Thomas Pringle (Donegal, Independent) | Oireachtas source

The Government's revelation of its annual transition strategy has been farcical to say the least. The Minister for Communications, Climate Action and Environment, Deputy Naughten, has called EU emission targets for the State as inappropriate, blaming the financial crisis for Ireland's failure to meet these targets. The financial crisis should have been an opportunity to be creative and to target investment in local energy supply chains, generating income for local markets and rural jobs for towns and villages across Ireland.

Instead, the Government over emphasises one type of renewable energy which disproportionately targets and affects rural constituencies, such as my constituency, Donegal.

While I welcome the recent allocation of €7 million to develop a renewable heat initiative and the biomass industry, it will be money making up for decades of lost opportunities. In my nearly six years in here, I have been calling for greater investment in biomass, which could lead to a greater number of sustainable, local, rural jobs for counties such as Donegal while also providing a carbon-neutral, local, sustainable energy market.

I recently met with the Minister of State, Deputy Doyle, alongside the Donegal Woodland Owners Society, DWOSL, where we conveyed the barriers to creating a local sustainable supply chain for wood chip or logs feeding into a biomass market. Donegal’s forestry sector can become a major player in the biomass sector through the production of wood for fuel. When timber is exported from Donegal in its raw form as logs, there is little value added to the end product. When wood is processed in Donegal, the supply chain to the consumer is shorter, which minimises transport related emissions. Donegal has huge potential for biomass production, given that approximately 12.2% of the land area is under forest. In 2015, Ireland imported 85% of its total energy requirement at a cost of over €5.7 billion. Donegal accounted for approximately €100 million of this energy bill. Given that only 7.8% of Ireland’s total energy usage came from renewable sources, there is huge scope to increase this figure.

We need fairer distribution of resources for the renewable energy sector as part of our efforts to stop climate change. Again, the Minister has avoided the issue of the use of public funds to invest in fossil fuel companies. I thank People Before Profit for mentioning and supporting my Bill. Divestment is the fastest growing international divestment movement, and it is for a reason. To reach our global targets and remain within the temperature limits, we must keep 85% of known fossil fuel supplies in the ground.

We need to fight climate change on a number of fronts, and one such front is through ethical financing. My Bill seeks to have the Ireland Strategic Investment Fund, ISIF, which manages our public moneys for investment, divest its assets of fossil fuel companies over a five year period. Divestment is not just climate-smart, but makes financial sense. The ISIF invests €133 million in fossil fuel companies, but given that fossil fuel commodities are increasingly volatile the ISIF lost €22 million in 2015, and €100 million in total over the past three years, on those investments. Imagine what this money could do if it were invested in renewable energy solutions, such as biomass or solar energy.

It has recently been announced that renewable energy specialist Gaelectric is selling 14 Irish wind farms worth an estimated €400 million to China General Nuclear Power's European energy arm, CGNEE. The Gaelectric chief executive, Mr. Barry Gavin, said the company intended to use the proceeds to pay off debts and support other renewable energy projects. The citizens of Ireland will subsidise those wind farms for the benefit of CGNEE. That does not make any sense. While I agree there can be positive ownership initiatives in place which mean communities benefit and prosper from renewable energy sources, I do not think wind energy will necessarily provide this. We need to radically diversify our renewable energy sector. It has been far too dominated by the production of wind energy, which is heavily subsidised by the State, affecting rural communities disproportionately.

It is a myth that wind energy is a cheap affordable energy source. We need to be realistic about it. In 2013 in the Republic, wind farms received €277 million from citizens. If the plans to install another 2,200 MW of wind generation go ahead, wind energy will cost citizens €660 million per year. Constraints payments, paid to wind farms for excess electricity production, amounted to €108 million in 2013, an average of €67,000 per MW of installed wind. Given the limit on wind power that can be taken by the grid, the more wind farms are built, the more wind power is constrained. This means the percentage could rise to 49%. If the plans to install another 2,200 MW of wind generation go ahead, constraint payments are estimated to reach €320 million per year. Yet, the Government insists on investing more than €4 billion in EirGrid to upgrade the infrastructure to facilitate it. It does not make any sense. The subsidy is paid mainly to wind farm generators, such as CGNEE, which have a contract with a supplier such as Airtricity, Energia or Electric Ireland. If the contract is not lucrative enough, the wind farm receives a top up from the public service obligation levy.

See this speech in context