Pat Rabbitte (Dublin South West, Labour)

Ireland's deployment of renewable energy sources in electricity has been increasing steadily in recent years as we work, North and South, to deliver a 40% level of renewable electricity consumption by 2020. There has been good progress from 5% renewable electricity in 2005 to around 15% renewable electricity at present. The challenge is to steadily increase renewable electricity generation in the all-island market from onshore wind and bio-mass year on year to 2020.

I am confident that Ireland has the capability to achieve its targets for domestic renewable electricity from the onshore wind projects already in the existing gate processes despite the difficulties being encountered and the undoubted planning and financial challenges that remain for a number of projects. In this context I am pleased to confirm that the REFIT 2 onshore wind programme has this week received State aid clearance from the Commission. This welcome certainty on the feed in tariff support for onshore wind will now enable investors to finalise their plans to build out projects over the next number of years.

While offshore wind is already being deployed in some member states as part of delivering on their national renewable energy targets, it is still a very expensive technology to deploy. Offshore wind currently costs in the region of €3 million per MW to deploy compared to the cost of onshore wind which is about half of that.

Wave energy technology is still very much at the research and development stage and the commercial and technical feasibility is not yet proven. While there are very promising wave technology devices in development, they are at pre-commercial stages.

Additional information not given on the floor of the House.

Ireland has a very small electricity market, with around 2 million electricity consumers. The public service obligation levy which is paid by all electricity customers in this small market currently encompasses support for peat, some conventional generation and onshore wind generation. Given the very significantly higher price of developing offshore wind compared to the lower cost onshore, it makes economic sense that we focus on developing our lower cost onshore wind resources to deliver Ireland's binding EU targets for renewable electricity. In parallel we will actively pursue the potential opportunities for renewable energy export which offshore wind represents. I will be working with my UK colleagues through the British-Irish Council and with my EU colleagues through the North Seas offshore grid initiative to deliver on this potential. In the present economic circumstances and given the challenges for Ireland's competitiveness, of which energy costs is a key component, the Government has agreed with my decision not to proceed with the application to the European Commission for State aid clearance for a feed in tariff to support offshore wind in the Irish electricity market. Given the inordinately high costs which would be incurred by business and domestic electricity consumers to support such a tariff, we need to focus instead on the opportunity to develop a renewable electricity export market for the offshore wind sector. The best future for Ireland's offshore wind resource lies in becoming an export industry.

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