Tommy Broughan (Dublin North East, Labour)

I welcome the opportunity to speak on Second Stage of the Electricity Regulation (Amendment) (EirGrid) Bill 2008. I strongly support the Bill, particularly its key objective of facilitating the development of the first east-west interconnector and interconnectors generally. This is a crucial step forward for our energy market.

However, I agree with the Labour Party spokesperson, Deputy McManus, that significant issues remain in terms of our future energy security. These include the development of a green energy market and the impact of rising energy prices on the public, particularly vulnerable persons such as senior citizens or those in low income households. The Minister has set out several major objectives he hopes to achieve and for which the House will hold him accountable in coming years. Regrettably, an issue in which he seems to have no interest is fuel poverty and the difficulties experienced by vulnerable households in this regard.

This small Bill is largely technical but it has significant implications for the future of our energy supply. As an island nation with a small population, we have a relatively small energy market. One of my key concerns as spokesman on energy in the last Dáil was to highlight the overwhelming importance of ensuring connectivity to other markets. In this regard, I strongly welcomed the development of an all-island market. Increasing our connectivity will enhance the security of our supply and provide additional protection against potential blackouts. This is vital given the level of amber and red alerts that occurred in the electricity system in recent years. I hope the Minister will keep a careful eye on this situation with a particular focus on increasing the quantity of electricity from renewable sources in the system.

Until recently, only 330 MW of power could transfer from North to South and 100 MW in the other direction. In the last Dáil, the Minister and I often raised the importance of strengthening the grid in the Border region, particularly in the Louth area. I hope this will be one of his priorities. I understand the development of the second North-South interconnector will allow a total of up to 800 MW of power to transfer between North and South by 2012.

In 2004, 400,000 GW of electricity was generated in the British market, which currently has five large players. The Scotland-Northern Ireland interconnector has a 500 MW capacity, which is too small to integrate Northern Ireland into the larger British market. However, the proposed east-west interconnector linking Ireland with Wales, with a target completion date of 2011, will have a capacity of approximately 1,000 MW. The enhancement of our interconnectivity, on both a North-South and an east-west basis, is absolutely critical to the security of our energy supply. Other speakers mentioned the key role interconnectors can play in the export of electricity. I attended various energy conferences during the last Dáil at which I discovered the dramatic contrast between the Danish and north German markets, for example, and our own. The experience in other jurisdictions makes clear that extensive interconnectivity is vital if we are to achieve the ambitions set out in the ESB's strategic plan for 2020.

When the Minister, Deputy Ryan, was in opposition, he was a consistent advocate of the break-up of the ESB. He repeatedly made the case that the best way forward was to transfer the entire network from ESB to EirGrid. Therefore, this Bill represents an astonishing volte-face on the part of this Green Party Minister. He has abandoned the key element of his oft repeated mantra on the Opposition benches that a major generator, or even a minor one, should not also have responsibility for the management of a transmission network. I recall the meeting in the Royal Hibernian Academy where members of senior management at the ESB were utterly devastated, understandably so, at the prospect of the demolition of that historic semi-State body, which has served the State so well. The Minister was a key advocate for that approach, putting forward the case that a decentralised grid could not be achieved under the direction of the ESB.

It seems the Minister has undergone some type of Damascene conversion and has now come forward with a much better plan for the ESB. The senior management of the ESB has consistently articulated its plan, which has been expressed in its vision for 2020, that it should effectively become a minority player. In other words, it envisages a situation where it is unable to fix market prices in the incredibly fast moving electricity market but will continue to function as the maintainer of the transmission network and the local grid. I welcome this development and the Minister's abandonment of what was a foolish policy. It would have been a pointless adventure to go down the other road. Some speakers on the Fianna Fáil benches referred to it as a madcap policy in the context of the achievements of the ESB over the decades, particularly in the 1930s, 1940s, 1950s and 1960s when the electrification of the State was one of the key stepping stones in our economic development.

EirGrid also has a crucial role to play and the Bill further enhances its function as the transmission system operator, TSO. This enhanced role is welcome, as are the new capital facilities to be provided for the company. I notice that the Minister's approval is strictly required in this regard. He is surely anxious to avoid anything like the controversy in the last Dáil when the then Minister for Communications, Energy and Natural Resources, Deputy Dermot Ahern, was unfortunate to discover that the ESB had embarked on a major and successful financing on the New York market of which he apparently knew nothing. I hope the Minister, Deputy Ryan, will not experience a similar fate in the coming years. I am sure he will not if he keeps a close eye on his job.

Sense has prevailed and we now have a situation whereby the ESB and EirGrid, two excellent semi-State companies, are being steered in the right direction in their respective roles in the vital electricity generation sector. I warmly welcome the ESB's strategic framework for 2020, which was announced by the company and the Minister some weeks ago. The target of achieving a net zero carbon rating by 2035 is reasonable, as is the objective of halving carbon emissions within 12 years. I also welcome the wide-ranging development programme, which includes the provision of €4 billion for renewable projects. The Minister will recall the debate on Hibernian Wind Power and so on, and the attempt effectively to ensure that the ESB would not be allowed enter the renewables market. Now, however, it has been decided that it will become a "green" company and that is to be welcomed.

I note the provision for a major expenditure of €6.5 billion on the development of smart meters. Both the Minister and I were strong advocates of smart metering in the last Dáil. What is the timeframe for this? When will smart meters be installed in people's homes so that their electricity performance can be monitored? What would be the advantages of installing a carbon neutral local energy system based, for example, on wind or solar power? In the UK people can get a picture of what is involved. Recently, I read that a low carbon device costs £9,000 sterling and has 17 years pay back time in terms of saved electricity. We need smart metering. When will the Minister launch this? Do many homes already have it? What will happen with regard to this?

I warmly welcome the vision of the ESB delivering one third of its electricity from renewables by 2020. With the exporting capacity of the interconnectors, we should arrive at a point where all Irish electricity is renewable or that we have the capacity at all times with wind power.

I did not notice much on storage in the strategic vision. Previously, storage facilities, such as those at Turlough Hill, was a major theme of the Minister and I support it. If we continue to move as quickly as we have been into renewables, given the nature of electricity can we store it better? I hope the Minister will announce major developments on this during the coming years.

The divestment programme of generation capacity, which the ESB always intended, will go ahead. The management would like it to become a smaller generator and the management of the transmission system would be its key element. With regard to competition, a major disappointment to this House was that while we have had an open market for three years, none of us can apply to have a supplier other than the ESB. More than 60% of the market will fully open up to other companies, including the other major player on the island, Northern Ireland Electricity.

So far, households have not benefited in anyway from the additional competition introduced in the market. It seems to exist only at the level of business. Eirtricity withdrew the facility it had for households. Deputy McManus rightly considered a major fear with regard to the Bill before us, which is whether consumers will pay for every inch of the interconnector. Ultimately, will they bear the burden through the cost of electricity, be it partly or mostly renewable, in addition to taxation and other spending? When will the Minister address competition issues, in particular to provide more advantages to households? Undoubtedly, the development of renewable power is more expensive and people have a cost benefit in that they gain by having a low carbon environment. Nonetheless, all of these costs should be spelled out and should be clear to people.

I warmly welcome the new vision for the ESB and I wish it well in this new phase of its development. The development through the Bill of the all-island market and the two island energy market are also to be welcomed. When the Minister was in Opposition he called for a full debate on nuclear power and has also done so since entering Government. We have not had this debate. Why, given the law of the land, must we go back through what we decided over a number of decades is an unnecessary form of development given the capacity for wind, wave and other renewable powers?

The Minister must also tease out this matter in the context of electricity storage and the base load. The security of our energy and electricity supply requires that we have an absolutely secure base load capacity and the Minister must spell out how he will achieve this for the decades ahead given that we will use considerably more power. It is striking that as IT industries develop and we become a high-tech economy, the amount of power used in the area increases. In my constituency, a small data storage facility will come on line shortly and will use 20 MW per day. Its consumption of electricity is phenomenal, even in the context of national consumption. Will the Minister address the issues pertaining to storage?

Having stated all of this, I welcome the Bill and the responsibility given to EirGrid, in particular the facility for exporting. A number of Deputies mentioned the ESB's involvement in the SeaGen project on wave power. The length of time it has taken to bring wave power on stream and have a dynamic coastal section is disappointing. It is hoped this will come to fruition in the coming decades.

Will the Minister address the matter of energy and fuel poverty, an issue he has refused to address either in Opposition or in Government? A fuel poor household is defined as one which must spend more than 10% of the household's finances on fuel use to maintain a satisfactory heating regime. On average, fuel poor households spend three times as much income on fuel as other households. A combination of low incomes, high energy prices and inadequately energy efficient housing are the crucial factors which condemn many Irish households to fuel poverty. Ireland has one of the highest levels of housing deprivation in energy terms in northern Europe.

The Minister's failure to introduce a significant energy efficiency programme in the nine or ten months since he took office is disappointing. Last year, we had the amazing situation whereby he cancelled the programme and then cobbled together money from other parts of the budget to carry it on. It seems a totally inadequate and derisory fig leaf and the Minister must address it. Householders contact Members of this House with regard to obtaining insulation systems and few resources exist to support it.

The most disturbing aspect of living in a fuel poor household is the adverse and potentially fatal health implications for families and individuals. Even though Ireland has a relatively mild climate, according to a UCD study carried out in 2001 it has the highest rate of excess winter mortality in Europe. Little recent research has been undertaken on this. According to the UCD study, approximately 18% of Irish households declared a level of fuel poverty. SEI estimates that approximately 60% households experience persistent fuel poverty and another 160,000 experience intermittent fuel poverty.

Approximately 300,000 may endure some type of fuel poverty. This is of particular interest to the Labour Party. Had we the opportunity to serve in Government we would have advocated a five year programme to eliminate it completely through insulation and support for vulnerable families. I draw this issue to the Minister's attention and ask that he address it as a matter of priority. We can be green and socially responsible at the same time in terms of insulation and other supports.

On behalf of the Labour Party, I support the Bill. It is a major step forward for which I commend the Minister. There are a whole range of other issues on which the Minister was voluble when on the Opposition benches. I hope now that he has an opportunity to do so he will address them one by one and will at an early date update the House on storage and smart metering.

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