Mr. Peter O'Shea:

I will ask my colleague, Dr. McNamara to talk about the clean energy package because it captures many of the issues that have been raised in the various questions about microgeneration and beyond.

It is clear that we are moving from an electricity system which comprises a small number of very big pieces at present to one which will be a large number of very small pieces. That is the direction of travel and microgeneration is a key part of that. There are several technologies, probably the most prominent of which, in response to Senator O'Reilly, is solar rooftop. That is, in part, down to building regulations and it will be part of the overall mix we will need to manage.

We launched our current scheme nearly ten years ago and there are 700-odd microgenerators on that scheme. It costs Electric Ireland well over €100,000 per year to operate that scheme. The reason it needs to be looked at is because it is not scalable in its current form. It needs to be commercially integrated to the market arrangements but also integrated technically within the system. It is a scheme that has done what it said on the tin and has kick-started microgeneration in Ireland. The last time we were before the committee in September I wrote to the committee afterwards to explain more about microgeneration and where electrons go when they go from one house to another. Electrons come out of a solar panel and, if they are not consumed in the house, what happens to them and who pays for them? It gets complex quite quickly but those complexities must be dealt with. We must understand those complexities and develop a set of market rules to address them.

The Senator mentioned overall capability and the cap. If a volume obligation is put on suppliers, the price paid for export will, at times, be in excess of the value of that excess electricity to the system and supplier that is receiving it.

There will also be times when it is of greater value. In the middle of the summer, if demand is down, the value of solar excess might be low. It is important to recognise that. The reason we do not favour putting the obligation on suppliers is that it creates a subsidy between different classes of customers. That subsidy needs to be paid for by somebody. It could be paid for through a PSO, which is a very explicit means of moving money from one bunch of customers to another. It could be paid for through cross-subsidies and tariffs, which nobody would particularly want, or it could be paid from the Exchequer. There are many ways of doing it but there are difficulties with it.

In the context of digesters, a report by the SEAI, produced in 2015 and updated in 2017, considered biogas, which is what the Senator was speaking about. Biogas can be created by taking slurry and grass from agriculture. It may be upgraded to biomethane. One could potentially inject that biomethane into the grid system as renewable gas or burn it in a CHP, which may well constitute microgeneration if its capacity is below a certain level. There is considerable opportunity and potential. The SEAI report reckons Ireland could meet 28% of its gas needs through biogas production by 2030 and that half of the biogas would be used to power CHP plants. Half would be upgraded to biomethane and injected into the grid system. Dr. McNamara will comment on the clean energy package.