Peter Kelly (Longford-Westmeath, Fianna Fail)

I wish to share time with Deputy Calleary.

The main provisions of the Bill are threefold. First, it will expand the functions of EirGrid to include the construction, ownership and operation of an interconnector, subject to the granting of relevant licences and authorisations by the Commission for Energy Regulation. Second, it will provide in primary legislation for subsidiaries of EirGrid, an increase in the amount EirGrid may borrow and for its total capital expenditure while, third, it will consequently amend the Electricity Regulation Act 1999 in regard to interconnectors.

While electricity regulation may not excite many people, its importance cannot be overstated. Electricity is at the core of much of what we do every day and it has become a natural part of our lives. We take for granted that there will be an endless supply of electricity and there will never be shortages or blackouts. This Bill will ensure we have an efficient, safe and economically viable electricity transmission system. The east-west interconnector makes sense and it will be of enormous benefit to the country. The Government mandated EirGrid in its energy policy to build an interconnector between Ireland and Britain, which is scheduled for completion in 2012. The EirGrid east-west interconnector will link the Irish transmission system to the British transmission system, thus enabling two way transmission of electricity.

Our electricity system is relatively isolated compared to systems in mainland Europe. In line with European policy the EirGrid interconnector will help ensure Ireland is more closely integrated into the wider European energy market and it will have both importing and exporting capacity. The interconnector will bring many benefits to domestic consumers. It will enhance security of supply. Electricity demand is forecasted to increase by between 2.7 and 3.6% per year over the next seven years, according to the experts and the interconnector is necessary to provide generation capacity to meet demand. It will also facilitate increased competition in the market, provide for energy importation from the UK market and create an opportunity for energy generators in Ireland to access the greater UK market. This increased competition will help to keep electricity prices down in both markets.

The interconnector will assist expansion in renewable energy. The proposal will facilitate growth in renewable energy in Ireland as excess energy can be exported to the British market. Our dependency on renewable energy can also be increased, as wind turbines generate electricity from a freely obtained fuel, which will never run out but which is not available all the time. The fluctuations in energy produced by wind farms in the case of a wind drop could be quickly resolved by accessing the large British energy market.

In today's world we are all more aware of the importance of issues such as climate change and energy efficiency. Our climate change commitments and the insecurity of future and current fossil fuel supplies require us to make changes in our energy policy. The Government has promised to develop our indigenous renewable energy resources and to promote greater efficiency in our use of all energy supplies. Over the last year it has made progress in policy supports for new renewable energy resources. Developments include moving to the second stage in the ocean energy development strategy by resourcing new wave basin testing devices at the maritime campus in Cork Harbour, a new offshore grid connection site in Belmullet, County Mayo, a new grant scheme for prototype wave power devices and a new support price scheme to ensure Ireland has one of the best investment as well as natural environments for such technologies.

The Government has doubled the support price mechanism for critical bio-energy power production systems which can bring about efficiencies both through the use of waste products in anaerobic digestion and the combination of both heat and power production in the one operation. The Minister for Communications, Energy and Natural Resources stated that over the coming months his Department will introduce further measures that will promote the development of new microgeneration systems, which will complement the work the energy regulator and network companies are engaged in to develop a smarter new grid system.

Energy efficiency is the key to meeting our targets for climate change and energy security. It will require a renewed focus, sophisticated policy tools and total commitment to change across all sectors of our country. It has been demonstrated that efficiency measures are the least expensive and most intelligent means of making substantial cuts in fuel bills and greenhouse gas emissions. The energy White Paper is committed to a 20% energy efficiency gain in the private sector by 2020 and a 33% improvement in the public sector over the same time. All organisations, no matter how large or small, should become drivers of energy efficiency in their own buildings, programmes and investment decisions. It must be realised that focus and leadership in energy efficiency has the potential to unleash savings and wider economic efficiencies for the taxpayer.

Last September building regulations were announced, which will require all new homes to be 40% more energy efficient. The regulations should lead to a 40% reduction in CO2 emissions. The regulations also introduce mandatory minimum requirements for the use of renewable energy, insist on the use of a significant proportion of energy efficient light bulbs, and introduce efficiency standards for heating systems. They will be good for the environment and the consumer and they have been welcomed by the Construction Industry Federation, which has been enthusiastic about the changes. It will take time to invoke significant change in the energy picture, but every step helps. A recent study stated that by 2020 Ireland has the potential to achieve carbon savings of more than 6 million tonnes and a total of €3.6 billion in economic benefits through energy efficiency. Proposals such as the east-west interconnector can only help in this endeavour.

Last week a €2 million microgeneration programme to be carried out by Sustainable Energy Ireland, SEI, in conjunction with key stakeholders, including the Commission for Energy Regulation, CER, ESB Networks and electricity suppliers was announced. Key points of the programme include assessment of the technologies and installation procedures and their associated standards and costs and development of qualification-accreditation systems where required; assessment of the implications of high concentrations of deployment of micro-generation on the electricity system; development of an appropriate buy back-refit tariff for exported electricity; field trials, initially over four seasons, for each of the technologies in the domestic and small commercial markets using standardised monitoring methodology to gain experience and provide data for assessment, but continuing into a second year as required; and a review of legal and regulatory issues from the points of view of consumer protection, quality of supply, security of supply and safety.

The programme is intended to provide the information, prepare the infrastructure and field trial microelectricity generating technologies, including wind turbines, to facilitate consideration of future policy to stimulate the deployment of microgeneration. It is envisaged SEI will announce details of the monitored and grant-aided field trials in the summer for approximately 50 installations. SEI has commenced activities on the commissioned studies that need to be undertaken within the context of this programme. The organisation will announce full details of the field trials it will manage in the summer. This will involve technologies such as small scale wind and PV, converting solar power into electricity, which have not previously had widespread application in the Irish market. I compliment the Minister and EirGrid and assure everyone that our electricity is in safe hands with EirGrid. We will have safe, sustainable and plentiful power.

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