Brendan Kenneally (Waterford, Fianna Fail)

I welcome the opportunity to contribute to the debate on this welcome legislation. Ensuring supply of safe, clean, sustainable energy at competitive prices is one of the greatest challenges facing Ireland. Many Deputies from the north east spoke about the North-South interconnector. I accept it is easy for me, as a Deputy from Waterford, to take a different view because my area will not be directly affected.

Several months ago, I travelled to Germany with a parliamentary delegation, which included the Ceann Comhairle. A number of members of the delegation with a particular interest in the North-South interconnector raised the issue with representatives of the federal and state governments. We were told it is not possible to route the lines underground due to the high costs involved. This approach has not been used elsewhere. Nevertheless, there is merit in erecting overground power lines alongside a motorway as this would impact on fewer people.

We need the North-South interconnector because the current infrastructure is not sufficient to meet our electricity needs. We also need the east-west interconnector linking Ireland and Wales. We must show flexibility regarding our source of electricity supply. In Britain, it is estimated that 11 million of the country's 26 million consumers have changed supplier, while 8 million of 20 million gas consumers have changed theirs. The comparative figure in the Republic is slightly more than 40,000, most of whom are probably on the commercial side.

However, when one examines the telecommunications market here, it becomes clear that Irish people do not have difficulty changing to a company which will provide the cheapest service and best value for money. Such a choice on the electricity sideis novel and not yet fully available but will, in due course, become as much a feature as the flexibility in the telecommunications side.

Traditionally, the ESB has been the dominant force in the electricity market. This is hardly surprising considering the company has been, to a large extent, the only supplier since the foundation of the State. In the main, the company has served the nation well in its three quarters of a century of existence. While there have been occasional flaws and deficiencies, in the main the quality of the service has been superb.

I digress slightly to pay tribute to successive generations of workers in the ESB who have worked hard, often in the most atrocious conditions, to restore supply and given exemplary service when the chips were down. It would be wrong of us, as we prepare for a major change in electricity supply and distribution, with more and more companies entering the electricity market, to forget this service to the fledgling State and the technical and financial difficulties which often had to be overcome. I am drifting into history and we have a new Ireland and economy in which the energy sector must move with the times.

I welcome the proposals to facilitate the interconnection of electricity generated by systems not in the ownership of the ESB. While this will make inroads into the company's dominant position, I have no doubt, given its vast experience and decades of tradition, that it will be able to take this new challenge in its stride and emerge a stronger, more competitive entity as a result. This has been proven in other sectors and I have every confidence the ESB will be able to do the same.

The development of the east-west interconnector is a key task in the 2008 work plan of the Commission for Energy Regulation. This project would provide 500 MW of power. We should be cognisant of the importance of renewable energy and the difficulties faced by many of those who wish to generate electricity from renewable sources and connect to the grid. It is important they receive support.

The first reaction of most people when faced with the question of how to reduce our dependency on fossil fuels is to look to motor vehicles for an alternative supply of energy. While there is no doubt this sector offers considerable scope for savings, it is not the only area which needs our attention. Renewable sources of energy offer sustainable alternatives to our dependence on fossil fuels, a means of reducing harmful greenhouse emissions and opportunities to reduce our reliance on imported fuels. For these reasons, Irish and European policies support the increased use of renewable energy from such sources as wind, solar power, wood, waste and water as they are abundantly available in Ireland. Several renewable energy technologies are now economically viable and capable of supplying clean, economical heat and power. The higher the price of oil, the more economically viable previously unviable sources will become. The alternative energy industry must be further developed and positively encouraged through substantial investment and assistance to the industry. The growing of rape seed and other crops should be actively promoted among a farming population which is finding itself increasingly isolated, with reduced incomes and disused or underused land. That is not a natural condition for good farmers and I am sure they would welcome any positive measure which would bring them back into productive and useful farming again.

The time is right for more initiatives in the alternative energy field. The public is thinking of ways to reduce energy costs and those who are so minded — that is a growing number — are looking at ways to help the environment and meet our requirements in the reduction of harmful emissions. A constituent of mine who has a stream running through his land has set up a company to develop a hydroelectric scheme with a view to selling his power into the national grid. I spoke about this in the Seanad and said it was not pie in the sky, and I was correct because it is up and running. I heard a man speak on local radio while I was travelling up here on Tuesday and he can generate enough electricity for 800 or 900 houses. One should think of the difference it could make to us if a number of people were to do something similar. He did this without any financial aid or assistance and said it would take approximately 15 years before he would eventually get a payback on it. He was not doing it for financial reasons but for the best environmental reasons. We must encourage more of that. It can be replicated on a large scale but the ground must be properly prepared for such developments.

I get very annoyed with people who use blanket arguments against wind power. Whether their point is that such turbines are noisy or that the towers impinge on the landscape, we must face up to the fact that we have to find an alternative to oil, and the wind method is especially suited to this country. It will take a large investment and may mean heavy subvention by the Government, but unless we promote these cleaner forms of energy we will leave the door open to those pushing the nuclear option.

There will be some drawback with every means of generating electricity. When the first hydroelectric station was set up at Ardnacrusha three quarters of a century ago, the landscape had to be changed radically to allow for the new route of the headrace and tailrace to accommodate the assisted flow of water. When Turlough Hill was suggested and constructed over 30 years ago many environmentalists condemned the interference with the mountain and countryside. That pumped storage station soon became a showpiece and, while small enough by today's standards, it still represents go-ahead thinking in the power and energy industry. I realise that wind energy is not perfect, but it is way ahead of other forms of electricity generation. It is held that Ireland has the most abundant and reliable supply of wind in Europe and it is bordering on sinful that we are not using it to the fullest effect. We cannot suggest that wind turbines are silent and there is a perception that wind farms are noisy developments. That is not necessarily true or accurate. As technology improves, the disadvantages and misgivings will reduce and in time we will come to look on wind energy as our saviour.

We are also best placed in Europe to take advantage of wave power, the returns for which are enormous. The technical people will be readily able to tell us just how many megawatts can be generated by a single wave, but I know from reading and from TV programmes that wave power has much to offer our country. It would be easy to despair and get downhearted about the future of oil. I have every confidence the motor industry will come up with an alternative fuel for vehicles and we have clean and bountiful natural resources on our side to tackle domestic and industrial requirements.

I began to mention CER's plans to develop this interconnector, which are well advanced and form a key part of CER's strategy for the further development of the Irish electricity sector. CER has worked with EirGrid to advance this project and it will remain a key priority during 2008. It will have a capacity of 500 MW and it is hoped that it will be delivered by the end of 2011. The advantages of increasing levels of interconnection for an island system such as Ireland's are clear. Not alone will interconnection with the UK increase security of supply, but it will also help to drive competition and improve overall efficiency in the Irish electricity system. This is bound to benefit all of us. It will significantly reduce Ireland's isolation from other European markets and will introduce new competitively priced electricity into the system. This will put downward pressure on prices meaning they will be lower than would otherwise be possible.

While technically the supply can flow either way, depending on who has the excess at any given time, the most likely scenario is that we will be the recipients of electricity from the UK. This opens up a whole new debate on nuclear generated electricity because we will be taking our supply from a grid which is in turn supplied from nuclear sources. We are a nuclear free country and, with an occasional exception, everybody wants to keep it that way. It is bad enough to have Sellafield on our doorstep and other nuclear stations on the British east coast to threaten our well-being without generating the same threats in our own country over which we have full jurisdiction.

I have some reservations about this matter and it is one of the reasons I have consistently pushed to make ourselves as self-sufficient as possible in energy supply. I repeat what I said several times before, we must put more resources into researching the generation of electricity from other renewable and sustainable sources. The major problem is encouraging independent generation and getting that power into the grid, as I mentioned. We are daily told about the imminent peaking of oil availability, the high demand which will come from the greatly expanding economies of China, India and other eastern countries and the instability and insecurity in the supply of gas from eastern Europe. A couple of years ago we saw how gas was shut off from the Russian Federation's neighbours and, while there does not appear to be any threat at the moment to those who can pay for their supply, we do not know what will come down the tracks in a decade or two.

Now is the time to provide for the hard times. Now is the time to encourage home-produced energy and to do what we must to guarantee easy access to the grid for those who enter the market and take the insecurity out of the equation for them. We should be mature enough to realise that people do not invest vast sums in any enterprise without some reasonable expectation of success and while obstacles exist which can easily be removed. The ESB is doing a good job. It has served us well, but this is 2008 and we have massive energy needs, not 1958 when demand was easily satisfied. We must move on and change. This legislation is another step along that way and I commend it to the House.

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