Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I have assurances from the Danish and Estonian ambassadors - I have no reason to doubt them - that this money will be going into specific projects, including renewable electricity generation projects that will contribute to the decarbonisation we need as a matter of emergency. I have faith in that because I have faith in our European system. It is something we committed to under the renewables directive in 2007, when it was originally framed. It was designed to provide what was not a get-out or accounting trick but a mechanism or stick for states. The idea was that if a state is not meeting its targets, it will have to meet them another way and pay. This is a stick. At the same time, I believe it is an appropriate stick that promotes or encourages those who have met targets. In a sense, it rewards them. They get the cash, but it can only be invested in renewable projects. I agree with the European directive. I was involved in framing it, so I suppose I would, but I believe it was an appropriate mechanism.

Deputy Smith is absolutely right about electricity and energy demand being the key and first priority. There is always a focus on generation. That is why, in some ways, the heat target is especially important. One key project we are going to do involves electrifying the generation of heat through the use of heat pumps. We all know that heat pumps do not work if they are not deployed in a building that is efficient. The dual tack involves insulating, and therefore promote energy efficiency, as well as using electricity to power heat pumps, which is a highly efficient use of electricity. This is where we are going to go. This is ending the use of fossil fuels in oil-fired and gas-fired burners and heating systems and ending the burning of coal or other smoky fuels. It means radically investing in energy efficiency first and heat pumps to warm far more efficient buildings.

I want to give a sense that this is possible. There are many examples of where we are not delivering it. There is one key issue around electricity demand in the past ten years. People will know that we recently reached a new peak in electricity consumption. Two weeks ago, electricity consumption peaked at 5,100 MW or 5,200 MW on a Thursday evening. In truth, that is the same level, effectively, that had been in place over ten or 12 years ago. Our economy has grown significantly in the intervening period. It is possible for us to create employment and run our economy without necessarily having a vast expansion in our electricity use. Our economy in the intervening ten-year period must have grown by between 50% and 80% if we do the mathematics based on 5% or 6% growth each year, on average. Electricity demand did not grow commensurately. Thus, we can promote energy efficiency in everything we do.

Why is it that we did not meet targets? Why is it that we do not compare well with Denmark or other countries that clearly have done so? It is demonstrated by the fact that we are paying them or Estonia for their projects. They have a tradition at it. They have been going at it for approximately 40 or 50 years. The Estonians and others, especially the Danes, responded to the first oil crisis in the late 1970s by investing in wind generation. They developed a comparative competitive advantage in this as well as in district heating. They developed real efficiency around district heating. The significance and importance of that area is underestimated in terms of how we meet the next targets. The 40-year advantage is what those countries have in the sense of understanding that this is going to be good for us as an economy.

A whole range of companies developed in the areas of energy efficiency, heat management and district heat management out of that strategic decision made 40 years ago in Denmark, and not just Vestas Wind Systems in wind turbines. We must develop in the same way and have the same widespread public understanding that this is the better solution and the direction in which we are going to go. I think the Irish people are there. I agree with the Deputy, and blaming communities is not the approach I would take in this regard. I think Irish people are waiting for the correct signals, supports and regulatory systems that will deliver this new energy-efficient heating system. The climate action plan can and will deliver the required systemic approach.

Turning to the aspect of public versus private enterprise, both will be involved. The State has a role, as do community energy projects. Large-scale interventions by the State, such as by the ESB and Bord na Móna, have real scaling efficiencies in energy systems and logistics. I am committed to supporting Bord na Móna as it moves from being a brown company to a green one and to defining itself as a climate solutions company, endeavouring to use its resources and expertise in engineering, which it has in abundance, in furthering our renewable energy future. It is the same with the ESB and any other public bodies moving into this space. That does not preclude private companies being involved, however. Those 50,000 homes will be retrofitted by a host of Irish building businesses of different sizes, and that is appropriate. Many Irish companies have expertise in this area. We want to encourage that and allow them to flourish so they can grow to become major exporting companies for us, in the same way those Danish companies did in the 1970s.

In that regard, my clear understanding of the policy of the European Union, in respect of CETA or any other policy, is that public policy aims in respect of the environment are protected. DG Competition keeps a close eye on whether there is inappropriate market manipulation or state aid which undermines the competitive market, but it is not a matter of ruling differently concerning private or public enterprise in that regard. In that context, it was interesting that much of the discussion at the meeting of the Energy Council yesterday concerned the need for DG Competition to be aware that we need flexibility in how we apply competition rules so that we can get innovation and development. A key issue across Europe, as well in the trade negotiations with the UK, concerns how we can maintain a level playing field while at the same time protecting our environmental and social standards. We need to do that, because this is the future economy and we must ensure that it is not a race to the bottom. It must allow communities, State companies and private enterprises to work in a fair way.