Jimmy Deenihan (Kerry North, Fine Gael)

I thank Deputy Coveney for sharing time. I too wish to address the Endesa issue as the legislation is a cause of significant concern for that company. Endesa Ireland Limited spent some €450 million purchasing two power stations from the ESB, at Great Island and Tarbert, and hopes to make an investment of €500 million in those plants. While the Bill may not impact the company to the extent it originally feared, it is nevertheless a negative as far as it is concerned. As I said during the debate on the Energy (Biofuel Obligation and Miscellaneous Provisions) Bill 2010, Endesa purchased all the carbon allowances allocated to the two stations from the ESB as part of the competition organised by the latter to divest some of its assets. The competition rules required that the participants included a separate line item setting out the value for the 2008 carbon emission allowances. The 2009 to 2012 carbon allowances were valued at the expected market rate of €25 per tonne and included in the total offer. That is one of the reasons Endesa paid such a large amount for the ESB's stations.

Since taking ownership of the assets, the value of the EU allowances, EUAs has fallen. Rather than enjoying a windfall gain, therefore, Endesa has suffered a loss. EUA prices are now approximately €12 per tonne compared to the €25 per tonne Endesa paid to the ESB. If anyone has enjoyed a windfall profit in respect of Endesa's EUAs, it is the ESB. As I said, Endesa intends to make a significant investment in the generation stations at Great Island and Tarbert. Such investment could create up to 300 jobs in construction at Tarbert as well as providing jobs in running the station and attracting further industry to the area. According to the company itself, Endesa's ability to invest will be diminished with each additional reduction in income. Endesa's income streams, energy sales and capacity payments have fallen significantly. Its 2009 running hours were 50% less than in 2008.

They are expected to fall again by half in 2010. The capacity payment was reduced by 15% from 2008 to 2009. This, too, is expected to fall further in 2010. The introduction of an emissions levy would further reduce Endesa's income. It is important to note this. This levy seeks to recover windfall profits. Endesa Ireland has not enjoyed windfall profits. Any windfall profits associated with Endesa's allowances are not as I have stated currently on hand.

Endesa Ireland is the only generating company in Ireland that has paid for EU aid and is actually suffering a loss as the allowances were in 2009 valued much higher than they are now. I appeal to the Minister to consider the Endesa case and to exempt it from the levy if at all possible. The Minister graciously met some time ago with a delegation from Endesa Ireland, which they appreciated. I believe it has put its case directly to the Minister and to his officials. From a small gain the Minister would enjoy a great deal of good will from this company which we want in the market in terms of competition and potential job creation in Cork and Kerry in the not too distant future. The Minister will be aware Endesa Ireland has applied to Kerry County Council for planning permission in respect of its proposed conversion operation in Tarbert. It is hoped there will be no problems in this regard. There is a proposal to provide a pipeline from Foynes to Tarbert to provide gas, which is another issue. Shannon LNG has received planning permission for a pipeline which pipeline it is hoped will in the future serve both Shannon LNG and Endesa.

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