Martin Ferris (Kerry North-West Limerick, Sinn Fein)

I welcome the Bill as it provides an opportunity to debate the issues legislated for in its provisions and also to debate wider energy matters. The matters to which I refer include fuel poverty which is inseparable from any debate on energy and which is impacted upon in various ways by some of the issues covered in the Bill.

A number of matters with which the Bill deals seem relatively straightforward. I refer, for example, to those which relate to the safety functions of the Commission for Energy Regulation, changes to existing legislation regarding the investigation of breaches of the Electricity Regulation Act and measures designed to address the theft of electricity and gas. Provision is also made for legislating for the transfer of pension entitlements from Bord Gáis and the ESB to the new companies established in the relevant sectors. The provisions to which I refer all appear to be uncomplicated in nature. If there are any issues that arise, we can deal with them via amendment on Committee Stage.

The main sections of the legislation which could have a major economic impact are those which deal with the energy demand reduction target programme. This is one of the key parts of the State's commitment to reduce energy consumption by 20% by 2020. The programme seeks to place efficiency obligations on suppliers and distributors. According to the explanatory memorandum accompanying the Bill, the programme has the potential to bring about significant savings for consumers, as well as reducing the overall level of carbon emissions from energy consumption within the economy. If all of this results in savings for the consumer, it must be welcomed, particularly in the context of rising energy costs and the burden, often unsustainable, these costs are placing on many families around the country.

We must forge ahead with other means of reducing the economic burden of energy costs which form a significant and growíng component of household and business costs. There is also the massive cost to the economy which is still hugely dependent on importing fossil fuels - to a level of almost 90% of current requirements. In that regard, we must press ahead with developing our own indigenous renewable resources. There will continue to be a great deal of discussion about this matter. The State has signed up to meet some ambitious targets and some have questioned whether these can be met. Among the reasons they cite are the high start-up costs of and the difficulty in capitalising projects such as those to which I refer. They also highlight planning issues, particularly where wind energy projects are concerned. Good progress has been made in wind energy generation, but we could certainly do a great deal more. The same applies to wave energy generation, which is at a much less developed stage. I am aware, however, that a number of important projects are being developed.

Given that it has been estimated that there is €100 billion in potential energy to be generated from wave power around our coastline, the incentive is not lacking. I mention tidal energy, as distinct from wave energy. There are significant opportunities to develop that if there is the political will to push it through. Not only could we be in a position where much of our energy requirements are met from a renewable indigenous source, but the development of that resource could lead to a massive economic stimulus and help to create many thousands of jobs. It has also been forecast that were this island to develop this resource to anything like its potential, we could become an exporter of wave generated energy to countries that do not possess our natural advantages.

To return to the concrete proposals in the Bill, there appears to be general agreement on the part of those involved in energy suppliers with the Energy Demand Reduction Target Programme. Bord Gáis, for example, believes that the programme has the potential to increase employment through the provision of energy efficient boilers, insulation, and so on. However, the company raises the possibility that the added costs involved, while benefiting the suppliers of energy efficient products, could add such a burden to consumers that they would further reduce demand for energy. That obviously applies to business and domestic consumers. The company's point regarding the impact of these measures at a time of overall economic downturn needs to be borne in mind when framing programmes such as this.

The ESB, in its submission to the consultation process on the programme, also made the point that there is insufficient data on how consumers are likely to react, and on final energy use. It also makes the point that there will be inevitably higher costs. Given that the ESB claims that these will be passed on ultimately to the consumer, the programme must be clear about where and when the promised savings to the consumer will come.

We can all accept that making a house more energy efficient through better insulation will lead to less use of electricity and gas for heating purposes and, ultimately, to lower household bills, but care must be taken to ensure that those are not offset by prohibitive initial costs. Care must also be taken to ensure that the suppliers do not offset any additional costs to themselves simply by increasing the prices they charge to consumers in which case the consumers see no benefit in terms of their own budgets, which is a far more important consideration to them than reducing the level of carbon emissions, however worthy that objective might be. Realistically, in the current economic climate where people find themselves struggling to put food on the table, the practice of reducing their overall energy costs by denying themselves adequate heating could increase unless the area is properly regulated to ensure that it will not be a further burden on the consumer.

On the issue of increasing the costs on households, I note the Tipperary Energy Agency's submission which claims that the programme of increasing household energy efficiency would only work in consultation with the local authority suppliers of social housing and with 100% long-term support. That is indicative of how many would regard the costs involved. That would not apply to private households which, presumably, would have to meet the extra costs themselves.

The ESB also recommended that a levy be imposed on all energy users in order to fund the EDRT. This raises the spectre of further costs. Considerable caution must be exercised before such a measure would be imposed given the current economic situation and the burden that is placing on households and businesses.

I certainly agree with the ESB on its linking of the programme to the targets for the production of energy from renewable sources. That would complement what I said earlier on the need to press forward much more aggressively on that and have a much more long-term and imaginative vision of what is possible in the energy sector rather than concentrating on measures such as this.

In a reply to a question on fuel poverty recently, the Minister referred to the energy efficiency of homes as being a key factor, along with what I would regard as the even more important factors of energy prices and actual household income. A report based on statistics gathered over the winter of 2006-2007 showed that there were 1,300 excess deaths which in large measure can be attributed to illness caused by persons being unable to properly heat their homes. The vast majority of those deaths were of those aged 65 and over. In his reply, the Minister stated that enhancing the energy efficiency of low-income homes through permanent structural improvements is the most effective means of addressing energy affordability. He went on to list the energy efficiency improvements made in almost 76,000 homes under the Better Energy: Warmer Homes scheme, and that 14,543 homes had been retrofitted this year. He promises to publish the affordable energy strategy within the next few weeks.

Clearly, the emphasis of the affordable energy strategy will be to concentrate on improving the energy efficiency of the homes in which people who are struggling to pay energy bills are living. I have no difficulty with that approach but I would question whether enough is being done about the other causes of fuel poverty.

I have also had a number of representations on the warmer homes insulation scheme. The position as it stands is that people can only apply for one form of insulation, either attic or cavity wall. While I understand that such is the current criteria, it is something that ought to be addressed. Those who have responsibility for administering the scheme admit that it is a deficiency that they are currently unable to address due to the limits on the amount of funding available. That is something I hope the Minister might address as part of implementing the strategy which he promises will be unveiled shortly. That is a significant difficulty. While there will be an argument that in the current economic environment the extra funding cannot be made available, surely the logic of tackling fuel poverty in this way would indicate that the extra funding would prove to be cost effective in a relatively short period. That would come about as energy costs and the burden on the State through social welfare in this area fall, not to mention the cost of coping with health issues brought on by the inability to properly heat homes.

I have had a number of representations on this issue from people who have had attic insulation installed in their homes but who, because they do not now qualify also for cavity wall insulations, are still experiencing problems. In one case of which I am aware, this is leading to a worsening of respiratory and other health problems due to inadequate heating and insulation. Most of the houses of which I speak were built in the 1930s, 1940s and 1950s. It is essential that there is adequate heating in those houses. Many of those householders are the second, and in some cases third, generation living in those houses.

Where they have applied, through various agencies, for attic insulation, the greatest energy saving for houses such as those is what I would call the wrap-around outside insulation. It costs approximately €4,500 to the Exchequer per home but it is invaluable to those who reside in such houses due to the amount of energy it saves. In most instances, in houses such as those which I have encountered the householders are persons on the wrong side of 60 - a little like the Minister of State, Deputy O'Dowd and me - and it is of significant value to them.

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