Oireachtas Joint and Select Committees

Wednesday, 21 November 2012

Joint Oireachtas Committee on Transport and Communications

Developments in Sustainable Energy: Discussion with SEAI

9:30 am

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I welcome Dr. Brian Motherway, chief executive officer, and Mr. Matthew Clancy, energy modelling specialist, from the Sustainable Energy Authority of Ireland, SEAI. They are with us today to inform the committee about developments in sustainable energy structures, technologies and practices, in particular in the area of renewable energy.

I wish to draw attention to the fact that by virtue of section 17(2)(l) of the Defamation Act, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I also wish to advise the witnesses that the opening statements they make to the committee today and the proceedings of this meeting will be published on the committee website. I now invite Dr. Motherway of the SEAI to make his presentation.

Dr. Brian Motherway:

I thank the committee for the invitation to meet with it this morning to discuss these issues which we feel are very important and topical in this country currently. It is a pleasure for us to have the opportunity to discuss them with committee members. We did submit a written paper and I will give the highlights of it rather than read through every detail. We will happily discuss any related issue members wish to raise.

I will start with the policy position on renewable energy from the Government strategy for renewable energy 2012 to 2020 which was released earlier this year. A short quote from it states:

The development of renewable energy is central to overall energy policy in Ireland. Renewable energy reduces dependence on fossil fuels, improves security of supply, and reduces greenhouse gas emissions creating environmental benefits while delivering green jobs to the economy, thus contributing to national competitiveness and the jobs and growth agenda.
This country has sustainable energy targets focusing on 2020, covering reductions in greenhouse gases, improvements in energy efficiency and the development of a renewable energy sector. Our paper highlights those targets in detail, noting that in particular the renewable energy targets are split between targets for renewable electricity, renewable heat and renewable transport. We also note our progress towards targets in recent years, in particular our progress towards renewable electricity. It is important to note as well that the use of renewable energy avoided the emission of approximately 3.6 million tonnes of carbon dioxide in 2011. Equally, the use of wind energy in 2011 is estimated to have reduced fuel imports by approximately €300 million due to the use of indigenous renewable resources instead of imported fossil fuels.

Sustainable energy starts with energy efficiency in terms of reducing the amount of energy we use in all sectors, and thereby lowering people's bills, reducing imports and reducing the environmental impact of energy use. Energy efficiency action also has the benefit of directly supporting jobs, reducing fuel poverty and improving competitiveness of businesses in terms of their energy costs. Members will be aware that in recent years energy efficiency activity in this country has increased considerably with many homes and businesses taking action to improve their energy performance and hence lower their bills. That has been driven by Government-funded supports that we in SEAI administer. Last year alone Government finance into energy efficiency stimulated a total spend in the economy of more than €250 million in all sectors. It is important to that such action has reduced energy bills in homes and businesses and directly supporting employment in the construction sector and making businesses more competitive and thereby protecting jobs in all sectors.

I will turn now to renewable energy and say a few words about the three strands of energy; electricity, heat and transport. First, growth in renewable electricity has been particularly strong in this country, driven by a deployment of wind especially in recent years. Last year, approximately 18% of all our electricity usage came from renewable sources, in particular wind. On the island of Ireland we have approximately a 2,000 MW capacity of wind turbines installed. That is in a context of peak demand of approximately 5,000 MW. It is estimated that we need to install approximately 300 MW a year every year between now and 2020 to meet our renewable electricity target in that timeframe. We believe that is achievable. There are many projects in the pipeline but there are challenges in terms of planning permission, the build-out of grid and other associated issues of which the committee is aware.

Renewable heat is a more complex sector related to the use of biomass in homes and buildings to convert wood chip or wood pellet into heat. It is about the use of waste to make bio-gas and many different sources from energy crops to waste materials, to forestry and turning lots of different technologies into heat that people use in homes and businesses. The important growth sectors in terms of meeting our targets are first, energy efficiency, because the less heat we use the easier it is to meet our renewable targets as well as all the other benefits. There will be growth in the use of renewable heat in the business sector in particular, especially in some of the larger users such as the food and drink sector, hotels and others that use large amounts of heat and are therefore more interested in deploying renewables in the short term.

We have a 10% target for renewable transport by 2020 and most of that is likely to come from the blending of bio-fuels into conventional liquid fuels that are used in transport, namely petrol and diesel. Already, all of the petrol and diesel one buys for vehicles currently has a small percentage of bio-fuels mixed into it. That will continue to grow in the future.

I wish to turn to the specific question the committee asked us to address on the cost of renewable energy, in particular its effect on electricity prices. I mentioned some of the benefits of renewable electricity in terms of reduction of imports of fossil fuels and also reductions in carbon emissions. The cost of that is a source of much debate and analysis. I wish to refer to a few of the studies and research that tell us about the issue currently. First, by way of background, as members are probably aware, wind energy in this country is supported in the electricity system by a mechanism known as the Renewable Energy Feed In Tariff or REFIT for short. In effect, it is similar to mechanisms used in other countries. It sets a minimum floor price that renewable generators get. If the price falls below that they still get the price which is to help to lower the risk of the investment for wind energy in particular. The reason for that is that the financial model for a wind farm is quite different from the financial model for a gas-fired station, as I am sure members appreciate. Whereas with a wind farm it is all about the cost of building it and then the running costs are very nearly zero, but with a fossil fuel-fired plant there is a certain cost to build it but also there is a significant ongoing cost of the fuel. Therefore the financial models are the same even though over their lifetime the cost per unit of electricity generated is similar, they are remunerated in different ways in the system.

A couple of quantitative studies provide indications of the impact of this on the price for consumers. A recent European Commission study carried out by the Fraunhofer Institute compared the mechanisms in all EU countries for supporting renewable electricity and noted that the Irish refit mechanism is one of the most cost effective systems in Europe. We remunerate renewable generators at one of the lowest levels in the EU. The reason for that is largely because the wind regime is very good here. Wind energy is more economically viable in Ireland than in other countries simply because the wind blows more often.

SEAI conducted a study with Eirgrid to analyse the impact of wind on prices and costs for every half hour over the course of 2011. In any given period, wind electricity can be put into the system at low cost if the wind is blowing, with the result that we do not have to use the more expensive generating plant. Plants that are less efficient and, therefore, cost more in terms of fossil fuel input can be powered down or turned off. Wind energy lowers the wholesale price of electricity, although it adds to retail prices due to market payments to reward wind generators. The balance between lowered wholesale prices and increased retail prices will ultimately determine the effect on the cost of electricity to the consumer. In the context of a total wholesale electricity market of €2 billion our analysis indicates that wind energy lowered the wholesale price across 2011 by approximately €70 million, which turns out to be almost exactly the same amount as the increase in the retail price. The net effect was, therefore, almost precisely zero. Wind energy did not add to the cost of electricity for consumers in 2011.

A recent study by Ernst and Young compared a number of European countries in regard to the contribution to local economies of wind and gas generation. Much of the value created in gas generation leaves Ireland to pay for gas imported from other countries, whereas with wind more money stays in Ireland because it is associated with maintenance jobs and other local inputs. The contribution by wind generation to GDP and job creation is higher than that of gas.

Further analysis will be published in the new year because we are carrying out a more detailed analysis in conjunction with our parent Department, the regulator and Eirgrid, focusing in particular on the impact of wind energy on consumer electricity prices in 2020. As I am sure members can imagine, the study suggests that the answer depends the cost of alternatives, namely, gas prices. When gas prices are high wind lowers the price of electricity. The exact outcome for 2020 depends on one's view of gas prices at that time. In that context, new data published last week by the International Energy Agency predict that gas prices will continue to increase at the rate of the last several years and will be higher by approximately 30% over the next decade.

I will now speak briefly about the enterprise opportunities associated with sustainable energy in Ireland. The global movement towards renewable energy and energy efficiency, including related technologies and services, suits Ireland very well for a number of reasons. First, we have a rich renewable energy resource both onshore and, over the longer term, offshore in terms of wind and wave energy from the seas around Ireland. That resource is becoming more valuable internationally as countries move towards renewable and low carbon energy. Second, the sustainable energy transition requires developments in information technology, remote communications and software. As these sectors and skills are strongly represented in Ireland there is an opportunity for Irish entrepreneurs to develop new technologies and services in sustainable energy, dealing with everything from control of energy in the home to management of wind and the grid. I refer in our paper to two areas that offer particularly strong enterprise opportunities for Ireland. The first is the concept of the smart grid. In the electricity system, the operator is always trying to balance supply and demand. This becomes a more complex task when there is a lot of wind in the system or when some turbines are turning while others are not, and a more technologically advanced electricity supply system is needed. Ireland's success in bringing renewable electricity into the system despite our relative lack of interconnection compared to other countries comes from developing technological solutions that are more advanced than the other countries which intend to expand renewable energy generation over the coming decades. This offers Irish companies opportunities to export the technologies and experience they are currently developing.

Energy export is a subject with which members may have become familiar. Ireland's rich renewable energy resources are considerably more economically viable than those of other countries. The prospect arises not only to meet our own needs from indigenous renewable resources but also to export clean renewable energy. The Government is currently negotiating a framework with the UK with a view to setting up mechanisms to allow Irish wind generators to sell electricity into the UK between now and 2020 in order to help it meet its renewable energy targets. This presents a tremendous opportunity for Ireland to create wealth and employment in this sector. Our indigenous natural energy resources could become a major export opportunity in the coming decades.

I am grateful for the opportunity to discuss this important issue. The topic of renewable energy is discussed extensively in society. We hope to contribute our knowledge and data to help inform that debate in the context of a sector which offers significant opportunities for Ireland. Given our comparative advantage in renewable energy the sector has potential for becoming a significant employment generator.

9:40 am

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I thank Mr. Motherway for his presentation, which gave us a lot of food for thought. As everyone wishes to ask questions, I ask members to put specific questions rather than make Second Stage speeches.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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I welcome the officials from SEAI. Mr. Motherway indicated that €500 million was being spent in the economy through grants and so forth. Some of the people registered by SEAI to install solar panels have complained about the treatment of smaller companies in comparison to larger companies. I understand that some of the larger companies can apply for grants on behalf of their customers whereas small companies that employ one or two people are unable to do so. Issues also arise in regard to inspections. People who previously worked in other construction sectors have experience of interacting with other bodies. They are asking that SEAI officials meet with installers on site when issues arise in respect of insulation. I have received several complaints by smaller companies which have been set up to install solar panels.

The warmer homes scheme comes within the remit of the SEAI and significant work has been undertaken on the scheme. What is its likely future? I am aware that pilot schemes were initiated by some local authorities to insulate their housing stock and, as far as I understand, these schemes worked extremely well. I suggest a pilot scheme should be considered for rural cottages built by local authorities, particularly those built 30 or 35 years ago when the provision of insulation was non-existent. As a result, there are significant energy waste issues. If our aim and that of the SEAI is to reduce the amount of energy being used by householders and businesses, retrofitting is a major issue.

I have concerns about a number of issues, but I understand there are time constraints. On renewable energy resources, particularly wind energy, we have seen major benefits. However, there are issues with local communities. How are we to integrate schemes and respond to the concerns of local communities? There are questions with regard to small-scale operators as opposed to larger installation companies. My main concerns relate to inspections, the warmer homes scheme and integration.

9:50 am

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I thank Mr. Motherway and Mr. Clancy for their presentation, in which they mentioned the 2020 targets. Are they confident these targets will be met?

Micro generation for farmers and smaller communities has been mentioned. How viable are these smaller operations? It is important that small operators see a benefit and that this subsidises their other activities.

Tidal or wave energy was mentioned. What is the current position on that technology? Is Ireland on target to take advantage of the latest developments?

On the Better Energy Homes scheme, as public representatives, we receive a significant number of queries, particularly from the elderly who have difficulties with such schemes. I have been in communication with the SEAI on a number of occasions in this regard. For many of the schemes one applies online where the approved grants are explained. People then go ahead and do the installation work or make the improvements, based on tight margins and what they can afford. However, they often find that their grant application is disallowed. I have come across some difficult human stories. People operating on tight margins get no hearing for their difficulties which are due to their not receiving a clear explanation of what the scheme involves. They are told all of the information is online and that they should know what is involved in the scheme.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Does the Deputy have a question?

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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Is the SEAI happy with people's level of understanding when they apply for these grants? Why is approval granted so quickly and then the onus is on applicants to prove their entitlement to a grant? In a sense, it is as if they are guilty until proved innocent?

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I thank the delegation for coming. Our targets for the use energy from sustainable and renewable resources are grossly under-set. As a nation, we should be in a position to avail significantly more of such energy. There are a number of issues, one of which is pricing. It is not just the current price of electricity that makes it difficult for citizens and businesses to operate, but also the uncertainty with regard to costs in the next three to five years. It must be possible to predict more accurately the costs involved within a sustainable energy environment than within a fossil fuel environment. What is the opinion of the SEAI in that regard? What is required which would enable energy costs to be fixed for a three or five year period? I suggest we go for a 60%, rather than a 16%, target for sustainable energy. What would be the impediments to this? How does the level of national investment in sustainable energy projects match that in fossil fuel energy projects?

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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I invite the delegates to answer the questions put by these three members before we move on to another group.

Dr. Brian Motherway:

I will start with the questions asked by Deputy Michael Moynihan about our grant schemes and retrofitting which are related to the question asked by Deputy John O'Mahony. Under the Better Energy Homes scheme, grants have been provided for approximately 150,000 homes in the past three year, creating significant employment and benefits. We acknowledge that with such a large scheme, there will always be cases where people believe the rules are unclear or cause difficulties for either contractors or homeowners.

With regard to contractors, in disbursing public funds the scheme gives rise to a number of issues around the governance of funding, financial management and quality of work which attach a level of bureaucracy to the scheme. We try to minimise this to make the process an easy experience for both the contractor and the homeowner. However, we focus on the quality of work done and the financial probity of the contractors. Where there are specific issues, we always try to deal with them to make the scheme accessible to small companies, as well as larger ones, as far as we can. Sometimes larger companies find it easier to meet our requirements in terms of financial management simply because they are larger. However, we try to work with smaller companies because we realise they are an important part of this sector. We are always happy to talk to specific companies that wish to talk to us or discuss issues such as how we can help them to participate within the overall governance rules.

Photo of Michael MoynihanMichael Moynihan (Cork North West, Fianna Fail)
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With regard to grant applications from smaller companies, is it correct that the SEAI accepts applications from larger but not smaller companies?

Dr. Brian Motherway:

The process of paying grants will be in transition in the coming year. As the Deputy may be aware, it is Government policy to move away from making up-front grants towards what is called a pay-as-you-save scheme, under which financial support will not be based on a grant but more on a loan model. Homeowners will pay for the work over a long period from the savings they accrue. Therefore, we are in the process of making changes to the scheme.

For the most part, we try to treat all installers in the same manner. If they have the wherewithal to manage our systems, we try to give them as much responsibility as possible. We try to deal with them on an individual basis. If the Deputy is aware of specific companies with issues, we would be happy to speak to them to discuss these issues or if they consider they are not being fairly treated and would like to do things differently.

Deputy John O'Mahony asked about homeowners. Ours is a large-scale system and we use online processing as much as possible. We have a quick approval process because it means most people can get on with the work involved. We also have postal channels and hotlines which people can call. We put a significant onus on contractors. The contractors who are registered with us and have signed up to the code of practice know the levels of installation required and the work they need to do for grants to be applied. We expect them to deal fairly with the homeowner in terms of what they propose to do in a home. If that does not happen, we try to resolve the issues involved.

We always try to deal with specific cases on a case-by-case basis. We decided last year to establish a special fast-track channel to allow Members of the Oireachtas to contact us to make us aware of particular cases that were proving to be difficult. We did this because we were receiving representations from Members of the Oireachtas. We deal with queries we receive at the special e-mail address, oireachtas@seai.ie, if it is possible to do so. I can circulate details of the system to members of the committee who may have queries.

Deputy Michael Moynihan asked about the warmer homes scheme, whereby the State takes on the full cost of upgrading from an energy perspective the homes of those in what is loosely known as the fuel poverty sector. We have upgraded approximately 90,000 homes in that way in the past few years. As the Deputy correctly pointed out, as part of a pilot scheme we are working in partnership with local authorities and other bodies to target whole communities, as well as individuals. We welcome the suggestion we should focus on particular sectors such as rural cottages. We hope to expand the pilot scheme next year in the context of the Government's new energy affordability strategy which was launched earlier this year. As well as dealing with individual queries and requests, the strategy places a focus on the area-based approach to which I have referred. We hope to continue to operate in this way in the coming years.

Deputy Michael Moynihan also referred to some of the concerns of local communities about wind energy developments. We are aware that in some areas wind energy projects are becoming more controversial and raising more concerns. It is very important that local concerns are listened to and addressed. The sector is getting better at consulting local communities and taking their concerns on board. We actively encourage wind energy project developers to place a significant focus on local consultation, involvement, benefits and participation in projects. That will help the sector to continue to grow.

Deputy John O'Mahony asked about the 2020 targets. We are confident that the targets can be met. The most significant progress in recent years has been made in the area of renewable electricity. This has been driven by a healthy wind energy sector which, in turn, has been driven by a healthy wind resource in Ireland which we hope will continue. The heat and transport sectors are probably more challenging because the technologies are not as mature or cost-effective as they are in the wind energy sector. We will continue to work on this issue.

I was asked about micro generation by farmers and others in local communities. We take the point that it is very important for local people to be able to supplement their income in this way, while also feeling the benefits of renewable energy production. From the perspective of the farmer, the challenge in the case of wind energy is that it is one of those technologies where the bigger it is, the more economically viable it tends to be for various reasons. Smaller devices tend not to be as quick at repaying one's investment. Nevertheless, we are seeing a healthy interest from the farming community and other rural sectors. They are interested not just from an economic point of view but also from an environmental stewardship point of view. We will continue to work with such individuals. The programme for Government contains a commitment to examine how the micro generation sector can be supported into the future.

The SEAI is very positive about the future of wave and tidal energy technologies for Ireland. The renewable energy resource available off Ireland's shores is truly massive. It could generate a great deal of clean electricity for Ireland and other countries. However, the technology is still immature. The technology associated with tidal power is technically easier. It involves locating a conventional-type turbine at a location where water flows in and out. A company in County Louth is exporting technologies to several countries. That is quickly becoming cost-comparative, but wave energy technology will take longer to develop. A number of Irish companies are developing devices, but none of them is yet fully mature. It is a new technological area which is still under development. The technology is still relatively expensive, but we are optimistic about where it can go in the future.

Deputy Michael Colreavy asked about the ambition for the sector. We certainly share the sentiment that this is a great opportunity for Ireland and more can be done. The targets may seem low, but they are challenging for the birth of a new sector. With the exception of wind energy which I have mentioned on a few occasions, the technologies we are discussing are still more expensive than conventional technologies, even though prices are coming down rapidly. The cost of solar power, for example, has reduced globally by over one half in the past five years, which has suddenly made it a much more viable technology. We hope to see prices continue to fall. However, there is a cost question in the short term, as some renewable technologies remain more expensive than conventional technologies, which is limiting their uptake from the State's point of view and also from the point of view of the consumer. I accept the point that renewable energy production brings stability to prices as it grows. The biggest cause of instability in electricity prices is the volatility of global commodity prices such as of gas and oil. We remain vulnerable as a small price-taker in these global markets. The more we can deploy our indigenous sustainable and predictable resources, the better the scenario for Ireland from an economic and environmental perspective.

10:00 am

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I would like to follow up on that aspect briefly. As a nation, we cannot have two main priorities. There has to be positive discrimination in favour of what we, as a nation, believe to be a proper source of energy. I do not believe we are there, or anywhere near there yet and we need to start thinking about how to get there. We need to have very clear thinking on what is our main priority.

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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It seems hydroelectric power generation is still the most cost-effective way of generating electricity. What is the current status of the Spirit of Ireland initiative? A number of years ago it was suggested the initiative would provide the answer to all of Ireland's energy ills. Is it still on the radar? Does the SEAI have any data for how the central heating districts throughout the country are working? Is any of them up and running?

I have a particular interest in tidal energy because Ireland's long coastline means we have significant potential in this area. I understand, however, that Ireland is a number of years behind Scotland in its development of this resource. I am also aware that there is a large tidal power plant in France. We need to take an all-island approach to the development of wave energy projects, rather than having Ireland and Britain working separately.

People who have old mills on smaller rivers where hydropower mechanisms are still in place seem to be coming a cropper because there is no policy in this area. They are encountering difficulties as a result of fisheries and environmental concerns. Is a policy being developed in that regard? Do the representatives of the SEAI have any ideas on how we could drive policy in that area?

Photo of Eamonn CoghlanEamonn Coghlan (Independent)
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I welcome the officials from the SEAI. I guess it is all about supply and demand. The greater the demand, the more prices will increase in the next few decades. As someone from an electrical background - my family was involved in the sector - I was always educated at home to turn off the lights and turn down the heating as much as possible. The delegates said the SEAI had identified where energy was used, but has the authority identified where it is wasted? Does it have a record of how electricity is wasted? Has the SEAI run infomercials or information campaigns to educate consumers on how to save electricity? My kids give out to me when I go around the house turning off the lights. They say, "Come on Dad - penny wise, pound foolish." I would like to know whether consumer campaigns have been organised to educate domestic and commercial users.

Will the representatives of the SEAI explain how the shared network relationship between the Twenty-six Counties and the Six Counties works? Is this relationship of economic benefit to the consumer?

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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I would like to ask a further question. If we do not get the interconnector up and running, we will not be able to export any of the renewable energy we are trying to produce to any other market. The interconnector is perhaps the most important element of the plan.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Does the Deputy have a specific question?

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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How are we going to try to deal with this issue?

This comes back to the issues of planning and local communities.

10:10 am

Dr. Brian Motherway:

I thank members for their questions. Deputy Ann Phelan inquired about hydroelectricity and Spirit of Ireland. As far as I am aware, the latter is still developing. There are a number of similar concepts but, as far as I understand it, the Spirit of Ireland version involves building a number of wind turbines on artificial lakes and pumping energy uphill when the wind is blowing and then generating electricity by allowing it to flow back down again. Spirit of Ireland is considering this matter not only in the context of meeting Ireland's energy needs but also with regard to exporting to the UK market. There have been other developments in this space as well. A number of private companies are working on the idea of harvesting renewable energy in Ireland, not just to meet our needs but also in the context of exporting it to Britain.

This matter is also germane to the Deputy's question on the interconnector. She is entirely correct in referring to the need to have routes along which to export. In addition to the interconnector that was recently brought on line, we are probably going to need others to the UK and also to France. Some of these interconnectors might be developed by private operators, while others might be developed by the State. The future of electricity in Europe lies much more towards integration, both in terms of the market and also in the context of physical connection. This will suit Ireland because, ultimately, we will have a significant comparative advantage over most countries in Europe because it is less costly to generate renewable energy here. This is a result of the fact that Ireland is windier than most of its neighbours in Europe. We will, therefore, have an opportunity to sell power not just to the UK but also, in the longer term, to the remainder of Europe.

Quite a number of developments have taken place in respect of district heating in recent years, particularly at the tail end of the building boom. This involves the idea of putting in place a central large boiler which would pipe hot water and heat to a number of homes, businesses or offices. District heating usually makes the most economic sense when there is a mixture of domestic and commercial uses at play and, in particular, if a school, a swimming pool or whatever, can be included. There have been a number of developments along these lines. It also tends to be deployed quite a lot in apartment blocks, where the costs involved tend to be lower. For obvious reasons it has been employed much less in recent years. This is because district heating systems are much easier to fit into new builds than they are to retrofit because the latter involves digging up streets, etc. However, there continues to be activity in the sector.

We are of the view that Ireland could be a leading global player in the marine energy sector, particularly as it has a ready-made resource off its shores. Scotland and France are among our competitors in this area but we also work with them. Some of the technologies being deployed off France are made in County Louth by a company called OpenHydro. This company recently won a contract to deploy its devices off the coast of Northern Ireland, which speaks to the all-island question. While very much in its infancy - this is because the technologies involved are quite new - we are of the view that this sector has significant long-term potential, particularly in the context of the development of technologies, expertise and services here.

Photo of Michael ColreavyMichael Colreavy (Sligo-North Leitrim, Sinn Fein)
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What is the name of the company to which Dr. Motherway referred?

Dr. Brian Motherway:

It is called OpenHydro. If the Deputy requires further information on it, we can provide it after the meeting.

Senator Eamonn Coghlan's point about supply and demand is correct. The waste of energy is very close to the hearts of those who work for the Sustainable Energy Authority of Ireland. We have worked on energy efficiency and energy wastage for many years. Even as a seasoned actor in the sector, I continue to be shocked by the amount of energy we all waste in our homes and businesses. Our statistics suggest that we could easily reduce our total energy demand through simple actions such as buying better quality light bulbs, better boilers and by turning off appliances. Some of the grant schemes we have run in respect of the retrofitting of insulation and boilers into people's homes have had a significant impact nationally in the context of saving energy. However, there is a great deal more to do. The business sector is taking strong action because those in it realise they can reduce their cost base by upgrading their energy efficiency and thereby reducing their bills. We have been approached by many companies in this regard. We offer grants to companies but we also offer free advice. If any business of any size wishes to approach us, we will give it free advice on how to save energy and hence reduce its costs.

There is a great deal of information in respect of this matter on our website and people can download mobile phone applications to obtain free information. We also engage in a great deal of activities in schools. For obvious reasons, the school audience is ripe in the context of educating people not just about the green dimension but also in respect of cost. We benefit from a nice, healthy information flow in this regard. I hear a great deal of anecdotal evidence from people about their children coming home from school and telling them what they should be doing to save energy in their homes. There is a great deal more awareness of sustainable energy than was the case even five years ago. We want to build on that awareness, and the interest which accompanies it, to develop further the various dimensions of our policies, for both economic and environmental reasons.

I was asked about the all-island nature of our network. We have an all-island electricity market but the Commission for Energy Regulation would be better placed to discuss this matter in detail. If it is acceptable, I will leave it to the commission's representatives to answer the question posed in this regard. I believe I have covered all of the matters raised.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Dr. Motherway referred to the potential to export energy to Europe. When does he envisage that this will become a reality? Which country would be our biggest competitor when we reach that stage?

Dr. Brian Motherway:

We are hopeful that we will be exporting to the UK by the end of the decade. The intergovernmental discussions taking place at present are focusing on helping the UK to meet its 2020 targets. It will be well into the next decade before the relevant infrastructure such as interconnectors, etc. will be in place to allow us to start selling energy further afield. There is currently a strong trend towards a fully integrated European market, what some people refer to as the "supergrid", which will involve all countries being interconnected and power being moved over much longer distances. Even though it costs more to move power over a greater distance, the fact that the resource available in Ireland is so strong will compensate for this. The benefits of generating electricity in Ireland are sufficiently strong to cover the cost of transmitting it over longer distances.

Our competitors will be other countries with strong resources. We are of the view, however, that we have the potential to be a strong leader in the field. It will be a question of whether the relevant technologies will be deployed. Some countries, such as Britain and Germany, are focusing a great deal on offshore wind energy at present, which is more expensive to generate than onshore wind energy. I accept, however, that the costs will decrease as technology develops. The imperatives to move towards renewables and away from fossil fuels are so strong globally that there will be opportunities for many technologies to develop. I do not believe there will be only one winner. There will be market opportunity for anyone who can develop solutions which can be used to generate clean electricity and move it at a reasonable cost. As a result of the fact that Ireland is a relatively small-scale player, it could be generating a great deal of electricity by its standards, but this would not mean that we would be taking over the European market or would be obliged to beat every other player. In light of our natural comparative advantage in this sector, we could be part of a healthy market.

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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If there are no further questions, I wish to sincerely thank Dr. Motherway for the huge amount of information he provided. We will suspend proceedings for a few moments in order that the representatives from the Commission for Energy Regulation, ComReg, can take their seats.

Sitting suspended at 10.48 a.m. and resumed at 10.50 a.m.