Oireachtas Joint and Select Committees
Thursday, 20 September 2018
Joint Oireachtas Committee on Climate Action
Third Report of the Citizens' Assembly: Engagement with Ms Marie Donnelly
I welcome members and viewers who may be watching proceedings on Oireachtas TV to the third public session of the Joint Oireachtas Committee on Climate Action. Before I introduce our witness today, at the request of the broadcasting and recording services, members and visitors in the Public Gallery are requested to ensure that, for the duration of the meeting, their mobile phones are turned off completely, or switched to aeroplane mode, as they interfere with the broadcasting system.
I would like to extend, on behalf of the committee, a warm welcome to Ms Marie Donnelly, who is a former director renewables, research and innovation and energy efficiency at the Directorate General for Energy of the European Commission. Before we start proceedings, I want to get some formalities out of the way. I advise the witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
I now call on Ms Donnelly to make her opening statement.
Ms Marie Donnelly:
Thank you very much indeed for the invitation to join the committee today. It is an exciting opportunity. I have had the pleasure of dealing with the European Parliament but not so much with the Irish Parliament, so it is a particular pleasure today.
I will give a brief introductory statement. I ask the Chairman to stop me if I go on for too long.
When we look at climate change, we cannot avoid looking at energy policy because energy is the source of around 75% of the emissions that are causing climate change. This is a global figure. The percentage is slightly lower in Ireland because we have a very high share of emissions coming from agriculture. If roughly 75% of emissions is coming from energy then we cannot tackle climate change without tackling energy policy. Today we are in the midst of what is called the energy transition whereby we are changing our energy systems in Europe and globally. What does the transition actually mean? If we are to achieve the national target of 80% decarbonisation by 2050 it means that we cannot have any fossil fuels at all in our heating or transport systems, with the notable exception of aviation and possibly marine. The target is 80% rather than 100% because we are not yet sure about the possibility of electricity fuelling aeroplanes. This means that for the other sectors we are talking about a 100% ban on and elimination of fossil fuels from our energy system. That is a challenge that starts today and we need to meet it over the period up to 2050.
How do we manage this energy transition and what does it mean? There are two pillars involved, the first of which is energy efficiency. The less energy we use, the easier it is to make the change and of course, energy that is not used is free energy. The second pillar is that if we have to use energy, which we do, then we must make sure it is sustainable and renewable. These are the two pillars upon which the energy transition is built. From the perspective of making a change to our fundamental system, the first thing we must do is draw a line in the sand today and make sure that anything we do from today onwards does not make the situation worse. We must stop the leak or, as the saying goes, "If you are in a hole, stop digging".
I would like to give one or two specific examples of issues that we need to think about in the Irish context. Ireland is currently developing Part L of the building regulations which is out for consultation at the moment and included within that is the carbon performance coefficient. The figure proposed is 0.3 and at that point, one cannot use oil heating in buildings. There is a suggestion that the figure should be 0.35, which would permit oil. In fact, we should be considering 0.25. This is very technical but it illustrates an important point. The number applies to new builds. We are talking about buildings that have not been constructed yet and it is very important that we pick the right number and stop the leak in our housing stock. It is also imperative that we are fair to people, both developers and individuals, who build houses. We should not have a standard in place which means that ten years from now they are going to have to rip out their heating systems and replace them. It is important to get it right at this stage, before we go down the wrong road.
I have chosen my second example because I believe that our young people will ultimately change our society. They are the ones who will lead us in so many things and therefore, our schools are pivotal. I recently looked at technical guidance document No. 33 issued by the Department of Education and Skills in February of this year. It states that heat pumps are not appropriate for use in schools. In another paragraph, biomass is dismissed. The document basically states that the only heating systems that can be used in schools in Ireland are either oil or gas. This is for new heating systems in our schools. The document also states that where there are permitted development, PD, solar panels on the roof of a school, they must be measured to only supply the school and switch off if there is an excess because they cannot feed that excess into the grid. This is an issue that must be examined further because it relates to new investments, to money that has not yet been spent. The question to ask is whether we can spend that money in the right way rather than creating problems that will ultimately have to be rectified later on.
One of the first recommendations of the Citizen's Assembly's on climate change was for the development of supervision across Departments in order to get results. As a former civil servant, I would suggest that there is expertise in each of the Departments here. Staff know their own areas, policies and actions and the requisite knowledge exists within each Department. The challenge is to bring that knowledge to the fore and then to a common forum so that it can be maximised across that forum. If one looks at the experience in other countries, many have set up what is effectively a senior officials' group where officials at Secretary General level meet once per month on the issues of climate change and energy policy. In the case of Ireland, such a group could be chaired by the Taoiseach's Department or by the Department of Finance, with the mandate to reduce the size of the fines that may come through in 2020. It could have monthly meetings where all of the policies that are being proposed are reviewed. There must be a focus on not contradicting ourselves or going backwards and a determination to move forward on actions together. I would also suggest that a report be prepared every three months, in table format, detailing actions taken and the reduction in greenhouse gas emissions or increase in renewable energy production that will accrue from same in 2020 and thereafter. A table is all that is required, with further details to be supplied later. This must get political attention so that actions are taken, decisions are made, policies are put in place and the results can be tracked on a routine basis. It would allow something to happen immediately because it is not a new structure. It is true that it does not have statutory responsibility but with political oversight, one can achieve the same objectives very quickly without additional costs.
To go back to the two pillars of energy efficiency and renewable energy, when one talks about the former, one must talk about housing. We use a lot of energy to heat our houses in Ireland. There are almost 2 million housing units in the country and more than half of those are currently using oil for heating, which produces high levels of greenhouse gas emissions. A second notable feature is that around 70% of Irish housing units are privately owned. These are privately held assets and I emphasise this point because the retrofitting of our housing stock is an expensive exercise and it would be impossible for the Government to fund it. Even if it invested the entire budget, it is not achievable. The question then is how to get people who own a private asset to invest in that asset for their own benefit. There are various tools and techniques that one can use to do that, one of which is raising awareness. I will take an Irish example to illustrate my point. In Ireland we have the Building Energy Rating, BER, system. If one proposes to sell or even rent a house, one must have a BER certificate. When one comes to sell a property, the sale price gets recorded in the Property Price Register, PPR. However, the PPR does not actually list the BER by the sale. This is not new information but simply a question of taking two databases and merging them so that people can see the value of sales for properties with different BER ratings. Studies conducted in Europe show an uplift of between 2% and 3% per band of BER in the value of assets. Just bringing those two pieces of information together would enable people to see the difference to the value of their assets if they improve the BER. This could also be done for rental properties using the Residential Tenancies Board, RTB.
Another issue is that unless people can see, feel and touch a retrofit, it is very hard for them to get their heads around it. In this context, the Citizens' Assembly is correct that the public sector has a leading role to play in Ireland. The public sector has an objective of achieving 33% energy efficiency and many of the actors in this space are achieving those numbers. Do we have open days which allow citizens to come and see the buildings that have been retrofitted, to understand the work involved, what it cost and who carried it out? Such open days would enable people to see, feel and touch the results and prompt them to ask questions about how to undertake a retrofit themselves.
A third issue, which is strongly evident from all the studies, is that one needs to have a trusted intermediary. We have seen successes in Ireland with this. For example, the Tipperary Energy Agency, an entity set up by the local authority, is independent. People feel they can trust what it says because it does not have a commercial interest in it. Accordingly, people can rely on it and it can help them deliver. Such an opportunity exists for all local authorities for their own citizens.
Of course, the issue of finance is key and is the hardest one. We have two opportunities, a carrot or a stick. The committee has already discussed carbon tax in its previous meetings. Ultimately, a carbon tax will ultimately influence people's behaviour, even down to the level of their own home. Tax could also be used as an incentive, as it is used in other countries. The advantage of using tax as an incentive is that this is not subject to state aid.
There are other options available. If one looks at the private mortgage market and the new developments where one can get an energy efficiency mortgage add-in. For example, a house might cost €400,000 and it might cost €30,000 to energy retrofit it. If it is part of the mortgage, maybe with a deferred payment but at the same level of interest rate, it is much more attractive to do it that way than to take out a private loan at three times the interest rate.
Another area is the new renewable energy support schemes where community involvement and benefit is at the heart of it. Communities can be owners, shareholders or beneficiaries. For example, a community wind farm could have a benefit of €2 per megawatt hour generated. This works out at about €250,000 per wind turbine over 15 years. On average, a wind farm will comprise ten turbines. That results in a €2.5 million benefit to a community over 15 years. Could we leverage that revenue in order that funding could be provided to a community to retrofit their houses? That would mean the community would get a long-term benefit out of this, rather than it being dissipated on useful things but things which do not have longevity. How can this be done in a way that is constructive and brings people on board? I do not have to make the point that making all of this happen would require skills and training, as well as bringing jobs into the community.
If we are leaving fossil fuels behind, what will we use as our energy vector? Right now, we are looking primarily at electricity. We see heating, transport and power in the area of electricity. It is for the most part ubiquitous. If we can move it to renewables, it would be carbon free and available for all of the community. Technology costs are coming down. Ireland is well placed because it has good natural resources in this space. This is where Ireland can become a world leader. We have the opportunity, as well as the expertise and resources. In this transition, it is not just a shift to electricity but in the way in which we generate and use it. That brings in the whole question of the community. Communities are at the centre of this energy transition. We are moving away from large power stations, like Moneypoint, where we generate and then distribute to decentralised generation, consumption on site and sharing of that energy. That brings in the citizen and the community. That is a key part of the energy transition. It has already been reflected in the new renewable energy support schemes. It is a mechanism to allow everybody, who wants to, to participate in the energy transition.
We have some way to go. We have only one community wind farm in Ireland, Templederry, and no community solar park. In contrast, up to 1 million European citizens are party to community renewable co-operatives where their communities generate power, use it themselves, sell it to the grid and exchange it. This is the opportunity which exists. It allows people, whether they are in an urban or rural space, to participate. In Germany, for example, 50% of solar PV, photovoltaics, panel in 2012 were on farmers' barn roofs. In cities in Flanders, not only are people putting solar panels on their roofs but industry is too. Sometimes, these are rented or they will exchange on them.
Solar PV operates on the basis of light not heat. We get light in Ireland, even in the winter time. We need to move on solar generation. This is an opportunity we cannot ignore. We need it to balance wind generation. We have much wind energy production. Winds are high in the early and the later part of the year but not in the middle. That is where solar PV comes in. If one wants to get a technological balance across the year, we need to move across all of the technologies.
The Citizens' Assembly has already identified the necessity for a tariff for microgeneration, with which I fully agree. It is also important for communities. In that context, sometimes one has to follow the rabbit down the warren in terms of philosophy. We have a situation where there is community involvement in the renewable support schemes. It is good. However, one then has to peel back the layers of the onion and find out what it actually means if a community wants to generate power and make it available to the grid. In another part of the regulations, there is now a requirement for planning permission and a connection fee analysis. There may be a charge for the connection fee and sometimes one will not get access if the distribution site is full. We have to take our belief in community involvement through all of the obstacles, as well as the legislative and regulatory operational steps, in order for it to happen for citizens. For example, we may need to think of ring-fencing, say, 20% of export capacity on the grid for communities, farmers and individuals in order they can get their electricity into the system and get a benefit from it.
Another area in which we have an opportunity is offshore wind. This has been developed quite strongly in the North Sea and off the east coast of the UK. In Ireland, we have not achieved anything in that space. There is now talk about doing this. It can happen under the new renewable electricity support scheme. However, it will never happen unless we get a joined-up Government approach such as a marine spatial planning system. We need licensing and consenting procedures in order to make the connection from the offshore wind farm to land. Otherwise, the developers cannot even start work. On average, and at best, it takes six years from the time one has that in place to when the first windfarm starts to produce. If we want it, we need to have this in place very soon.
Bioenergy is a real opportunity in Ireland. We are an agricultural community. Bioenergy can have a direct impact on heating and transport. Biomethane, for example, can be incorporated in the gas system and biofuels can be incorporated in the fuel system. There is a proposal coming forward for transport of a 10% incorporation of biofuels into transport fuels. That is to meet the directive requirement of 10%. In fact, there is nothing to stop us going to 12% of 14% should we choose. It is effective in reducing greenhouse gas emissions and is quite easy to do because it is done by mandate. It is done at the oil refinery stage, meaning that one is not required to mobilise all of the citizens to do it.
It happens closer to the source. There is a cost impact, but it is quite small down the line. The same logic applies liquid energy used in heating, for example, where biofuels could be incorporated to reduce emissions. This leads me to the topic of agriculture. I will not go into detail, because the committee is going to discuss this. There is an opportunity for agriculture. Agriculture in Ireland can contribute to this energy transition, but it will need a joined-up approach from our farmers, our co-operatives and our policy framework to allow it to happen.
My last point is that we are running very close to the 2020 target. A little thing called fines may apply in the end. It is important to think about what can be done now, in the short time that is left, to mitigate the damage those fines might do. The first, simplest and easiest thing to do, at least operationally though maybe not politically, is a mandate. That will mean an instruction from the Government saying "Thou shalt do X" or "Thou shalt not do X". It can work. Overnight, plastic bags in Ireland disappeared and smoking in public places stopped. With political courage and a mandate, things can happen very quickly in a very cost-effective way. We need to look at the obstacles that prevent the individual citizen from taking action and try to remove them so that citizens can take action right now, before 2020.
For 2030 we have a target of 40% greenhouse gas emission reduction, even allowing for land use, land use change and forestry, LULUCF. This is a reality. We are not going to meet the target for 2020. Given our profile in the world and our food export industry, I do not think it is good for Ireland to continue to miss targets of that kind. It gives a very negative impression of the country to the rest of the world. We will have to do something in that context. For renewable energy the target is 32%. With cost reductions in renewable technologies they are the cheapest technologies for any new build. Gas or oil cannot beat them. There is no other technology that is cheaper than renewables for the generation of electricity. The issue is how we phase out the existing elements to change the system. A step change will probably be required in transport, as has been done in Paris. From 2030, no diesel vehicles will be able to enter Paris. In Beijing, no internal combustion engines will be on the streets from 2025. It is a decision taking effect far enough into the future for people to react, but it is a step change.
This is a long-term challenge for our buildings, but in the 2050 building roadmap we have the opportunity to set out how we would achieve that in a gradual way, phased over the period from now to 2050, so that ultimately we can build very comfortable and pleasant houses in which to live, sleep and work. I am afraid I may have gone on for a little bit too long. I thank the committee.
I thank Ms Donnelly. That was very informative. I will start with a number of brief questions and then I will move to my colleagues. Which renewable technologies have proven most successful for European countries that are reaching their targets and doing a lot better than Ireland? We have constructed seven offshore wind turbines out of 830 that have received licences. What are the blockages for us and how can we improve on that?
I am very much in favour of the community feeding into the grid through microgeneration. This is something we must look at. We have no clear national guidelines on wind farms which contain proper setback provisions. Does Ms Donnelly agree that this is an issue? We are all very much aware of the objections around that. That is where community involvement comes into this: getting the buy-in of a community so that it benefits from microgeneration. Perhaps Ms Donnelly will expand on that.
What types of funding or co-funding are available for renewable energy generation research and development at EU level? One of the problems with EU energy policy is that the price of carbon under the emissions trading system, ETS, is too low. This means it is still profitable to generate electricity from coal. How is the EU tackling that issue? In her time at the Commission, did Ms Donnelly find getting progress in this area frustrating? Is there something we are missing in discussing the ETS? That is something of which we as a committee have to be very cognisant.
With the upcoming reform of the Common Agricultural Policy, CAP, there is talk of rewarding farmers for sequestering carbon. To what extent does the Directorate General for Energy influence the way the Commission develops proposals on the agriculture budget? How can Ireland take advantage of research and development to become a leader in renewables? Does Ms Donnelly have any advice for our committee on research and development of renewable energy technologies when we write our report? What direction should we take as a committee? I know there are several questions there. I invite Ms Donnelly to deal with them in whatever order she wishes.
Ms Marie Donnelly:
I thank the Chair for those questions. I will try to answer them more or less in sequence. Regarding offshore wind generation, we have seen a quite serious commitment from the countries around the North Sea to the development of offshore wind generation there. We have seen a very dramatic reduction of costs. The reason for that is that technology costs decrease with volume. The wind industry has repeatedly said to us that it does not need a huge amount of support this year and nothing next year. It needs a steady amount every year. It can then build capacity for that amount, which will allow efficiencies to develop in the production chain. In large measure, that is what the 2030 plan is about. It is about building the volume of demand for, say, offshore wind generation so that industry can scale up and maximise efficiencies in rolling it out.
Copper is used in the production of offshore wind turbines. It is bought through the exchange in Paris. Copper risks being a limiting factor in the production of wind turbines unless production figures are made clear. The second limiting factor is ships. Very long ships are needed to bring turbines out into the sea and put them in place, and they are in scarce supply. The idea is to put together a long-term plan which shows volume. That allows the industry to respond, bringing down costs and increasing efficiency.
By virtue of doing that, the most recent offshore auction in the Netherlands required a subsidy of zero. That is because it is a part of a phased roll-out of volume. I note that in the Netherlands the transmission operator pays for the grid access. That is distinct from the UK where the developer pays for grid access. There is a little bit of difference there. The assurance of the volume, however, means it is possible to get the actors together. For example, the Commission set up a special working group to examine the obstacles.
I will provide some small illustrations. Offshore wind turbines in German waters cannot cause an acoustic increase beyond a prescribed level. The UK does not have any requirement at all regarding acoustics. In Denmark, offshore wind turbines must have two red stripes on the blade. In Belgium three red stripes are required. I am not sure the bird can see the difference between two red stripes and three. These are very small illustrations of how, when things operate in parallel, differences can arise with which industry must cope. We put the North Sea working group together to look at some of these.
Are the requirements very important? Could we standardise them so that we can get efficiencies in the system? Ireland is part of that group. We benefit from the work going on there and we can bring it to bear on our own offshore industry. However, we cannot take a step forward until we get foreshore consenting and licensing procedures in place. The positive news is that financiers, investors and developers are ready to move in the Irish Sea. It is an opportunity of which we can avail.
With wind farms, the issue of setback and flicker are very real and are of very real concern to people who live in the locality. Rather than saying "Thou shalt do this or that" through legislation, which can be difficult to change if technology changes, the most important thing is for the community to be involved in the development.
The community has to say, "Well, maybe it is a little bit close but we can live with it" or "We want it moved from here to there". However, it must be part of a dialogue. I really believe that what is coming through now for renewable sources for electricity, RES-E, is really very good. This community involvement and the requirement for dialogue with the community are mechanisms for resolving a lot of the resistances and concerns that people have regarding wind energy.
Technology changes all of the time and it is true to say that wind turbines are getting taller. I do not know whether members have seen the Leonardo DiCaprio film "The Aviator" about the life of the legendary director and aviator Howard Hughes. One scene shows his character flying a plane through lower altitudes and it shook. When the plane climbed to a higher altitude, however, it was stable and that is why we fly at such high altitudes. The higher one goes, the lower the resistance and the steadier the jet stream. That is why taller wind turbines are being used. Taller turbines can pick up a much better and consistent wind current than lower ones. Also, the use of taller wind turbines means that fewer are needed. The efficiency level for onshore turbines is approximately 35%. For offshore turbines, it is in the region of 50%. However, the efficiency level has increased from 28% due to advancements in technology and an ability to identify and pick up the best wind currents. If something is put into legislation at this stage and then technology advances, it will be very difficult to respond to technological changes in an area where advancements are made all the time.
In terms of funding for research and development, when I left the European Commission the budget was €700 million over seven years or €100 million per year for research on the area of energy. A huge amount of that goes to different parts and less so to existing technologies because they are industrialised at this stage and it is for industry to deal with them.
Let me briefly illustrate some of the research areas which will be important in Ireland. How does the grid cope with a very high share of renewable electricity that is variable? I am sure members have seen the pylons and how the cable comes down in a nice arc. I am not a physicist but I shall outline some aspects of physics that I have picked up. When electricity passes through, the cable heats up and then sags. Therefore, people must always monitor how much electricity passes through a cable in order to prevent it from sagging too much. Up until now, we erred on the side of caution and did not pass more than 80% through cables. Now that there are IT sensors to gauge the temperature, it is possible to allow 90% to be passed through a cable. This is part of the research on how one can adjust existing things to make it possible to respond to the energy transition. Ireland is doing rather well in this regard.
Under Horizon 2020, Ireland receives a rather competitive 4% of the budget. Let us remember that we represent less than 1% of the population so the percentage is fourfold and proves that we punch above our weight in terms of the process. Part of that success is due to excellent research and, even more so, due to our researchers in Ireland collaborating with their counterparts elsewhere in Europe. That exchange of information is where there is real benefit. Specifically in terms of research here, marine energy has strong potential in the longer term. The research is at an early stage at an excellent institute in Cork and we need to continue with it.
The second area that is very important is understanding how we can use energy, particularly electricity, for the maximum benefit. I made a presentation on the usage pattern of electricity at an event organised by the Citizens' Assembly. I outlined that one could reduce the overall cost of the system by 20% simply by changing the usage pattern through the use of digitalisation, such as via one's smartphone.
On the ETS carbon price, I am pleased to say that the rate is now €20 and is likely to increase a little. During my time working at the European Commission, the carbon price languished between €4 and €5 per tonne. The current rate has pushed the wholesale price here in Ireland from €45 per megawatt hour to €65 because our electricity is part of the ETS. That situation makes renewables more attractive and means that the PSO levy we pay for renewables has almost disappeared. Will the price continue to increase? That is very hard to say.
The ETS system covers utilities and big industry. I am concerned that there may come a point when, for big industry, particularly that which exports, increasing the cost of carbon will become a serious competitive disadvantage. As I no longer work for the European Commission, I am free to suggest that the ETS should be divided into large industry, on the one hand, and utilities, on the other, because we must be conscious of the economic impact of the carbon price. I stress that this is not a policy of the European Commission.
On the CAP, it is now about finding ways to allow agriculture to play its role and contribute to the transition. The agricultural sector has a lot of opportunities to do so. The new LULUCF relates to the sequestration of carbon inland.
In terms of sequestration through forestry, there is a great deal of opportunity in this country because we are very far behind. The opportunity of using land as a carbon sink will be emphasised in the CAP. From the perspective of both DG Energy and DG Climate of the European Commission, we support that because it makes sense. We also support the idea that efficiency in farming should be combined with efficiency in energy transition. Let me outline the situation in France. In order to harvest grain, one must cut the stalks, etc., and one is left with stubble that can be used to produce bioenergy. Clearly, the harvesting of grain provides a resource as well. At the same time, one gets a food product and a raw material for a bioenergy. To think about agriculture in that context and take it forward is really what the CAP changes are all about.
I welcome Ms Donnelly and thank her for providing a comprehensive document. She has already answered my question on offshore wind energy. In her written submission to the Citizens' Assembly she stated, "It is essential ... that Government informs the population of the policy direction for Ireland" We have waited years for guidelines in respect of wind and solar energy production. I would like to hear her thoughts on the fact that we have not had these recommendations. There are many unknowns, especially in terms of solar energy. When people see planning applications for solar farms they do not understand what is involved and are fearful. Does Ms Donnelly believe it is important that we have clear guidelines regarding wind and solar energy farms?
In the submission to which I refer Ms Donnelly also stated, "heating our homes represents almost half of our energy consumption, this is a priority area". If we are serious about climate change, we will have to start with home heating.
Ms Donnelly further stated that 88% of housing units here "were constructed before energy efficiency standards were required" and that "almost 1.5 million homes still need to be retrofitted." She clearly stated that even at a 3% retrofit rate per annum "it would take 33 years to upgrade all of our homes". That is a long period.
At our meeting a couple of weeks ago, we heard from the ESRI about the Sustainable Energy Authority of Ireland, SEAI, grant scheme. The ESRI conducted a comprehensive study with a sample of over 160,000 applications. It was interesting to note that the highest number of applications by far were relating to cavity insulation and attic insulation, which shows that people cannot afford to fit pumps or solar panels. We need to tease out these matters and I would like to hear Ms Donnelly's thoughts on them. Obviously, as she stated, the Government cannot afford to retrofit every house but it supplies 35% of the cost for installing a higher grade retrofit. I imagine that more people would apply for the scheme if more money was made available for retrofitting homes.
I thank Ms Donnelly for her very comprehensive presentation and the documentation she provided both to this committee and previously to the Citizens' Assembly.
In terms of European norms, does the quality of Irish retrofitting match that of other European countries? There are different shades of retrofitting. Will Ms Donnelly comment on the quality of retrofitting in Ireland and what we are doing here? I echo a question asked by Deputy Butler. How can we aggressively enhance the current level of retrofitting, on which we are far behind as Ms Donnelly noted in her submission?
What have other countries done to enhance the energy efficiency of public buildings? Ms Donnelly referred to the Department of Education and Skills and its technical guidance. It is shocking that even now our new schools and buildings are not being built for the future in the context of climate change.
That brings me to new homes. There is an issue with supply. How do we balance that with this committee's concerns about climate change? What have other countries done to address issues around housing while also providing future-proofing for new homes? How can we advise on achieving that balance? We should not build new homes that we will need to retrofit in ten years' time. That is not a good economic model.
Germany, under Angela Merkel, has aggressively embraced renewable energy. Can Ms Donnelly outline any lessons from there?
Ms Marie Donnelly:
On wind and solar guidelines, the technology is changing. It is difficult to include it in legislation but operational guidelines make sense. What is happening in community involvement under the RES, renewable energy systems, is the way forward. It is an issue that not only arises in Ireland but also at European level. The new renewable directive makes citizens and community involvement a legal requirement and gives every citizen in Europe the right to produce, consume, store and sell electricity. That is a right that is coming through for everyone in the legislation. To exercise that right, it is for people to decide that they or their community wish to do it themselves or, where a developer wishes to do it, that the developer must speak to them.
One issue where Ireland has a challenge is that we do not have solar farms. We do not know what it means to have a solar farm. We should have one at the very least so that people could go and see it. The level of negative reaction to renewable energy for solar farms is very low across Europe. It is higher for onshore wind, but low for solar because in virtually every other member state individuals can install solar panels on their roof and sell electricity to the grid. They are not excluded from the technology. That is a very important element in the acceptance of the technology. When individuals can generate and use renewable energy, they understand how a developer might use it in a wind farm.
On housing, this is a long discussion. If we look at what is happening in other countries, Ireland is not unique in our housing being in need of retrofitting. Different approaches are taken in different countries. I will take Germany first. Germany has an aggressive policy of retrofitting because it has the KfW bank in place. It is a public bank, backed by state guarantee and so has AAA rating for borrowings. It lends for retrofit at interest rates of between 0.49% and 1.5% so loans are almost free. It comes with technical assistance on what householders need to do, how they need to do it and where. That is a model that the Irish Government has looked at and not taken forward, but is one that I strongly recommend. It is a really good model that can and should be transplanted into the Irish context. If one can borrow at interest rates of that order, it is a better way to move.
Other countries have different policies. Take the Netherlands, whose housing stock outside Amsterdam is not dissimilar to that around the South Circular Road in Dublin. There are long rows of houses, maybe two storeys high, relatively compact, and they have what they call the energiesprong system where, off-site, they build and prepare padding, although it is more complicated than that. This is transported on a big truck and stuck onto the outside of the house. The roof is changed solar panels installed on it. The kitchen and bathroom are also changed because that is always popular among residents. This is done in one day and because it is prepared off-site the quality of the padding, what one could describe as the tea cosy, is assured. It is done commercially and with a phased payment. It is done a great deal for social housing. The laws in the Netherlands have been changed to allow part of a tenant's rent to be used to pay for this retrofitting over a period.
In France, the Île-de-Paris local authority managed to get a very substantial loan from the European Investment Bank, EIB, to retrofit 40,000 apartments on the periphery of Paris. It will take place over five years. Once again, this is done at preferential interest rates. They are managing the process, that is, the technology side, so that people do not have to worry about it, and phasing repayment from the people using and renting the apartments over a period of years.
What one sees across Europe is government policy to make funding available, on the one hand, and local government taking action to support people in the transition. The local authority tends to be a trusted source. People can believe it and rely on it in order to help deliver. If one can get scale, there will be efficiencies and efficiencies bring costs down. Those are a couple of examples that we could use in the Irish context.
Under the directive, the retrofitting of public buildings is a legal requirement and 3% of public buildings must be retrofitted each year. Ireland has taken a stronger position on public buildings, setting a retrofitting target of 33% by 2020. The difficulty with public buildings is that some are large and others small. Until recently, there was a difficulty in that if public money was used to retrofit a public building, and this funding was borrowed, that was included in the Government's balance sheet as a debt. That was due to a technical guideline introduced by the European Union's statistical agency EUROSTAT in 1995. This is why technical guidelines make me nervous. The guideline, which was introduced in advance of the euro, enumerated the things that count as public debt. At that time, no one even considered retrofitting buildings, energy performance contracts and energy services companies, ESCOs, but once this started to take a life of its own, this guideline meant that we could not make it happen in Europe. It took us six years to get around that guideline, including two vice presidents of the Commission leaning on EUROSTAT to get it produce a explanatory note, as it did a year and a half ago. This sets out the conditions whereby the public sector can contract with an energy performance company under which the company does the retrofit, carries the risk and is repaid over a period of years.
Ms Marie Donnelly:
Yes, it is off balance sheet and that is a major issue. That is another area for the public sector to look at to see how it can best be used.
For new homes, Ireland is talking about building 600,000 new units, which would amount to one quarter of our stock. That is why I emphasised building regulations. Let us get this right. While it may be a little more expensive, it is much less expensive to do it now than to try to retrofit afterwards.
Let us make our building regulations future proof and get them right for the new builds that are coming down the track.
There is an issue with retrofit. I looked at the BER ratings across the country. In Dublin and its surrounding counties and in Cork approximately 20% of buildings are A-B rated. It is 10% in the rest of the country. There is an obvious reason for that. In Dublin the average cost of a house is approximately €500,000 so while an investment of €30,000 is a lot, it is against €500,000. If one's house is worth €250,000, which it might be in country areas, €30,000 is a much bigger investment. One can see how the economics work in terms of the asset value. That is why we must link the sale price of a house to the BER rating, so people can see that their asset will retain value in a recession and will have increased value once they have done this, not to mention that the operational costs will be cheaper.
I thank Ms Donnelly for her interesting presentation. If we were to emulate any country in Europe, which one should it be? Denmark, for example, aims to be carbon neutral by 2050. That is an ambitious target and it appears to be on course to achieve it. Does Ms Donnelly have any thoughts on that?
The Tipperary Energy Agency has been getting a great deal of attention with regard to the local authorities and linking communities. Does Ms Donnelly think that the model of the Tipperary Energy Agency linking with a local authority should be replicated across the country? It strikes me that there is a level of expertise there which might not exist in local authorities. That type of advice would be particularly useful in terms of the type of work local authorities will require in retrofitting their housing stock and looking at new planning applications if the regulations are ever introduced.
With regard to getting information to communities, does Ms Donnelly think that the best way to link into communities where, for example, there are many community groups such as community development groups, would be through the local community development committees, LCDCs, or the public participation networks, PPNs? They might be a good way of getting communities to think about the types of projects Ms Donnelly referred to earlier in terms of developing their own projects and so forth.
We often hear the argument that wind energy is only generated when the wind blows and we are asked what we will do after that. Does Ms Donnelly have any views on the battery storage flywheel technology? I am interested in that because we have one in County Offaly. It is a most interesting technology.
My other question is on methane. Should it be in the emissions trading scheme, ETS? Could we be doing more in agriculture with regard to the sequestration that might be possible there?
Ms Marie Donnelly:
Regarding the other member states to emulate, each country is different. Each country has different resources and each has a different philosophy on what it wishes to achieve in terms of the reaction to climate change. Certainly, Denmark is an obvious country to consider. What is remarkable about Denmark is the extent of collaboration and co-operation across all the structures in society. I can offer one illustration of that. I was recently in Copenhagen and visited its new waste incinerator. It takes pride of place in the centre of Copenhagen. When we think about waste incinerators in Ireland we do not tend to think of them taking pride of place in a city or on the skyline of a city.
The incinerator in Copenhagen is the largest waste incinerator in Europe and has recently come on stream. It was designed by one of Denmark's renowned architects. The building is a little like a comma and slopes downwards. The outside has little panels and on one side there is a climbing wall. The reason it was built in that way is that it is a ski slope for the citizens of Copenhagen to use in the winter. The design was that it would be a waste incineration plant in the middle of the city that would be part of the city - it should be something that the people of the city could use and enjoy. Rather than put it in a corner and forgetting about it, the Danes are building very expensive apartment blocks beside it because the air coming out of it is so pure. However, to get it together the Danes had to get six municipalities, the equivalent of 600,000 people, to agree to send their waste to that site. Their waste volumes are reducing every year so the Danes had to be sure they would have enough to be able to feed this large incinerator. Six municipalities had to agree to collaborate to supply it. That is one illustration of the type of partnership and dialogue that is useful to take place in countries.
Another country that has done a very good job is Portugal. Like Ireland, Portugal has wind, although more sun than we have. Portugal imports most of its energy, as we do, so it is paying that money out of the country. It wishes to try to keep that money in the country and its attitude is to get the citizen involved. To take the example of solar energy, which is popular in Portugal, people can put four panels on their roof. Basically, one can go to IKEA, buy four panels, put them on the roof, use the energy and sell it to the grid. One does not need permission or a licence. One simply says to the supplier, "I am doing this". There is no grant for the panels. One buys them oneself to supply it and one gets paid for what one sells into the grid. It is as simple, clean and neat as one could possibly imagine.
One of the things the French have done, and this would be particularly relevant for Ireland, is use their agriculture. The city of Strasbourg has a gas system in place that has used natural gas up to now. The French have encouraged the development of biogas in the agricultural sector and their objective is to have 20% biogas in that system by 2030 which will come from the agricultural base around the locality.
That is an illustration of the things that are taking place in other countries in Europe that, perhaps, would be interesting for us to examine. On the Tipperary Energy Agency, we should have one in every county or every two counties or region, whatever the case might be. It is absolutely essential. The mechanics could be sorted out as to whether it is a full agency or a full-time person who can share expertise across a number of localities. I believe that if it is not local, people will not tend to go to it or trust or believe to the same extent. If there is somebody locally with whom one can think and speak it is much better. That person can draw in expertise from wherever it is required if it is not in the locality. That is definitely a priority issue.
In terms of the dialogue with communities, every possibility is required. We should use all the structures that exist. I would add the Irish Farmers Association, IFA, the Irish Creamery Milk Suppliers Association, ICMSA, the Gaelic Athletic Association, GAA, and others. There are also the public representatives. They have a huge role to play in terms of sensitising the population just by opening people's ears and encouraging them to think, talk and find out about it, as the case may be. Not many people in Ireland think much about energy except to complain about the bill. They worry about climate change but it is so removed that they feel helpless to do anything about it. Some dialogue about practical, concrete things that allow people to take action themselves is needed. One can start the dialogue and build on that into the future.
Storage will be key. That is part of the issue. The complaint about renewable energy has always been that it is variable. We have it when the wind blows but we do not have it when it does not. That is why we need solar power in Ireland. We do not have as much wind in the summer and we need solar power to cover that gap. More than that, however, we must use all the storage possibilities we can, including flywheel, hydro, salt caverns and salt batteries.
Anything we can find we should use. One interesting thing, although this is perhaps less relevant in Ireland, is that in many of the villages in Austria, for example, one will see the big water towers one sometimes sees. These are insulated towers of hot water. Water is heated during the summertime and is then used in the wintertime for the district heating system. It is a form of storage. One must think outside the box when it comes to storage. What are the services we get from energy? We get hot water to heat our buildings. If we can store it in the summer, we can use it in the wintertime. There are many different ways in which we need to think about storage. Yes, batteries will be useful, but we need to think much more widely than that.
Regarding methane and sequestration, if we are to maintain our agricultural sector, we have no choice but to beef up the sequestration side of it. We must be able to get a better balance in the process. It is feasible and we have the opportunity to do it, but perhaps we need the structures and the policies in place to make it happen. It will not be sustainable to have high levels of methane unabated in the country, and I do not think we should jeopardise our industry by failure to take peripheral action to support it.
Ms Marie Donnelly:
I do not think it is relevant so much for the ETS for a number of reasons. First, methane is a real issue for us because we have a significant agricultural sector. The same issues do not arise in other parts of Europe or, indeed, the world. By its nature, methane is different from carbon, so I think there are other measures we can and should use on methane other than the ETS and that we should leave the ETS as it is for carbon. ETS, as a carbon mechanism, is probably correct as it stands.
I have a final question. I refer to the bioenergy Ms Donnelly is talking about and the fact that we see other countries availing of the opportunity to grow for ethanol. Is this something at which she has looked? Is it something about which we should be thinking? Does she have any views on that matter?
Ms Marie Donnelly:
One thing we have in Ireland is land - fertile land, relatively speaking, some land more so than other land. There is an opportunity to use our land more effectively. We can use it for agriculture, and, of course, that feeds people, which is very important, but some of it we can use as an alternative to imported fuel, and yes, we should be doing that more. There is a lot of research that shows the benefits of, for example, special kinds of grasses and rapid turnaround on the crop. We have a particularly suitable climate for this. There are other energy crops that we could be growing as well. Växjö in Sweden, for example, is a small city by that country's standards. The city is run on bioenergy generated by farmers in the vicinity. It is a combination of biomass and bioenergy. They have done this for the past 15 years. They set it up and said they would make their economy independent in terms of energy and do so with the farmers in the vicinity around them. There are opportunities there. It requires bringing together a number of the actors in order that one can put the structures in place to make it happen.
I have a final comment. I liked the proposal Ms Donnelly had on the Secretaries General of Departments, perhaps, and someone from the Taoiseach's office chairing. This has come up before. It really sounds like she is proposing a whole-of-Government, whole-of-society approach to this. If we have all the Departments, all the local authorities and all the State agencies focusing on this down into communities, that is where we will achieve our success.
We will bring in the Secretaries General of the Departments. Regarding the comments of Deputies Butler and Jack Chambers on housing, we will bring in officials from the Department of Housing, Planning and Local Government in the next three weeks. We will raise some of the issues the Deputies have brought up then.
I thank Ms Donnelly for her presentation. It was very useful. I have some questions that I prepared before she made it. Some of them might have already been answered. Then I have some questions about what she has said today if that is okay. The questions I had earlier were based on the Citizens' Assembly presentation. I could be wrong but my take on what she is saying and on the pitch she is making is that it is the citizen's responsibility. I think the problem we have here is that the Government is not taking its responsibility and we need to shift that balance. Whether or not it is the citizen's responsibility, and citizens do have a responsibility to buy into the system and to make it work, the Government has a responsibility to take the actions to allow the citizens to do that. The problem we have in Ireland is that citizens are way beyond the Government and want to make change and make things happen. However, the Government is holding them back. What we have here is a Government that does not make decisions or make things happen to allow us then to go on. That is what we need to focus on in this committee: how we get the Government to do things. What Ms Donnelly said in response to the questions earlier was very interesting. All the examples she gave relate to Europe and to governments being proactive in facilitating citizens to make these things happen, whereas in Ireland we do not have a proactive Government. I do not feel that we do in any event. I could be open to correction. I am interested in how we get the Government to face up to its responsibilities and actually put in place the measures that will then allow citizens to do what Ms Donnelly is talking about. That is where we need to focus.
As an example, Ms Donnelly, when referring to the Citizens' Assembly, mentioned in response the German bank KfW and what it is doing in facilitating homeowners. As an aside, we have recently had issues regarding post offices and how they can be maintained. One of the proposals from Irish citizens is that KfW would be facilitated through the post offices to provide finance to citizens. The Government has shot this down, is saying "No" and is pushing the existing bank system in through the post offices, with the exorbitant interest rates with which citizens cannot live, so it is the Government that actually has an awful lot to do. That is one side of the matter. I will get to my questions and then Ms Donnelly can come back.
I have a couple of questions. Rural areas are badly affected by both high energy costs and fuel poverty, so many people, including farmers, do not have ready cash to develop in retrofits or complicated projects. The oldest and least efficient oil and gas heating systems are located in rural areas. What is the best way to make renewable energy and renewable heat an integral part of rural life and to ensure that it is there all the time? Ms Donnelly mentioned how agricultural co-operatives in the Netherlands have been successful in setting up community anaerobic digesters, solar PV cells and so on. What financial incentives and grants are available from the State to facilitate that? Ms Donnelly also referred to the two key barriers to renewable energy in Ireland, namely, the lack of a feed-in tariff for small-scale householders and the very slow roll-out of smart metering. Could she explain a little about where the reluctance lies in the context of allowing this to happen? What are the barriers to making it happen for householders?
Ms Donnelly also referred to offshore wind capacity and addressed it somewhat further in her previous response. I ask her to expand a wee bit on the barriers to that, where those barriers lie and how we can overcome them.
Ms Marie Donnelly:
That is absolutely clear. Government does have a key role to play in two ways. The first - and the one that can be taken most quickly - is to remove obstacles. Rules and regulations or whatever that are there that should not be there should be taken away. I cited one or two but with a little research I could probably find another few.
Saying something cannot be done, in a world where people can think outside the box and access things in a different way, is no longer valid. We must try to avoid situations where we say, "Thou shalt not do", but rather, "You can achieve", and go and do it in the most efficient way. That is the second role of Government, which is sometimes to incentivise people to take action. People are clever enough to take the action that is logical and most cost-effective for themselves, but sometimes they need to be prompted to do so. That is where the Government comes in to facilitate the change, at least at a citizen and community level. The micro-grid financing tariff is one. It defeats my logic that one would generate renewable electricity and then either switch off the system or spill the electricity without reward. I find it difficult to understand that as a logic.
Ms Marie Donnelly:
I have many thoughts about it but I was warned at the beginning to be careful about what I say. There are possibilities. This is not just an Irish issue. It is a general issue around the world. When a system has operated for years and years with large incumbents, there tends to be a degree of inertia. Large incumbents move slowly for the most part. If I may use a German example, rather than an Irish one, RWE and Aon are two of the four huge utility companies in Germany, with a market capitalisation of billions of euros. In 2009, the chairman of RWE said he did not believe in renewables, that it was a fad and it would disappear. Within three years, RWE's market capitalisation had halved because the utilities did not invest in renewables whereas the farmers and the citizens did, and suddenly the two big utility companies found themselves on the wrong side of the new technology. That error has been corrected because they are both investing heavily in renewable technologies today, including onshore wind and offshore wind. That is an illustration of large utility companies that have been around for a long time and that say they know how to do this and will not have their system disrupted. It is not unique to Germany. Sometimes large entities that have been around for a long time need to be forced to move and to move more quickly.
Ms Marie Donnelly:
Government has a big role to play. Members of the Oireachtas have a big role to play. This is where they should say that this is what they want and they want it by a certain date, and they should get on with it. There should be no acceptance of delay or prevarication or anything else. Smart metering was mentioned, and Ireland is in arrears on smart metering. We were supposed to have achieved the full roll-out of smart metering by 2020, but we will start only next year, with 250,000 as a pilot project. The services linked to smart metering will come on stream only ten months later, and then there will be a progressive roll-out. I understand why the regulator in Ireland has done that. It is careful and cautious. What I do not understand, however, is if, for example, I ask for a smart meter in the morning - I asked but was told they were not available - I want to be able to avail of the services of the smart meter now. I do not want to have it in my house for a year before I can get the benefits out of it. It is a question of trying to put oneself in the position of the individual whom we are asking to take on new technology, which can be of huge benefit, but whom we are telling we are not ready to give the benefits to yet. We need to get our act together and say, "There it is. You can have the benefits straight away." These kinds of things need to come together. I do not want the lights to go out but a little bit less caution moving forward could be useful. We have an intelligent population who are well able to manage all of these issues, and we could do it.
Regarding the Netherlands, the Dutch Government went into an agreement with both industry and agriculture on mechanisms of climate change and the response to climate change. It set up a deal as to what would be achieved and what it would do with both the policy framework and the financial elements. One illustration is that the Netherlands economy had historically run on gas because it had its own gas from the North Sea, but that gas is almost depleted. In Groningen, the output had to be reduced by 75% because there were earthquakes in the locality. It has to move out of gas, therefore, and that message is clear in the Dutch mind. What will they do? Much of the agriculture, especially the flowers and the glasshouses, has been run with gas. To tackle the problem, it has decided to go for geothermal heating for the glasshouses on a collective basis. The Government is supporting the shift of the energy source to geothermal for the glasshouse industry so as to be able to move away from gas. That is a whole-industry shift done in collaboration with the Government in a planned and structured way. There are grants involved in it as well, but they are naturally compliant with State aid.
On changing the heating system in rural areas, the Deputy is correct. Oil heating is largely a rural problem in Ireland because there is no gas grid there anyway. It is not easy. We should not be too optimistic about the speed at which it can happen. If we take 33 years, which is a long time, we can look at some of the realities of housing in Ireland. We have a churn rate of our houses in Ireland of approximately 20 years whereas in Belgium, where a house is sold every 58 years, nobody moves. Basically one builds a house, one moves into it and one dies. In Ireland, however, we know many people who have lived in two or three houses, so the churn rate in Ireland is much higher. We have an opportunity to take action at the point of churn. I was talking about the mortgage and how one could build into the mortgage a little icing on the cake that could handle the retrofit. It is an opportunity to take our own national characteristic and see if we can do something to get that across.
We might take heat pumps as an example. They are more expensive than oil and gas boilers. They are too expensive in this country because we do not have the volume to get the price down. If there was the equivalent of the Tipperary Energy Agency, TEA, in every county, and public procurement rules were used to buy, say, 100 heat pumps and get a volume discount on the price, and if they were then made available to one's own people in one's own county at that lower price, it would bring down the price of the heat pump. It is perfectly legitimate and can be done using public procurement rules, and is simply made available to people in their own area. There are ways where collective action can make the cost of this change lower. The other issue is seeing, feeling and touching. It is important that people can see what it looks like when the job is done. Then they can start to think about what it might look in their own house if they did it, what it would cost and what would be involved. Maybe if they changed their windows five years ago, they would not need to do it, but there are different ways to do it.
On offshore energy, licensing and consenting procedures need to be put in place, and we will have to get agreement on landfall for the grid. We will also have to get agreement on who will pay for the grid. Will it be the developer such as in the UK, or will it be the EirGrid, as in the Netherlands and Belgium, for example? These are questions to answer. When one looks at our demand for electricity going forward, three factors will increase the volume. First, if we shift heating and transport from fossil fuels into electricity, demand will increase. Second, it is projected that we will experience a population increase of almost 1 million over the next couple of decades, which is a 20% increase in population.
Third, the number of planning applications for data centres indicates demand will increase by more than 50% over the next ten years. Much of the increase in demand for electricity in Ireland will be the result of large companies needing large volumes of electricity. This lends itself to what is called corporate power purchase agreements, PPAs, where large corporations purchase their power directly from large producers, for example, offshore wind producers. This means it is funded through the corporate side of business without subsidy from the taxpayer. This approach involves a radical thought process but the opportunity exists to use the corporate entity. We now have the RE100 operating globally. This is a collection of large companies, including Microsoft and Apple, that are committed to using 100% renewable energy, including in their supply companies. They are prepared to invest in wind farms and take the off tech as a commercial corporate activity over time. We have an opportunity to think about what is the nature of our demand profile on the island and what is our potential opportunity for offshore wind. We could then match the two as an opportunity going forward. That is just a thought. It is in the early stages but there are possibilities that could be developed.
I thank Ms Donnelly. I am a bit gobsmacked at it all. It is fascinating and complicated at the same time. I hope the guy in the German utility was fired for making such a dreadful error. I am very aware sometimes of a rural-urban divide and I am the first Dubliner to speak today. Ms Donnelly said that 20% of dwellings in the city have an A-B energy rating, whereas only 10% of houses in rural areas have it. Is that because of affluence or awareness? Is retrofitting chic and trendy because it allows people in Dublin 4 to speak to their neighbours about it? Are citizens aware and concerned about climate change or have they given up or taken a defensive attitude - I am putting this politely - similar to that of Donald Trump, in other words, that climate change is nothing to do with them and it is all hocus-pocus?
Ms Donnelly also mentioned onshore wind and the need for guidelines. My colleague, Deputy Brian Stanley, put forward a Bill on this topic last year. The issue with onshore wind is that we have not taken communities on board. That is not just an issue with climate action and energy efficiency. In most spheres of life communities need to have ownership, including when a builder comes into an area and says he or she plans to do this, that or the other. The community should be involved from the beginning. It gets people's backs up when something is seen as being imposed on them, as opposed to being an effort to uplift everybody. It is a case of who owns the country. Communities should be involved from the beginning and given ownership in order that they have an idea of the direction they want to go. This is a no-brainer, yet for whatever reason the powers that be take a paternalistic attitude that they know best and they will tell people what to do. There can be objections but they will not really be listened to. I agree with Ms Donnelly's view on that.
I am new to the issue of the potential for offshore wind. I thought we had only one offshore bank off the coast of Arklow but Ms Donnelly mentioned several others. There has been a decrease in the cost of constructing offshore wind turbines. Ms Donnelly referred to shipping, infrastructure and other technical requirements. Given the decline in the cost of offshore wind development, how can we progress more offshore wind farms? I am not sure what term is used.
On the use of solar photovoltaic or PV cells on windows, the scheme announced in July seems be helpful and needs to be expanded. The majority of the population will never think about this option. Perhaps those who are retrofitting or perhaps building a home from scratch would consider it. The technology is available and seems to be easy enough to use.
The feed-in tariff seems to be a waste of an opportunity. When we go home we only start using what is being produced at that time. We are putting nothing in the bank, whatever bank that may be, whether it is the national grid or our own bank. We have no incentive to do this. Surely it would be easy enough to implement this, as is done in other countries. Why is Ireland lagging behind in this area?
This is a new committee. I have not been involved in climate change before and I am still learning. I use the green bin and do what I can but there is obviously much more involved. It is about informing the public with words that do not confuse. While I vaguely know what microgeneration means, I would have to break down the word in my head. Most people who read it would give up and through it in the bin - hopefully the green one. This committee and those who appear before it need to use crystal clear English that is as accessible as possible. I will not use the term "dummy's guide", but we should not bore and overwhelm people. We may not be able to explain everything but we can explain the basics in understandable and accessible language. The acronyms turn most people off.
In respect of EUROSTAT and having expenditure off the books, as it were, the local authorities have expanded their warmth and well-being scheme for the insulation of homes, both social and private. Strict criteria apply to the scheme. Is there scope to expand it significantly and rapidly? Do we not have sufficient expertise in companies in this country to deal with this issue? We need to invest in this area, and if it can be done off balance sheet, we should go for it because the costs will repaid in the long term. Two years ago, the residents of St. Teresa's Gardens in Dublin took a landmark case to the Council of Europe involving poor housing, damp and mould and their implications for health. We also need to understand the implications for public health of poor energy. I thank Ms Donnelly very much for bringing me on an adventure that I needed to go on. However, we need to bring our citizens with us.
Ms Marie Donnelly:
Senator Devine is absolutely right about the average citizen. If we went into the pub this evening, how many people would discuss energy? I would go further and suggest asking the person those on either side of us the next time we are in a pub how much they spend on energy every month. They will ask what we mean when we say "energy".
Ms Marie Donnelly:
Does anybody know? How many of us know how much we are spending on electricity every month? Do we know how much we are spending on heating every month? Do we know how much we are spending on transport? Are these costs that we keep in our heads? They are not. When we do not have that awareness of what it is costing us and what is coming out of our pockets, it is very hard to move people into the space of being in an energy transition and all of the wonderful things that go with that. Senator Devine is right that we have to make this relevant to the citizen.
To pick up on the final point the Senator made because it is important, one of the things that the retrofit of a house does is improve the quality of the air and removes damp and mould.
I looked at the figures recently and in Ireland we have 470,000 people with asthma, which is the fourth highest in the world. I understand the Deputy is going to County Tipperary to look at them, but when some of the houses are seen, it can be understood why we have such a problem. When someone is hunched in front of an open fire, with all of the particles going into his or her lungs and a draught coming in through the windows and doors, it becomes clear why people have a problem with asthma and their health is limited. We tend not to put enough emphasis on the fact that all of this talk about retrofitting and energy efficiency actually delivers a healthier and more comfortable house in which to live. That may be an entry point into the conversation for many. It is something that is relevant to them and they can then start their journey towards retrofitting from there. The two most important points concern health and how much it will cost. The Deputy is correct that this is not a common topic of conversation in the pub and that it is hard to get the message across, which is why it is hard to secure community involvement because people tend not to get excited about an energy activity until it is almost visible and then they feel like they were not told about it and that they were not involved. It is all linked because if people were more excited about energy matters, they would watch what was happening and intervene earlier, but that does not absolve developers and policy makers in making things available in a transparent way and outlining what their plans are, what they will mean, what they will look like, the reasons they want to do it in a certain way and asking for suggestions, all in a simple way in order that people can understand with infographics showing what the plan is.
On the urban-rural divide when it comes to retrofitting, I have not seen any studies of it, but my intuition is that it is due to asset value. That is the biggest factor.
On the off balance sheet, I am not a financier and was only introduced to financing energy projects and renewables a few years ago. I have had many conversations with bankers and investment funds using terminology I do not necessarily understand; therefore, it is very new to me. It is new to my colleagues working in Ireland, both in central government and local government. It was not traditionally the case that a local authority would work out how to use money from an investment fund to achieve an objective. What was traditionally done was to tell central government that X amount of money was needed and it would be spent. There is a learning curve in how these new financial instruments are used and in partnership energy efficiency investment funds are needed. The organisations will fund energy services companies, ESCOs, such as Crowley Carbon which is very successful globally. They can fund the investment, run it for ten or 15 years to get a payback and guarantee the results for the ten or 15 years. There is that model and it works, but it is new.
On offshore projects, it is a huge opportunity that needs to be developed. It is not a panacea that will solve every problem, but it is a resource that can and should be used.
In one part of her presentation Ms Donnelly spoke about utilities versus heavy industry and their segregation in carbon reduction. Can she flesh out what she said a little? Second, does she have studies, statistics or even anecdotal evidence of where carbon tax was increased recently in some countries and how it transpired politically on the ground? Third, we spoke about energy prices. Many people where I come from, particularly in the farming community, talk a lot in the pub about the price of diesel. It is very much on their minds when it goes up and also when it comes down. Consumers feel it when they are at the pumps. It would be fantastic if Ms Donnelly could give me more background information if she has it.
Ms Marie Donnelly:
Therefore, the Deputy will have to bear with me. The price of carbon covers utilities and heavy industry polluters. It languished at €4 to €5 per tonne for many years. With the clean energy package coming through, it has gone up to around €20 per tonne. Depending on how the predictions are viewed, it should go to €30 per tonne in the next while and the upward trend could go as high as €50 or €60. From the modelling, a price of €50 per tonne would make coal totally uncompetitive, but we do not know if we will get to that stage. The concern is that, at €50 per tonne, if companies were manufacturing steel in Europe, that price would make them very uncompetitive on the global market. That is why I am concerned about having utilities and heavy duty industry in the same system because what is sauce for the goose is not necessarily sauce for the gander in this instance, but that is just my personal view.
The United Kingdom has a carbon tax which started at £12 but which will increase progressively to about £50. It is included in its legislation; it is happening and the reason it will divest from coal in 2025. In France there is-----
Ms Marie Donnelly:
It has also been introduced in legislation in France. It has a carbon tax which will also increase progressively during the years. I do not know what the precise figure is, but it will increase. Do not forget that China has also now introduced a carbon price mechanism. It is happening in many countries. It is happening because governments take a carrot and stick approach. It is a way of moving people through the market mechanisms, rather than through legislation.
Ms Marie Donnelly:
It can go higher than £12, but it will not go lower. In the emissions trading system, ETS, carbon allowances are bought and sold. Sometimes they can be traded. Therefore, if there are many of them, the price will be very low. As happened when the carbon allowances were withdrawn, the price went up.
The next time the Deputy is in the pub, he can say the reason the price of diesel has gone up is we are dependent on fossil fuels from outside the country. It is not just Ireland but Europe is one of the largest regions in the world and one of the biggest importers of fossil fuels. However, it does not determine the price of fossil fuels. The price is determined elsewhere and Europe, in its entirety, is a price taker. Therefore, when the price goes down, it is great, but when it goes up, there is absolutely nothing we can do about it. That is one of the reasons we need to go down the route of energy transition. Think of a utopia where we use our natural resources such as wind, solar, bio and marine energy to produce our own energy vector which we would use for heating and transport and the generation of power. It would be done with our own resources on our own island and we will be energy independent. Then we would not have to take the global price for diesel because we would no longer be buying it. We would decide what our price was. Energy transition is not just a climate issue, it is also about security of supply and competitiveness because the competitiveness of European industry frequently relies on the international price of oil and gas and can put us at a huge disadvantage when competing against other competitors globally. Equally, from a security of supply point of view, as the committee knows, we import a lot of gas supplied by a particular colleague through a particular pipe which can be turned off.
Some 45 million people lost gas supply in the eastern European countries because the supply pipe was turned off. There are issues of security of supply and competitiveness in energy transition as well as climate change. The price the farmer is paying for diesel is a factor in that context. The next time the issue comes up, Deputy Neville can say that farmers need to be part of the energy transition.
I have spoken at length to one organisation that is based in my area on the topic of renewable biogas and an anaerobic digestion. We have had many meetings on it. We have been trying to get farmers to buy in to this. There was toing and froing. I may not be using the correct technical terms, so please correct me if I get them wrong. There had to be a collective of 300 or 400 farmers to feed into the system and there were issues around contamination, so there had to be some fail-safe mechanism to ensure there was no cross-contamination within farms as a result of the gas. That was an area that was being worked on at the time. I have spoken to the organisation about that and we have been working on it. We have been communicating with the upper echelons in Leinster House about it as well.
I do not have the technical knowledge to be the facilitator of that. However, this is an issue that is being discussed more and more, but as Ms Donnelly states, it is a transition and it is managing that transition.
Ms Donnelly referred to speaking to County Limerick farmers. They cannot be told to change to this system overnight. It is a case of trying to educate and manage the transition and get them to buy into it. A kickback buy-in will negate against any investment that will go into it, because farmers are under a lot of pressure at present.
Ms Marie Donnelly:
First, it is not straightforward. A number of models for doing this exist. We have agricultural resource as a raw material for anaerobic digestion. We also have experience of the co-operative model in Ireland. Milk, for example, is collected from 100 farmers and brought together to a central location. This idea of collecting the raw material from a number of farmers and ensuring quality and getting it right is something of which we have experience and we have structures in place that can deliver it. I do not underestimate the cost of the investment, but it is an investment and that means there is a revenue stream. It is an opportunity for farmers.
I will go back to the German farmers. The reason that they put the photovoltaic, PV, panels on the barn was not because they were pretty but because they were a source of revenue for them. Likewise there is potential for this to be a source of revenue for farmers once the structure of the investments is in place. I agree with the Deputy that it is a big mountain to climb, but it is an opportunity and we need to think about it.
A second issue is solar panels. I tabled parliamentary questions in early 2017 on the use of solar panels on farm sheds. I know there was more of a debate about using land for solar panels. It has implications for basic farm payments related to the amount of land being used, and it intensifies farming as well. We have to keep a balance. I would be in favour of using PV on sheds to generate electricity to sell back into the grid. That would make perfect sense.
I thank Ms Donnelly for her presentation. It is quite inspiring because she has given us examples of countries such as the Netherlands and Germany where it all seems so easy. There are so many different mechanisms to generate energy and to work towards energy security. We are here on the island of Ireland and we have probably the best wind in Europe available on the western seaboard. We have the potential for solar energy and we are good at research and development, and innovation.
Having listened to Ms Donnelly, I am wondering why we are not doing it. We have every opportunity. We must become energy secure. We must decarbonise, without a doubt. In my local pub, we talk about the weather. We do not talk about the climate, but I can guarantee that we talk regularly about weather. How do we change the conversation? How do we use the best of the Irish to move towards energy security and decarbonise? The targets are there. We are not meeting them. Many of us are very frustrated. If a person has an examination, he or she sets himself or herself a target, and to proceed and to progress, that person needs to reach that target. We are not doing that. There is frustration in our communities. We see that one good example, Tipperary Energy Agency, and we are looking forward to visiting it. Ms Donnelly is correct that it should be rolled out to all the local authorities. Why has it not? It is not that the Tipperary Energy Agency was formed yesterday. It has been in operation for a number of years. Why is it not happening throughout Ireland?
Ms Donnelly spoke about economies of scale around retrofit in the Netherlands. We have some retrofitting and again Tipperary Energy Agency is excellent on super-homes. Why is there not a programme to do that en masseto get the efficiencies instead of this happening one by one in communities, thus not creating the efficiencies of scale? My central question is the reason for the resistance. What is the problem in Ireland that does not allow us make the steps and get traction because we are not making the necessary progress? I would be interested to hear Ms Donnelly's response.
Some 97 per cent of the members of the Citizens' Assembly recommended that a new independent body be formed as a matter of urgency with new powers and functions in legislation to address climate change urgently, and twice I have used the word "urgently". In her opening statement Ms Donnelly suggested, and I agree, that the senior officials in Departments should work together and present a document each quarter. In respect of that recommendation, does Ms Donnelly think we should have independent body and have the cross-departmental senior officials producing transparent and open reports to allow for the process that my colleague, Senator Devine, mentioned of building the awareness and getting greater understanding? At present, marine spatial planning is not in place nor is the foreshore consenting licence. There are so many opportunities and so many steps that we need to take but we are not taking them.
My final question is on marine capacity. We have a great maritime capacity, more so than most other European countries. We should be developing offshore windfarms. I have friends who work in the offshore sector in the North Sea and I hear of the benefits in terms of job creation, not to mention the benefits of clean and renewable energy. In terms of carbon sequestration, is there anything we could do with the sea all around us? I am thinking about is seaweed. Seaweed is a marine plant and could be beneficial in terms of carbon sequestration. The Government is talking about licensing aquaculture that will deplete our seaweed resources, such as the large kelp forest in Bantry Bay. Should there be a cessation of that immediately with regard to our climate potential?
Ms Marie Donnelly:
Tipperary Energy Agency has been very successful and is doing a super job. It is not the only one. Codema, which is the energy agency for Dublin, is also doing a great job. It brought out an "energy in the home" unit two years ago. This practical product, which has been made available to citizens in Dublin, won a prize in Europe last year. The combined energy agencies of Carlow, Kilkenny and Wexford are operating in a similar space to Tipperary Energy Agency. They are doing a very good job. There is also something in Kerry, although it might not be as developed. It is a matter for each authority to prioritise climate and energy as an issue and to invest resources in it under the most appropriate structure so that these facilities are available to the people of the local area.
It was mentioned during one of the earlier discussions that some people talk about the weather and some people talk about the price of diesel. It is clear that Irish people talk about the weather all the time. Somebody suggested that we should take up a model that has been pursued in Flanders. When the local equivalent of Met Éireann comes on the nightly news, a little chart shows how much renewable energy was made available in the region that day. People can see the figure every day. I think that would be a really useful thing to do. It would not be expensive to put it on the table. If people could see it every day, it would become relevant. They would see that 50% of their electricity that day had come from renewables, for example. If there was no wind, the figure might be 20%. It is a question of making it visible so that people can talk about it when they are in the pub.
I would like to speak about the first recommendation for an independent body. I made my suggestion within the group of senior officials primarily because we had that kind of structure within the commission. While it could be very frustrating sometimes to get beaten up by one's colleagues, I think it delivered better quality policies because there was an internal screening process before going outside. Such a process often reflected the concerns of stakeholders in each of the Departments and, to some extent, the concerns of society. It was good from that point of view. The advantage of this approach is that existing expertise is used immediately. Such a mechanism could be put in place tomorrow if a decision to that effect were made. It would take time and money to create an independent body. Depending on the structure of such a body, there is a risk that it might operate outside mainstream government. Such an agency might be seen to be on the side, rather than on the top. I think there is a need for something that is on the top of government, takes senior decisions, has political reporting requirements and takes responsibility for that. That is why the quarterly report, which should only be a table, should say what has been done and what it means for greenhouse gas emissions and renewables within a certain timeline. It should set out the actions that have been taken, rather than those that are being considered or consulted on. If more detail is requested thereafter, it can be provided. It is important, in the interests of political accountability, to be able to see an actual record immediately. I emphasise this as a possible opportunity.
The emerging issue of seaweed has not been the subject of an awful lot of study at European level. Other parts of Europe do not have as much seaweed as Ireland. The five marine countries along the Atlantic seaboard - Ireland, France, Spain, Portugal and we will possibly still have the UK - will look at this issue. All five countries are co-operating on marine energy generally. The whole issue of seaweed has to be looked at across those countries. As the sea does not operate with boundaries, the reality is that what we do in one country will have an impact on other countries. It is an issue. I would say that we should use seaweed as sequestration. To be honest, I do not have enough knowledge at this stage to be able to comment on whether what is happening is good or bad, or whether another direction could be taken.
Some in Waterford sent me a text the other day to tell me that Kilbarry eco-estate has received planning approval. It will be Ireland's most sustainable development. Homes will have no energy costs and will have enough power to power an electric vehicle. This will lead to a 50% reduction in the annual footprint of homeowners. Savings of €40,000 a year will be made in respect of social homes with no oil and gas usage. The community will own 30% of the energy as a co-operative. That is what is happening in Waterford. I hope we will be able to use that as a positive example for the future.
I thank Ms Donnelly for her presentation and for the valuable and useful information she has presented to us. She spoke earlier about mandating and legislating for certain issues. She spoke about a carrot and stick approach. She used the bag levy and the smoking ban as examples. I think there is an interesting point here. Those measures did not impose a cost on consumers. There was an inconvenience, but it was an acceptable inconvenience because there was no net cost to the consumer. I think that is an important thing. We need to look not only at Ireland but also at Europe. I had a conversation with a German farmer who has a wind turbine. We discussed the reluctance and resistance to renewables, especially wind, from the Irish agriculture sector. He said that the fundamental difference is that the wind turbine the farmer in Germany can see when he looks out his kitchen window is his wind turbine, but that is not the case in Ireland. It is an important difference. In certain circumstances, renewables have had a legacy of generating wealth and taking it out of the locality. It goes to big corporations and businesses - out of the country and away. I think there is a need to ensure the wealth that is generated through renewables in a locality can be distributed and spread around within that locality. An important change is needed in this respect.
We have seriously missed a trick with regard to microgeneration, community initiatives and the ability to share the power that is generated. In parts of Denmark, the Netherlands and Sweden and in other places, people have been given the ability to generate energy and power and share it with their neighbours. That is not the case here. That capacity is still absent here.
Ms Donnelly referred to agriculture many times in her contribution. Agriculture and transport are often cited as the villains when we speak about many of these issues. I think we still need to do some work on sequestration of carbon in agriculture. There is a lot of ambiguity around the numbers, the reality of how much carbon we could sequester and what those values are. There is a need to attribute those things to agriculture and give it the credit it is due.
I firmly believe agriculture can be part of the solution. I was interested to hear biogas being mentioned earlier because there has always been an intense heated debate about the competition between land for food and land for fuel. The fundamental difference is that investment in anaerobic digestion in Ireland and in the UK often involves sole traders or big business. There is one person, rather than a collective or a co-operative, behind the investment. I firmly believe there would be an appetite for a shared initiative involving a number of people. However, the requirement for capital investment and access to finance means that this sector tends to be confined to sole investors or big multinationals.
There was a brief reference to geothermal technology, which I find quite interesting because I do not think it adds up on a commercial basis in the absence of a subsidy. Given that the agriculture industry is completely and wholly dependent on subsidies, we need to be mindful of the fact that it is not a good place to build a business model on. We need to look at renewables that will work in business terms without subsidy and support.
We need to be aware of the consequences of our actions and conscious of the competitiveness needs of business, especially in the agrifood area. It is important that we take an holistic approach to this matter, rather than cherry-picking certain bits and pieces. If we focus on wind, for example, it can have a knock-on effect. I will give an example. I visited one of the most energy-efficient buildings the other day. I went into a beautiful office looking out over the city, but it was very hot and warm. The guy I was meeting had his desktop fan on to blow cold air across his desk because he was not allowed to open the fantastic triple-glazed window in this office. I do not know whether they thought he was going to jump out of it.
There was no provision to open it. Reference was made to the climate in this room today. The air-conditioning is running flat out. It would be lovely to have a window that could be opened. We must be careful because although we now have the mechanisms to give us controlled environments, it sometimes may be better to go back to basics and open a window or take off one's coat.
Ms Donnelly referred to utilising agricultural stubble. Again, that is part of the discussion about the consequences of our actions because one must remember that if one removes the stubble, one takes out organic matter from the soil, which can lead to soil degradation. We must be careful not to cherry-pick.
There is a role for universities and researchers in this regard. Researchers are working on energy pathways, efficiency and life cycle. It is important to do the entire calculation and also to factor in the societal benefits of doing these things. Ms Donnelly rightly highlighted the health benefits which we very often do not factor in to the cost of renewables.
Historically, we have accepted there is a problem but always assumed that someone else will solve it. How do we get people to accept responsibility and take ownership of these problems?
Ms Marie Donnelly:
I will start with the Senator's German colleague who stated that it was his turbine. The Senator is correct that the issue of community involvement has historically been problematic in regard to onshore wind energy production. I hope that will be assuaged by the new renewable energy systems, RES, and requirements for community involvement. It may have been necessary to use a big stick to persuade people to do it but it is the right way forward. However, a very large proportion of investment in onshore wind farms in Ireland in recent years has been made by Irish companies. We have not attracted many German, Dutch or other companies to invest in wind farms in Ireland. The majority of wind farms are Irish-owned, so if there is a problem we should discuss the issues of dialogue and communication among ourselves because-----
Ms Marie Donnelly:
That is true. That is a very different and important issue in that the area is opening up to people. The Irish Wind Farmers' Association has been established and is an active group.
An issue of which the Senator reminded me is that if there are, for example, three wind turbines generating power in an industrial park such as that in Ringaskiddy the power generated cannot be sold to other factory outlets on the site because of a rule which I think was brought in by the Energy (Miscellaneous Provisions) Act 1995 and which does not allow a direct wire. To overcome the obstacles that exist, we sometimes have to go back into the archives and remove rules and legislation that made sense then but do not make sense today. We should remove obstacles that prevent people doing potentially useful things.
My vision for agriculture in this country is that it would be carbon neutral. That is a vision, objective and aspiration toward which every farmer in Ireland could move. It will not be easy and will require change and investment.
On the issue of anaerobic digestion, if I was an investor, I would not invest in anaerobic digestion for biogas unless I had the commitment of farmers who were stakeholders in the business because without that, I could not rely on my source of raw material. I do not see any rationale for investing in it without having the involvement of farmers. They could be whole or part owners but if one does not have a farmer committed to supplying the raw material, one cannot run one's digester. It needs a co-operative type structure to deliver it on the ground. Such structures are in place in certain parts of the country. However, it is expensive technology.
Geothermal energy is very interesting. A geothermal map of Europe is available. Hungary, which sits on a lake of fire, is probably the most interesting place in Europe in that regard. The entire Hungarian energy system could be run solely on its geothermal capacity. Another promising location is under the city of Paris. Many public buildings in Paris are heated and cooled using geothermal energy because the city also sits on a lake of oil. There are some very useful geothermic areas in Ireland which we should maximise. The difficulty with geothermal energy is that it requires a very high level of initial capital investment. Taken over its lifetime, it is a very cheap technology but there is always the question of the upfront investment that is required.
On researchers, I recently attended a meeting at which there was discussion of bringing models for climate change, energy generation and so on together. All the models were linked. However, the agricultural side was omitted and I wondered why that was so. There is an element of getting climate and energy researchers to reach out to the agricultural side but, equally, the agricultural side must put itself in the middle of the debate on energy and climate. I do not see agriculture as a problem but, rather, an opportunity. We will only be able to deal with this and reach a positive solution if we take that attitude.
Ms Donnelly never sees things as a problem but, rather, always as an opportunity, which is why she has been an inspiration to those involved in the semi-transition for many years and has risen to the very top of the public service. Her expertise is very highly regarded. I hope that our State will use it as best it can in tackling the significant challenge it faces. Specific and very practical and useful suggestions have been made. I tend to agree with Ms Donnelly that the key is for the Secretaries General of Departments to meet rather than having an outside body. I am very interested in her reference to the Dutch partnership model, with which I am familiar. We should be pursue a partnership model involving Secretaries General and representatives of the ICTU and IBEC and others because, as Ms Donnelly stated, progress is made when the attention of all is focused on an issue. Ireland can be successful at that because, as Nancy Pelosi said, it is big enough to be significant but small enough to be flexible. It would be possible to get all the relevant parties around a table. Based on the evidence Ms Donnelly has given to the committee, it should outline to Secretaries General that they must have monthly meetings and present quarterly reports in a list rather than essay format. If possible, we should consider adopting the Dutch partnership model. The National Economic and Social Council, NESC, may have already carried out some analysis of that model and its potential application in an Irish context.
The committee or its research team should write to the Secretary General of the Department of Education and Skills to ask why our schools can only be fuelled by fossil fuel heating systems and to clarify how the Department can apply that rule and concurrently teach our children about the importance of the environment in classes such as civic, social and political education, CSPE. How can schools fly a green flag while the Department of Education and Skills states that they may not use a renewable heating system? That is a disgrace. The committee should write to the Secretary General to request an immediate change in that policy.
It should also write to the Secretary General of the Department of Communications, Climate Action and Environment to ask why the Department, in the context of the consultation process, has put forward a 0.35 coefficient which allows for oil-fired central heating systems rather than a coefficient of 0.25 which I presume would also preclude gas-fired heating. We should write immediately to outline what we have heard today and ask the Secretaries General who will be appearing before the committee and those who will not, such as the Secretary General of the Department of Education and Skills, to explain what we have heard and what are they going to do about it.
May I ask a couple of short questions? As I stated, Ms Donnelly was involved at the highest level in the establishment of the Sustainable Energy for All programme, on which I think the commission did a good job. I liked the 2020 package developed by the commission but it has learned and changed its approach and the rates have evolved. We are subject to the new governance system and must assist the Government in achieving targets within the very tight timeline under the new national energy and climate action plans. I acknowledge that Ms Donnelly left the commission last year but, as she was involved in drafting the governance structures, is she aware of any Government which is successfully implementing such plans?
There are such tight time limits and my understanding is that we do not really have a plan ready. What could we do in three or four months? Does Ms Donnelly have any suggestions when it comes to the actual drafting of the national energy and climate action plan which is, in my understanding of the governance system, the be all and end all of this matter? Does she have any advice as to how we would write this or how we as a committee might assist the Government in writing it?
The Irish Fiscal Advisory Council was in yesterday and said, in its work of assessing fiscal risk for this country, that both the likelihood and the impact of the risk of Ireland paying climate fines are potentially high and that this is a real concern. I know that some say that Europe will never fine us; that this will never happen. Does Ms Donnelly think that we will get fines and can she give any assessment as to what they might be? How can we avoid them? Perhaps the latter part of that question is too big. Is there a real potential for fines, however, and if so can the witness give a figure as to what they might amount to?
Thinking big here, we have passed Second Stage of a Bill which will end offshore oil and gas exploration in Irish waters and I am convinced and confident that, if the Dáil has time, this Bill will pass into law. The Fossil Fuel Divestment Bill 2016, introduced by Trócaire, Deputy Thomas Pringle and others, was historically important in showing leadership in divestment and I believe that we will have a similar ability to end offshore oil and gas exploration. The reason I think that is because it is feasible for us to develop offshore wind on the west coast of Ireland, using places like Killybegs, Galway and Shannon, and floating offshore wind, in particular, given that the seas are so rough. I believe that we should be doing this on the scale of ten, 15 or 20 gigawatts with a view to selling it into the rest of the European system. As Ms Donnelly said, the industry wants people who are thinking big and thinking long term on this matter. If we are thinking big then, does she think it a rational industrial, economic and energy policy for us to think of producing that scale of offshore wind on the west coast in order to export to the rest of Europe? From my own perspective I would like to say that everyone else is betting €100 million a pop on oil exploration that never finds anything. We know that there is wind out there and that the technology works, so my sense is that this is the scale of ambition for which we should be going.
I have two further questions. One of the risks here concerns Brexit. Ms Donnelly mentioned work on the North Sea countries offshore grid initiative and on the north-west electricity market. In order to sell the offshore wind on the west coast we would obviously have to either go through the United Kingdom or sell into it. Should we hold back and wait to see what happens with Brexit or is the regional electricity market with which Ms Donnelly was previously involved still progressing?
Ms Donnelly cited the example of Flanders, where there has been some really good co-operative investment in renewable energy. I was very fortunate to meet a company operating as an ecopower co-operative in Flanders and this was the best example I have seen where one was able to invest into the company with as little a €250 per share. One could invest in large-scale renewables as well as in local, small-scale projects and there was a supply company giving very good energy service supply company assistance. Why is it that we have no ecopower co-operative in Ireland, in Plunkett House, for example? I was very moved by a comment at one of our earlier hearings which compared the work of this committee to the work of the recess committee carried out by Horace Plunkett in the 1890s. This is exactly the model for us to follow as it was collaborative and used the resources of our land well. Horace Plunkett is a hero and a model for co-operatives in the rest of Europe, certainly in the United Kingdom and elsewhere. What is the obstacle preventing Irish co-operatives from taking the ecopower model and introducing it here? What is stopping us?
Ms Marie Donnelly:
As one might expect, they were very specific and detailed questions. With regard to the plan, Deputy Ryan is absolutely right. The governance process is central to going forward with the clean energy package. We have learnt many messages from the earlier rounds of legislation and one such message was that if one does not have a joined-up approach to this problem one will end up negating some of the good achieved. This is because one will inadvertently carry out reverse actions. In order to get the maximum impact, one needs to take the holistic view, not just of what one is doing oneself, but also of what one's neighbours are doing. Firstly, this plan asks member states to look at their own systems. What is each state's own energy need and what is it likely to be? Does it have an excess or does it have a shortfall? This is in the context of the fact that there is approximately 32% excess capacity for electricity in mainland Europe today, although this is not of course valid for Ireland. The problem is that there are not enough interconnectors between the areas with an excess and the areas with a shortfall and this is one of the reasons for the Connecting Europe Facility and the programme for 15% of interconnectors for member states so that we can actually bring this together. That excess capacity means that, as mainland Europe goes forward with the electrification of heat and transport and if the interconnectors can be put in place, the electricity system as it is will be able to cope with the increased demand.
This is different from where we in Ireland are at. We are an island, and our growth is such that demand will increase. We have to deal with that. We in Ireland, then, are in a slightly different situation. This issue with this plan is that one not only looks at one's own situation. Italy, for example, should not only look at its own situation but rather should look at who it is interconnecting with. What is happening in France? What is happening in Austria? What is happening across the Adriatic Sea in Croatia? Do these countries have an excess or a shortfall? Can one trade or build a common model? The plan is about, not only what one does in one's own country, but also what one does with one's neighbours. Brexit will have something of an impact on us in this respect because, following the departure of the United Kingdom, we will become very much an island. That, then, is the first point, that one not only looks at one's own situation but look around instead.
Secondly, one should take a long-term rather than a short-term view. At the moment this view runs to 2030 but the real message is that we not just stop there, we must at least think about what happens beyond that. The year 2030 is only a milestone in a journey and one can decide if that milestone is going in this way or in that way. That is an element of it. It is a milestone that we need to think beyond so that we get a long-term perspective. The investments we are talking about here are long-term infrastructural investments. One does not invest in electricity systems for ten years, one does so for 50 years, so any investment we make now we make for the long term. The idea and the structure of the plan is that one looks at what is happening in one's own space, what is happening beside one, and what is happening in the dimension of time.
To give some good examples so far, the Dutch already have a draft and it is already in consultation. There are different models out there, of course. The French are already well advanced with their model, primarily because France is one of that states that has been pushing for this, and it will be written by central Government. Germany has two versions and has to sort out which one to use. There are, then, examples of countries that have made progress in this space. The template is already there. If the Department is busy or does not have the resources or whatever else, I would suggest that it just get a group of researchers, or a commercial company or whatever, to do a first draft and then take that draft apart. It is a matter of just getting somebody to put words on a page and then tear that apart as necessary. The Department cannot delay; it needs something and it needs to be able to react to it. The sooner the Department gets this, the better. If one could just use the template with what is currently available then I quite honestly believe that a first draft could be done in approximately six weeks. This first draft would of course have to be refined and developed, and then sent to Brussels where, no doubt, a number of comments will be made on it, not least of which would be that the ambition not might be sufficient. I say this because I am quite sure that the ambition for renewable energy coming out of Ireland will not be sufficient. The target for Europe is 32% and the expectation in Europe is that Ireland will come forward with that target. It would surprise me greatly, however, if the Irish draft has a target as ambitious as that.
This takes me to Deputy Ryan's second question on fines. The renewable energy situation, for example, concerns legislation that is on the books and Ireland was part of the process for adopting it. This is normal legislation. The European Union operates on the basis of rules.
What marks the European Union out as different from other regions in the world is we have a common rule book, common legislation and we enforce the legislation. For example, if we had, which we possibly have, rules on how to build a chair, because we have a Single Market and the chair is built in Germany, it has to be able to be sold in Italy. If for whatever reason Ireland decided to make chairs with five legs instead of four and then could not sell them, there is legislation on this breach of the rules, there is recourse to the Court of Justice in Luxembourg, it will rule, and Ireland will have to conform with the rules because the rules are there for the Single Market. In the case of renewable energy, it is the rule and the law. Ireland will be breaking the law. We will be referred to the Court of Justice in Luxembourg which will ask first to be shown how we have broken the law, which in this instance will not be very difficult.
The second stage is that when a person breaks a Community rule, he or she is required to fix it, and if that person does not do so, he or she is fined every day until that person fixes it. This happens in all of the areas, not only in energy. That is why we would be fined. The law states we must achieve 16% renewable energy. We will not get there and we are clearly in breach of it. We will be fined until we get there, which might take two or three years. That means it is not just a once-off fine. It is every day until we get there.
The question arises of how the level of fine is assessed. Generally speaking, the court will use a market levelling mechanism. It will ask what it would have cost to comply with the legislation, and that is what the fine will be. That is how we get the figures of roughly €200 million per percentage point because, roughly speaking, one should have been able to achieve a percentage point with €200 million. I cannot say definitively that will be the number, but that is the mechanism that will be followed.
We will not be able to excuse ourselves. We will not be able to play the poor mouth. Ireland is the second richest country per capitain Europe, after Luxembourg. We have the highest and fastest GDP growth rate in Europe. We have all the natural resources in the world to achieve this. Why would somebody in Cyprus or the Czech Republic give Ireland a soft ride? These countries are much poorer than we are and these countries will make their target. Why should we get an easy ride? Politically, I do not see it happening.
There is an express provision in the governance regulation to provide for fines. That was put in there very deliberately because Europe has to be serious on this issue. If we are not serious, we are wasting all of our time. I think we will be facing fines.
On offshore floating turbines, I agree 100% that it is the emerging technology. Again, it is the five countries I was telling the committee about. I had the pleasure of going to see the offshore floating turbine off Porto. It is very impressive. It works. It works in storm conditions, even in hurricane conditions. It is fantastic. I think we can definitely do it. There are two issues we need to look at. If we are to do it off the west coast of Ireland, we will have to bring that power either across the country or around the country to get it to Europe, and we must think about which of the options we will take. The Celtic interconnector, with 700 MW, is a start. We will need more than that. At one stage, Iceland was talking about building an interconnector to the UK because Iceland has lots of power. That would be 2,000 km in length and nobody seems to be surprised at the notion. For us to build an interconnector to France, it would be nothing like that length. It would be much shorter. We could even build an interconnector to Spain. It is not only that we would sell our power to them, which is obviously an opportunity, but also that, more important, we would be able to exchange power. That is where the real benefit comes. The reason electricity costs less in Denmark than it costs in Ireland is because Denmark exchanges power in Nord Pool, which includes the Netherlands, Germany, Sweden and even Norway, so that Denmark can balance its system. We must pay all of the balancing costs ourselves because we do not exchange with anybody else. The interconnector is not only a mechanism to sell, but also to buy, which reduces our costs. As a philosophy for the future, that is the big thinking that we need to have in our heads.
Who knows what Brexit will be? My personal hope would be, regardless of what happens, that we still have a connection with the United Kingdom, and indeed Northern Ireland, in the electricity space. It must be remembered that we have a single electricity market on the island of Ireland. It would be most unfortunate if that were to be broken up. We need them and they need us. There are mechanisms for co-operation that can be put in place, regardless of what kind of withdrawal agreement gets put into place. It would be my personal hope that it is possible to have the same standards on both sides and we should maintain the connection and dialogue. We have to wait and see how things happen.
On the Flanders co-operative, I know why we do not have energy co-operatives. One of the limitations, if one looks at the Flanders co-operative in raising co-operatives in Europe, is that a large share of the 1 million people who are party to a community co-operative are operating with PV technology. The reason I put so much emphasis on PV technology is it is simple. It is like a light bulb. One plugs it in and goes away. It is an easy technology. No expertise is necessary other than setting it up. It allows people to participate in the process in a simple way. It is also an urban opportunity as well as a rural one. If we were to open, as it were, solar energy in this country, especially on a small scale, we would find co-operatives starting to emerge because it becomes a logical consequence of that as an entity. That is an area where policy can make a seriously big difference.
I will keep this brief because it has been a long afternoon for everyone here. First, it is interesting to listen to what Ms Donnelly has to say. I could listen all afternoon. It would be good to get Ms Donnelly to speak to our communities. I had a wind farm on my doorstep and it was horrendous for me, a politician, to have to deal with it. It was a case of us and them. Even when I tried to plead the community card, it did not work. Something I suggested at the time was that one wind farm should be made available to the public as that would cover their ESB bills. This happens in Scotland and it works well, as Ms Donnelly probably will be aware. What is happening now, in terms of communities meeting and those developing the wind farms having a conversation, is very important. The wind farm is there a year and a half to two years, and the level of opposition has virtually died off. We did get on that mountain - it was Coillte land - a beautiful amenity area, which is being used by up to 2,000 people a month with very little advertising. It will help tourism in a major way in County Roscommon, which we badly need.
I will ask Ms Donnelly one or two questions about that. Some of the experts will say that such inland wind farms will be a no-no in a few years. Apparently, Germany does not do much of it anymore. That is one question. Does Ms Donnelly believe that to be the case?
Second, Ms Donnelly spoke a great deal about how we bring communities together on this, but how is that barrier broken? No matter what efforts are made, there will still be a significant barrier to be broken down even to have the discussion. The trust factor is not there. I do not have an issue with wind farms once the community is taken into account. In my own locality, we are fortunate where we have the community programme in terms of funding coming from the owners of the wind farm to help out community projects.
One of the unfortunate things about it is that a Leader company from east Cork opts for Roscommon. At the time, Coillte said it did not want to put locals on it and I can see that point to a degree. They might favour "A" over "B". However, the arrangement is not satisfactory for a local community.
Another issue is that people do not trust the planning regime. They will always say the council will grant permission and Coillte will uphold the council's decision, notwithstanding the total process. The question, therefore, is how we break that barrier down. Battery areas or units were referred to in respect of wind farms. These are now being put in beside the wind farms and in other places and there are huge concerns among the public about this. They are just afraid of it. How do we break down that barrier? I am told in my area that the batteries would be used to gather electricity for release in an emergency and, therefore, we would have fewer power cuts.
Deputy Ryan made an excellent point on heating systems in schools and, like other members, I support that. I note the point about offshore wind farms. It is called the "wild" Atlantic and there will be huge problems servicing those wind farms, notwithstanding what some of the experts say. Other parts of the world were referred to. If one looks at the wind factor, it is less severe or bold than it is in the Atlantic, which is ferocious. There is a big difference between having a wind farm in the Irish Sea compared to the west of Ireland. Is there an issue there?
I would like to make a contribution on biofuels but I am not going to go into that any further today. My final question is on our 2020 targets. It is a huge issue. I accept what Ms Donnelly said in that regard. It is bad for Ireland. However, the vast majority of the public does not care. How do we break that barrier down to get it through to the population as a whole that we have a serious fines issue coming down the track? It is going to hit our budgets and other projects in this country if we are going to get caught with all those fines. Many members of the public do not care. They will talk about it but they do not care. How do we change that mindset? I will keep my other questions for another day.
Ms Marie Donnelly:
On inland wind, I note that there are a great many wind turbines in Germany and there has been resistance there to onshore wind. The Deputy is right about that. That is why Germany is investing in offshore energy. The difficulty for Germany is as follows: while Schleswig-Holstein has a 100% renewable supply of electricity and exports to the other landers, it is draws electricity from the North Sea whereas a huge centre of demand is in Bavaria in the south. The question is how to get that energy to the south. Germany is planning two spines of HVDC pylon links to bring the electricity down to the south. The consultation process with citizens there has been hugely complicated. There is resistance to doing this and they have gone through a great many hours of consultation with all the participants and citizens on the routes to put this process in place and get the energy from the north of Germany to the south where it is needed.
Ms Marie Donnelly:
It is an issue that needs to be debated and thought about. If there is a cost, people have to decide whether they are prepared to pay it. I agree there is no simple answer. However, Germany is moving to offshore development because it needs the energy. One has to remember that Germany is taking seven nuclear power stations out of action in 2022. Germany is using much more coal and lignite now than it did previously but it wants to get rid of it. That can only happen if enough renewable energy is available. Germany is caught a little bit in a dilemma as to how to go forward on its power system.
I said earlier that the technology of wind turbines had changed dramatically. The height has increased because there is better control and that has changed the situation with regard to the acceptability and utility of sites. Initially, we were always looking at putting turbines on mountain tops but it is not perhaps as necessary to do that today as with the earlier versions of the technology. It may be more constructive or cost-effective to put a wind farm close to a grid connection, rather than to have to build a grid connection out. This is a balance because the grid connections for build out will tend to be in areas of sparse population and that might be a preferred option for wind farms. On the other hand, if one goes to a place where there is a lot of gid connection, there will probably be a lot of people too. One has to strike a balance economically. The discussion should be had with people, however, to state a preferred option and the reasons for it and to ask what they think. It may be, however, that the Government will have to say that while people do not want it, someone has to supply it. As such, an element of framing will need to be done because we will need, ultimately, to have the power from somewhere.
On battery units, I reiterate that one should touch them and stand beside them. They should listen to the battery units. I have seen them in operation in Belfast, for example, where they can react in one tenth of a second to the power situation. They can operate for three minutes, which is generally enough to prevent a power outage. While they are not cheap, they are hugely useful, especially when one has renewable energy coming through. Given where we are now with our technology, it might be better in the future. If people have a concern, bring them up and let them see it. Let them hear it, touch it and ask the questions. Let them put their concerns on the table and answer them honestly and correctly. People should be given the information. Some will be convinced and some might not. Let us at least try to convince those who are open to being convinced. That is the real issue.
The Deputy is correct regarding offshore wind that the conditions off the west coast of Ireland are hostile. There is no discussion on that. It is why the five wind farms are in the Irish Sea, which is much more attractive. However, we should not neglect the west coast. While it is true that the wind speeds there are higher and there will be more maintenance involved, more power can be generated, so there is an opportunity. We have to think about it and how to exploit it, but it is there.
On the 2020 fines, apart from the cost, which we are all concerned about, what makes me really nervous is that the population will consider it to be a question of Brussels beating us up again and, because we pay fines, people will become hostile to climate action and the energy transition. They will become negative about it. If for no other reason, we have to spend the money as quickly as we can in the country for the benefit of the people who live here. People might not be sensitive to it now, but if it is a choice between a new hospital wing and paying fines to Brussels, I know how the population will react. We have to try to pre-empt and minimise that as best we can to avoid a negative reaction on the part of the population.
On community trust issues, we have done ourselves a disservice regarding onshore wind farms. The ESB is seen as more trustworthy perhaps. When someone from the ESB knocks on someone's door in connection with putting up an electricity pole, there is more trust. Is that kind of engagement at local level on onshore wind turbines something one sees in other countries to instil trust? Is the main broker who comes to a community to convince people from a trusted institution with a reputation as opposed to someone who is seen as an outside developer?
Is that a key factor in winning over the public?
I have one other suggestion. This has been hugely useful. Could the committee write to the Department of Communications, Climate Action and Environment and ask whether it has a draft plan yet and, if so, could the committee have a copy of it before it meets any of the Secretaries General?