eamonn Confrey, head of electricity policy.

The three pillars of Irish energy policy are sustainability, security of supply and competitiveness, leading to the affordability of energy. We are very much in the mainstream of European energy policy. One of the challenges is that very few policy interventions actually serve all three pillars equally.

I know that renewable energy is the focus of the joint committee today. The key element in that regard is the enabling directive of 2009 which is only 29 articles long. It provides for the development of a renewable energy market and a process to embed renewable energy resources in the energy mix. It very much focuses on the European approach and five of the articles deal with trade in energy supplies across borders. It focuses on support for the integration of renewables in the transmission and distributions systems.

All countries have a national target and under the directive Ireland has a target of 16%. Our starting point in 2005 was 3.1%. The increase of 12.9% was the fourth largest asked of a European member state. In making progress Sustainable Energy Ireland, SEI, has modelled our likely landing point in 2020. It suggests we should land on a figure between 13.2% and 15.4%, depending on the scenario modelled, which puts us between 80% and 96% of the 2020 target. In the second report on the state of the energy union 2017 the European Union projects that Ireland will land on a figure of 15.5%. It is important to bear in mind that when the directive was developed, the price of a barrel of oil ranged from $60 to $70. It subsequently went to the about $120 a barrel and peaked at $140 for a short period. For much of this decade it has fallen back to $40 to $50 a barrel. In Ireland we have had a very profound economic correction which has impacted significantly on consumer decision-making, particularly when it comes to heat and transport.

In individual sectors we have had our greatest level of success under the heading of renewable electricity. The outturn in 2016 was 27% against a target of 40%. We do not have final data for 2017, but the initial indications are that we will land on a figure between 31% and 33%. We have had less success under the headings of renewable heat - we landed on a figure of 6.5% against a target of 12% - and transport - we Ianded on a figure of 4.5% against a target of 10%. Therefore, we face a significant challenge in meeting the targets set under both headings.

An important point borne out in the presentation is that we have to decarbonise the electricity system. This is important for the sector itself but it is also important as we move heat and transport to electricity.

Energy efficiency was the second item referred to in the letter inviting us to appear before the committee. The International Energy Agency has identified that the barrel of oil not used is the cheapest, cleanest and most secure form of energy. Energy efficiency has long been a focus in Irish energy policy. We have a target of 20% by 2020 and the indications are that we will reach approximately 16%. Unlike the renewable energy target, this is not binding but it is really important nonetheless. In terms of funding, the constrained Exchequer position has impacted our capacity to invest but over recent years, from 2016 to 2018, funding has risen from €55 million to €107 million. The increase in resources has led to new initiatives. This year support is being provided for heat pumps, for a deep retrofit pilot warmth and well-being programme and €14 million is being provided for SMEs.

The focus now is much more on the post-2020 period and our ambitions out to 2030. The European Commission has published its Clean Energy for All Europeans package which contains targets of a 40% reduction in greenhouse gases and a 27% increase in energy savings. We had negotiations at the energy Council on 18 December and substantial agreement was reached by the energy Ministers. The package is now in the trialogue in terms of the individual instruments. It contains a total of 11 individual instruments - eight in the package proper and three which preceded it.

Our next objective is the completion of the national energy and climate plan which must be in draft form by the end of the this year and submitted to the European Commission. It must be finalised by 31 December 2019. I will stop there for now.