Ulick Burke (Galway East, Fine Gael)

I welcome the opportunity to make a contribution. I do not believe I have ever seen a shorter Bill before the House. Nevertheless, it is of major importance and I welcome the fact the Minister has outlined most of the debate. Bord Gáis, unlike many of the State agencies, has set about, through the provisions of this Bill, expanding the distribution and network of natural gas throughout the country. The list of counties with access to the network will include all of Leinster bar County Wexford, which Deputy Browne mentioned earlier, all of Munster bar County Kerry and only two in Connacht, Galway and Mayo. I believe Galway and Mayo have been included because the link from east-west to connect with the Mayo line going towards Limerick cuts through County Galway. Nevertheless, we see the importance of that in terms of the most recent development and extension to the electricity network, that is, the construction of the gas power station at Tynagh, Loughrea, County Galway. When one reflects on the controversy generated by the proposal to bring gas onshore in Mayo, it must be very profitable for Shell to pursue this development, distribute the gas throughout the country and sell it to An Bord Gáis. It is ironic that Tynagh has become the source of the most recent generation, because it was one of the first places where the natural resources, lead and zinc, were found in the past. A very attractive deal was provided by the Government of the day to the people who developed that mine and it yielded enormous profits to them.

It is important that the west achieves parity with other areas throughout the country, and hopefully because of the basic network that now exists, many towns in County Galway will benefit. We are told there are 12 towns in Counties Galway and Mayo in terms of connection, but there are other towns that have the potential to be connected provided Bord Gáis sees fit to develop such as Loughrea, Gort and Athenry in particular, as well as Ballinasloe. The opportunity should be given for this important infrastructure to be developed there, to give an added advantage, few as they are, for attracting industry to the area.

Bord Gáis has had a 28% increase in profit after tax in the last year. It must be acknowledged that it is one of the few State agencies able to report such a level of profitability. The Bill, given the proposed increase in capital investment, is important and likewise the urgency of this must be acknowledged to allow Bord Gáis to continue. The most attractive aspect of this investment for me is that it will allow Bord Gáis to diversify from the single resource of gas and become involved in renewables. One thinks of the difficulties that have arisen over the last decade, some genuine but others spurious, that stagnated the production of electricity from renewables. I think in particular of the great difficulties many projects have had to face in terms of the delays and additional costs incurred as a result of objections in the planning process. Individuals and bodies such as Dúchas, in the past, have objected to many worthy projects, which had they been put in place would now provide a major advantage given the high cost of oil and fossil fuel energy used in the generation of electricity. There were difficulties and the Minister, his Department and the Government had to react to the situation that arose in Derrybrien. On that hill another major project received planning permission but because of the likelihood that rare hen harriers were nesting in the area the project was delayed for two years at a high cost to the developers until it was allowed to go through. As a consequence, the profitability of the technology changed and there is huge additional expense even before the project gets off the ground. Many complained about the planning process for strategic infrastructure, but it was welcome insofar as it allowed meaningful projects to go through rather than having unnecessary and unjustifiable reasons for delay. The initiative of Bord Gáis which adopts a hands-on approach to all its developments can be seen in a positive light in the manner in which it approached the issue of entry onto lands, completed idts work and then got out without any hassle.

I have asked on numerous occasions about the original project at Tynagh which was developed by Gama and then sold to Tynagh Energy Limited but have never received a satisfactory answer. It has been reliably reported that the cost of generation per unit of electricity at Tynagh is very attractive; that the contract is irregular in that it pays for full capacity of output, regardless of drawdown. I have asked many times if this can be confirmed. If that is the case, it is no wonder we have such a high cost of electricity. I ask the Minister to clarify this matter because it seems to be an unusual contract. We are discussing the advantages of the Bill in bringing competition to the energy market but the contract at Tynagh rules out real competition.

Many have mentioned reliability of supply. Deputy Breen has mentioned that we find ourselves on the periphery of western Europe in the context of the difficulty which arose between Ukraine and Russia some years ago. If it had developed, we would have been the first to have our supply line cut off. The Bill provides for the storage of gas which will eliminate some of the difficulties that may arise in the future. It is possible that gas stored can used to supply rural towns.

Few agencies have provided or proposed to provide a network into sparsely populated or rural areas, unlike Bord Gáis. Recently we have seen, as a consequence of the budget, that the Government and the NRA have decided that some of the road network that was to be in place by the end of 2016 in the west is to be abandoned. We do not know when work will recommence on these much needed projects which form part of the Atlantic corridor or east-west network. We have the potential in the Bill to provide additional funding for the development of infrastructure for the supply of gas in the west.

When we discuss conventional generation of electricity, I hope we will move away from oil and coal supplies. If one is downwind of Moneypoint at Killaloe, County Clare there is ample evidence of air pollution, dust and other emissions. I hope there will be a step in that direction to reduce our dependence on heavy fossil fuels such as coal and oil.

What will happen in the midlands regarding the use of peat? I hope the Minister will give a clear indication from his Department on the generation of electricity using peat. There have been concerns about the loss of employment and the future of established traditions in the production of electricity in the midlands. It is important that the Minister clearly indicates his policy on the continuation of the production of electricity using peat in central Ireland, particularly in view of the escalated prices charged for oil and gas. Thankfully, they have now returned to more reasonable prices. There were suggestions Bord Gáis would have generating stations in the midlands to complement those traditionally established. Many hope the Minister will clearly indicate his ideas in this regard.

I will finish with the issues of competition and the cost of electricity. Some three or four months ago everybody realised oil was expensive and that it was necessary for the ESB to increase its prices. However, despite the increase allowed and although oil has reduced in price, the ESB is now seeking an additional increase. While it is important that the Minister encourages competition, as intended with the resources being provided through the provisions of the Bill, he must also make the ESB aware of the difficulties a further increase in prices would create for many industries and small businesses which are at their wits end in their efforts to survive. If it is necessary for subsidies to be provided, they should be considered as a matter of urgency.

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