John O'Mahony (Mayo, Fine Gael)
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I welcome the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, and his officials and invite him to make his opening statement on the recently launched Green Paper on Energy Policy in Ireland.

Pat Rabbitte (Dublin South West, Labour)
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I offer my apologies to the Chairman and members if they were kept waiting but I was at another engagement and did my best to extract myself.

Timmy Dooley (Clare, Fianna Fail)
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Would Deputy Burton not let the Minister go?

Pat Rabbitte (Dublin South West, Labour)
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I doubt the veracity of that, Deputy Dooley.

I am glad to be here to discuss the recently published Green Paper on energy policy. The many developments at national, EU and international level since the energy White Paper of 2007 make it timely to review our energy policy and to consider how best to shape it for the future.

The context in which these discussions will take place is inevitably complex, with many interrelated strands and competing interests. The cornerstone of energy policy will continue to be the three pillars of sustainability, security and competitiveness. In addition, there is increasing recognition that the energy sector is an important contributor to the economy both financially and in terms of the numbers employed in the sector. It has the potential to generate further economic activity and real employment.

The Green Paper is taking a long-term look at the policy, the regulatory and societal interventions we need to make in the coming years. Government, industry, system operators and the public will all need to make sound evidence-based choices.

In developing our energy policy for the future we face several key challenges, including reconciling competing and interrelated dynamics of the three pillars, to ensure good equilibrium and maximum flexibility on an evolving energy landscape; significant international policy developments such as the impact of indigenous shale gas in the United States on EU energy prices and geopolitics generally; the United Nations fifth report on climate change and the need to closely align climate change and energy policy; the importance of informed engagement by the public in energy debates, especially on affordability, renewable energy, climate change and energy infrastructure; and the potential of energy policies to transform the economy and stimulate jobs and growth. The challenge for policy makers is to find the right balance of measures, taking account of these complex interrelationships and the need to maintain the economic and social fabric nationally and regionally.

In view of these many and complex energy challenges, I considered it timely to publish the Green Paper to stimulate an informed debate on the future shape of energy policy. I decided that, set against the backdrop of the three energy pillars and the need to stimulate economic growth, the paper should focus on a number of key themes. This does not preclude anyone from raising other issues during the public consultation process. The six priority themes chosen are empowering energy citizens; markets, regulation and prices; planning and implementing essential energy infrastructure; ensuring a balanced and secure energy mix; putting the energy system on a sustainable pathway; and driving economic opportunity. There are inevitable tensions between competing policy objectives. Resolving these complex and interrelated policy choices is critical, especially if we are to encourage the right conditions for economic recovery and job creation. These difficulties are further compounded by the continuously changing energy landscape. For example, the International Energy Agency’s World Energy Outlook for 2012 highlighted the significant change on the global energy landscape which had taken place owing to increased deployment of hydraulic fracturing and horizontal drilling. The USA’s unconventional oil and gas production is having a profound impact on international energy markets and prices and likely to have significant implications for EU competitiveness and geopolitics generally.

Of equal importance is how to reconcile energy policy and climate change. This has been underscored in the United Nations’s fifth assessment report which concluded that the effects of climate change "are already occurring on all continents and across the oceans" but that the world was "ill-prepared for risks from a changing climate". We have a progressive position on climate protection, but we also have a long way to go in terms of economic recovery, particularly in the context of the challenging greenhouse gas mitigation target for 2020 set for us under EU law. It is clear that an equitable distribution of effort sharing will be required in allocating national contributions to achieving new targets under the 2030 climate and energy framework. Economic development and low carbon transition are not mutually exclusive and can be progressed in parallel, provided we advance on an informed and sensible course.

Involving the citizen in debates on energy and climate change must be central to policy development. We need to develop balanced and far reaching policies on areas such as grid development, the use of wind resources and the streamlining of public permitting and consent procedures. In doing so, it is important that past lessons are learned and that we adequately address valid public concerns about the impact of policies on the environment and health and safety, while, at the same time, ensuring security of supply and cost effectiveness. The Green Paper aims to encourage a wide ranging debate on this critical issue and I look forward to suggestions on how we can achieve effective and informed public participation and engagement.

I refer to prices, an issue that is important for all energy consumers, whether residential or business. Prices have been fully deregulated in the electricity retail market and the regulator has decided on 1 July as the date for complete deregulation of gas prices. Consequently, prices are mostly set by suppliers and commercial and operational matters for them. Customers can and do avail of competitive offerings from electricity and gas suppliers. We have a limited capacity to influence prices, as electricity and gas costs in Ireland are influenced by various drivers outside our control. These include global gas and oil prices, the cost of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and our low population density. The most important factor affecting electricity prices in Ireland is the continuing upward trend in international gas prices. To mitigate the impact of these factors, we must remain focused on controllable costs bearing in mind their limited extent. Increasing the penetration of indigenous secure renewables and adopting greater energy efficiency measures in homes and businesses are among the most significant ways we can counter the effects of cost drivers.

The promotion of energy efficiency is an area within our control where action can be taken to reduce energy costs. Initiatives such as the new €70 million national energy efficiency fund will act as a catalyst to develop energy efficiency projects in the market and enhance the level of finance available to support the clear energy and cost saving opportunity for public and commercial sectors. The development of indigenous sustainable sources of energy will also help to offset the impact of volatile fossil fuel prices. I hope to hear innovative and creative suggestions on the further steps we might take during the consultation phase on the Green Paper. I hope to publish a new bioenergy strategy in the coming weeks which will inform the debate on how best to put the energy system on a sustainable path. A more indigenous low carbon economy, centred on energy efficiency, renewable energy and smart networks, offers great scope to address the interrelated challenges of climate change, energy security and competitiveness. Achieving this transformation lies at the heart of the Government’s energy policy.

As we develop the new technological know-how to manage the electricity system of the future, we are creating opportunities for Irish-based companies to become world leaders in smart grids and deliver working solutions a decade ahead of their international competitors. In building on our strengths we have the opportunity to further develop Ireland’s reputation in the renewable energy sector as a place of excellence in research and the development of new technologies.

To sum up, we need a new transformative vision for a robust energy policy framework for the future. The Green Paper provides an opportunity to reflect and take stock of our current position and adopt a long-term view on the interventions necessary to help to shape future energy policy. Competitiveness, security of supply and sustainability, as well as energy policy’s potential to support economic growth and job creation, will remain at the heart of energy policy as we move forward. I look forward to an informed and robust debate and would like to encourage everyone to engage actively in the public consultation process in order that we can collectively transform the Irish energy system for the coming years.

John O'Mahony (Mayo, Fine Gael)
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I thank the Minister who has clearly outlined the challenges and the opportunities ahead in the energy sector. Significant change has taken, is taking and will take place. The Green Paper highlights the reduction in energy needs since 2007. Energy demand has fallen by 19% and as a result, CO2 emissions have reduced by 21%. Transport energy demand has reduced by 27%, with a 43% reduction in demand for freight transport. Has the downturn in the economy given us a better opportunity to plan? Has it allowed us to meet our targets and so on?

The alternative question is where would we be now if the economy had continued to boom. Would it have meant the country would have had a serious shortage on the electricity grid?

Pat Rabbitte (Dublin South West, Labour)
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It is a very interesting question which shows how forecasting can be such a difficult business. When people sat down in 2006 to prepare the White Paper of 2007, clearly, nobody foresaw the dramatic step-down in economic activity. Around 2006 we were on a knife-edge in terms of our capacity to meet demand and it was very fragile. The 19% reduction to which the Chairman refers is dramatic. Yes, there have been energy reduction measures and some improvement generally in our consumption patterns and all the rest, but, primarily, it is due to the economic step-down. The Chairman’s question concerns whether this gives us some headroom in planning, to which I believe the honest answer is “Yes.” We are not on the same knife-edge. The possible exception is that we now operate in an all-island energy market and Northern Ireland does not have the same easy security of supply in the immediate years ahead. That is hugely significant in the context of the interconnector project planned between County Meath and County Tyrone.

The Chairman is right about the urgency that might have been evident in 2005-06. It does give us time to plan and is one of the reasons, although only one, I opted for a Green Paper rather than a White Paper. So much has changed and while the Chairman has put his finger on one of the reasons, we must also look at international developments. The revolution in unconventional gas and oil production in the United States is also a hugely significant factor and the European Union is preoccupied with the competitiveness implications of that development for Europe. Gas prices here as compared to those in the United States have been turned on their head dramatically. In the United States one will find people connected with the energy business predicting that in the next ten or 15 years the United States will head for self-sufficiency. This would have enormous implications both for geopolitics and energy policy in the European Union. The short answer to the Chairman's question is that he is right, that this does give us some time. That is why we have a Green Paper and an open invitation to all to contribute during the public consultation phase.

Timmy Dooley (Clare, Fianna Fail)
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In the renewable sector as a whole, Ireland has invested heavily policy-wise and, in general terms, in the wind energy sector, but we have not done as much as we might have in the wave and tidal energy sector. I accept that they are at an early stage in terms of development, but they have been at that stage for some time. The Minister has rightly identified the emergence of hydraulic fracturing as an opportunity to generate energy closer to home and that seems to have taken some of the smart money in developing an alternative energy source away from the wave and tidal energy sector. I am a little concerned that we are, to some extent, starting to buy into this.

I note the Minister's comments on the context in which we are competing with the United States. We have always competed with the United States which has always had a cheaper source of energy available in terms of its oil drilling business and this has not prevented us from developing our industrial sector to date. While I accept that it is a challenge, our unique characteristics on the western side of Europe give us an advantage, if we could get our heads around investing a little more in wave and tidal energy projects. Clearly, the markets have not advanced the moneys needed. It will take a progressive approach on the part of the Government at some point to really make it happen.

On the fracking issue, the jury is out in some countries. From what I have seen and the general view, for a country as small as Ireland with a strong tourism industry, it is just not an option. I know there are exploratory licences, but we would have done better from the start if we had just said: “No, thanks, we are not interested.” While l accept that it is always important before one makes a final decision to look and see, from what is available from other countries, we should be at the point of saying it is just not for us. I can understand why it works in parts of the United States where there are vast tracts of land that are entirely depopulated and if there is a level of destruction of the environment, it is manageable and can be contained and the impact is relatively limited. I am not an individual who jumps on the bandwagon and says, “Not in my back yard” - quite the opposite. However, in this instance, we must consider the potential impact not just on drinking water but on the visual amenity of the country which we market very strongly as a green destination from a tourism perspective. Wearing my hat as Opposition spokesperson on tourism, I would be deeply concerned about anything that might emerge in that regard.

On LNG, liquefied natural gas, what is the Minister’s view on the decision of the regulator to include a cost for the gas interconnector in respect of the LNG project at Ballylongford? This has effectively prevented the project from going ahead, as he knows. He has noted that the Green Paper is strong on the issue of competition. The LNG project would have provided for a level of competition and assisted with security of supply. It was unfortunate, therefore, that the regulator took the decision it did in that regard.

In a broader context, does the Minister believe there is still a need for a regulator in the energy sector? Have we reached a point where we can move on from it and allow the market to effectively dictate the supply of energy?

Pat Rabbitte (Dublin South West, Labour)
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Quite honestly, the last question is a six-marker, on which I do not have sufficient knowledge to give the Deputy an informed reply. It is a very big question as to whether, having deregulated prices and with gas prices about to be deregulated from 1 July, there is a need for a regulator. I would have thought our EU partners would be horrified at the suggestion there would not be a regulator. I would certainly appreciate an input during the public consultation phase on the regulatory regime in Ireland from whomsoever wishes to make an input, not just those who have a vested interest in making a pitch on that issue.

I could avoid the Deputy's question on the regulator taking into account the cost of the interconnector as part of the infrastructure by saying that I do not have to answer it given that the highest court in the land decided it is right that it should be taken into account. My Department has consistently argued that it is an integral part of the infrastructure and that the interconnector has to be remunerated. In those circumstances a level playing pitch is necessary. We could not allow a situation in which a decision made on a particular company does not apply. For example, Corrib gas will come ashore next year and the project may beat the summer 2015 deadline which was fixed several months ago. The same rules would have to apply in that context. The judgment, which I had to read, is a very detailed and extensive unravelling of the complex issues arising. I was persuaded by the correctness of the decision. It is not right to say that it has prevented the LNG project from proceeding at Tarbert. Coincidently, I met the promoters of the LNG plant at Tarbert last night. I remain hopeful that it will provide an extra string to our bow in terms of an LNG facility. I am actively working with the promoters to see how the Government can facilitate the project and I have every hope for its future.

Deputy Dooley raised an interesting question regarding our focus on renewables in Ireland, which has primarily been on wind. I am proud that, notwithstanding the straitened circumstances in which we found ourselves, we managed to maintain our investment in research in wave and tidal energy. The offshore renewable energy development plan, OREDP, which we published in September, takes an imaginative and comprehensive approach to the future exploitation of offshore resources as a contribution to our energy security and needs. We continue to invest in this area. I do not know of any country which has made great advances beyond the research and development stage in which we are currently engaged. We are carrying out innovation work in this respect in co-operation with the sector. It will undoubtedly become an important source of energy in future but it will not meet our energy needs next week or next year. Last year we hosted a major international conference on ocean energy which was attended by approximately 950 delegates. The scientists attending the conference lauded our potential for developing wave and tidal power given that we are an island nation. Our main thrust has been to maintain investment in the test beds, including work by the Irish Maritime and Energy Resource Cluster, IMERC, in Ringaskiddy and the development of the new Beaufort laboratory. This area is, therefore, very much on our radar and it is included in the Green Paper.

Patrick O'Donovan (Limerick, Fine Gael)
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It is important for my part of the country that the lines of communication between the Department and the promoters of LNG are kept open. Leaving aside the regulatory issues, the major size of the project would help to transform the economies not only of west County Limerick and north County Kerry but also the entire mid-west region. It has been likened to a new Aughinish Alumina for the Shannon Estuary. There are concerns locally, however, about the delays in developing this potential win for the State.

The Minister referred to Corrib gas. Notwithstanding the regulatory issues in LNG, where would we find anybody who would be willing to make a substantial investment in Ireland given the experience from a regulatory and a planning point of view in terms of bringing resources onshore, which is regarded as straightforward in other countries? Will the Green Paper address some of the issues that arise in terms of capital investments required by companies to come into Ireland and, in some cases, the welcoming committees rolled out to meet them?

The issue of biomass and incorporating the biomass industry into the energy sector is very relevant to my constituency. The Minister will be aware of the issues arising in respect of the application of REFIT from Bord na Móna for those who cultivate miscanthus. I am interested in learning more about the relationship between the Departments of Communications, Energy and Natural Resources and Agriculture, Food and the Marine in this regard. On the one hand, the Department of Agriculture, Food and the Marine is actively encouraging people to cultivate energy crops but, on the other, there is a lack of a transition from farm gate to end of life use for crops that could compel, for want of a better word, State-owned entities such as Bord na Móna, Bord Gáis and ESB to use these products to meet our carbon targets. Biocrops are currently being cultivated on a considerable area of land across the country, with significant investment from the State by way of grants from the Department of Agriculture, Food and the Marine. There appears to be confusion as to how these crops can be best utilised in meeting the State's energy needs.

Pat Rabbitte (Dublin South West, Labour)
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I can reaffirm there are the close contacts and co-operation on LNG. We have to be careful to ensure we have diverse sources of supply. When one considers the crisis in Ukraine, depending on a single source for supply is not encouraging in terms of energy security and, therefore, it is important to develop indigenous resources, including renewables. LNG will also become an important aspect of ensuring future security of supply. Apart from what it would do for the region that Deputy O'Donovan represents in terms of employment, it is an important policy objective.

As regards its having gone on too long, I find it hard to make up my mind on that issue in the sense that global developments in energy affect major investment projects. Investment in energy projects is so massive by comparison to the more normal investment in this economy that there is a longer timeline between conception and execution than in any other area I know of, and there is nothing unusual about a major investment taking ten to 15 years in energy internationally. Therefore, I would have thought that the step-down in economic activity here, to which the Chairman drew attention at the outset, and the changes that have taken place in the global marketplace, where, for example, the United States is now exporting coal, are developments that were not foreseen. I believe they do affect the pace of decision making in other areas. I hope the energy project will be realised for a whole variety of reasons.

I do not know if it is fair to say that what has happened in north Mayo is typical of Irish attitudes to industrialisation or anything like that. I do not think it is. I do not deny that what has happened at Corrib has been communicated around the world, as that is certainly true. Mistakes were made, of that there is no doubt. If one goes back far enough, to the period of switchover from Enterprise Oil to the present ownership arrangement, the mistakes were not all on one side either. We have been trying to address these issues going into the future. I honestly cannot recall whether an expansive piece of legislation to do with foreshore licensing, permits and all the rest has actually been published. It certainly has been brought to Government on more than one occasion at its various stages by the Minister for the Environment, Community and Local Government. It is a major piece of legislation, which is very far advanced, although it has not been published yet. It will provide more clarity in the future in this particular area. I have had some input into it, given our concern in this area.

The miscanthus episode was not a happy one, which I entirely accept. My colleague, the Minister of State, Deputy Fergus O'Dowd, will within the next two or three weeks publish a major policy statement on bioenergy. I hope it will pick up on some of the points and disconnects the Deputy has raised.

There has been discussion for some time now about the synergies that might obtain between aspects of two different State companies, Bord na Móna and Coillte. I believe that process is also coming to an end in the sense that there are some overlapping areas and there are undoubtedly synergies. The question has been mooted as to whether one could create a bioenergy company by merging the two companies. There are also strong views that both companies should concentrate on their core business and, where there are synergies, that issue should be addressed. Those discussions are about to come to an end. I imagine a Government statement will be made on that in the very near future.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I welcome the Minister and his team and thank him for his presentation. I said in the Dáil that I welcomed the Minister's initiative in putting forward this Green Paper. I could hardly do any less, having called for it for some two years now. I recognise it is not going to be easy to come up with a blueprint to ensure we have a sustainable, secure, competitive energy market that enjoys the support of the majority of people, particularly for certain projects in certain communities. However, I have already indicated in the Dáil that I want to work with the Minister and the Department on this because I share the vision that we have to maximise our use of renewable energy in this country.

I will be submitting a detailed response to the Green Paper. If I may, I will go through the six headings that the report hinges upon. The first is "Empowering Energy Citizens". Language is a funny thing. We sometimes take a condescending approach towards public consultation, and what we mean by public participation or consultation is that we make "them" understand the scientific facts. That is not what I would regard as "Empowering Energy Citizens". What I would look for is a way to give real power to local communities and to local government, representing local communities so they would become an intrinsic part of the whole wider energy strategy. It is not simply a question of conveying and convincing them that the science is right. It is a process of getting communities and local authorities engaged as part of the wider energy strategy. In that regard, I would be looking at issues such as micro-generation projects, the cost of connecting to the network and obstacles in the way of those who, in many cases, wish to put up their own money to help themselves to access energy that is renewable, that is micro and that serves a purpose for them. We have a lot of work to do under that heading of "Empowering Energy Citizens".

Under the second heading, "Markets, Regulation and Prices", and on the question of whether the CER should exist, European regulation has resulted in a fairly major overhaul of Irish and European energy markets. In our case, the ESB and Bord Gáis have been split into different companies, we have allowed some sections of those companies to be privatised and an area that was once under State control is now shifting to the hands of private companies. I know the Minister has said it is not his intention or wish that there would be increased privatisation but the same may not be said of another holder of the office. I will be arguing that, despite increased competition from the various energy companies and despite this push towards privatisation, energy costs have continued to rise. The CER should be doing more, or the process involving the CER should be doing more, to control the rising costs of fuel for families and for commercial consumers.

Under the heading "Planning and Implementing Essential Energy Infrastructure", I am concerned when I see the words "fracking" or "hydraulic fracturing" mentioned twice in the Minister's remarks.

I know the Minister will say there has been no fracking and that no decision will be made until the EPA reports have been prepared. However, I agree with Deputy Dooley on this issue. Even if we accept the denials of fracking causing damage in the countries in which it has already been introduced, it has not been tried on a small green island with a dispersed population and a reputation for agri-food based on clean and green. It is bordering on economic suicide to consider hydraulic fracturing given the nature of the island on which we are privileged to live. We should not even be preparing an EPA report because we should have prohibited it from the outset. The licence to explore was granted in the dark of night during the dying days of the last Administration. Serious questions arise about how and why that was done. We should not give any company the slightest glimmer of hope that we will allow fracking. These companies will take legal action against governments if they see the slightest sign that they invested money in projects that were prevented from proceeding. The further we allow them to proceed in their explorations, the greater the risk that they will take us to the cleaners. We should do the prudent and proper thing, and say "No, you cannot frack here."

I agree that we should investigate interconnectivity between the Six Counties and the Twenty-Six Counties, and between ourselves and Europe. It is a pity that the Government did not listen to Leitrim County Council 14 years ago when, on foot of a proposal I had prepared, it forwarded a motion to what was then the Department of Local Government to the effect that every motorway development should include a multipurpose service duct alongside the road. It would have added an additional 5% to construction costs but we would not now be having this debate about overhead wires. It shows the lack of vision and joined up thinking - I hate that phrase - among Departments that are working within their own bunkers and refusing to sanction an additional 5% in expenditure. It will now cost 100% more for a sister Department, all of which will come from the taxpayers' money.

It is important to ensure a balanced and secure energy supply based on a mix of renewables. We should not be relying solely on wind energy. The Minister has pointed out that the State is investing in trials of other options. We need to accelerate these investigations. We will have to put the energy system on a sustainable pathway. We have signed up to legally binding agreements on reducing our CO2 emissions and it is important that renewable energy is the focus of the debate.

In regard to economic opportunities, the State rather than the energy companies needs to be driving the energy agenda. The biggest risk to the vision set out in the Green Paper is that we fail to change that basic principle. I am not arguing that energy companies should not benefit from developments in this country but the State should be setting the agenda and making decisions based on the interests of Irish people and our energy security and sustainability. Development should not be at the whim of an energy company which will push a certain form of energy because it can get a higher grant for it. We need to take control of that horse. State companies like the ESB can play a role in developing energy opportunities. Any further privatisation needs to be opposed and it should be set out in writing that we will not allow it. All analysis needs to include an assessment of impacts of economic existing economic activities, such as agri-food, tourism and landscape and water management. I find it somewhat scary that when I speak to people who are involved in agri-food exports, tourism or water management they feel they should not have any concerns about the threat of fracking in this country. I do not understand that. No company will make money from poisoned water.

Pat Rabbitte (Dublin South West, Labour)
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Deputy Colreavy has covered considerable territory. I welcome his intention to make a written submission during the public consultation phase. In regard to empowering citizens on the energy question, the first major step in that regard is our decision to opt for a Green Paper, which allows interested parties, whether citizens, consumer organisations or business organisations, to set out, before 31 July, their considered positions on energy policy in Ireland. If I had produced a White Paper it would have been an indication that we know best and are not open to input from elsewhere to our settled policy. The merit of taking the Green Paper route at a time of significant change and dramatic developments that were not foreseen allows an opportunity to hold a debate that can lead to a White Paper. We may not make our end of year target but we intend to try. I hope citizens will take advantage of this opportunity.

We also intend to hold a number of workshops and seminars on various themes in the Green Paper which we will throw open as widely as we can so that they do not involve only the obvious stakeholders. We hope to arrange one of these sessions prior to the summer recess. Even after the closure of the public consultation stage at the end of July we will continue to run these sessions until the end of the year. The Deputy spoke about language and empowerment but we are heading into an era of, for example, smart metering whereby citizens will have more control over how they use energy.

They will be able to access energy when they need it instead of using it indiscriminately, as is currently the case. Technology allows us this capability.

I have dealt with the issue of privatisation. Deputy Colreavy knows the circumstances under which we were obliged to make some contribution to the bailout. We are making a much smaller contribution than was envisaged at the time this Government came to office. The disposal of the energy business of Bord Gáis brings another major player into the marketplace. Regarding the Deputy's other questions on pricing and so on, we have a more competitive marketplace now than we had only a short few years ago. This is to be welcomed.

I should not confuse the role of the regulator when replying to Deputy Colreavy's question on whether the regulator should be doing more on pricing. The regulator carefully scrutinises network costs to ensure they are not being ramped up and to try for some element of control over same by the network companies. This is the only element of price control exercised by the regulator. We have a competitive market. Unfortunately, we continue to import 96% of our gas and 100% of our oil. In those circumstances, we are price takers. In addition, market and exchange rate fluctuations and the small size of the Irish market are issues with which we must contend.

I welcome Deputy Colreavy's acknowledgement of the importance of an appropriate interconnection between the Republic and the North. The all-island energy market was a considerable achievement. In that context, the absence of the interconnector to mesh the two systems together is costing us a great deal of money. The regulator puts the figure at close to €30 million per annum. It is an important infrastructural project. It is large in Irish terms, although not internationally, at just 40 km of transmission between Meath and Tyrone. However, it is necessary and, from the point of view of Northern Ireland, urgent. It is also costing the taxpayer in the South up to €30 million.

John O'Mahony (Mayo, Fine Gael)
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Is that because we are not accruing revenue from the interconnector or because electricity is being wasted?

Pat Rabbitte (Dublin South West, Labour)
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It has to do with the efficient delivery of electricity, which is the first consideration. It is also a cornerstone of the North's energy security policy. I was asked whether we could debate these issues at more leisure now than when we were in the red hot heat of the boom. The answer is "Yes", but I would strip out the North-South requirement as being an exception to that. We need to get on with that part as soon as may be.

On fracking, there have been new technologies since man started being inventive. Some scared the horses at the time but came to be essential to the way we lived as civilisation evolved. There is nothing unwise or unusual in taking expert advice on a new technology and whether it is safe or threatens the environment. This is all that we are doing. Our Environmental Protection Agency, EPA, is staffed with experts and can take advices that it believes it might need of a professional and technical nature. The EPA is to produce an expert report for the Government on this technology. We have not gone any further. There is no hydraulic fracturing under way in the Republic. What the previous Government did amounted to nothing more than desktop surveys. In any event, as a member country of the EU where this subject inevitably arises from time to time, Ireland needs to have a position. Therefore, it is important that our position be informed by the best scientific and technical advice available.

I agree with Deputy Colreavy in that anything that despoils the natural beauty of the more scenic areas of this country is unacceptable, but it takes something like the Ukrainian crisis to bring home to those who sleep easy in their beds at night - in the conviction that when they plug in the kettle in the morning it will boil and when they turn on the light it will work - the fact that we cannot be cavalier about such matters. Security of supply is an issue in the world in which we live, and if it is an issue for those plugging in kettles in the morning, it is a far greater one for large energy users, especially the kinds of major company investing in Ireland today. The notion of an outage of five minutes would be unthinkable and would do immense damage to the industrial strategy being pursued by the country. We have to be careful not to take security of supply for granted. This means diversifying our sources and exploiting our indigenous resources as best we can. We have done this effectively in the case of wind, but we must continue to keep up with technology.

Helen McEntee (Meath East, Fine Gael)
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I thank the Minister for appearing at the committee two weeks in a row. I am delighted to hear that the Minister of State, Deputy O'Dowd, will shortly make an announcement on biomass fuels. A number of proposed projects in Meath focus not just on miscanthus but also on sugar beet, among other crops. That we are largely dependent on oil for transport means that many of these projects will play a role.

My question has largely been answered, as it is similar to the Chairman's. The first policy focuses on citizens, the participation of whom is necessary to shape the future. In 2011, there was a decrease of 27% in transport energy and 13% in industry energy. Energy usage per building and household has also decreased. As such, people can be forgiven for believing that we do not need so much infrastructure, which is the cause of upset for many.

If the 3% growth in GDP expected this year and the average 4% annual growth expected in the following years are not achieved and, when we reach 2020, there is still no public acceptance of policy in this area, what is the plan? The Minister has mentioned that in 2006 and 2007 we were on a knife edge and that the only reason we did not fall off the edge of the cliff was the economy did so. We would not want that to happen in 2020. Is there a plan in place and will it be included in the Green Paper?

Mr. Eric Mamer from the European Commission recently appeared before the committee, when he made the very interesting point that while the targets as set out in the Green Paper were legally binding, the Commission would not be forcing member states to comply with the 2020 targets. In other words, because there would be balance in terms of one country reaching the targets and another not meeting them the Commission would be happy with this. Does this have any bearing on reaching our targets?

On wind energy and turbines, where stands the intergovernmental agreement between Ireland and the United Kingdom? A particular project in County Meath was based solely on wind energy exports. Is it the case that if this agreement is not secured, companies will have to alter their projects and only supply the Irish grid? Does the Minister have powers in this regard or is it simply a matter for the companies concerned?

On effective and informed public participation, what has been the level of participation thus far and what will be the process following 31 July?

Noel Harrington (Cork South West, Fine Gael)
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I, too, welcome the Minister and his officials. I also welcome publication of the Green Paper. It is good that it has been published at this time. While this is not the best time in the establishment of policy, there is much that can be done strategically to benefit the State.

I would like to discuss further some of the points raised in the Green Paper. I often wonder if we had to undertake a rural electrification process of the type developed more than 90 years ago, how difficult it would be for us to do so in the current climate. Under the citizenship clause, infrastructural development, citizens' sensitivity to cost and consistent supply can no longer be taken for granted. Members may have heard the references by the comedian Des Bishop to our unique relationship with immersion. They are not far off the mark. Citizens are very price sensitive and this should always be remembered.

On the infrastructural section of the Green Paper, in terms of public consultation, we have not done a good job. It will always be challenging to secure stakeholder and citizen involvement and this process is not going to get any easier. As such, we need to learn from previous mistakes and shortcomings.

In regard to micro-generation, district heating systems and smart metering, practices in other jurisdictions are better. The Minister referred to our weaknesses in terms of our geography and the diversity of population. However, they can also be strengths in delivering programmes or initiatives, particularly in rural or peripheral areas, where the bar might not as high in terms of citizen involvement. I would wager that if initiatives were of community benefit, there would be greater community involvement.

Were the views of IDA Ireland and Enterprise Ireland solicited prior to publication of the Green Paper or have they offered their views on a consistent, sustainable and competitive energy supply? If so, what was their view on the delivery of these cornerstones of energy supply throughout the State rather than on the eastern seaboard only? The Minister might also say whether, as part of the research and development element of the Green Paper, there will be a greater mix of Government and private sector investment in research and development in the State. I am not sure there is a good equilibrium. Perhaps he might offer his view on whether there should be more or less Government intervention in research and development.

Terry Brennan (Fine Gael)
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I refer the Minister to the story I told him privately about a farmyard on which previously there was only one light but which now receives a 100 kVA supply. I thank him for his presentation. The energy reduction measures are to be encouraged in the home and industry. The Minister also referred to the changes taking place. Are we on course to meet our alternative energy targets by 2020? It is important that there be security of supply to all corners of the country for the next 20 to 30 years, irrespective of whether it is wind, tidal or other forms of energy.

This time yesterday I visited a business park in County Meath for which almost 20 years ago I designed the electricity requirements. I was taken aback by what had happened there. The original idea was to develop ten sites for small to medium-sized enterprises, with each being provided with water and sewerage facilities and 25 Kw of electricity using a 200 kVA transformer. I had not been to visit the site for almost 20 years and it had developed beyond recognition. There is a 38,000 kVA transformer station located in the middle of the development and demand on the business park is now 200 times what was originally anticipated. It is welcome that the ESB had the infrastructure in place to cater for all of the businesses on the site. As I said, the original intention was to provide ten development sites, on which 100 people would secure jobs. There are now almost 40 factories located on the site employing almost 1,000 people.

I cannot over-emphasise the importance of ensuring security of supply of electricity countrywide for the next 20 to 30 years.

Perhaps that is the reason IDA Ireland is hesitant to move away from the east coast in most cases. Yesterday I was deeply encouraged by the small IDA factories at the development I visited.

I knew this meeting was taking place today so wish to emphasise the importance of interconnectors North and South, east and west. We help one another at times of peak demand and provide electricity cheaply at times of peak demand in reverse. I also want to emphasise the necessity to move, as part of the European grid, in the interest of security of supply. That is of paramount importance.

We must reduce CO2 emissions but I am not sure who to talk to about it. However, I am convinced that we can reduce CO2 emissions throughout the country, particularly on our motorways which have, in some instances, excessive lighting and well exceed the demand for electricity. We should reduce the necessity to have so much lighting. I am just emphasising the requirement for doing so across the island. If a similar initiative was implemented in Sligo, Newcastlewest or wherever we could supply the electricity required to run a business park. Implementing such initiatives is the way forward. Parts of Ireland do not have an adequate supply of electricity which reduces the chance of attracting an IDA Ireland factory to the area. A business park comprising small and medium-sized industries is the way forward for many towns that are similar in size to Kells, County Meath which I visited this time yesterday.

Sean Barrett (Independent)
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I welcome the Minister to the meeting. On my way here this morning I saw that he was in the company of Wolfe Tone on the corner of St. Stephen's Green. I do not know which leadership or whatever he was following but I wish him the best of luck in that regard.

I welcome the Green Paper. The Minister is open to discussion, as always. Will someone tell me the number of different ways there are to generate electricity? As he will know, three of the Minister's party colleagues are vociferous opponents of wind generation. He knows who they are.

The different methods to generate energy are wind, tidal, offshore, biomass, solar, turf and LNG. Scientists present such methods, particularly wind, as being free but they are not. It would be valuable to the discussion if the Minister included the numbers in his White Paper.

Electric cars are technically feasible. One estimate has declared that an electric car requires a subsidy the equivalent of what a normal car contributes to the Exchequer. I say to the Minister for Finance - to whom I wish a speedy recovery - that one can do everything, technically, yet it may not make economic sense.

As the Minister for Communications, Energy and Natural Resources pointed out on page 17, the energy cost for households has increased by 29% between 2007 and the publication of the Green Paper, and also industrial energy costs have increased by 31%. That finding should ensure that energy is assessed by price alone and is also used more efficiently, including the incentive programmes that he mentioned.

CER successfully made the case for the stranded asset theory in the High Court, as the Minister said, but I do not know what the economic implications will be. Railways left canals as stranded assets and then roads left the railways as stranded assets. If I opened a new airport in one part of England and two industries compete against each other then one will become a stranded asset. I do not know if it is a stand I would like to hang my hat on unduly. Progress and the changes in pricing, mentioned by the Minister, seem to indicate that it would be cheaper to bring gas into Ballylongford. If that means a pipeline then it should be treated like an old piece of canal, a disused airport or whatever. There is no need to disrupt resource allocation in the rest of the economy because relative prices have changed. We might have to add coal to the picture as well. As I gather, fracking has been deemed a success because it has led to a dramatic fall in coal and gas prices, a fact that may improve the economics of Moneypoint.

I look forward to the White Paper and thank the Minister for attending. I hope that a debate can take place after he supplies the numbers that I have asked for.

John O'Mahony (Mayo, Fine Gael)
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Many issues have been raised. I ask the Minister to go through the list and Members can get clarification along the way.

Pat Rabbitte (Dublin South West, Labour)
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I have heard a good deal of common ground. I come down on the side of Senator Brennan regarding the critical issue of having an infrastructure and transmission fit for purpose. Deputy McEntee mentioned, and it was probably at the back of everyone else's mind, the scale of the stepdown in economic activity and wondered whether we need to continue to invest in building out the grid. In response, I ask Deputies and Senators to focus on what has happened in the housing sector. This time last year one could not sell a house here. At the time nobody could have forecast that we would have an acute housing need in Dublin. The housing situation changed overnight. Similarly, the economy will recover and it has started to grow and recover. Ní hé lá na gaoithe lá na scolb. That is not the time to start to address this issue. Deputy McEntee was absolutely right with what she said and it has gone through my own head a lot. We have had discussions on the matter. There are a lot of studies on how much additional investment is needed. There is no doubt in my mind that Senator Terry Brennan is right that one must have a grid that is fit for purpose. The Kells Business Park is not an isolated example and will be the case increasingly.

I agree with all of my colleagues who said it that this process will get more difficult. Deputy Harrington gave examples and wondered where we would be with the 1950s rural electrification programme if we had to deal with the scale of community resistance demonstrated in some parts of the country today. We practise a very difficult trade because it is very interesting to have the correct approach and the right scientific direction. If a politician does not get re-elected to the House then there is not much point in having additional knowledge to use in the policy formation stage. I understand that colleagues have come under a lot of pressure.

As I said here before, if we had not built the railways when we did then one would not be able to build them now. I am not sure that I agree, all of the way, with Senator Barrett's viewpoint that railways are a stranded asset. I was in the west of Ireland at the weekend and witnessed a lot of people pour out of the trains. However, I accept that the load factor may not be as big in the middle of a normal week as it was on the bank holiday weekend. Certainly, if we had not built the railways when we did then we could not build them now. It is a huge issue for us.

Reasonable people must be engaged with to explain that economic prosperity depends on having a grid that is fit for purpose. The comforts of modern day civilisation which – mostly fortunately – we enjoy in this country cannot be delivered unless we have a system that is fit for purpose. It is remarkable that we do not dig deeply into energy policy as we do into other policies. Senator Sean D. Barrett said he saw me on the corner of St. Stephen's Green where we were launching a report published by UPC on technology, uptake of broadband and the rapid pace of change in Irish society in terms of access to the Internet. If there is a party in the House that has a comprehensive policy on energy, I do not know it. Colleagues find it very difficult to confront some of the difficult questions. They have opposing views on such things as rising prices, as expected, but a comprehensive approach to energy policy has not crossed my desk. I include my own party in this. I am sure some colleague will correct me and say there is one.

The 29% price rise, to which Senator Sean D. Barrett properly draws attention, is predominantly a function of what has happened in gas prices in the intervening years. When making a comparison to housing and assessing how quickly we can be overtaken in public policy, I should have made the point that it was interesting to note that peak demand for gas and electricity was arrived at in January 2010 after the crash and the reason was the snow in that month. That is a salutary lesson that, unfortunately, we cannot fold our arms, say we have plenty of energy, that the economy is static and that we can relax. The events of January 2010, outside the economic boom, show why we cannot relax.

The midlands export project will not proceed. It is not feasible within the time constraints imposed by the European framework. It was a ring-fenced project which was to adopt a different technology. Interconnection between member states is encouraged as a central plank of European policy and is a two-way street. We will be importing energy supplies from Britain and the impact of interconnector between Wales and Ireland has been positive on Irish prices. The short answer to the question is that the midlands export project will not proceed.

Will we meet our targets? We think we will. With regard to renewable energy, we are halfway towards our 2020 targets in terms of wind energy. Based on the advice we have received and the connection offers being pursued by developers, we think we will reach them. However, the story is less positive in the areas of heat and transport, which are more problematic. I must ask my colleagues to prepare a note in response to Senator Sean D. Barrett's point that the subsidy for electric vehicles is equivalent to the extra cost of running a normal car. The car manufacturing sector has been addressing the issue of price of a car which up to now has been priced with a premium. The savings in running costs have been dramatic. Therefore, I am sceptical of the Senator's assertion, but perhaps it needs examination. The ESB national charging points infrastructure is in place and well advanced and the final touches are being put to it. According to European experience and the figures we have available, we are likely to see it climb dramatically between now and 2025 and it will make a contribution.

Senator Sean D. Barrett rhymes off the sources of energy. The energy mix is important. Nobody in his or her right mind would be reliant on one source of fuel. The Senator rightly points out that the price of coal has been falling, largely due to the shale gas phenomenon and the exports of coal from the United States. One of the linkages policy makers cannot ignore is how to reconcile energy policy with climate change policy. There are constraints no matter how one tries to arrange the mix. We have climate change targets to meet and they are hugely onerous. While I think we got the rough end of the stick in 2007, there is a price to be paid for not meeting them. No policy maker can ignore this.

IDA Ireland and Enterprise Ireland have been involved and will continue to be involved as we work towards the White Paper. It is important that they be involved. Microgeneration has not been an outstanding success. Only Electric Ireland has participated or offered to help in the initiative under way in this regard. If the argument is that the State should intervene, perhaps there might be a good argument for it, but we must measure it against the impact on prices. However, the uptake has not been great.

Noel Harrington (Cork South West, Fine Gael)
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I omitted to ask a question about the future of refining and storage. Decisions are imminent. Does the Minister have an opinion on these points, particularly on refining?

Pat Rabbitte (Dublin South West, Labour)
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It is an important question, as it relates to the facility at Whitegate and Ireland's domestic needs as an island economy. There has been retrenchment in the refinery sector across Europe in recent times and a dramatic reversal in the past two or three years in stocks retained in the jurisdiction. We are required to maintain a 90 day supply of certain stocks in case of destruction of supply.

Up to now that was only to a minor extent accommodated in our jurisdiction. A system of ticket stocks applied to source the requisite 90 days outside of the country. We have significantly reversed that now and more than 70% of our stocks are in the jurisdiction. That is a factor in this case as well.

Phillips 66, which operates Whitegate and is required by licence to meet certain commitments up to 2016 with the Government, has indicated that the facility may be for sale. During the period that it was in the shop window it did not sell. Whether that means the parent company has changed its mind or whatever, things are proceeding as they were and we are maintaining close contact with the company with regard to the future. In any event, we will be confronted with the decision in 2016 and we are trying to line it up well in advance of what happens in that area.

John O'Mahony (Mayo, Fine Gael)
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One final point relates to the analysis of the undergrounding. A committee was formed under the former Supreme Court judge Mrs. Justice Catherine McGuinness. Is there any progress on that? Has it met?

Pat Rabbitte (Dublin South West, Labour)
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Yes, indeed it has met and it is working away assiduously. The expert panel is probably going into the matter in greater depth than I envisaged. It is an expert committee. As you said, it is chaired by the former Supreme Court judge Mrs. Justice Catherine McGuinness. We have presented to the group the essence of the response to the public consultation following the concerns people fed back to us. On Grid Link alone there were some 35,000 submissions. The truth of course is that much of this was replication and duplication and so on. There are three or four main issues that people are concerned about. As a result of the expert panel, chaired by Mrs. Justice Catherine McGuinness, a comparative analysis will now be conducted between the cost of undergrounding compared to overhead transmission. Both reports will go out together. People will be able to make a comparison. Both will go to public consultation together.

John O'Mahony (Mayo, Fine Gael)
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Is there a timeline for when that might take place?

Pat Rabbitte (Dublin South West, Labour)
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It will be as soon as the expert panel finishes its work. My understanding is that it is far advanced. The panel published its terms of reference and so on. These were broadly welcomed by the various groups involved, which, in itself is an achievement. I am not in a position to say this, but I would have thought the panel would have completed its work before the House rises for the summer.

Helen McEntee (Meath East, Fine Gael)
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The Minister referred to the workshops and the various themes within the paper. Will the Minister let us know when these take place? I completely agree that we need to expand our infrastructure and that we need it for the future. There are projections of 3% of GDP growth this year and 4% the following year. Even if we are economical with our energy, we need to expand. However, certain people have formed groups and committees which oppose all of these projects. They might not read or see the review and might not believe that we need to expand. If we knew when the workshops will take place we could inform people and ensure people cannot say that they have not been informed or that we did not tell them. It would enable them to look into it themselves.

Pat Rabbitte (Dublin South West, Labour)
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To short-circuit the matter perhaps it might be better for my Department to advise the clerk to the committee and let the clerk communicate with the members of the committee. We intend to hold at least one such seminar between now and the House rising as well as a further two or three between then and the end of the year.

In case I am interpreted as putting undue pressure on the independent panel when I said that I expect it to have completed its work by the summer recess, perhaps I should withdraw the remark. The panel will have its work done but it is the supervision of the integrity of the process that will go on.

John O'Mahony (Mayo, Fine Gael)
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What happens next, after that?

Pat Rabbitte (Dublin South West, Labour)
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As soon as the report is available on route-specific underground costings, both it and the cost of the overhead transmission will go out to public consultation. People will be able to compare one with the other and we will have the debate, hopefully in a calmer environment, about why it is necessary, howsoever we do it, to ensure that we have a grid in the country that is fit for purpose.

Sean Barrett (Independent)
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Is there a date for the publication of the fracking report?

Pat Rabbitte (Dublin South West, Labour)
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I think it took three years in the United States and was carried out by the US Environmental Protection Agency. It will take another year here anyway. Really it is a matter that our EPA is competent to answer. Perhaps the Minister for the Environment, Community and Local Government will know but there is at least a year's work in it.

John O'Mahony (Mayo, Fine Gael)
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Thank you, Minister and I thank your officials for engaging with us and giving your thinking behind the Green Paper and the necessity for it. Energy policy is contentious in some ways but it must be confronted. This is an important part of the process. The Minister may or may not be aware that we hope to produce a report on the renewable energy sector later in the year. I note the deadline for submissions is 31 July. We will be stretched to have it ready by then but I hope it can feed into your deliberations and on the process you have started.

Pat Rabbitte (Dublin South West, Labour)
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Thank you, Chairman, and I thank the members of the committee. As a matter of courtesy I should point out that one matter you spent some considerable time teasing through was the policy in respect of offshore exploration and so on. Arising from the committee's report we brought in consultants from outside the country, namely, Wood Mackenzie, to do a study for us. I have now taken that report and I intend to publish it in the not-too-distant future. I imagine it is a report the committee will wish to have its say on after publication.

John O'Mahony (Mayo, Fine Gael)
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We look forward to that with great interest.