Mr. Michael Manley:

On the issue of fines, it helps to step back. The 2009 renewable energy directive is a positive instrument. It is not drafted in the same way as a road traffic law whereby people who exceed a certain speed have a penalty and a fine to pay. It contains almost 30 articles, one of which creates a process whereby we could have a support scheme. This is clearly in state aid territory. It creates an opportunity to have joint schemes with other countries and the opportunity to use statistical transfers as a way of getting across. There is no reference to fines in the directive. It was very much written as a positive instrument and a guide to cajole, lead and drive forward the renewable energy portfolio.

In terms of where we are at, the figures published yesterday from the SEAI had just over 10% renewables at the end of 2017, with a target of 16% for 2020. We are exercised by this and we could not be any other way. The projections we have suggest the outturn in 2020 will be somewhere between 12.25% and 14.2%, if I am correct. It is in that band. This gives an indication of by how much we will miss the 16% target. The mechanism we will then be required to use is statistical transfers. As of 2016, 17 countries were behind and 11 countries were ahead with a surplus. These countries have a surplus to sell. There is no developed market yet. The only trade to happen was between Luxembourg and Latvia. In that instance, the trade was at €30 million per percentage point. This gives the order of what the multiplied figures would be if we hit 14.2% and we are able to buy at exactly those prices.

Fines could arise in one process. In early 2021, the State will report the outturn in 2020. The final report will be in 2022. The European Commission could take a view that it had not achieved the target and would seek to bring it before the European Court of Justice and it would be up to the court to seek to impose a remedy. There are issues to understand in this. We were at 3.1% renewables when the directive was written. We were given a target of 16%. Despite the fact that in the period from 2007 to 2013 we went through a dramatic financial adjustment, we will come in somewhere between 80% and 90% of target. It is very different in the case of carbon with regard to targets. There is no provision for fines in the directive. The mechanism most likely to be availed of will be statistical transfers. Reporting to the Commission will be in the first quarters of 2021 and 2022.