Martin Mansergh (Tipperary South, Fianna Fail)

I welcome the Bill and the Minister.

Interconnection has a history going back at least 30 years, or as far back as the Cork to Midleton railway line, for example. I used to be an official dealing with energy in the Department of Foreign Affairs in the late 1970s and top of the agenda at the Taoiseach's Department at that time was east-west interconnection. It was politicised to the extent that it was being pushed as a strategic objective. It clearly had important energy policy dimensions and I remember attending talks in the Department of Energy in Millbank, where this was discussed.

The economics at that time never quite came together. As the Minister referred to in his speech, there was also the dimension of the North-South interconnector, which was disrupted and destroyed by IRA bombs. How that was supposed to contribute to the unity of the country is about as puzzling as putting devices on the Dundalk-Newry railway line, which still happens occasionally.

As Deputy Durkan alluded to, there was at that time a little bit of what one may term "insular geopolitics" involved in both electricity and gas sectors. If there was to be any electricity interconnection between Ireland and Britain, Northern officials were anxious to have it go across the North Channel. We were equally determined that it would be an Ireland-Wales interconnector. Most of those considerations have given way to those which relate to what is in the interests of different countries and jurisdictions.

The North-South interconnectors were restored some time ago and there is now a single energy market on the island of Ireland. These are beneficial developments but they only marginally improve the economies of scale. When I worked as an adviser in the Taoiseach's office, I recall discussing with representatives of the ESB the Coolkeeragh plant on the north coast. The capacity of said plant was going to exceed the natural needs of Northern Ireland and the excess was going to feed into the north-west region of the Republic, primarily County Donegal.

I have no doubt about the value and importance of interconnection, particularly when energy supply at an affordable price is at risk. One must try to achieve the economies and that can only be done by sharing with larger markets. I welcome the fact that EirGrid will be the vehicle for doing this and I am glad the latter will remain in public ownership. In general, I believe strategic infrastructure should be in public ownership because the Government or public authorities can then react to situations and are not obliged to persuade, bribe or compel private operators to take actions which, for purely financial reasons, they may not be inclined to take.

The previous speaker referred to the ESB being in public ownership and the question of competition. Many of the European laws that deal with such matters are primarily designed to cater for much larger national and transnational markets. France has a large market and the Government of that country is determined to retain control of EDF. I regard the ESB as one of our most efficient semi-State companies. Since its formation 80 or so years ago, it has done a superb job.

The unions in the ESB are quite powerful. Yesterday, we paid tribute to the outgoing Taoiseach, Deputy Bertie Ahern, whose first achievement as Minister for Labour in May 1987 was to solve a serious dispute in the ESB. When people seek competition and when private companies press governments for a slice of the market, what they are really seeking is a slice of the monopoly. It is felt that there can be perverse situations in which one is obliged to raise the price of electricity in order to attract competitors into the market so that, in the long-term, it is hoped, the price will fall below a level than would otherwise the case. I am sceptical about this line of thought.

I previously held a negative view of a certain trade union official — I will not name him because he is outside the House — who seemed at one point to want to "Scargillise" the railways. However, I find myself somewhat more in agreement with his views on the ESB. If there is to be a monopoly — it may be difficult to avoid it in light of the relatively small size of the market — a near monopoly or a duopoly, the ESB is a fine company in that regard and falls under a fair degree of Government control. When working as a civil servant in the late 1970s, I observed that it sometimes seemed that the ESB was rather more in control than either the Government of the day or those civil servants who were nominally in charge. That was at a time when the Government was being pressed very hard on the nuclear project.

The legislation and the concept of interconnection make a great deal of sense. Arguably, they are both vital in the context of expanding the market for renewables. A great deal of renewable energy is of a fluctuating nature. Wind energy is an obvious example. In a small market, it is not possible to become dependent on wind energy for more than a certain percentage of one's needs because one will otherwise put one's supply at risk. However, fully operational interconnection with a very large market completely alters the context. The establishment of interconnection is necessary if one is to make serious progress with wind generation.

The Minister is probably more conscious than anyone else that the term "green" — I do not use it in its strictly political sense — is much abused. There are often competing points of view that each claims to be greener than each other. Partly as a result of my experience of local controversies in County Tipperary, I would not be completely enamoured of land-based wind generation. Pushed beyond a certain point, the latter would conflict with tourism and amenity objectives. There are some locations to which land-based wind generation is particularly suited. Equally, however, there are others to which it is not appropriate. I appeal to the Minister not to adopt an attitude that wind energy in unlimited amounts is good, regardless of where the turbines etc. relating to it are located. Serious environmental conflicts or disputes could arise if we were to push too hard in respect of this matter.

I have very few reservations with regard to offshore wind generation. Most of the time one cannot see the wind turbines on the Arklow banks. If one can see them at all, they appear almost as matchsticks on the horizon. The turbines on the Arklow banks do not interfere with amenities in any serious way. The volume of wind at sea is probably much more constant than it is on land.

As the Minister is probably aware, Scotland, which is similar to Ireland, has serious restrictions on where it will allow large-scale wind generation projects to be located. In the past week, the public authority on one of the Outer Hebrides rejected plans for a very large wind energy project on the grounds that it would interfere with the amenities and tourism attractions of the island. Another aspect of interconnection — I am referring here to interconnection with Britain — is that it means we will be importing nuclear energy among other things. The Minister probably chose not to refer to this matter or if he did refer to it, he did so only briefly. I do not have a particular problem with that and do not regard nuclear as a moral issue, although practical and safety issues arise. Broadly speaking, I agree with the Minister's views on nuclear energy. We have a small market for the standard economic nuclear power station. I remember the Taoiseach being very puzzled when a number of pro-nuclear experts were putting their case as if to ask in which constituency they were proposing to locate such a facility. Notwithstanding the arguments that have been made, it would be very difficult at this point to find any constituency in Ireland that would accept a nuclear power station.

There are also reservations about the economics of nuclear power. It is no accident that some of the major civil nuclear powers also run military nuclear installations so some economies of scale may have been achieved that are invisible to the public eye, not least in technological research. The British Government has had to stump up tens of billions to decommission nuclear waste. British taxpayers must be very forbearing because they do not seem to bat an eyelid at the cost of the nuclear industry.

Notwithstanding the fact that a generation after Carnsore Point some nuclear advocates want to re-examine the question — I have no objection to the matter being debated — for political and economic reasons and the question of consent, the arguments do not really add up. While I may be arguing against myself, if one has interconnection, in theory the relatively small size of the island market here would no longer necessarily be an objection, but the other considerations also kick in. In addition, I would be fearful of a terrorist attack. The attacks on the Twin Towers in New York literally came out of the blue one morning. One never knows what might be attempted next, despite all the precautions. Eventually, over time, when nothing happens, people lower their guard and there is more opportunity to strike again.

Even 12 months ago we were keen to promote bio-fuels and the European Union also has a programme for promoting them. They were getting a favourable wind but now we are reading headlines about world food shortages so a certain degree of caution is required. If one looks at the matter purely in an Irish context, there is no doubt that there has been a trend towards the extensification of agriculture, although we are certainly nowhere near producing our maximum. People keep referring to us as a small island whereas we are the third largest island in Europe. The Romans got that one right but we tend to get it wrong. We may be an island with a relatively small population but we are not a small island. In other words, we have land which can be used for bio-fuels and forestry without materially affecting or prejudicing mainstream agricultural production, the WTO and Commissioner Mandelson willing.

If one drinks too much water one will drown so all good things are good in moderation but not to excess. The problem is that one gets enthusiasms for alternative energy, such as bio-fuels, and while there is much scope in these areas nothing should be done to excess or uncritically.

I do not know whether the Minister mentioned the figure in his speech, but as I understand it we are approximately 90% dependent on energy imports at the moment. I can remember at the time of the second oil crisis the figure used for Ireland was 80% and the aim was to bring that down. One matter of concern, which is rarely discussed in this House because of its sensitivity, is the delay in bringing natural gas ashore on the Mayo coast. While the matter was perhaps approached clumsily at first, there have been many attempts to accommodate reasonable demands. It is not right that a protest group should be holding things up on national policy grounds. The House and the Government are elected to deal with energy policy issues and to make democratic decisions about them, including the terms of oil and gas exploration. That is a matter that should be left to this House. With the alteration of the pipeline, I hope that the larger interests of the country might be taken into account and the protest will draw to a close. It has been prolonged and has cost the Garda Síochána a great deal of money and resources, which could have been better used elsewhere.

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