Simon Coveney (Cork South Central, Fine Gael)

This legislation may be challenged in the courts, although perhaps the only company willing to do so will be Viridian. I do not expect the State-owned energy companies will take the Minister to court; they would be ill advised to do so and will simply have to put up with it. However, the same does not apply to private energy companies and we must prepare for that by ensuring we have a legally sound case.

There is a particular case in regard to Endesa Ireland Limited, and the Minister is aware of my concerns in this regard. Endesa spent a substantial sum in purchasing two power generating stations from the ESB. My understanding is that it then paid a separate amount to purchase carbon allowances between now and the end of 2012. The ESB, which sold the allowances to Endesa, was paid for an averaged value of those allowances between now and 2012 taking an average value for carbon. Essentially, therefore, Endesa has already paid for its carbon allowances while everybody else got them for free. The ESB, meanwhile, has effectively been paid on the double for the carbon allowances that apply to the Endesa plants because it got them for free initially and then sold them. I do not blame the ESB for that; it did a great deal when it sold the two power plants.

I do not expect Endesa will have to pay a very large carbon levy in any case because I do not expect it will produce that much power onto the grid between now and the end of 2012. However, in the case of the energy it does produce, we must consider whether it may be appropriate to exempt the Endesa plants or to seek some other way of recouping what the company has already paid under its contract with the ESB. When I mentioned this to representatives of the ESB, they laughed at me and said I surely did not expect their company to pay for the emissions Endesa will produce between now and 2012. To some extent, however, fairness would dictate that this should be case although legally it is probably not possible to do so. I ask the Minister to review this situation because it is a particular case. Endesa paid for its allowances in expectation that they would have value, unlike the other energy companies which got the allowances for free.

I look forward to Committee Stage of the Bill when I propose to table several amendments in respect of the issues I have raised. I hope the Minister will take some of them on board.

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