John Carty (Mayo, Fianna Fail)

I thank you, a Leas-Cheann Comhairle, for the opportunity to speak on this important issue. We all realise the volatility in energy prices is a problem through the EU as it is the largest importer and second largest consumer of energy in the world. Unfortunately, Ireland does not have a substantial indigenous resource like some other countries but depends on gas imported from the UK. More than 86% of our national requirement has to be imported and this is the major fuel used in power generation.

As a people we can contribute to using less by ensuring that energy demand is reduced through innovative energy efficiency measures. It would also help with security of supply and cost competitiveness. Better use of renewables brings greater diversity. Greater efficiency means lower demand and less dependence. Ireland has great potential in producing renewable energy especially by the harnessing of wind, ocean and bio-energy. That is the challenge.

The Government has a long-term strategy for biofuels and biomass which will deliver ambitious targets in the next ten to 12 years. I commend the Minister and the Government on supporting practical actions on the renewable side such as the comprehensive range of grant supports to develop greener homes, commercial bioheat and CHP units.

It is important to remember that the gas prices that came into force on 1 October 2006 will be fixed for one year, that is, until 30 September 2007. The Commission for Energy Regulation plans to review prices again during the summer of 2007. I have little doubt the Minister will ensure this is done. As in the case of gas, international fuel price is the major cost driver of electricity. The plant in Ireland is heavily reliant on fossil fuels. Some 90% of Ireland's electricity is generated by fossil fuel plants. It should be noted that the price of crude oil increased from $10 per barrel to more than $70 per barrel from 1997 to 2006. Some 70% of the price of electricity is made up of generation costs which are driven by fuel costs. Gas, oil and coal, all of which have to be imported, are used for generation. Forward prices for gas in 2007 increased by 40% compared to 2006 and oil prices increased by 36% which led to increased prices to the consumer. The Government has taken this into consideration especially for long-term social welfare recipients.

Under the national fuel scheme administered by the Minister for Social and Family Affairs, social welfare recipients receive a fuel allowance for 29 weeks of €14 per week and an additional €3.90 for the purchase of smokeless fuel. The Government recognises the hardship for the elderly in paying for fuel by providing this allowance. I have little doubt that in the forthcoming budget the Minister will again look favourably on another increase in this payment. The Minister has given his undivided attention to creating the conditions to keep energy price increases to a minimum, for which he should be commended.

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