Ms Rebecca Minch:

I will briefly mention EU funding from the energy efficiency perspective and improving energy efficiency in the built environment. The Deputy is right in that there is a very important opportunity in terms of the potential of EU financial instruments. Ultimately, the scale of the action required, looking to the coming decades, is beyond what the Exchequer alone could support. It has been a very important part of energy efficiency policy, in particular, for the past number of years to explore alternative funding options. In that regard, there are a number of issues about the Irish market for energy efficiency, particularly the residential aspect. There is the question of the suitability of the scale of what Ireland would need, as it has tended not to be on the large scale that would normally be funded by these kinds of EU projects. That is one area that must be addressed and there is an openness in terms of the European Investment Bank, EIB, understanding that its approach must become somewhat more flexible.

There is also the very important aspect that when we look at using EU financial instruments, we must have a very well-developed business case to do so. That is why a number of schemes have already begun and we are bringing them forward in 2017, with additional Exchequer funding that we have managed to secure, around piloting deeper retrofits, including fuel switching away from fossil fuels in the residential sector. That is the kind of larger scale work, with investments of €20,000 to €30,000 in individual houses, that could allow us to avail of these types of financial instruments.

Having said that, while there is a very clear incentive coming from EU energy policy to avail of these funds, on the other hand there are issues arising from fiscal rules with which the Government must conform. That particularly arises with the public sector and its buildings, which could also be an area of potential for EU funding. The need for any such investment to impact the Government balance sheet is something that the Commission is looking into. Along with a number of other member states, we have pushed for that and we expect to hear from the Commission and EUROSTAT on the rules around the impact on the balance sheet around mid-year. That could be useful in moving on the issue.