Oireachtas Joint and Select Committees
Thursday, 3 December 2015
Joint Oireachtas Committee on Transport and Communications
Energy Policy: Minister for Communications, Energy and Natural Resources
Today's meeting is being carried live on Virgin Media channel 207, eirVision channel 504 and Sky channel 574. Members should switch off their mobile phones or turn them to airplane, safe or flight mode, depending on their devices. All sittings are broadcast on the channels I have mentioned in a replay loop over the following week. I remind those present that any sound interference affects the broadcast, whether it is live or a replay. No apologies have been received. The purpose of this meeting is to hear from the Minister for Communications, Energy and Natural Resources, Deputy Alex White, about energy policy in Ireland. On behalf of the joint committee, I welcome the Minister and his officials - Mr. Jerry Higgins, Mr. Kevin Brady and Ms Bernie Comey - to this meeting.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l)of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the joint committee. 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 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. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him or her identifiable. I advise them that any submissions or opening statements they have made to the committee will be published on the committee's website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
I would like to remind those present that a meeting of the Select Sub-Committee on Communications, Energy and Natural Resources is due to take place at 5 p.m. We are obliged to leave 15 minutes between meetings. Therefore, I ask members for their co-operation in ensuring this meeting concludes by 4.45 p.m. As I would like to give everybody a chance to speak at this meeting, I propose that contributions should be confined to two or three minutes to ensure no one is denied the opportunity to engage. I ask the Minister to make his opening statement.
I thank the Chairman and the members of the joint committee for inviting me here to discuss Ireland's energy policy. I acknowledge that at its meeting on Tuesday, 24 November, the joint committee focused on the topics that were to be addressed at the EU Council of Energy Ministers meeting later that week. The main topic of that meeting was energy union. I welcome the opportunity today to discuss Ireland's energy policy in more detail. As the committee is aware, I intend to publish the energy White Paper later this month. This White Paper will set out Ireland’s energy policy framework up to 2030 in the context of our long-term ambitions to 2050 and beyond. A key element of the White Paper will involve putting citizens and community engagement at the centre of energy policy. This approach was reflected in the extensive consultation process that informed the development of the White Paper.
The joint committee has provided a number of important and interesting questions for me to address today. I would like to respond to them in the context of the three core objectives of energy policy, namely, competitiveness, security of supply and sustainability. Competitiveness is critical to provide the environment for enterprises to grow, invest and create jobs and to provide affordable energy for domestic consumers. As Deputy Fitzmaurice said at last week’s meeting, we all hope to see the current growth in employment continuing in future years and we need energy policy to support that growth. In 2014, Ireland’s economy grew by 5.2% while overall energy use fell by 0.5%. As I said last week, this represented an effective and welcome decoupling of economic growth from energy use. We need to continue to improve the efficiency with which we use energy to support sustainable economic growth in future years. If we are to maintain competitiveness, we must ensure our energy markets work efficiently and continue to invest in energy infrastructure. In this regard, a key investment project for Ireland is the North-South transmission link.
As the committee will be aware, EirGrid made a formal application for the project to An Bord Pleanála on 9 June of this year. I am constrained, therefore, in what I can say about the project other than in the provision of factual information.
I draw members' attention to the significant benefits the North-South project will bring on both sides of the Border through lower wholesale electricity prices in the single electricity market. This is achieved through the combined transmission systems operating more efficiently without the current constraints. In terms of future developments, there is a need for greater interconnection with our European neighbours. In this regard, the economic case for a potential France-Ireland electricity interconnector is currently being studied. Such a development could build on the success of the east-west interconnector between Ireland and Wales which opened in 2012 and has led to enhanced competition and downward pressure on the wholesale price of electricity. An analysis was carried out by EirGrid on the impact of the first year of full commercial operation, namely, from May 2013 to April 2014. This analysis indicates that wholesale electricity prices in the all-island single electricity market would have been 9% higher if the east-west interconnector was unavailable over that period.
As Deputy Colreavy highlighted at last week's meeting, electricity interconnectors are used to both import and export electricity with the flows driven primarily by the relative market prices. To date flows on the east-west interconnector with Wales have predominantly been in the import direction. However, there are periods when electricity is exported. Once again, this is an example of markets operating more efficiently with greater interconnection.
I will turn now to security of supply. Investment in interconnection also increases Ireland's security of supply, which is the second core objective of our energy policy. Ireland's energy import dependency decreased from 89% in 2013 to 85% in 2014 and is expected to fall further in the coming years due to natural gas flows from Corrib and increased levels of renewable energy. This is very positive from a security of supply point of view. However, oil still constitutes almost half of Ireland's total primary energy requirement. In order to mitigate the associated risk, the National Oil Reserves Agency holds 90 days of oil stocks. In terms of consolidating their effort in this area, last month I signed an agreement with the French Minister, Ségolène Royal, in Paris that allows for both Ireland and France to hold emergency oil reserves in the other country. The diversity of Ireland's fuel mix makes a positive contribution to Ireland's security of supply. In this regard, the future of Ireland's only coal-fired power station at Moneypoint is important. The operating life of Moneypoint in its current configuration will continue into the 2020s. Therefore, key decisions on the future of Moneypoint will have to be taken before 2020.
The third core objective of Ireland's energy policy is sustainability, which is encapsulated in our 2020 targets. These targets include increases in renewable energy and energy efficiency and reductions in greenhouse gas emissions. Ireland is over halfway to meeting its renewable energy target of 16% and I believe we can reach our target by 2020. In 2014, 8.6% of energy consumption was from renewable sources. This includes 22.7% of renewable energy in the electricity sector, 6.6% in the heat sector and 5.2% in the transport sector.
Ireland is also approximately halfway to meeting the 2020 target of a 20% increase in energy efficiency. Ireland's greenhouse gas emissions reduction target for 2020 includes all sectors of the economy, the most significant non-energy sector being agriculture. The EPA reported in May of this year that more measures are required in order to meet our 2020 emissions target, including increased use of renewable energy in the heat and transport sectors. In order to address this need, my Department has recently carried out consultation processes on a potential new renewable heat incentive, which I expect to be in place next year, and an increased biofuels obligation. An initial consultation has been carried out on a potential future refit scheme for renewable electricity, which I expect will also be in place in 2016. There will be two further opportunities to contribute at key stages in the design of any new scheme. To date, onshore wind has provided the most cost-effective source of renewable electricity. The process of examining a potential future refit scheme will include consideration of other technologies including solar, biomass and offshore wind.
In conclusion, I will re-emphasise the three core objectives of our energy policy, which are competitiveness, security of supply and sustainability, and the need to strike a balance between all three in the actions we take and the measures we implement. I thank the committee members for their time today and I look forward to their insights and questions.
I welcome the Minister and his officials to discuss energy. The Minister gave me credit on the Order of Business this morning, which does nothing for my street credibility. Wind power, a policy which was developed in 2007, seems to be the main renewable energy but we seem to have come to saturation point in this regard. Many commentators, nationally and internationally, say the amount of wind coming on stream at the moment is uneconomical as we go forward and Colm McCarthy has said we will have to have a NAMA for wind if we keep going. Is it time to have a mix of renewables in the energy generating sector? I have asked the Minister about biomass and I know the United Kingdom took a huge policy initiative in relation to subsidies in that regard. There was a sea change in Government policy to fund biomass and to develop the Drax power plant as a biomass facility, even though they are shipping the raw material across the Atlantic. Where are we in regard to biomass? Many of the stakeholders have said we should not go down the biomass route just yet but there needs to be a discussion on it.
The technology relating to offshore wind is moving on apace but how far are we away from developing it, given the natural resource we have off shore? Many central European countries have been moving away from wind as fast as they can in recent times. There is planning permission for a number of solar energy farms, one in mid-Cork, not too far from Macroom, though there is only on the island at the moment, in County Down. Is the Minister looking at that option? IBEC spoke with us yesterday on the PSO levy and we were told that high users are particularly affected by the PSO levy. The White Paper will probably deal with the mix of fossil fuels and others into the future but has the Department any concerns over the powers and the legislative tools the Commission for Energy Regulation has?
The Minister said we had 90 days of oil in reserve. When the price of oil went down in 2014 it took nearly six months before it showed up in the energy market and at the pumps but when the price of oil goes up it shows up almost immediately. In the UK and across Europe the bodies overseeing energy markets have the legislative tools to enforce a reduction in price as well as an increase in price.
In the last week we have seen some of the energy providers announcing a reduction in prices with great fanfare. However, there must be a fundamental examination of the Commission for Energy Regulation in the White Paper on energy and the energy policy that is being developed. We must have an ard stiúrthóir or a proper commission to ensure there is a State regulatory body in place to enforce what is in the best interests of the State and consumers, be they businesses or households. There must be a fundamental examination of the legislation. It is ten years since the original legislation was passed and even last Friday when we were discussing the gas installers, which I accept is a separate issue, it was clear that there must be a drastic overhaul. The Minister said last Friday in the Dáil that it would be an interdepartmental matter, but all legislation is interdepartmental. However, there must be a fundamental examination of the Commission for Energy Regulation.
To recap, have we gone too far on wind? Is it time to look at other mixes? Has the Minister considered a policy change on biomass or has he even engaged with the various stakeholders on what would be required on solar and offshore energy generation? I realise the North-South interconnector is before An Bord Pleanála, but the technology is available to put it underground. EirGrid was giving us all kinds of information on the savings made from Grid Link and Grid West. With regard to the North-South interconnector, it is time the Government grasped the issue and decided to put it underground. I believe there will be public disorder if EirGrid attempts to proceed with it over ground.
I thank Deputy Moynhihan. With regard to wind, as I said in my opening statement onshore wind has demonstrated its value and cost-effectiveness. That is clear and the information and data are available to prove that. We have installed wind generation capacity of just under 2,400 MW. The provisional 2014 figure indicates that 18.2% of electricity demand was met by wind generation. Almost 23% of our electricity is produced from renewable sources and approximately 80% of that, or 18.2% of electricity, is produced from onshore wind. It has been a successful initiative and has proven itself.
Do I think the entire renewable energy story can be reduced to onshore wind in the future? I do not. I agree with the Deputy that we must be mindful of the potential represented by technologies such as solar generation, biomass and offshore wind. On his question of whether we have been engaging, yes we have engaged very much with those sectors, and not just with the industry. People often wonder if this is driven by industry. The policy is the policy of the Government, which we hope will be endorsed by the Oireachtas. The Government must make policy and policy decisions must be made that the market will take up. We will trigger certain approaches in the market and we will trigger investment. People who are proposing to invest in a particular sector, not just in the energy sector but in any sector, must have an understanding of what government policy is. The Government's policy continues to be that onshore wind has played a very effective part in our renewable energy programme and will continue to do so, but it will not be the entire story. That is the reason I mentioned the consultation process we are engaged in at present regarding REFIT, so we can see what opportunities exist for solar energy, biomass and some of the other technologies.
As I said to the committee last week, one cannot help but be impressed by the fact that the cost in the solar area has dropped so much in recent years. It is a very short period of years. Some commentators describe it as the price having practically collapsed. It has certainly reduced enormously from what it was a few years ago. One must take account of that, but that gives rise to another question for the policy maker. Will it reach the stage where it is so effective that it might not necessarily need a high level of subsidy? If something is going to happen and the market is going to deliver a new technology in which people are willing to invest, while we must be careful that we do not wait around for years and not make any decisions we must also be careful not to make decisions too early and commit the people's resources too early to something that might be going to happen in any event. Putting on a commentator's hat, and people can make up their own minds, there are some countries in Europe that would probably admit they got involved too early in terms of subsidising solar energy, because the price has come down rapidly. I assure the Deputy that we are very much aware of the potential for solar energy. Personally, I believe it has very considerable potential.
Regarding offshore wind, the Deputy correctly stated that offshore wind also has a very exciting part to play in our future portfolio of renewables. The issue is the expense involved and the level of investment required this far in advance. The extent of the development of the technologies is at a relatively early stage. As I said last week, whoever is holding this portfolio next year, indeed six years hence rather than a year hence, would be looking at a real development in the evolution of our offshore wind.
Biomass also has a big role to play but more likely in the heat sector. I am aware of what is being advocated about Moneypoint; I have read the discussions. We must keep an open mind about Moneypoint but we will have to make decisions about it when it comes to the end of its current configuration in 2025. Decisions will have to be made about it in the forthcoming period. I have read and listened carefully to what is said about biomass as a potential replacement for coal in Moneypoint, but I remain to be convinced that it would make sense to have large scale importation from the US or elsewhere on a regular basis, with tens of thousands of tonnes of wood chip, pellets or whatever else being shipped across the Atlantic to feed Moneypoint. The type of subsidy that would be required would be considerably more than the subsidy we give to onshore wind at present, so that is a cost for consumers. It would also have to be converted, of course. However, none of these things should be rejected or ruled out, and I am not doing that. We can have a good debate about this. We do not need to make a decision about Moneypoint now, but we must make one in the five year period ahead.
I do not accept that we are at so-called saturation point, as some commentators say. I gave the figures earlier for the amount of onshore wind that is installed. We can and must do more in the period to 2020, but we certainly must start bringing our other technologies into the equation then, such as solar and offshore wind as they become viable.
With regard to energy prices, there have been reductions and that should be acknowledged. Most energy suppliers have reduced their prices this year and I welcome that. There were announcements by Electric Ireland, Bord Gáis and SSE Airtricity of savings to customers. I encourage other suppliers to follow suit and to pass on the reductions that have taken place in the wholesale sector to consumers in the domestic and business sectors for both gas and electricity. That is very welcome.
The CER plays a very important role. I heard the Deputy speak previously about conducting a review. I never oppose reviews. If there is a reason to conduct a review, it should be done.
If I am not mistaken, the Government has already committed to having periodic reviews of all the regulators and there is no harm in that. In my view, the regulator has worked well in the sector. We made a decision and people can have a view as to whether it was right or wrong. We have a situation where the prices are set in the market. We no longer have the old situation where a Minister could issue a directive as to what would be the price of gas or electricity. That is gone and we have a market now. The other side of the coin must has to be that the market must work for the consumer and the citizen. There is no point saying we have a market if the citizen is losing out. The consumer has seen prices come down. There is some resistance to the phrase that Ministers sometimes use to the effect that people should shop around. People do not like Ministers saying that because it sounds a bit patronising or whatever. I do not want to sound that way but it is true that people can make huge savings if they switch. In fact, we have one of the highest switching rates in Europe at present and people can make savings if they do it.
Does it not take an awfully long time from when the wholesale price is reduced to the time it hits the consumer? In 2014, we saw the price going down drastically. In the United Kingdom, the Office of Gas and Electricity Markets enforced a reduction in price whereas we are only catching up with that price in winter 2015.
There were reductions last winter and it is not true to say the gap is a year. I had a close engagement with the suppliers last winter and, indeed, with the regulator and it was explained to me that because of the manner in which supplies of oil and gas are acquired, the companies use a hedging mechanism. In fact, gas is the more relevant to our discussion. They buy ahead at a price they judge to be a good one. If the price goes down, they are still, as they put it, stuck with the product they bought at the higher price. It takes some time for it to work its way through. In fairness, I said that if they were saying that and it was credible, I would want to see the prices come down after six months when the hedging impact was over. The prices have, in fact, come down. It is very important for consumers that they are paying less for their gas and electricity.
I thank the Minister for his opening statement. This week was obviously an important one with the opening of the conference on climate change which is very much on the agenda. We all have a responsibility to stop its effects and to reduce our carbon footprint. The biggest obstacle I see not just for Ireland but for every country is public acceptance and participation. Communities must feel that they are part of the change. Two years ago the Department of the Environment, Community and Local Government asked communities to have their say, particularly on wind energy. I do not believe we should have as significant a focus on wind as we do but communities were asked to have their say and to have an input into new, revised wind energy guidelines. Unfortunately, we are still waiting for those. I note that the Minister said during Leaders' Questions this morning that negotiations had not broken down between himself and the Minister for the Environment, Community and Local Government. However, the fact that we are still waiting for the guidelines suggests otherwise.
In my county, we have a proposal for 46 industrial wind turbines. The project is developer-led and the community was originally told that the energy was to be exported to the UK. However, when negotiations between the UK and Ireland broke down, the project suddenly became important for our own national grid. People have no confidence in what has been said and they have no confidence in the wind sector because of the way it has gone on. One way we can reinforce confidence in the sector is by publishing revised guidelines which take people's concerns and genuine fears on board. It would be irresponsible for us as a Government not to resolve this before the end of the current Dáil term. Is that something the Minister hopes to do? When was his Department first consulted about the revised guidelines and how many meetings has it had with the Department of the Environment, Community and Local Government in that regard? When was the last time the Ministers met to discuss this?
Can the Minister explain community involvement a bit more? Communities feel they are not being involved or included. How does the Minister expect to deal with current applications? Is it the case that applications which are being processed now will be left behind and that things will carry on from whenever the new White Paper is published or will companies be held accountable immediately and asked to revise how they have engaged with communities? How is EirGrid being held accountable in respect of community involvement with people in Meath, Cavan and Monaghan in respect of the North-South interconnector? EirGrid has not engaged in that regard in the same manner it did with communities in respect of GridLink and GridWest.
I thank the Deputy for her questions and observations. I do not want to start on a discordant note but many people say to me - I accept it as absolutely genuine and in good faith - that they realise we have to address global warming, that serious adverse effects are already visible from climate change, that we have to engage in a plan to decarbonise our economy, that we must move away from fossil fuels and that we need to look at new ways to deploy our resources and energy. However, they also say that wind is not the answer and that it does not even form part of the solution in some cases. If we do not address this issue on the renewable energy side through wind, we will be obliged to address it in some other way. Deputy Moynihan referred to the UK. I meet Ministers from different European countries, many of which have nuclear energy. I do not detect any enthusiasm in this country to go back and change the provisions embedded in our law to prohibit nuclear energy in Ireland. There are other forms of renewable energy, as I acknowledged earlier, which are at different levels of development. However, we cannot say we will not do onshore wind without saying what we will do instead.
I accept that there is a major issue for many people in communities which have had extremely bad experiences, whether as a result of the activities of developers or State agencies, going back a number of years. They felt, in some cases very reasonably, that they were not listened to and that their concerns were not addressed. There has been a huge improvement in that regard, particularly from EirGrid. I very much welcome EirGrid's new approach to public consultation and community engagement. If we want to have renewable energy and if we accept that renewable energy is necessary and essential, onshore wind will play a very big part.
I am not the Minister with responsibility for planning. As such, I cannot directly answer some of the Deputy's questions on planning, the operation of the guidelines, when they will kick in and whether they will affect existing applications, etc. I am not trying to walk away from the issue because it is an all-of-Government responsibility. I accept that there is a tension between the legitimate concerns of citizens and communities on one hand and the imperative to have a renewable energy policy on the other. It is not just a question of two Ministers. As a whole Government and a whole society, we must work out how we are going to reconcile this. We have not done it very well up to now. We all have a responsibility in this regard. It is principally a responsibility of Government but all of us are involved. The Deputy will see in the White Paper we publish in the next couple of weeks an initiative of real substance in terms of how I propose to address the issue of involving communities and citizens in the evolution of our energy policy.
I do not direct the following remarks to Deputy McEntee for one second.
I will just make a general point. As leaders, we cannot say "No" to one form of renewable energy that provides up to 20% of our needs without having a realistic, credible view as to what we will replace it with. It does not matter who is sitting here next year; we just cannot do that. We have got to take responsibility for what we want to see happening.
In the first instance, the wind energy guidelines are a matter for the Minister for the Environment, Community and Local Government, as Deputy McEntee knows. My Department, in particular, has been engaging with that Department. I have had perhaps three meetings on this issue with its Minister and officials. The respective officials in both Departments have had many meetings seeking to work through a set of proposals that would take account of the real concerns that exist, particularly in respect of noise, shadow flicker and amenity. It is a question of trying to reconcile these concerns with the progression of our renewable energy policy, particularly on wind. It is not easy to reconcile the two. I might as well be clear about that.
Meanwhile, we have guidelines - it is not as if we do not, although I accept that they date from 2006, which is nine years ago. As soon as we can reach a conclusion on these very technical issues, which have been the subject of discussion between the two Departments, I am sure the Minister for the Environment, Community and Local Government will move on the guidelines. The White Paper and the change to the whole context for public discussion and debate will be extremely important. That is my role.
I have a proposal that I believe will interest people and give them some cheer. It is that we should now start to consider ways of identifying lands, very often State lands held by Coillte, Bord na Móna or other State bodies, to determine whether we can concentrate much of the technology in those areas. This is another strand of work I am involved in to ensure we can make progress with onshore wind energy.
On the North–South interconnector, there is not really a lot that I can add to what I said at the outset. The matter is in the planning process and before An Bord Pleanála. There is a statutory process that needs to take its course. EirGrid has made considerable strides in regard to community and citizen engagement. It is fair to say it needed to do so. It has done so and has done so in a very effective way. I am aware that EirGrid has opened offices in Navan, Cootehill and Carrickmacross. It has appointed community liaison officers and agriculture liaison officers, who are all involved in an outreach exercise with the local communities along the intended route of the interconnector.
With all due respect, I believe wind has a part to play; I am not saying it does not. The Minister has touched on a number of areas that will contribute to wind energy but the Minister for the Environment, Community and Local Government has said himself the proposed revised wind energy guidelines will allow for a considerable amount of wind energy generation and will not, as the Minister for Communications, Energy and Natural Resources possibly believes, stop all wind energy generation projects in the future. How do we resolve this? It would be completely irresponsible if the Government did not resolve this before the end of this term. If there are completely conflicting views in the Cabinet, where does that leave us, my constituents and those in every other county? Every county, not just Meath, is affected by this.
When I first approached this matter, I believed these were black-and-white questions. I also believed that if one considered a set of assumptions and setback distances, it should be very easy to work out what it would mean in terms of lands available for wind turbines and wind farms. However, it became clear early on that the matter is much more complex than that. There are different types and categories of land. It became increasingly complex. I agree with the Deputy that it is desirable to have new guidelines. Both the Minister for the Environment, Community and Local Government and I agree on this. However, we are still trying to bottom out some technical work on the exact implications of having certain setback distances. We can be pretty clear on the need to do something on noise and shadow flicker. The issue concerns very long setback distances. Some of those advocated, not by my colleague but by others, would have the effect of closing down onshore wind energy production, despite what some commentators might believe. Although it might sound like a cop-out, it is not a cop-out for me to state that I do not decide where wind farms go. However, I understand why people contact me about particular wind farms. It is perfectly fine because they regard me as the energy Minister but it must be realised I have no role whatsoever in determining where a specific wind farm or turbine should be located. Whether it is in Marley Park or somewhere in Laois, I have no powers in that regard. My role concerns energy policy but one cannot have an energy policy completely isolated from factors such as planning and citizens' interests. Equally, the planning code has to have regard to other areas of government and policy, such as the energy policy. We must try to reconcile the two.
I welcome the Minister and his staff. I am a little disappointed because I would have imagined that the management summary of the report would at this stage be of printer’s copy standard, with photographs selected. I believed we would be receiving a copy of the management summary and I am a little disappointed we do not have it. Be that as it may, I wish to talk in the first instance about climate change. The Minister and I accept the scientific data that it poses a really serious problem, and we accept the evidence suggesting we must keep within 2° Celsius above pre-industrial levels. I believe we accept the premise that 80% of known fossil fuel resources already discovered will have to remain in the ground or this planet will have a serious problem. Why are we still talking about fracking? Why are Ireland and other countries still exploring new sources of oil and gas if we can use but a fraction of what is already accessible?
I hope community energy projects will be included in the White Paper. I would like to see a lot of development in this area over the next five to ten years. It is an area that the public will very much buy into because they will see a direct benefit to themselves. For community initiatives to be developed, there needs to be a feed-in tariff for solar energy. Will the White Paper contain anything on that? Will a feed-in tariff for microgeneration be mentioned in the White Paper? The voluntary scheme was scrapped last year. Any individual renewable energy microgenerator must give away excess electricity to the grid for free. Could, and should, community developments be included in the renewable heat incentive because the consultation draft is only for industrial projects?
Will there be a discussion on how we might facilitate a direct route for communities to access the national grid? This project will be buried if people have to wait for ten years or more and risk the costs and uncertainty of investing in those projects. Finally, will we consider requiring developers to give communities and individuals an opportunity to have ownership of part of developer-led projects? In Denmark, for example, the legislation requires that 20% of wind projects are owned by the communities or by individuals. That would mean some of the economic returns would go directly back into the communities that host the developments. To what extent will that be covered in the White Paper?
I do not know what to say about the north-south interconnector. I have a fear about this project. So much has been spent on the design and getting it through the planning process to date that I believe the fear of the waste of money and the potential for further delay will drive a decision rather than what is the best thing to do. One thing we learned from the Grid Link project was that delay was our friend. It enabled us to assess more accurately the demand requirements over the next decade at least and allowed us to arrive at a much more cost-effective solution. I realise there is a greater urgency about the north-south interconnector but if the factors that are being considered at present are cost and timeliness, it must be taken into account that there will be far more cost and infinitely more delay unless the solution that is installed enjoys considerable support in the host community. That is a very big risk with this project.
Will the report discuss-----
Okay, I will rattle through them very quickly. The Minister mentioned Whitegate oil refinery. Will the White Paper include the consideration criteria that will be used?
Will the White Paper contain a recommendation on set back distances for wind turbines? I would have liked to say a great deal more on that. The Minister has answered the question of whether the White Paper will promote new technologies. Finally, will the White Paper contain discussion points or recommendations on interconnector development between Ireland and Britain or France?
On the first point raised by the Deputy about oil and gas, I do not wish to misrepresent him but he was querying why we would continue with oil and gas at all. The White Paper will emphasise that we are in a transition. There will not be a moment next year, the year after or almost certainly for as long as any of us might have a chance of being in this House that we will be able to say that we have turned off the tap on all of the fossil fuels or that we will no longer have any reliance on them. We will have a reliance but it will be a reducing reliance on fossil fuels in the years and decades ahead. It will be a considerable period of decades before we can say that about oil and gas but particularly gas because it is much cleaner-----
-----in terms of a transition fuel. They will be there and we need them for security of supply. People talk about coal and say we should turn off Moneypoint. I have heard what has been said in the past couple of weeks about closing Moneypoint, for which I have some sympathy, but if one were to close Moneypoint, one can forget about the supply of energy in the country. There will not be a reliability of supply. It will not be a case of a Minister going down to switch it off some day soon. It will be a plan to phase out fossil fuels generally. That is what the White Paper is about.
The White Paper will be quite high level in terms of policy direction. Some of the specifics the Deputy mentioned are included in it. For example, we will address the issue of community energy projects and the involvement of communities, whether that is through co-operatives or equity holdings in projects and so forth, as one sees in other countries.
The White Paper is at a high level of policy. The questions of the specifics of feed-in tariffs, in whatever area, are for consultation and decision. For example, the REFIT scheme on which we are consulting at present will be dealt with in the course of 2016. It will not be dealt with in the White Paper. It cannot be because there are all sorts of rules relating to state aids and consultations that must be gone through. It is the same case with the renewable heat incentive. The renewable heat incentive will be brought forward in 2016 but will require state aid approval. It will have to go through the hoops that all of these state inventions must go through.
The White Paper will contain a fair amount of detail relating to the policy orientation of this Government in respect of the transition to a carbon free Ireland but one will not see each and every one of the specifics signed off in a White Paper. One could not do that. It is a high level policy document in that regard. It will give us the basis and opportunity to take forward the absolutely essential project of decarbonising our economy and society.
I do not believe decisions on the north-south interconnector will be made on grounds other than the requirement for that interconnector, which is real, urgent and extremely important. I do not believe that it will be rushed or that some elements of decisions there will be made on the wrong basis. I do not foresee that happening and there is no evidence that it will happen. There is a real and demonstrable need for the north-south interconnector. There is an economic case for it, not just for this jurisdiction but also for the northern part of this country and for the all-island economy, which the Deputy will support and will wish to see advanced. It is an absolutely critical piece of infrastructure we need-----
As soon as it is approved by the Government, which I hope will be next week, we will be in a position to share it. I should point out that I have taken careful note of what has been said not just at this meeting but also in previous meetings and Deputy Colreavy and others in the committee have contributed more than they might think to what is in the White Paper.
Does the Minister consider energy saving measures to be important in the White Paper? I am aware that in schools where walls have been insulated and new types of lighting and more efficient boilers have been installed, the cost of energy has been reduced by up to 20%. We must focus on that area. Many homes throughout the country could benefit if the retrofit grant was made more widely available rather than a certain amount every year. I realise we will not resolve all of this in one year but that is where I believe the biggest saving can be made.
The Minister spoke about community and citizens' engagement and referred to wind energy. I gather from what he said that what communities want and what the Minister is talking about will be two different things. Given the distances communities want for the wind turbines to be set back and what the Minister says, it will not be possible to fit enough of them in the country. Community engagement or involvement therefore goes out the window. This argument about wind has been ongoing for the last five to seven years and I could fill this room with engineers and very professional people on the matter.
In fact, I read an article in recent days about how two Google engineers have spent the past ten years studying wind. They have said it is one of the most uneconomic things in which a country could be involved. It has come to the stage where, for the benefit of both the public and the country, we need an open forum involving the Department, the people who maintain it is effective and economically feasible and those who can supply facts and figures. The Minister threw out a figure. He said 18.2% of electricity is created through wind energy. That figure does not tell us everything. The way the figures are taken mean a producer could be producing that amount of electricity on a graph but the real point is the amount used. Sometimes wind turbines produce at night-time when the electricity is not used and, to put it frankly, it is being dumped. We are paying investors for something that we are not utilising.
The Minister referred to the 90-day reserves of oil. If oil is cheap, would it not be a good thing to do a deal with another country to buy it in advance? The Minister said they could store a certain amount. Should we not up the ante if oil is cheap? That would give security as well. Can we not consider doing more of that? I know there is an oil well hidden at the bottom of Cork. We may get more oil wells around the country, if we are lucky enough. Next year or the year after, Whitegate will be put out of commission. I understand the Canadians are getting out of it. What is the plan for the future there?
How much of our own gas are we getting at present? Is it 60% or 70%? For how long is this forecast to last?
We have to be honest and straight with people. We cannot jump away from fossil fuels for many years to come. Such a move does not happen overnight. We have talked about this before. With luck, the number of people in employment in the country will increase by 150,000. I realise the Minister has discussed decoupling these points. However, agriculture has a major input into the economy of the country. I will give some credit to the Taoiseach. When he was at the summit on climate change in recent days, he called it. He said Ireland has come through a torrid time. We cannot go jumping headfirst into something now. We cannot all live in tents. We cannot have an ideal world in which we eat nothing or have no money. That is not the way our world functions. I have one specific question for the Minister to add to those I have asked already. Can we cut to the chase as regards the argument on wind energy? I would love an open forum, televised for the people, where the facts and figures on what wind energy costs, what is being subsidised and what is the net value of this form of energy as against other types of production can be set out.
I agree with the Minister that we will be importing material for biomass. Electricity prices in England and France are lower than here. Given the development of interconnectors and the way technology is improving, will we have spent billions on some ideal-world solution? In that context, our manufacturing people, who create jobs, are still at a disadvantage because France or England could probably sell us electricity at half the price once they perfect the systems they are developing.
I agree with Deputy Fitzmaurice on the point about energy efficiency and energy savings. We have increased our support in the budget cycle and the capital plan to ramp up our energy efficiency strategy. This will happen by way of direct Exchequer support. However, the White Paper makes clear that we will explore innovative ways of leveraging finance, whether European money or private finance. Many countries are examining this possibility at present. The question is how to finance energy efficiency initiatives in the domestic sector and in business.
It is always difficult to persuade people, whether they are under financial pressure or not, to borrow to make changes to their homes - for example, by way of retrofitting - that will benefit them in future. Last week I referred to the tragedy of horizon that we often see. People find it difficult, as a result of the many financial pressures they are under, to see the value of investing today in something like energy efficiency, although it can bear major dividends in future. The Government is keen to ensure that we bring the agenda forward and members will see this reflected in the White Paper. It is also reflected in capital plan and the budget.
Deputy Fitzmaurice made a stark comment to the effect that what communities want is totally at odds with what we want in terms of renewable energy. I do not accept that the situation is so bad. Certainly, there are real concerns in communities. However, I have seen and visited other communities throughout the country where wind farms and turbines are situated and where there is little or no difficulty or issue about them. That is not to suggest that people do not have legitimate concerns. Some people do and they are entitled to have them voiced. However, it is not true to say that there is universal rejection throughout the country in respect of onshore wind, wind turbines or wind farms.
The Deputy referred to the idea of an open forum. He should look carefully at the White Paper. Much of what Deputy Fitzmaurice and his colleagues have been saying this afternoon will be reflected in the White Paper. We must address this matter. We cannot have an energy policy by diktat. It has to be debated with the people and understood. At the same time, we have to give leadership and we have a responsibility to give leave leadership. We had a debate in the Chamber this morning. The point was made that we represent people. That is fair enough. We have to represent their concerns but we also have to give leadership. I made a point in response to Deputy McEntee's comments. If we take a view that we are going to migrate from one technology, for example, wind farms or wind energy, then we have to be ready with a credible alternative. There is no walking away from this issue. This is here and we have to get a grip on it. This applies to this Government, this Dáil, the people and the next Dáil. There are no easy solutions. There is no point in saying that is not going to happen if we do not have a credible alternate view about what we think should happen.
I am not saying the Minister should get rid of everything. I am saying there is a strong argument to the effect that wind is one of the most unfeasible types of electricity production. For the betterment of the people, the Minister needs to bring individuals from both sides to an open forum where the issue can be thrashed out and at which the cost of production and the extent of subsidisation can be made clear. This will make it clear to the people that if we want this type of electricity, then it is going to cost one and a half times or twice as much in real terms. Let us live in the real world rather than a fictional one. In other words, we need to know that if we want this in future, then electricity will cost us a given amount for our ideal world.
I realise the Deputy is making a broader point in terms of the wider community. However, it is not true to say that the economics of wind generation are negative. We can have a debate in this committee and we can bring forward the data we have. We have data from the 2015 report of the Council of European Energy Regulators. The report demonstrates that the per-unit supports for renewable electricity in Ireland are among the lowest in Europe.
I can give the Deputy figures for 2014 on what we have saved in respect of fossil imports as a consequence of the deployment of wind energy, as the SEAI published them last week and they are on its website. He can see for himself what the saving is and the value of wind. We are not saying it is the only technology and type of renewable energy we can use, as we can use others as well, but I respectfully say it will feature prominently. The Deputy is right that we need to get our heads around it as a community and we need to debate it and ensure it is understood, not in a dictatorial way by the Government but in a way that shares information with people. The ideas outlined by the Deputy are very good.
Sometimes people say that a turbine or wind farm operates only so many days a week or so many hours at day. We know that wind is intermittent. I am not directing this to Deputy Fitzmaurice, but it is well understood that wind is intermittent and that there are days when the wind does not blow. However we also have days such as, if my memory is correct, last Sunday, when 53% of our electricity was generated from wind. One can see this on the Eirgrid app. The fact it is intermittent is why we must develop new technologies for storage. Amazing work is being done throughout the world on addressing and mitigating the problem of intermittency with wind. If this can be solved it will be an enormous step forward, because we could migrate to renewable energy much more quickly than any of us think is possible at present. These are the types of issues on which we could do better sharing and debating with the public.
We have a requirement under the directives to keep 90 days of oil reserves. In the past, the old Irish National Petroleum Corporation, INPC, used to do what the Deputy suggested, which is to buy oil ahead, but I am not sure whether state aid rules would allow us to do so now. To return to gas, we now have a mix and we have discussed this. I discussed the transition with Deputy Colreavy, and it seems it is likely that of our fuel mix of oil, coal and gas, gas will be the preferred fossil of the transition.
I suggest that Senators Brennan and Byrne ask their questions and the Minister will reply to both. We agreed to finish the meeting at 4.45 p.m. because an Estimates meeting will be held here immediately afterwards.
I apologise for not being here for the Minister's presentation. I was delayed by a vote in the Seanad and we expect another one shortly. I mentioned at our last meeting the possibility of reducing our energy demands. I am convinced, even though I say it myself, it is a good idea with regard to emissions and the cost to local authorities of electricity in our towns, villages and motorways. Our demand for electricity is too high. The Minister mentioned using State assets such as Coillte and State-owned properties, and this will help to alleviate and minimise the objectors locally. I am not sure what the reason is, but it will make it easier for the Minister.
We have a number of inlets and fjords throughout the country. I live on a fjord, where the tide comes and goes twice a day every day. It is not like the wind and it does not stop for anybody. Has the project which has been on Strangford Lough for the past ten or 15 years been examined? Electricity is supplied by the turbine to 1,200 to 1,500 domestic houses in the adjacent towns and villages. Have we examined any of our inlets? We should look at the possibility of having similar projects such as that on Strangford Lough. All avenues of alternative energy must be explored. I agree with the Minister that wind energy is economical. It would not be used in parts of our country and predominantly in other European countries if it was not an economical proposition. Wave technology must be explored to the full as we are an island nation.
I asked about the North-South interconnector, which is of great concern to me with regard to the proposals for more pylons. I do not know whether we can run 220 AC supply underground in parallel with the existing interconnector. Is it technically possible to join them at the beginning and end with both running parallel in between? I do not expect the Minister to remember, but on the way from the meeting I mentioned to him the capacity of the proposed interconnector between Ireland and France, if and when it happens. We do not need the capacity to Northern Ireland that we are designing.
I will not repeat all of what Deputy McEntee said, but I agree with her that the Government will be grossly irresponsible if does not publish guidelines by the end of the year. The Minister is being blamed locally by his Government colleagues for the failure to publish guidelines, but he is correct that Deputy Alan Kelly is the Minister responsible. The Minister, Deputy White, seems to be the bogeyman in Meath at present with regard to wind turbines. This is probably unfair because the ball is in the court of the Minister, Deputy Kelly and, as the Minister said, it is a matter for the entire Government, both Fine Gael and the Labour Party, to make the ultimate decision.
The slowness in dealing with this is contrasted severely with the alacrity with which the Minister has changed the terms of the REFIT 2 scheme over the past week. He has facilitated wind energy companies, which have lobbied him to make a change to the scheme to facilitate projects which have made planning applications, such as those in Emlagh and Maighne, but have not yet received a grant of planning permission. The Minister has changed the terms of the scheme to facilitate these projects and allow them to qualify for the REFIT 2 scheme if they obtain planning permission by the end of next year as opposed to by the end of this year. The Department's website mentions queries from, but I call it lobbying by, energy companies which have made planning applications but which did not have their ducks in a row and were not going to comply with the terms and conditions of the scheme. The scheme would be of huge financial benefit to them and would probably make the schemes valuable. These companies do not yet have planning permission and it is certainly unlikely that the project in Maighne will have planning permission by the end of the year, and for that in Emlagh it will be 21 December at the earliest. Why was this done so quickly? Why were they facilitated?
Throughout this debate there seems to have been a facilitation of these developments, first, by not publishing guidelines and, now, by changing the terms and conditions of the REFIT 2 scheme which were approved not just by the Government but also by the European Commission under state aid rules. Has the Minister presented the changes to the Commission and, if so, is it happy with what he is proposing? Will he outline the extent of what the Department calls "queries" received, or what I would call "lobbying", in recent weeks?
I thank Senator Terry Brennan for his observations. We are certainly addressing all of the developments taking place and taking account of new technologies, particularly in the production of tidal, wave and ocean energy. Of all the developments of interest for the future, offshore production of renewable energy seems to be the most exciting. It is important to note that there is a long lead-in period associated with all of these technologies. What the Government is concerned with is supporting and funding research. That is our major contribution in this area. It is very unlikely that there will ever be a situation where the Government will construct offshore wind arrays and involve itself in tidal or wave energy production. What it can do is be involved in funding research, understanding what the developments are and where the opportunities will be in the future and supporting the research institutions, including the universities. I have in mind, in particular, the Beaufort facility at Ringaskiddy, which is a very impressive centre of excellence for research into ocean energy, whether tidal, wave, offshore or wind. That is our principal involvement in these technologies.
Senator Terry Brennan referred to the North-South interconnector project. I can only repeat what I already have said in this regard which reflects what representatives of EirGrid said when they appeared before the committee. No two projects are the same. Whereas it was possible to make changes to the Grid Link project, for example, we are not comparing two projects that are the same if we compare it with the North-South interconnector. What was done in the case of Grid Link cannot necessarily be done in the case of the North-South interconnector project or any of the other projects being brought forward.
On the possibility of constructing an interconnector between Ireland and France, a feasibility study is being carried out with the French authorities. We look forward to seeing the fruits of that study. As to what the capacity of that line might be, it is not possible to say at this point. A cost-benefit analysis would have to be carried out in order to determine what capacity might be possible and affordable in the context of an Ireland-France interconnection. The process is at an early stage, but we look forward to seeing it progressing. In the context of energy union, everything is changing very quickly in terms of what may be possible in the future. Deputy Michael Fitzmaurice has noted that the extent to which we will have interconnections with other jurisdictions may be the determining factor in the future in the use of renewable energy and, ultimately, the value to the consumer in terms of the pressure on prices that it might be possible to deliver.
In respect of REFIT 2, I must profess a little uncertainty as to what precisely Senator Thomas Byrne is asking about. I saw something about what he mentioned in a newspaper report recently. I will write to him tomorrow about this to indicate precisely what has happened, if anything has. I will be frank with him and say I am personally not aware of having made any such decision in recent days or weeks. I have civil servants here with me today and have had an opportunity to check quickly with them. I cannot recall having made any such decision in recent times. I will try to write to the Senator about the matter this evening, but it will more likely be tomorrow.
The Minister should make a public statement because there is unease about this matter. There is a clarification notice on the Department's website which indicates that the terms and conditions of the scheme are to be changed dramatically, apparently for the benefit of identifiable projects.
I do not accept that allegation, which is a political charge. I am not aware of precisely what is involved, but I will write to the Senator tomorrow to clarify the matter. In addition, I will make a public statement if it seems necessary to do so.