Mr. Michael Manley:

I thank the committee for having us here to make an input on this Bill. When the Bill was before the House on Second Stage, the Minister for Communications, Climate Action and Environment, Deputy Bruton, made it plain that the Government supports microgeneration. It has been a long-standing position of successive Governments. In 2017, we organised a workshop with a number of stakeholders and subsequently established the Micro Renewable Energy Federation. In 2018, we introduced a pilot scheme. There is, therefore, a strong commitment to the development of microgeneration as part of a changed role for citizens, consumers and communities within the energy system. The Government has not opposed the Bill so far, recognising this very point and that the support of microgenerators will be needed as part of the implementation of the clean energy package, which has effectively been negotiated. Evidence-based analysis and assessment will be necessary to deliver the citizen and community entitlements at the heart of the recast renewable energy directive.

There is evidence that microgeneration will have minimal direct impact on carbon emissions but, more important, it provides an opportunity for citizens to play a part in the overall energy and climate agenda, the implementation of what needs to done, and sharing understanding thereon.

The existing pilot scheme will help our understanding of what the likely demand for microgeneration in Ireland will be. A previous scheme, run by Electric Ireland, offered a generation tariff. It opened in 2009 and remained open until around 2013, but it attracted only 700 applications. Including an obligation on electricity retailers to procure 5% of their electricity from microgenerators before first establishing the likely demand for such a scheme may well be premature and may have unintended consequences. The pilot demonstration scheme opened in 2018 for applicants. To date, 3,000 have expressed interest. Working with the Micro Renewable Energy Federation, a code of practice for microgeneration has been developed. This will help to ensure appropriate quality standards in the sector and will, in turn, increase public confidence in new technology.

Microgeneration and the role of the energy prosumer was part of the Government energy policy in the energy White Paper. That was a key document setting out a number of points of departure. I refer to the engagement of energy Ministers with consumer bodies in Europe that have made it plain that consumers are busy people. They have children, parents, lives, work and social lives. The time they can commit to any sector is limited so they need simple, reliable, robust systems.

Another principle we would like to underpin the scheme requires that it be equitable and fair. While supportive of developing the emerging microgeneration sector, there is a need to be careful regarding the consequences for consumers who end up paying higher costs, in effect subsidising those who can afford to participate. There are a range of options for how we pay for microgeneration. They broadly fall into three groups: include the cost in the PSO; allow energy retailers to socialise the costs, averaging across their energy rates; or have the Exchequer intervene. None is simple and all involve additional costs for somebody. Energy suppliers could socialise the additional costs associated with microgeneration through their unit rates, which would have a negative impact on consumers, particularly those who cannot afford to participate.. Network operators would also have to address how their lost revenues would be recovered. Following the latest major storm, network repairs cost €30 million. Funding needs to be addressed, therefore.

The actions to develop the climate action plan's microgeneration policy will assess these and other challenges. In respect of excess renewable electricity generated and consumed on site, microgeneration will remain a more expensive source of supporting the supply of renewable energy to the grid.

It is clear that microgeneration is part of the future energy system. It is arriving. It is here. More microgeneration technologies will be developed and built in the future. These must be underpinned by appropriate electricity market design and industry standards, which are currently being developed. The Bill aims to facilitate this growth, and the Government has made clear that it shares that ambition and will work positively on the amendment Stages to ensue effective and appropriate supports are developed in this area.

I look forward to the discussion and taking any questions that members may have on this topic.