Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I was glad to hear the contributions of Deputies Michael Harty and Michael Collins. This is a subject close to my heart. It is hugely important and complex and requires time and consideration. My interest stems from the belief the electrification of the economy will be one of the main ways in which we can meet the climate change challenge we face. There is not a wide understanding among the public of the nature and scale of that challenge. What we committed to in Paris, which is what we need to do according to the scientists, requires us as a developed country to completely decarbonise the energy system by the middle of this century, not by the end of the century, as the previous Government's White Paper indicated as the timeline. That will not meet what the scientific analysis states we need to do. There will be challenges in the areas of food production, industrial production and waste management. In the energy sector it is an opportunity. I will set out why we should grab it and how the Bill fits into that overall picture.

One is always taught that energy policy is a trilogue, that one has to balance the three competing interests of a competitive energy supply, security of supply and looking after environmental objectives. Some people add a fourth consideration - the balance of payments and developing the economy. Such is the scale of the challenge that the environmental considerations trumps all. We have to guide our development of energy sources towards decarbonisation. To a certain extent, that comes ahead of competitiveness and security of supply because the science is certain. The issue of ompetitiveness can be addressed in a variety of ways. We could become much more efficient in order that we do not need as much energy or we could turn to other energy sources. There is a variety of approaches to take. It is the same with security of supply. There are no choices on the decarbonisation path, but there are choices between various decarbonisation systems. We have to do it if we are to avoid the planet tripping onto a very dangerous runaway of climate change that will affect all of us, our children and grandchildren in an incredibly adverse way.

It is uncertain exactly which technologies will work. We should acknowledge this. We have to do it in an iterative way. No one knew ten years ago that shale gas in the United States would provide a major technological breakthrough. No one knew that the cost of photovoltaics would fall by 50% in the past five years. We should admit to uncertainty. Things change and we will learn by doing. The best analysis of what energy transition will involve recognises that electricity generation will play a central part in the transition we need to make. Some might say there are hydrogen fuelled vehicles that could be developed. In that regard, we would probably be creating hydrogen from electricity through electrolysis. In moving away from fossil fuels, electricity generation will be the way to go. Increasingly, it seems that renewable energy sources will play a central part globally. Some argue that it will be nuclear energy, but that is not happening globally; the investment is being made in renewables. In Ireland our market is small; we have little expertise in the area of nuclear energy and there are still risks in terms of security of supply and waste problems. Therefore, it makes more sense for us to go with renewables. This is happening all over the world and far more quickly than we thought. The transition will be about electricity generation and renewable energy sources which will give us a competitive advantage. The amazing opportunity we have as a country is that we are actually good at this and we could be really good at it. We need to be ahead of the game because it will allow us to sell our capability to the rest of the world. Only yesterday the US Government, with the Mexican and Canadian Governments, committed to ramping up the scale of their ambitions in order that by 2025 half of their energy supplies will come from a new clean low carbon system. We can sell into these countries. In China, if one looks at the statistics, it has overtaken the European Union and America in terms of the investment made.

I will be sharing my time with Deputy Catherine Murphy which will stop me in my tracks. Therefore, I had better hurry up. I was really warming to my task and the prospect of entering endless fields of figures.

There is an opportunity for this country. As I said, we are good at this and can excel at it. We can sell our expertise to the rest of the world and it will make us secure. It is our power supply. No one will ever go to war over a solar panel or a wind energy source. There is security in the fact that it belongs to everyone and there is a source everywhere. We just need to switch it on. It is far more secure than having to rely on imported Russian or Saudi Arabian gas; therefore, we need to make the switch and we can do it competitively. It is already happening.

People are rightly concerned about domestic prices. We have to address that issue. The biggest electricity consumers in the world are data centres. They are coming here in numbers because they know that we have a competitive, clean pitch. They cannot have a high cost carbon fuel supply. We cannot burn coal. If we claim leadership in this area and want to be competitive and secure, we cannot keep burning coal and adding wood to it will not work. Let us go to Kilrush in County Clare and have a good debate on it and look at the facts, but we cannot keep burning fossil fuels. It is as simple as that. The alternative can be clean. It will be a combination of renewable power sources and gas as an interim technology because we have more than enough gas plants which are sitting idle. They are much more efficient than the coal burning ones. We need to use them as interim technology to balance the variable supply. We also need interconnection.

7 o’clock

The big investors know that there is a competitive ten to 20 year prospect in this country. That is the reason they are coming here and investing in those large data centres. They know they can get lower carbon and a relatively competitive supply because our wind power is cheap. It is probably the cheapest renewable energy in the world and we have a huge amount of wind resources. We must be careful how we manage it. We need to step back and try to win back the public on this and to get an understanding of that. We need to bring the power ownership back to the people. However, we should not turn our back on it because if we were to do that, what would we be doing to the secure supply and where would be the competitive advantage? Where would we get the digital jobs which would come in tandem with having this low cost electricity supply?

The European Union has been falling behind in this area. It was leading but because of a lack of confidence as a result of the financial crisis and because there were concerns about the competitive advantage of its shale gas resources, we lost our confidence in Europe with respect to climate change. We stepped back and said that we would not set such ambitious targets for 2030. The Commissioner may be getting it right in one way in the sense that Europe is saying let us piece the jigsaw together. That is what it is doing and it wants to apply the targets in 2017-18. Therefore, we must get our piece of the jigsaw right. We need to get the market mechanisms right more than anything else, which is what this Bill seeks to address.

I would make a broad point on the nature of the transition. We are going to make a 100% transition and most countries, including Ireland, have made a quarter of that. We are up there among the leaders. We are better than Denmark. We integrate renewables better than it does. We can be better than Denmark at this. We can sell our technology to the rest of the world. The first quarter of the transition was done by inserting renewables into the existing market system. The next quarter will be done by changing the entire system. Everyone know this. All the electricity markets in Europe are changing in recognition that this is the way we are going. Germany, in particular, is moving this way and that will drive the European approach. Therefore, we must make sure that we are in tandem with that. The system is not going to develop in the way that Germany did it for the first 25 years, which was the first quarter of the transition, with big subsidies for renewable power because already wind, solar or photovoltaic, pv, energy now generate lower costs than any of the other alternatives. However, we need to design the market system to make sure that providers can get access and that we use them in an efficient way. That is what we need our regulator to do.

The target market model system that the European Union has been relying on up to this point will not work because it still assumes that fossil fuels are the dominant fuel supply but everyone recognises that energy resource is gone and no one sees it as the future. We need to create a place in which investment can be made in the high capital renewable alternatives and we need to design our markets system around that. That requires us to do various things. It is a change from the old model, where we had big base-load plants such as Moneypoint chasing ever-increasing demand, towards a system where we have a variety of variable power supplies or a market based around an assumption of most power coming from variable supply sources. That will be matched with balancing that with variable demand and a range of payments to give investment certainty for the provision of power, the provision voltage frequency and stability on the system and flexibility with respect to energy services that come in this market system. That is how the market will have to be designed. It is complex. That is what our regulator has to do to make sure we are integrated with this new approach.

We have a difficulty because the UK was moving in a different way. It is not clear what is its energy policy. It has been led by the Treasury in recent years as much as by its energy department. They are backing nuclear and Drax coal-based power plants, which are incredibly expensive and, in the case of Drax, are not clean. We have a difficulty with the way that the UK is going and that is something we have to manage, particularly in terms of Brexit. There are a number of things that we know will work, whether it will be with the UK or whether we will integrate more with the rest of Europe at the same time.

The demand management component is the key critical element in this. Efficiency must come first in everything we do in the clean energy area. When we come to deal with Committee Stage, I hope the Minister will be able to give Ireland an economic advantage in incentivising demand management because it is the key. This is what everything is seeking to be good at. No one has excelled in this yet. As a State, we have all the leading technology companies here, we have a single owner of our distributed grid, North and South, we are good already in terms of the balancing of this electricity system and we have a good regulatory system. I listened to colleagues who spoke earlier and they are always giving out about the Irish saying that we are the worst at this and at that. We are not bad at regulation. Our top regulators have moved on. Why is it that several of our regulators have been taken up by some of our European colleagues? The UK competition regulator is a former Irish communications regulator. The UK regulator of energy is a former Irish energy regulator. We are good at this. We have an independent system. We are good at implementing European regulations in the energy space. We have a good grid operator. EirGrid is a very talented company in this space. We have a good distribution company. We have all the conditions in place to be a world leader at the integration of energy demand management efficiency flexible systems. This is a prize we should grab. It guarantees our wealth and our jobs for the future in the west and in the midlands more than anywhere else. Let us grab it as the economic opportunity of our time, which it is.

President Obama does not spend all his time thinking about this. The US Energy Secretary, Steven Chu, came over here a few years ago. He spent four hours in EirGrid control centre because he knew what we were doing was ahead of the game. If we get very good at it, we can sell elsewhere.

The Minister needs to send a message to the regulator that in this process of dealing with this Bill we should look to be the best at demand management aggregations and should be pushing energy efficiency in everything we do. It is not easy to do that. No one has got it right. The European Commission is looking for countries to step up to the plate and provide this piece of the jigsaw, an example of demand manage aggregation using efficiency first in everything we do, in the market signals that we create. Let us create 15-minute market opportunities where we put in scarcity pricing and integrate storage demand management heat integrated solutions. All this smart management on the demand side is what we need to be good at. The attractiveness of it is that it does not run into any of the obstacles about a big grid or big wind; it is managing that as we pause and work out what will do next. As we push solar energy, let us work on the demand side and be world leaders at it and in doing that we will create security and competitive jobs by the tens of thousands for this country. That is the prize we should go for. We should use this Bill as a vehicle to send a signal to the regulator to go for that. Those concerned are well able to turn it into a reality.

We need to do this on an all-island basis. It makes no sense for us to have two electricity markets on this island. We made a great step forward when the single electricity market was set up nine years ago. It has worked and it was transparent and sophisticated. We need to evolve it and change it, which is what this Bill will do. We need to build interconnection between the North and South. As unpopular as that may be, I keep saying to my Sinn Féin colleagues seated on the lower benches and my Fine Gael colleagues on the opposite side that if we believe in an all-island approach, we have to build a grid. If we do not connect the North to the South, the North will separate from us. Forget about the politics, it will be the physics that will lead it.

See this speech in context