Dáil debates

Thursday, 10 March 2005

Priority Questions.

Alternative Energy Projects.

4:00 pm

Photo of John PerryJohn Perry (Sligo-Leitrim, Fine Gael)
Link to this: Individually | In context

Question 1: To ask the Minister for Communications, Marine and Natural Resources his preferred policy options for the development of the alternative energy sector with particular reference to the need to promote wind generated electricity production and the encouragement of bio fuel, in view of the desirability to achieve Kyoto targets; if he has satisfied himself that adequate progress has been made or is likely to be made in this regard in the medium term; and if he will make a statement on the matter. [8457/05]

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
Link to this: Individually | In context

The completion of the most recent round of competitive tendering to support renewable energy technologies, AER VI, is an appropriate opportunity to review the programme. Last May, a renewable energy development group was established to advise on future options on policies, targets, programmes and support measures to develop the increased use of renewable energy in the electricity market to 2010 and beyond. The group's report, which is due shortly, will form the basis of my future policy decisions on the increased penetration of renewable energy technologies in the electricity market.

Biofuels are addressed in the EU biofuels directive. An interdepartmental group has been set up, chaired by my Department, to consider policy options for the development of a biofuels sector.

As part of the ongoing work, a liquid biofuels strategy study was published by Sustainable Energy Ireland in December. In March 2004, my Department secured an amendment to the Finance Act 1999, which provides for the introduction of a scheme for excise tax relief for biofuels.

The European Commission has now given state aid clearance for the scheme. The scheme will be publicly advertised over the coming days and interested parties will be invited to apply for excise relief, through a competitive call for proposals process.

The targets in the directive are indicative and not mandatory and many member states, including Ireland, would not be in a position to meet the 2% target by the end of this year. Ireland is starting from a very low current production base, and the 2% target therefore represents a considerable challenge.

The Deputy can be assured I am committed to the development and promotion of further renewable energy projects in the electricity market and the development of a biofuels market in Ireland's transport fuel sector.

Photo of John PerryJohn Perry (Sligo-Leitrim, Fine Gael)
Link to this: Individually | In context

I welcome the Minister's reply. Will the Minister concede that comments made in January by Mr. Tom Reeves, the regulator, that he was unconvinced of the need for additional support for the wind energy sector, has led to something of a crisis of confidence in the renewable energy sector? I welcome the Minister's reference to the EU allowances and the tax break is very important. Will the Minister state what he believes to be the necessary level of support that would be adequate to kick-start this again? Wind energy can offer an independent energy source to divert us from dependence on gas from the North Sea. Spain has a thriving wind energy industry employing 25,000 people. Ireland has the capacity to produce 80,000 MW of electricity from wind with a current peak demand of 4,500 MW. Will the Minister agree there could be a potential for export in this important sector? Is there a possibility of introducing more competition into the market which will reduce costs?

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
Link to this: Individually | In context

I do not wish to comment on what Mr. Tom Reeves said about support for alternative energy sources because I do not think that would be fair. I reiterate my belief, which is Government policy, that we need to support the alternative energy sector and adopt more ambitious targets. It was for this reason that we established the renewable energy development group that will report to me shortly.

I agree with the Deputy that we must examine alternatives to reduce our dependence on fossil fuels, specifically gas. We should continue to support alternative sources of energy, including but not only wind. The renewable energy development group report should help to clarify the future direction of policy. We need to view alternative and renewable energies on a longer timescale than heretofore and spread costs over a longer period.

Photo of John PerryJohn Perry (Sligo-Leitrim, Fine Gael)
Link to this: Individually | In context

What consultations have taken place with the ESB on the forthcoming deregulation and expanding the grid? The major difficulty with establishing wind farms is the prohibitive cost of connecting to the grid. How supportive has the ESB been of deregulation, opening the market to competition, and wind farms? Do the location of wind farms constrain the development of the national grid?

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
Link to this: Individually | In context

I have no function in matters such as the price and costs of electricity as these are regulated by the Commission for Energy Regulation. In fairness to Eirgrid and the ESB both companies have supported connections to the grid. The Deputy may be adverting to difficulties in certain areas, principally the west, where the grid is not suitable for wind energy.

Photo of John PerryJohn Perry (Sligo-Leitrim, Fine Gael)
Link to this: Individually | In context

Yes.

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
Link to this: Individually | In context

In the course of a conversation with the chief executive of the ESB, I asked him about this issue in the context of the €3 billion programme the company is undertaking to upgrade transmission lines and so forth. He informed me that the upgrade would overcome some of the technical difficulties regarding the grid.

ComReg is the body responsible for ensuring the ESB and others do not use their position to hinder alternative sources of energy, prevent connections and so forth. A limit has been imposed on the amount of wind energy permitted in the system. As I indicated, we should extend the planning timescale and take a longer term view as opposed to engaging, as heretofore, in short-term planning.