Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

I move amendment No. 1:

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

To delete all words after "Dáil Éireann" and substitute the following:

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

"recognises that:

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— Ireland faces particular challenges in terms of energy cost competitiveness, including significant dependence on volatile imported fossil fuels, particularly gas and a requirement for major investment in energy infrastructure, following two decades of under-investment;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— the implementation of Government policies, along with falling natural gas prices, has led to significant reductions in Irish electricity prices in recent years, bringing them closer to and in some cases below EU and Eurozone averages for both domestic and business consumers;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— Government policy to foster competition in energy markets is working, with multiple suppliers offering a range of products to all segments of the market and that significant discounts are available to households and businesses who simply switch their supplier;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— the Public Service Obligation (PSO) levy in place for this year accounts for the entirety of the rise in electricity prices from 1st October, 2010, that the Government has decided to cover the full cost of the levy for those households in receipt of the free electricity allowance and that a significant number of domestic and business customers could reduce their electricity bills and more than offset this cost by availing of reductions offered in the competitive electricity market or by engaging in Government supported energy efficiency programmes;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— improving energy efficiency has been widely agreed internationally as a key mechanism to offset energy price rises, enhance security of supply and reduce greenhouse gas emissions;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— increasing the contribution of renewable energy in the Irish fuel mix is the best protection against further fossil fuel price rises;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— the Electricity Regulation (Amendment) (Carbon Revenue Levy) Act 2010 commenced on 1st July, 2010, that the Commission for Energy Regulation (CER) and the Department have put in place the necessary administrative procedures and arrangements and that the CER has been administering the scheme since 1st October, 2010; and

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— re-branding is a necessary part of deepening the EU internal market liberalisation process and enhancing competition in the national market, in the best interests of consumers;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

commends the Government for:

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its comprehensive actions to deliver a secure, sustainable and competitive energy supply, including its commitment to increasing competition as the best means of exerting downward pressure on electricity prices in the long term, and improving the regulation of energy markets, with resultant benefits to consumers;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its policy of enhancing security of supply and reducing our exposure to volatile international fuel prices through increased fuel diversity, with particular focus on indigenous and renewable resources;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its continuing commitment to those most at risk of energy poverty, through the creation of a cohesive and coordinated approach to energy affordability issues overseen by the inter-Departmental/Agency Group on Affordable Energy;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment to produce a comprehensive Affordable Energy Strategy which will outline actions to protect vulnerable households with a view to ensuring that existing and future measures are targeted at households where the risk of energy poverty is greatest;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment to 340,000 fuel allowance recipients by providing over €231 million in 2009/2010 via the fuel allowance and smokeless fuel scheme as a contribution towards a person's home heating costs;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment to 380,000 Household Benefits Package recipients, which will cost in excess of €200 million in 2010;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— committing to domestic and non-domestic energy efficiency programmes including for social housing, including:

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its continued commitment to the Warmer Homes Scheme, which has supported community-based organisations and private sector contractors to provide nearly 51,000 energy efficiency improvements in low-income households over the past nine years; This year alone will see energy efficiency expenditure near €30 million in vulnerable homes;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment towards improving the quality of private housing for vulnerable groups through the provision of €80 million in 2010 for the operation of the housing adaptation grant schemes for older people and people with a disability; and

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment to providing incentives for domestic retrofits through the Home Energy Saving (HES) schemes, which was launched in March 2009 and since then has processed over 86,000 applications resulting in expenditure of over €48 million;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its commitment to introducing a new national retrofit programme in 2011 on foot of the most recent consultation exercise which closed in mid-September 2010 and which aims to deliver energy efficiency upgrades to one million residential, public and commercial buildings in Ireland, involving energy supply companies, energy services providers, construction workers, energy auditors and policymakers;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— the provision of significant programme supports for all businesses, including an energy efficiency tax incentive under the Accelerated Capital Allowance scheme; Over 1,600 businesses have already availed of this programme, all of whom have identified immediate savings, typically greater than 10% of costs; Total business cost savings from the programme already total close to €60 million a year;

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— the creation in June 2010 of an Energy Efficiency Fund, which supports exemplar energy efficiency projects in the public and commercial sectors; 43 projects have been approved to date which will deliver lifetime savings of over €70 million; and

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

— its comprehensive package of measures to mitigate energy costs for large energy users, including the taking of windfall gains from the electricity industry, the provision of rebates and the rebalancing of network charges."

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

I propose the Government amendment to the Labour Party motion while recognising that this is an issue very much worthy of debate. I commend Deputy McManus on raising it because, as I have said previously, this is a crucial issue in energy policy for us to get right, to consider and reconsider. I will set out some of the programmes and projects in place and ones we need to introduce to supplement what we are doing in this area. I will respond to some of the issues raised in Deputy McManus's contribution and the contributions of other speakers and well as setting out some of the measures the Government has taken.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

I wish to refer to a useful meeting of the Oireachtas committee on the issue of disconnections, which is a matter of concern. That meeting continued for four and a half hours and I followed parts of the debate on monitor. It was a useful exercise to bring in the energy companies to account for what they are doing, to bring in the regulator to get the commission to reconsider the policies in regard to disconnections, which we all agree must only be the last resort. What emerged from that meeting is that this is a complicated issue and it is important to reflect on how we can get this right to minimise the social disruption caused to people by being disconnection and to ensure we do not have a hugely expensive system that would impose a significant cost on customers. That meeting was useful. I look forward to the energy regulator returning with the commission's review of the disconnections policy in that regard and to ascertain if there are further measures that can be introduced to make the policy fairer and more effective.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

A measure that has been put forward and which is coming on stream is the allocation of pre-payment meters. This is one of the immediate measures that can be put in place. In regard to gas pre-paid metering, the CER has already revised the definition of "financial hardship conditions", which has made it easier for people to get such pre-paid meters. Since December 2008, some 1,500 gas meters have been installed on the grounds of financial hardship. We all acknowledge that this is a serious issue for many people. Such metering is one element which may assist people in danger of experiencing fuel poverty to ensure they will not suffer a disconnection.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Returning to that meeting of the Oireachtas committee, having listened to what people involved in this area said, one of the key points is that we need to get people to contact their suppliers. They should not ignore the problem, it is better for them to get engaged. While I take on board what Deputy Ferris said about the Government's over-reliance on the Money Advice and Budgeting Service, MABS, or other bodies, those bodies are working effectively, they have public contact and have gained public trust. It would be wrong for us to send out any message other than that people should contact their supplier and they should contact MABS. A crucial first step in any good code of practice is to set out a repayment plan to acknowledge the issue and to seek flexibility, which, I believe, will be given by utilities in advance of any disconnection. That is the best and most important measure that we can encourage and support to avoid traumatic cases where disconnections occur.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

There exists a code of practice which requires that customers must be given a seven-day notice of disconnection in advance. It is right that no elderly customer would be disconnected in the middle of winter or that no person with a medical condition who relies on medical equipment would have such equipment shut off or his or her electricity disconnected. It is right that the regulator is considering if we need to go further than that.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

When electricity and energy prices spiked in 2008, an interdepartmental committee was set up, the membership of which comprised officials from all the relevant Departments who have an interest in this area, including the Department of the Environment, Heritage and Local Government, my Department, the Department of Health and Children, the Department of Social Protection and other outside bodies. That committee examined the various measures being taken and if it was necessary to make immediate changes to them. I will give some details of those measures, which are not insignificant.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Some 380,000 customers are recipients of the household benefits package. Under this package a standing charge for electricity is paid and 2,400 free units of electricity per annum are given to those in receipt of it. In the case of gas customers who are recipients of this package, a gas allowance of a subsidy of €52 is provided in terms of a customer's gas bill every two months or a subsidy of €111 is given over winter months. This package of €200 million from the State, recognises that fuel poverty is an issue. It is not insignificant. It is a significantly larger scale package than the equivalent measures in the UK. Certain measures have been put in place, which recognise that fuel poverty is an issue of concern.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

In addition to that, the fuel allowance scheme was increased in light of those higher oil prices, recognising that there was an increasing issue of energy poverty with the higher spike in oil prices two or three years ago, to a provision of €20 per week for 32 weeks. That was an increase in both the rate and the length of time in respect of which the fuel allowance measure applied. This year, we are expecting that to have a cost of some €231 million on top of the €200 million that is allocated under the household fuel benefits package. Therefore, there are significant payments by the State to cover the valid issue of fuel poverty.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Critically, I believe we would all agree that one of the best measures to protect people from fuel poverty is not only to provide an ongoing allowance to cover the fuel cost but to improve the building to ensure that the demand for such fuel is decreased. That is a far better investment by the State and far better protection for people experiencing fuel poverty than concentrating on household benefits or fuel allowance packages. As important as those benefits and payments are, it is far better to cut off the need for people on lower income to spend more money on fuel to heat their homes.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

That is the reason I am proud, at a time when energy prices were rising, that we increased the warmer homes scheme. When it was introduced in 2008 approximately €2.5 million was being spent on it. This year, the best part of €30 million will be spent on it and the works will be carried out to more than 22,500 houses and up to 25,000 houses by the end of this year. This scheme targets those people on lowest income - those in receipt of fuel allowance, disability benefit or invalidity benefit. I have been in many houses where people have said their house has been transformed, it is a warm house and they do not have to turn on the heating as much because the heat is retained as a result attic insulation, wall insulation or other measures that have been put in place. That scheme is working. It has had a huge effect in terms of helping tens of thousands of households threatened by fuel poverty. I am pleased that we have been able to extend it to the extent we have done so.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

I am told that this year the Department of the Environment, Heritage and Local Government will spend approximately €40 million in a similar retrofitting scheme to benefit people living in social housing. Under this scheme the local authority can claim 90% of the capital cost - up to €15,000 - if a building is improved beyond a C1 rating, or if that is not possible, for technical reasons, in the case of the building, a 50% grant allocation is being made available to a local authority up to a total of €15,000.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

I would say in response to Deputy McManus that there is an ongoing clear commitment on the part of the Government that when it comes to energy efficiency retrofit measures we target and allocate to those on lower incomes and in social housing. That €70 million budget this year will be spent and targeted, although we will not know the detail until the end of the year, as these things are often staged. I have been told by both Departments that they are confident we will spend roughly that amount. That targets specifically those in receipt of fuel allowance or those living in social housing.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

We need to go further. While it has taken longer than we expected, my Department has been working on myriad measures on which we have to work. We have been working on the alternative fuel energy strategy - the affordable energy strategy. Having gone out to public consultation earlier this year, we will be able shortly to produce our report in that regard. Critically, it sets out to do what Deputy McManus seeks, namely, to identify the most at risk categories. We engaged consultants specifically to take account of demographics and household patterns to identify the worst cases, that is, those who are most vulnerable to fuel poverty. We must target these extreme cases given the health effects that arise from what is a life and death issue. It is appropriate, therefore, that we do research and statistical analysis to allow us to target these households and change our schemes to respond to extreme cases.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

This is not only a matter of correlating household formation but also of correlating the type of dwelling because there is a clear correlation between the age of a dwelling and the performance of the building. It is this correlation of household characteristics data analysis and building analysis of age and type of building which will allow us to start targeting our measures on particular housing sectors.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Deputy McManus cited a recent report done on the home energy savings scheme. The scheme is working well and is receiving approximately 1,300 applications per week. While I accept the scheme's budget was not fully spent last year, this was largely because it is a demand-led scheme. It took time to get the scheme up and running and achieve the level of public response we expected.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Some statistics concerning the home energy savings scheme bear repeating. Of those who engaged work under the scheme, 98% would recommend to their neighbours that they do the same work. This is not an insignificant percentage. The research also indicated that 90% of respondents would approve the contractor who undertook the work. While I would prefer an approval rate of 98%, I anticipate that in any survey of any category of work done on homes, a 90% approval rate is not a bad result.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

From speaking to officials from the Sustainable Energy Authority of Ireland, I understand the housing characteristic of the households involved in the home energy savings scheme is very much the standard, typical Irish house. If I recall correctly, the survey found that the average household income of these households was approximately €50,000. I understand the number of people surveyed was 10,000, although I stand to be corrected. Scheme participants belong to what would be described as middle Ireland and many of them would be in a certain amount of difficulty with debt, whether because one partner has become unemployed or the value of the mortgage may be higher than the value of the house. The scheme has been of real benefit to tens of thousands of people this year and last year and will continue to benefit others next year.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Deputies McManus and Ferris argued that we should introduce a national retrofit scheme. The Deputies will be aware that the Department is engaged in precisely such a project. Our new, national retrofit programme has been out for consultation. The programme is designed to bring together and co-ordinate in a more efficient manner the various schemes in place.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

Notwithstanding the success of current schemes, we need to adapt and improve them in a number of ways. First, we need to place on all utility companies supplying energy to the home, whether gas or electricity, an obligation to have their customers make energy savings. When one analyses different international projects and policies, they all show that this is the correct approach. We will then tailor the obligation scheme to meet some of our social and affordable energy objectives as well as our energy policy objectives. Funding will remain available in difficult budgetary circumstances because this form of investment makes more sense than any other investment. We will be able to target low income households at risk of fuel poverty with support funding from the State. This would be provided to the supplier - the person doing the work - to ensure the work is done at the least cost and in the most effective and efficient manner.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

The evolution of our various schemes towards one which is driven by a range of energy companies uses a variety of energy service company models to secure real efficiency and technological innovation in the way work is done. This is the right way to go. This evolution from existing schemes to one which imposes obligations on energy service companies and utilities will take time and will result in a better system. Crucially, it will allow us to start introducing some pay-as-one-saves elements which will help fund some of the capital costs involved. This approach entails providing a loan up front to be paid off subsequently over a five to ten-year period using the savings made by the householder. The annual saving from the home energy saving scheme is estimated to be €750. This approach overcomes the capital cost obstacle to doing work of this nature.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

We are moving towards a retrofit scheme and the Department is committed to evolving the current model, not only for domestic buildings but also for public and commercial buildings. These offer significant economic opportunities to make savings and reduce our current budgets while creating construction jobs which are badly needed at this time. It will take some time to get right the financial mechanisms and utility obligation. Once the mechanics are working effectively, however, we can ramp up the scheme to a massive size. It makes economic sense to do so.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

We have commenced this process. This year, for instance, we provided funding for approximately 45 projects in public and commercial buildings. The nearest example that comes to mind is the Mansion House, with which Deputy Catherine Byrne is familiar. The Department has committed to a whole energy plan for the building that will deliver energy savings. We need to do this type of work on a range of public buildings and the Department is supporting many such projects this year with a €9 million budget. Over their lifetime, the projects will deliver savings of €70 million. These types of investments make economic sense.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

As we are only at the starting point. We still have a major challenge ahead if we are to achieve our commitment to a 33% improvement in energy efficiency in the public sector. It will take time to ramp up the scale of the response required to achieve this objective. Crucially, we are doing it right, as has been confirmed to me during visits to the United States and United Kingdom where schemes similar to the new retrofit scheme we are on the point of launching are being considered. We have done a detailed, lengthy and thorough consultation exercise which builds on the experience of recent years in operating other schemes.

Deputy Minister for Communications, Energy and Natural Resources ( Eamon Ryan:

The increase in electricity prices arising from the introduction of the public service obligation, PSO, levy at the start of this month, as announced in early August, has been understandably controversial. The levy was, however, prescribed in legislation. By 1 August, the energy regulator had to have considered and introduced the levy. It was not new, therefore, but a requirement under legislation.

See this speech in context