Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I understand the point being made by Deputy Stanley. As he is aware, a large part of the fossil fuel PSO is close to my heart, namely, peat fired energy generation in our three midland power stations. In fairness, I believe it is only because a predecessor of mine, Mary O'Rourke, happened to be in this job, we would not have those three peat fired power stations in the State. The intention is to convert those stations over to biomass and I am working quite closely with Coillte, Bord na Móna and the ESB in that regard and we hope to make progress. Bord na Móna has already given the commitment to be out of electricity generation with peat as a feed stock by the end of the next decade.

The issue is the PSO and at the last Question Time, Deputy Stanley's colleagues, as well as Members on the opposition benches, gave me a lot of grief over the cost of the PSO to consumers. In regard to the last analysis done in 2015 by KPMG on the cost of solar PV in Ireland, while the costs of solar have come down significantly, it is now costing in nearly €150 per megawatt. Wind costs €69.72 per megawatt for a large wind farm while it costs €72.16 for a small wind farm. Hydro costs €88 per megawatt. Under REFIT 3 biomass combustion costs €89 per megawatt and small biomass, in a combined heat and power system, costs €147 per megawatt. That is probably more congenial to communities getting involved in energy generation.

The problem has been that solar was far too expensive to produce up to now. However, the costs are coming down and I had a meeting last month with some manufacturers in China which are driving down the costs even further. Solar will definitely be part of the new scheme but exactly how that will be structured will have to be weighed up against meeting the targets which must be achieved and in finding a balance so that consumers are not paying an excessive PSO.

That is a fine line which must be drawn and I am being rightly criticised that there is no support for the solar energy industry because the Commission for Energy Regulation is increasing the price of the PSO to consumers. In this regard I see exactly where Deputy Stanley is coming from. The challenge is about trying to strike the right balance.

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