Dan Neville (Limerick West, Fine Gael)

I welcome the opportunity to speak on the Energy (Miscellaneous Provisions) Bill 2006. I refer to the key statement made in section 3:

9B.—(1) It shall be, and be deemed always to have been, a function of the Commission to participate in the development of an all-island energy market, including the preparation of proposals and the provision of advice to the Minister in regard to any part or aspect of the establishment, management and operation of such a market.

It is opportune that the House is discussing this Bill when energy is such a concern as a result of the rise in oil prices. That rise, global instability and general acceptance that oil reserves will grow ever less dependable should act as a wake-up call to those who think we can continue as we are and not risk major economic problems in the decades ahead.

In 2003 the price of a barrel of oil was $35 while this year it is well in excess of $70. Economists warn that the day may not be far off when it will reach $120 a barrel. Even natural disasters such as the devastating hurricane Katrina put upward pressure on oil prices and demonstrate the susceptibility of Ireland's economy to events beyond our control. Coupled with this price pressure are the repercussions of Ireland's failure to meet its commitments under the Kyoto Agreement.

To neutralise the effect of global warming on the earth's population, it is generally agreed that the level of global greenhouse gas emissions will need to be reduced by 70% by 2100. As a first step, the 1997 Kyoto Agreement was drawn up with the aim of reducing global emissions of greenhouse gasses by 2012 by 5.2% based on 1990 levels. Under the agreement, to which Ireland is a signatory, this country undertook to limit the increase of these emissions in 2008-12 to only 13% based on the level of emissions in 1990. Without action, it is estimated that our emissions will rise by 37%, almost three times the permissible level. Currently, we are at 25% above our 1990 levels. If agreed commitments on emissions are not met, Ireland will face a bill of up to €400 million.

Sustainable Energy Ireland states that renewable energy has been contributing nearly 2% of Ireland's primary energy supply since 1990. Most of this has been delivered by traditional biomass, waste wood used by the timber processing industry for drying and wood burnt by the residential sector for home heating. The second most significant contribution has been from the large-scale hydro power plants, whose output has varied from year to year depending on rainfall patterns. The growing contribution from wind energy is also evident. In 2003, biomass contributed 1.2%, hydro power 0.34% and wind energy 0.26% of Ireland's energy requirements. However, as the price of oil increases even more and supply becomes less secure, we must try to strike a better balance. Our European partners already have made a start. In 2001, Austria was sourcing 22% of its energy consumption from renewable sources.

The first step to tackling Ireland's energy crisis lies with how we use energy at home and at work. Statistics show the following. Between 1990 and 2003 coal usage dropped by 52% and the share of coal fell from 27% to 10%. Sod peat usage dropped by 69% and its share fell from 26% to 6.4% over the period. Peat briquette usage reduced by 40% and its share fell from 7.1% to 3.4%. For briquette usage there was a large reduction of 17% in 2003 alone, but oil usage increased by 195% and its share in the residential sector grew from 16% to 37%. Natural gas usage increased even more significantly, by 360%, or 12% per annum, and its share rose from 5.4% to 19.5%. Renewable — mainly wood — usage increased slightly by 1.2% but its share dropped from 1.9% to 1.6%. Given the inexorable rise in the price of oil, the huge increase in the use of natural gas and the worrying drop in the use of renewable energy to heat our homes, something must be done.

According to the strategy report of the campaign for take-off for renewable heat pumps in Ireland, produced by Arsenal Research for Sustainable Energy Ireland, of the 1.2 million dwellings in Ireland, three quarters were built prior to the introduction of the draft Irish building regulations in 1976. Some 86% were built before the more stringent 1991 building regulations. This implies that some degree of energy inefficiency exists in most Irish dwellings. The report states:

Irish insulation levels are among the poorest in Northern Europe. The extent of double-glazed windows, at 36%, is very low relative to other countries. Ground floor insulation, at one-in-four households, is likewise paltry. Similarly, less than two-in-four households have draught sealing or wall insulation.

To tackle this, householders and businesses must be grant-aided to ensure that heat is not lost and energy is not consumed unnecessarily. Sustainable Energy Ireland states that insulating the 50 sq. m. attic space of a typical house costs approximately €254 and could save approximately €76 a year. It would, therefore, pay for itself in about three years.

Using alternative energy sources and moving away from the burning of fossil fuels makes sound environmental and economic sense. Unfortunately, the initial capital outlay can deter householders and businesses from making the switch. In Britain, the Clear Skies programme has sought to remedy this. Funded by the Department of Trade and Industry and managed by Building Research Establishment, Clear Skies aims to give householders and communities a chance to realise the benefits of renewable energy by providing grants and access to sources of advice. Householders can obtain grants of between £400 and £5,000, while not-for-profit community organisations can receive up to £50,000 in grants. Grants are given to the following renewable energy installations: solar thermal, wind turbines, micro-small-scale hydro turbines, ground source heat pumps, room heaters-stoves with automated wood pellet feed and wood fuelled boiler systems. The model has been a success in the UK and the scheme has offered grants to 6,562 households and 304 community organisations. In 2006, the Government finally moved on this important agenda and it is time to move further still.

The economic case for a move to generating electricity from alternative energy sources is unquestionable. At present, only approximately 4% of Ireland's electricity is generated from renewable sources. This compares to 47% generated from natural gas, 26% from coal and 12% from oil. That involves costly extraction methods, ever increasing importation costs and, above all, a total lack of stability. Our economy cannot withstand this. It is imperative that the mix of sources from which we derive our electricity is improved. My party believes that it is eminently possible to shift our dependence from imported non-renewables to indigenous, renewable energy for electricity generation.

Wind energy is vital in the effort to meet our Kyoto targets. A number of problems exist with wind energy: cost; structural problems, including the control of the national grid by the dominant supplier and generator of electricity; planning problems, which we all have experienced, including the lack of a national policy favouring the construction of wind farms from which the relevant authorities can take a lead; and reliability, which, with our climate, is probably greater here than in most countries. My party believes these problems can be overcome and wind energy can play a large part in meeting our energy needs.

According to the Department of the Environment, Heritage and Local Government, landfill remains the predominant waste management practice in Ireland. An estimated 1,901,864 tonnes of municipal waste, or 79%, was consigned to landfill in Ireland in 2002. At landfill, bacteria cause the organic fraction of deposited waste to decompose under partially anaerobic conditions, producing a biogas. This biogas consists primarily of methane and carbon dioxide in the ratio of 2:1, with small quantities of other gases also present. Landfill gas emissions can be minimised through effective recovery systems which harness the gas and use it as a renewable and valuable fuel. In addition to electrical power generation, landfill gas can also be used for combined heat and power, for kiln firing and as a heating or vehicle fuel. Landfill gas is similar to natural or fossil gas and can be fed into the natural gas network.

Nationally, Ireland's landfill capacity will last for roughly another ten years. It is vital that we use this period to make the most of the natural resource that landfill produces. In 2004 there were 34 authorised landfill sites in Ireland. Of these, only five have been developed to generate a total of 15 MW of electricity that is fed into the national grid. Development of these sites has been supported under the alternative energy requirement scheme run by the Department of Communications, Marine and Natural Resources. Meanwhile, our wastewater treatment plants provide all the inconvenience of a so-called "disamenity", without any of the potential economic and environmental benefits, including the harnessing of valuable methane gas.

Approximately half of the total amount of electricity generated from renewable energy sources comes from hydro energy. According to the report entitled Tidal and Current Energy Resources in Ireland, produced by Sustainable Energy Ireland and published in August 2005:

There are many similarities between wind and tidal current generating systems both in terms of devices and the nature of the driving force. Compared to wind technology, tidal systems are in their infancy and there have been only a small number of prototype scale demonstrations of plant with an installed capacity of over 100kW. It is expected to take several years before items of equipment are produced for purchase and installation.

The same report states that hydro energy could produce approximately 2.18% of the predicted electricity consumption for the year 2010. This figure could increase to 6.27% of the predicted electricity consumption between 2010 and 2015.

Ireland's peat industry faces a major challenge in the years ahead. As our peat reserves are exhausted and existing peat contracts with Bord na Móna come up for renewal, it is important that other uses are found for the infrastructure in place while also examining the introduction of renewables as a source of fuel for electricity generation. Fine Gael proposes that grants of between €500 and €3,500 should be paid to householders wishing to convert their home heating to renewable energy. Grant aid to householders who wish to insulate their homes properly should be available up to €500. With regard to electricity generation, we propose a move to generate 33% of Ireland's electricity needs from renewable resources by 2025. We will consider a complete separation of the ESB from the national grid to ensure a level playing field for all energy suppliers.

Fine Gael proposes that investment and commitment to wind energy should be predicated on the putting in place of the necessary interconnecting infrastructure which can ensure continuity of supply in the event of a reduction in supply from wind. We will seek to recover landfill gas in all landfill sites and waste water treatment plants as far as is practicable for electricity generation to be fed into the national grid and for private use. Fine Gael will increase research and development funding in the offshore hydroelectric sector to ensure established targets are met and commit to a review of progress with a view to exceeding those targets should conditions permit. Bord na Móna should be included in the overall development of energy policy given its experience and expertise as an energy provider and its ability to play a meaningful role.

I refer to biofuels and the role of agriculture. Fine Gael proposes the abolition of all excise duty on biofuels produced from renewable energy crops and to establish grants for producer groups, which would comprise up to 50% of the costs of setting up the group, subject to a maximum of €300,000 per group. We propose the reform of the energy crops scheme by examining whether the current rates of payment are adequate to promote energy crop expansion and whether the sugar beet crop should be included under the scheme to facilitate development of the bioethanol industry. A public competition for the establishment and operation of a number of biofuel processing plants, strategically located in a selected number of locations will be undertaken. Capital start-up grants for these processing plants would initially be provided to enable these plants to become established and begin viable processing operations. Fine Gael proposes greater links with international biofuel processors and-or fuel suppliers and the relevant Departments, especially the Departments of Transport and Agriculture and Food, to facilitate the promotion of the biofuels industry. A public awareness and promotion campaign will be undertaken to encourage the growth of biofuels. Throughout the public and private forestry sector, the growing of trees with a high carbon sequestration capacity to make a further contribution to meeting Kyoto requirements will be encouraged.

Clear targets should be set for the wood energy sector in Ireland. No targets are in place to allow for the replacement of imported fossil fuels with domestic wood energy. Targets and a clear policy direction would promote better forest management and stimulate the growth of the forestry sector. Forestry grants must be repositioned to promote and develop sustainable forestry. There must be a greater focus on the potential of a vibrant forestry sector through alternative timber use to reduce dependence on fossil fuels. In particular, there must be a greater emphasis on short rotation coppice forestry such as willow.

With regard to transport, a significant shift in the allocation of capital transport funding is necessary to facilitate a meaningful increase in the development of public transport infrastructure projects. Vehicle registration tax, VRT, will be reformed by Fine Gael through the establishment of a system of energy efficiency labelling for motor vehicles, with lower rates of VRT for those cars with more efficient engines, and we will create a market for biofuels by legislating to provide that all motor fuels must include a blend of fuel from renewable sources. All petrol sold at filling stations will include a 5% bioethanol mix and all diesels will contain a 2% bio-diesel mix. An immediate increase in the number of buses providing commuter services into our major cities should be introduced, especially feeder buses to rail connections.

A public transport regulator should be established as a priority with the aim of assisting in the provision of increased public transport services. Action should be taken on the provision of increased rail services as a viable transport solution to reduce dramatically our current reliance on the car. All public transport vehicles and public service vehicles should be required to convert, where practical and feasible, to forms of biofuel, whether in a pure or blended form.

A centre of excellence for alternative energy should be established, charged with ensuring Ireland develops a world class alternative energy sector. The centre should incorporate the existing Sustainable Energy Ireland and should be located within an institute of technology with outreach points in other academic institutions nationwide.

With regard to planning for the future, Fine Gael proposes that all public buildings should run on alternative energy sources as soon as is practicable and feasible. The national spatial strategy should include major renewable energy infrastructure projects. Our renewable energy infrastructure should constitute an element of regional development plans, while a community dividend should be provided to act as compensation for those living close to important infrastructure that aids the entire country reach its alternative energy commitments. Fine Gael is committed to these proposals and I am pleased to have had the opportunity to be the first to place them on the record of the House.

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