John Browne (Wexford, Fianna Fail)

I welcome the opportunity to clarify for the House the steps this Government is taking to support the greater use of renewable energy technologies and future proposed actions. The Government fully recognises the importance of reducing our dependency on non-renewable fuels, whose prices are subject to the vagaries of global markets, and certainly the energy markets. We have taken a number of innovative measures to which I shall return.

In addition, from a national economic perspective not just an energy policy or environmental perspective, increasing the amount of renewable energy in the system will help in substituting costly fuel imports and in dealing with levels of uncertainty in the future evolution of energy prices. It will also assist in providing a more balanced fuel mix.

The Green Paper on sustainable energy, published in 1999, set a challenging target to add 500 megawatts of new renewable energy-powered electricity generating plant to the electricity network.

That target was subsequently increased by this Government to 728 mw. In addition, specific categories of offshore wind and biomass fed combined heat and power plants were added to ensure those technologies also are explored. An accelerated payment method was also introduced to further reassure investors of the growing opportunities available from investing in renewable energy technologies. These departmental actions were supported by actions of Sustainable Energy Ireland to place various reports and a wind atlas beneficial to all potential applicants in the public domain. Further support for innovative proposals is available under the dedicated research demonstration and development programme operated by Sustainable Energy Ireland. Additional practical support and advice is available from the renewable energy information office located in Bandon, County Cork. These centres are also supported by energy agencies located in some local authority areas whose programmes are funded or co-funded by Sustainable Energy Ireland.

In December 2003, a consultation paper was published to hear the views of all interested parties on future support mechanisms and targets. This was followed by the establishment of a renewable energy development group which included representatives of this Department, the Department of the Environment, Heritage and Local Government, the Commission for Energy Regulation, the network operators, the scientific community, the ESRI and representatives of both project developers and electricity suppliers. This is a broadly representative group and its work is reaching a conclusion.

However, my colleague, the Minister, Deputy Noel Dempsey, again demonstrating the urgency the Government attaches to the accelerated development of renewable energy technologies, satisfied himself on the basis of interim reports that there was sufficient consensus to announce certain conclusions. On 7 April last, addressing the annual conference of the Irish Wind Energy Association, the Minister announced future capacity requirements for renewable energy electricity generating capacity, broadening of the support mechanisms to include all supply companies in the market and changing the support mechanism from competitive tendering to a fixed price tariff.

The target announced by the Minister is to have more than 1,400 MW of renewable capacity built and operating on our electricity system by 2010. This will require us to more than double in five years what was delivered in the previous decade. Previous support contracts were exchanged between the ESB and successful applicants and the additional costs were recovered by the ESB through a public service levy. The electricity market is now a fully liberalised market and project developers are free to contract with any licensed supplier. The suppliers will be assured they will receive compensation on terms which match those already available to the ESB customer supply.

The most significant announcement by the Minister, Deputy Dempsey, was that the support mechanism will change from a competitive tendering process to a fixed price system. This announcement has received positive responses from representatives of project developers. I have already mentioned the support programme involves a public service levy, which is imposed on all electricity customers. There is, therefore, particularly in the case of a fixed price support mechanism, an onus on the Minister to ensure that the price imposed will deliver a reasonable and fair rate of return to project developers while ensuring that the interests of national competitiveness and the ultimate burden of cost to the final consumer are fully taken into consideration. The Department is finalising some finer details of the new support mechanism with the Commission for Energy Regulation and I expect that these discussions will be finalised shortly.

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