Brian Leddin (Limerick City, Green Party)
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Apologies have been received from Deputy Richard Bruton. This meeting has been convened to consider Supplementary Estimate for Vote 29. I welcome the Minister of State at the Department of the Environment, Climate and Communications, Deputy Ossian Smyth, and his officials to the meeting.

Members of the committee are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against either a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I also remind members that they are only allowed to participate in the meeting if they are physically located on the Leinster House complex, and in this regard I ask all members, prior to making their contribution to the meeting, to confirm they are on the grounds of the Leinster House campus. I remind members that, in accordance with Standing Orders, discussions should be confined to the items constituting the Supplementary Estimates. I now call the Minister of State to make his opening statement and we will then have questions and answers.

Ossian Smyth (Dún Laoghaire, Green Party)
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I can confirm I am on the Leinster House campus. I am thankful for the opportunity to present details of the Supplementary Estimates for the Department of the Environment, Climate and Communications - Vote 29. The Supplementary Estimate for the Department is a technical Estimate regarding the reallocation of savings within the Department subhead. A sum of €28 million is being reallocated from the communications programme to the energy programme and will be added to a €132 million forecasted capital underspend on the sustainable energy programmes to facilitate the transfer of €160 million to the energy efficiency national fund. The transfer to this fund has been approved by the Minister for Public Expenditure and Reform to provide additional support to households impacted by rising energy prices in 2022. It includes €60 million for the proposed low interest rate loan scheme for homeowners to improve the affordability of energy efficiency retrofits. The remaining €100 million will be used to address waiting times under the warmer homes scheme and to increase the number of retrofits supported through other Sustainable Energy Authority of Ireland, SEAI, residential and community energy efficiency schemes.

A sum of €24.5 million is being allocated from the communications programme for the environment and waste management programme to provide additional funding in 2021 for climate financing, litter initiatives and additional carbon credit purchases. Ireland is committed to concerted global action to address the climate crisis and engages in negotiations under the UN Framework Convention on Climate Change and the Paris Agreement through its membership of the European Union. Climate finance plays a critical role in supporting development countries to address climate change.

At COP26, the Taoiseach outlined Ireland's commitment to increase its financial contribution to climate financing to €225 million by 2025. The Minister for the Environment, Climate and Communications, Deputy Ryan, very much welcomes this commitment and, in support of it, is increasing the climate finance contribution from his Department from €5 million annually to €15 million. The reallocation requested in the Supplementary Estimate allows for that increase to come into effect from 2021.

In addition, funding is being provided for the reimbursement climate action fund for 2021 for expenditure on the Bord na Móna bog rehabilitation project. The rehabilitation project is being carried out on 33,000 ha of peatlands. The works under the scheme are expected to create 350 jobs in total and will contribute to Ireland's target of being carbon neutral by 2050. Rehabilitation works under the scheme have commenced on 18 bogs and all operatives involved have been reassigned from peat harvesting activities.

By year end, the Department is forecasting a substantial capital surplus of €246 million. This arises mainly due to the impact of Covid-19 on the delivery of two of the Department's largest projects, €132 million in the sustainable energy programmes and €79 million on the national broadband plan. The extent of Covid-19 related restrictions on construction activity between January and mid-April this year had a significant impact on activity in the sustainable energy programmes and national broadband plan.

Progress on sustainable energy programmes was severely impacted by the level 5 restrictions in place in 2020 and from January to April in 2021. As a result, the waiting lists and waiting times for the warmer homes scheme have grown. There are currently just over 7,000 homeowners on the warmer homes scheme work programme. The SEAI data indicate that for homes completed in the first half of 2021, the average time from application to completion was almost 26 months.

Every effort is being made to maximise activity output since the recommencement of construction activity in the residential and commercial sectors in mid-April. However, it is inevitable that a substantial budget underspend will accrue by the end of the year. The Department will be using some of the additional resources from the energy efficiency national fund to increase output under the warmer homes scheme. This is a targeted measure to protect vulnerable consumers, further shielding them from the impact of future energy price spikes.

On the national broadband plan, National Broadband Ireland commenced connections to the new fibre network in January of this year, but due to the level 5 Covid-19 restrictions in place until April, which closed the construction industry with certain exceptions, it sought an extension of milestones to be delivered in 2021. A revised target of 59,432 premises passed was agreed with the Department. This is a 40% reduction on the original target of 102,000 premises passed.

National Broadband Ireland has also faced further complexities working with existing networks, which have also impacted on progress. This includes challenges arising in rolling out fibre broadband in a rural environment, such as significant tree trimming to ensure cable can be placed on overhead poles and remediation of ducting. Building work is now progressing across the 20 deployment areas, with 277,000 premises now surveyed, and enabling work is under way in a further 16 deployment areas.

There is no additional cost to the Exchequer associated with the initiatives being brought before the committee today. They are being funded from within the 2021 allocation for the Department of Environment, Climate and Communications on a once-off basis. I thank the members.

Brian Leddin (Limerick City, Green Party)
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I thank the Minister of State for his opening statement. I invite questions from members.

Jennifer Whitmore (Wicklow, Social Democrats)
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My first question is to clarify if I am on the right track and then I have a subsequent question for the Minister of State. I have only had a chance to look at these figures today. The Minister of State mentioned €160 million is to be transferred to the energy efficiency national fund. How is that fund established and how does it operate?

Ossian Smyth (Dún Laoghaire, Green Party)
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The energy efficiency national fund is an existing fund which was set up prior to this year. The scheme already exists. It exists to allow for energy efficiency upgrades, such as through the warmer homes scheme and so on, to be carried out. Works such as retrofitting or through any schemes of the SEAI can be carried out. It has a legislative basis. By putting money into it that is unspent, it allows us to use that money in a later year. In essence, it is a mechanism whereby we can use unspent energy efficiency money outside of this calendar year.

Jennifer Whitmore (Wicklow, Social Democrats)
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I am still not 100% sure if I am on the right track with this. Is this the energy efficiency national fund on which the Comptroller and Auditor General did an analysis and in respect of which he said there was considerable risk with the Government setting up a fund like this? Essentially, it is an external qualifying investor fund, QIF, that is managed by outside fund investors. Is this the fund? Am I correct in saying that?

Ossian Smyth (Dún Laoghaire, Green Party)
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I am not entirely sure what the Comptroller and Auditor General was referring to in that particular report but I can come back to the Deputy on that in a minute.

Jennifer Whitmore (Wicklow, Social Democrats)
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Yes. Perhaps one of the officials could answer that. The Comptroller and Auditor General expressed concerns in 2018 about the energy efficiency national fund. He said it was essentially an investor fund where the Department does not have control over investment decisions because it is only one of a number of investors. I checked online and I do not know if this is the correct fund. If I could have clarity on that, it would great. There is an Irish energy investment fund in which the Irish Government is an investor, as are property groups, Glen Dimplex, church bodies and pension groups. Essentially, this is a fund that has been set up to invest in energy efficient projects not only in Ireland but in the UK and Singapore. The Comptroller and Auditor General said that because the Department does not have control over the investment decisions, including the pace at which those investments are made, he would have concerns about it. He also had concerns about the significant professional services costs associated with it. I note from the Comptroller and Auditor General's report that the management fee was set at 1.25% of committed capital, which if we were to put €160 million into this fund would incur almost €8 million in fees. The Minister of State might clarify whether I am on the right track and if this is right fund. If it is, I would have serious concerns about the €160 million going into it.

Ossian Smyth (Dún Laoghaire, Green Party)
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There are two separate funds. There is the QIF and the energy efficiency national fund, EENF. This money is to go into the EENF. In previous years, money that went into the EENF was then sent forward into the QIF and, as I understand it, that will not happen this year. I will invite my official, Louise, to comment on that if that is allowed.

Brian Leddin (Limerick City, Green Party)
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We can go into private session to hear from the officials.

Ossian Smyth (Dún Laoghaire, Green Party)
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Is that how it works?

Brian Leddin (Limerick City, Green Party)
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Yes.

Ossian Smyth (Dún Laoghaire, Green Party)
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Okay, if the Chairman wants to do that.

Brian Leddin (Limerick City, Green Party)
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We will now go into private session.

Brian Leddin (Limerick City, Green Party)
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Does Deputy Whitmore wish to continue?

Jennifer Whitmore (Wicklow, Social Democrats)
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I would be interested in following up further on the issue of the QIF, but I can do that through the Department and through parliamentary questions.

Brian Leddin (Limerick City, Green Party)
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I thank Deputy Whitmore for that.

Darren O'Rourke (Meath East, Sinn Fein)
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I thank the Minister of State for the update. In terms of this transfer, what would be the implications for the roll-out of retrofitting under the schemes? The Minister of State said the purpose of this is to increase the resources for the retrofitting schemes, including the warmer homes scheme. We expect to have the national retrofitting plan soon. Does the Minister of State have a sense of the difference this funding will make in expediting the roll-out of retrofitting? I have two questions for the Minister of State, one concerning the expediting of the roll-out of the retrofitting schemes and the second related to the targeting of them at those most in need, such as those at risk of fuel and energy poverty. Much of that relates to the warmer homes scheme in particular.

Ossian Smyth (Dún Laoghaire, Green Party)
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This is the transfer of unspent money from the national broadband to allow for additional expenditure on retrofit. There are three broad categories in the context of retrofit. There is the local authority grant scheme, which is 100% funding for people in local authority housing. As I understand it, that is set at €85 million for next year. There is the better energy, warmer homes scheme. It is entirely funded from the Exchequer. It is for people who are on a low income but own their home. For example, the house may have been purchased from a local authority or something like that and the person may be on a welfare payment. That has €109 million projected for next year and it will be greatly increased by these transfers. That will mean many more people who are not renting from a local authority but who are living on a welfare payment and are homeowners will be entitled to have their home upgraded next year.

The final category is those who are not living on a welfare payment but are homeowners. They come under the general retrofit scheme. The intention was that there would be approximately €100 million for that section. For that section, a new national retrofit scheme will be announced in January. Part of that will be a loan scheme so that people who wish to retrofit their home but do not have any capital or savings will be able to get a portion of it paid for through a grant and the remainder paid for through a low-interest loan with some kind of Government security behind it. The payments on the loan would be paid off through the savings as a result of increased energy efficiency.

Those three schemes come to approximately €300 million between them before we make these transfers into the fund for next year, and two thirds of that money is directed towards people on low incomes. It is very much focused on the people who need it most. The reason for focusing it towards people on low incomes is that they are the people who are in energy poverty, who have not had upgrades to their houses and who do not have double-glazed windows or whatever. Those are basically the people whom we need to target.

Darren O'Rourke (Meath East, Sinn Fein)
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I thank the Minister of State. Does he have indicative figures in respect of the type of ramping up or the timeline? He stated that many more people will be included in the scheme. How many will be included? The turnaround time from assessment to works being completed is more than two years in many cases. Is there an estimate for when that might be reduced to a more reasonable timeframe? I do not know if that is provided for at this stage or whether it will be included in later plans. I ask the Minister of State to address that issue.

I refer to the €1.5 million for carbon credits. To what does that relate? Is it just the normal state of affairs or does it relate to missed targets or specific measures?

On the broadband plan, funding is shifted away from it, largely to energy schemes. There is an imminent target of in the region of 60,000 homes being passed by the end of January. How many of those homes have been passed at this stage, two months out from the target date?

The issue of the doubling-up of homes that were passed by private operators was discussed recently at the transport committee. Does the Minister of State have an update on those figures? It was reported that 45,000 homes that were on the national broadband plan had been passed by private operators. Is that the case?

Brian Leddin (Limerick City, Green Party)
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I will come in before the Minister of State replies. Programme A is for the Committee on Transport and Communications, of which Deputy O'Rourke is a member. Broadband and programme A are dealt with by the transport committee. If the Minister of State wishes to speak to that, I have no objection, but it is not necessarily a matter for this committee.

Ossian Smyth (Dún Laoghaire, Green Party)
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The Deputy asked, if we are loading more money into retrofits, how many more homes will be done or what will it do to the waiting lists. I only have the financial figures in euro today. I could divide the figure by the average amount for a retrofit but, to give a proper estimate, I will wait until January when we will announce the national retrofit scheme. I will have accurate numbers at that stage in terms of how many people this affects. Obviously, it is a large number.

The Deputy asked about waiting list times, to which I referred in my opening statement. The big problem here is that during the pandemic restriction period, construction was stopped altogether. There was a period of three months when we could not do anything. Everything got delayed by that number of months. It will certainly help. The nature of this is that because the better energy, warmer homes scheme is entirely paid for, there is significant demand for it. Nearly everybody who qualifies for it wishes to avail of it. There is enormous demand. There is also demand among people who do not qualify and are outside the income bands. Broadly speaking, everybody wants to have their house retrofitted if they can. There is significant demand. We are trying to upgrade 500,000 homes in ten years. It is a decade-long programme and I am sure there will be enormous demand at the start. In January, I will have numbers on exactly what that will be.

As regards the €1.5 million in carbon credits, normally the National Treasury Management Agency, NTMA, would invoice a year in arrears, but its auditor recommended that it be done this year. As such, we have been asked to pay out this year the €1.5 million we would have paid out in carbon credits next year. That is why we moved it in. It was a technical accounting request that came from the auditors. I am not sure I can say any more about that.

As regards the better energy, warmer homes scheme and the waiting times for the scheme, we are focusing on the people who are waiting longest. Their homes will be tackled first. The people who have been waiting 26 months or more for an upgrade - they have literally been waiting years - are those who will be tackled first with the additional money.

Was the Deputy's next question on broadband?

Darren O'Rourke (Meath East, Sinn Fein)
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In the context of broadband targets, what is the status in respect of the 60,000 by the end of January?I refer to the article of which the Minister of State is aware that was published in the Business Postregarding the private operators passing-----

Ossian Smyth (Dún Laoghaire, Green Party)
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The issue of encroachment by private operators.

Darren O'Rourke (Meath East, Sinn Fein)
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Exactly.

Ossian Smyth (Dún Laoghaire, Green Party)
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The end of January estimate is for 59,000. The latest I heard was that 30,000 people are available for order or pre-order at this stage. I do not foresee the projected figure being achieved. I went to a board meeting of National Broadband Ireland, NBI, in County Clare two weeks ago. It was the first time in nearly two years the board of the company, which is the supplier that will be building this broadband network, met in County Clare. I met the board to state I am having difficulty with the figures being supplied and that they are far behind what the company is supposed to have done within the year. The pandemic and the restrictions on travel and building and so on did affect delivery, but that is not the whole story. It does not account for the volume of reductions we have seen. As a result, there are three mechanisms whereby penalties will be applied to the contract.

More important, we need to get the contract back on track. As such, my focus at the moment is to see how quickly we can get back onto the original curve of the roll-out and how we can accelerate it. With that in mind, I will meet the chief executives and chairmen of Eir and NBI to try to facilitate some kind of improvement in their working relationship so that we can see an acceleration, or certainly get back on track. Overall, the national broadband plan is a seven-year project with a €2.7 billion contract. I am sure it will be completed on time and on budget, but the question relates to the interim targets and the milestones along the way that had to be put back into position.

Darren O'Rourke (Meath East, Sinn Fein)
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Is the figure of 30,000 a recent one? How far off the figure of 60,000-----

Ossian Smyth (Dún Laoghaire, Green Party)
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I do not have the most recent figure to hand as this is not a communications committee meeting.

Darren O'Rourke (Meath East, Sinn Fein)
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No problem.

Ossian Smyth (Dún Laoghaire, Green Party)
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My figure is a little out of date as it is from a few weeks ago.

Brian Leddin (Limerick City, Green Party)
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To repeat that point, programme A, which is the broadband side of things, is for consideration by the Committee on Transport and Communications.

Darren O'Rourke (Meath East, Sinn Fein)
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Not too many have turned up to the meeting. I think we are all right for time.

Brian Leddin (Limerick City, Green Party)
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There is plenty of time, and it seems the Minister of State is keen to answer anyway, but I think he would be repeating himself at the transport committee meeting, whenever those Estimates are taken. I am sure Deputy O'Rourke will have an opportunity to have another go at interrogating the Minister of State then.

Are there other questions from members on programmes B to E, inclusive? No.

Will the Minister of State explain the additional funding under subhead E4, the carbon fund? Perhaps he could go into that. Additionally, he might explain the transfer of money to the international climate financing allocation.

Ossian Smyth (Dún Laoghaire, Green Party)
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Subhead E4 is the same €1.5 million that was asked about. It arises because of an audit report from the National Treasury Management Agency, NTMA, saying-----

Brian Leddin (Limerick City, Green Party)
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Apologies. Yes, the Minister of State has explained that already.

Ossian Smyth (Dún Laoghaire, Green Party)
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-----that would have to be done not a year in arrears but this year. It is a move to that. It is the purchase of carbon units, which is required under the Kyoto Protocol targets. Funding for these purchases comes from the Central Fund, and then provision is made in the Vote from the technical Estimate in the following year. This year, however, we have been told to do it in the same year. That is where that comes from.

Brian Leddin (Limerick City, Green Party)
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I thank the Minister of State. I apologise for asking him the same question twice. I asked about the transfer to the international climate financing allocation.

Ossian Smyth (Dún Laoghaire, Green Party)
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That is to transfer €10 million from savings under the national broadband plan to increase the climate financing allocation from €5 million to €15 million in 2021. This arises from a commitment made by the Minister, Deputy Ryan, at COP26 in Glasgow to increase the contribution from Ireland by €10 million a year. It is in the budget for next year but we wanted to do it this year as well, so by using that transfer we can make the payment in 2021 as well. The increase will help Ireland to reach an overall target of €250 million in climate finance by 2025, which is our target.

Brian Leddin (Limerick City, Green Party)
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I thank the Minister of State for that. I also thank him and his official for assisting the committee with our consideration of the Supplementary Estimates.

Ossian Smyth (Dún Laoghaire, Green Party)
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Thank you, Chair, and I thank all the committee members. Of course, they can contact my office at any time outside of the committee and I will always be happy to answer their questions.

Brian Leddin (Limerick City, Green Party)
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I thank the Minister of State. We very much appreciate that offer.