Simon Coveney (Cork South Central, Fine Gael)

We strongly advocate the introduction of this measure. At present, we have a pretty scandalous rip-off of consumers. Every consumer and business in the country pays a levy on electricity bills, which is calculated by the cost of carbon emitted into the sky during the generation of that electricity. However, the generators themselves are being given free carbon allowances until the end of 2012 by the Government. In other words, the suppliers and generators of electricity are charging their customers for the cost of carbon being emitted during that process but they are getting it for free because they do not yet need to purchase carbon credits. When they do, I will have no difficulty with them passing on the cost of carbon to consumers.

In an effort to wean consumers into the reality of accepting there is a cost for carbon, which there is, we charge for the cost of it in ESB and Bord Gais bills and in Airtricity bills to a lesser extent. We are giving those companies the capacity to emit carbon for free until proper emissions trading is up and running after 2012. The CER acknowledged this problem more than a year ago. I genuinely welcome the Government's belated acceptance that we should be doing this. However, I also recognise that it is easier to speak about these matters in Opposition than in Government. Other countries that have tried to do this have experienced real problems with legal challenges and that is why the Attorney General's office is being stretched to produce legislation that can make this happen in a way that will not be legally challenged. I accept it is not simple but the principle is one that is absolutely indisputable.

We cannot stand over a situation where we charge consumers for carbon and the money they pay goes into the pockets of generators. It is a windfall profit they have not earned because of the regime we have in place to allocate free carbon allowances to energy generators for the next three years. As if energy prices were not high enough in Ireland, we are charging people even more to give energy generators profits that have not been earned. To be fair to the ESB, it responded by giving back much of that money through reducing network charges and subsidising it by the windfall profits they are making with regard to what consumers pay on their bills. However, the other generators have done nothing and have just pocketed the money. It is welcome. I would like to have seen it by now although I can perhaps understand why we have not. I encourage the Minister to bring it to committee so that we can have a discussion. He will find that we will be very co-operative in trying to find the right mechanism to make this happen. I anticipate us being in government in the not too distant future and we will need to deal with the legal headache should there be any legal challenges to any new windfall profits levy or tax that may be applied to electricity generators, which in many cases are big multinationals with the capacity to stall any such levy by taking legal challenges.

I am supportive of the provisions regarding LPG. It is appropriate to deal with that in this legislation rather than doing it separately. I met representatives from the CER this morning and spoke about some of the regulatory and safety issues it will need to take on regarding LPG. That is welcome. I am somewhat concerned that the CER is being asked to do a considerable amount and I am not convinced it has sufficient staff to do it. For example, I have concerns about the gate 3 process regarding wind energy. I have regularly confronted the CER on the management of the gate 3 process, in particular the fact that we basically apply grid connection and contracts on the basis of a queuing system. Someone wanting to come into Ireland, spend a fortune and employ many people at a perfect site to build a new wind farm cannot do it. We have no mechanism to connect to the grid even if someone wanted to build a wind farm 50 yd from it unless that individual joins the queue. I got a very honest response to the effect that the CER was working with what it had in place and gate 3 is what it has. If it were to open up that system and change it, it would need significant increases in resources to be able to assess all the different projects that exist. The CER is doing its job and defending the gate 3 policy. However, I can talk much more freely about it. It is a flawed policy and we should not just be making the best of a flawed policy; we should put in place a parallel system that can fast-track really good projects. Perhaps we can discuss that in more detail at some other stage, either in committee or elsewhere with the Minister.

Let us get on with the bio-fuels obligation. It is the right way to go. Let us put in place structures and incentives through import tariffs, definitions and export tariffs regarding energy elements of bio-fuels in order to develop a home-grown bio-fuels industry that can and should happen. We certainly have a competitive advantage in that industry versus other European countries, even though we do not have an advantage versus countries such as Brazil. We should make that happen. I encourage the Minister to be brave in promoting that industry rather than just following the lead of the UK, particularly in the tariff structures.

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