Bernard Durkan (Kildare North, Fine Gael)

I welcome the long overdue publication of the Green Paper, while recognising its limitations. We could have done with this a year ago. It would have been useful to have had it in the public arena. We should have had the opportunity to put proposals to the Minister, to ensure that as we proceed into the future, energy supplies would be soundly based, incorporating security of supply and the need to serve the customer in a competitive, reliable and cost-effective manner.

The Green Paper is vague in certain areas. While I know this is just a discussion document, any debate of this nature should entail some degree of costings. Members on this side of the House who had to produce policy in this area, had to review the dangerous area of costings in order to maintain some degree of reality, and that was worthwhile. There are some matters that should be touched upon in this debate, which have not been covered. The experience we have had so far as regards regulation has not been a happy one from the viewpoint of either industrial or domestic consumers. That is a sad fact of life which needs to be addressed. It is not addressed in the Green Paper and neither is it likely to be unless some major changes occur.

All the emphasis, for example, seems to be on driving prices upward in order to make it attractive for more people to enter the marketplace. What is actually needed, as referred to elsewhere in the Minister's speech, is real investment in research and development which in turn will bring to the market the required expertise, as well as a manufacturing and processing capacity that will be cost-effective and competitive. If we proceed as we have done in the past year or so, it will augur poorly for policy in the future in this particular area. I must emphasise, as will others, the absolute importance of energy at this juncture, for two reasons. First, we have a heavy energy requirement at present, which is likely to increase dramatically as time goes on. More important, however, if we are to be serious players in providing alternative energy in our economy, then we must take the investment route now, as a matter of urgency. We must bring together the various Departments that have an input and have them singing from the one hymn sheet — not like the nonsense we have had in the past year as regards the phasing out of the sugar industry, where those being forced out could only receive compensation provided they did not grow sugarbeet which might be used for alternative fuel purposes. That is not how we shouldproceed.

The Minister needs to drive his ministerial colleagues along the right course. I know the pursuit of alternative energy is Government policy at present, although sadly, the initiative came from the Opposition. I agree with what the Minister has to say as regards the national development plan. It is a positive step, since the energy providers will be major players in the industrial sector and this must be incorporated in the national development plan. It must be brought forward at the same time to avoid a serious problem in the future.

I am not so certain about the effectiveness of the landbanks. The only way to introduce proper competition in the marketplace is to encourage those who have a tendency, interest and willingness to go the route of alternative energy, and who are doing so, albeit on their own to a great extent. The way forward is to encourage them, providing them with the necessary scientific backup and research and development right across the board to ensure they can get into the marketplace much more easily than at present. There is some practicality, however, in the landbanks initiative, in that they are adjacent to existing installations and obviously will be readily convertible from the point of view of gaining access to the grid, etc.

We are all agreed on one issue, namely, that the break-up or fragmentation of the ESB is debatable. Some pundits are in favour and others are not. Personally I believe it could be dangerous. We have seen, for example, the way deregulation or the lack of regulation has worked in other areas in recent times. The vulnerability of the economy in a vital utility sector must be borne in mind in this regard. The grid should be totally independent of the ESB, however. A move has been made in that direction, but I am not sure it has been progressed to the extent it should be. There is only one rider. It should remain within the State or semi-State sector. We must learn from our mistakes such as the sale of Eircom and perhaps others. We must introduce new measures to prevent the continuation of a monopoly. However, in order the protect the consumer — industrial or domestic — we should add the rider that within the marketplace there must be a major player to ensure some part of the infrastructure will remain within State control and cannot be used for monopolistic purposes. We would then have the benefit of both ideologies. We would have a free moving private sector feeding into the grid and a national controlling interest provided through ownership of the grid.

The grid and how it operates will be important issues in the future. Ready and inexpensive access will be hugely important. For example, there would be no sense in allowing delays in accessing the grid for companies providing alternative energy supplies. The integrity of the grid is another crucial issue, on which much discussion has taken place in the committee, the House and elsewhere. The grid is only as reliable as the components feeding into it. If there is an unreliable component, there must be a backup to compensate for it. Circumstances where there may be a delay in providing a supply must not be allowed to arise; a supply must be readily available at all times.

We must realise our commitments under the Kyoto Protocol. Whether we like it, we must live up to them. If we do not, we will have to pay large fines. I am sorry the Green Paper does not deal with this issue more realistically. We must balance the likely cost of fines against the much more attractive but similar cost of investment in research and development to ensure the consumer is looked after.

For several years we have listened to discussion on the importance of and need for competition. What can we tell our constituents, consumers in the industrial and domestic markets, in the light of recent events? International fuel prices are on a downward trajectory and have been for several months. It has happened to such an extent that the oil producing countries are now discussing reducing oil production to prop up the price. What do we do? We decide to increase the prices of gas and electricity and hammer the unfortunate consumers as if to teach them a lesson. There were no circumstances under which this could have been justified. I am sorry to be critical of the Minister on this issue but the time has come for him to review his observer status in this area. He should clearly indicate to all and sundry, including regulators, that this is not acceptable and the economy cannot stand it. Neither manufacturing industry nor the domestic sector has any provision made for it where it can offset the imposition indicated in the recent raft of price increases.

The degree to which competition can be introduced and the benefits this delivers to the consumer must be examined as a matter of urgency. The Minister will know there are a number of heavy energy users in his constituency that are under severe pressure as a result of the most recent price increases. He should look seriously at requesting a review of the price increase decision and seek to restore prices to their previous level. That would be a positive gesture and do an awful lot for the competitiveness of the economy.

I do not want to overreact, but today a committee of which I am a member discussed the concept of European regulations on competition and how we must conform to them. However, there are problems and the regulations do not seem to be working for us as yet. The Minister should spend serious time on getting this moving in order that it will deliver a positive, beneficial impact for the economy. He needs to meet the various bodies involved. We cannot afford the luxury of another year floating along as regards energy, regulation and the apparently unjustifiable price increases. I feel churlish in having to repeat this to the regulator and the providers. However, there is only so much consumers can withstand. The time has come for ministerial leadership, to acknowledge what is happening and ensure changes are made to have a beneficial impact.

We must move the industry forward as one, whether it is the production of one fuel or another, one technology or another, or in one area or another. This is not a nuclear country, nor is it likely to be. We all welcome this. While some suggest we should have a debate on the issue, we should conserve our energy and use the debate to provide the alternatives.

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