Wednesday, 12 October 2005
Question 87: To ask the Minister for Communications, Marine and Natural Resources the position regarding work on the energy White Paper; the proposed timeframe for its publication; and if he will make a statement on the matter. [27868/05]
The changes in the energy landscape in terms of our increasing dependence on imported fossil fuels, world movements in fuel prices, the move to liberalised markets and carbon constraints from our Kyoto obligations make it necessary to consider carefully how we will meet the energy needs of the economy and wider society in a sustainable and affordable way for the future. I have therefore instructed my officials to draft a comprehensive policy statement which fully addresses the issues and challenges that lie ahead in the energy area. I aim to have a completed paper ready for publication in early 2006.
It is my intention that the policy paper will have both a medium and a long term perspective, explaining the policies that are in place now and which will have a direct effect over the next five years or so. I am also looking forward to 2020 and beyond to assess what our energy needs might be and what policies we might adopt to ensure that those needs can be met in a sustainable way and at an affordable cost.
Deputies will be aware that a comprehensive review of the electricity sector is currently under way to examine the institutional arrangements and market structures for the sector here. That study is well progressed and the consultants involved have engaged in extensive consultations with stakeholders in the sector. I expect to receive the final report before the end of the year. The outcome of this review will form an essential part of the policy paper.
It is disappointing that the publication of the White Paper on energy seems to have been postponed yet again and that it has taken the skyrocketing price of oil, at $70 and more per barrel to focus our minds on the matter. Would the Minister welcome submissions from all the stakeholders in the energy industry and from the other political parties in this House in order to shape the medium and long term strategy?
Does the Minister share the concerns recently expressed by the British Minister of State for Energy, Mr. Malcolm Wicks MP, about power cuts this winter in the UK due to gas shortages and, in particular, wider problems in the British wholesale gas market? Is it possible that security of supply of Irish gas could be affected? Will security of supply be a key component of the White Paper on energy?
I welcome the pricing initiative announced by the Minister and the replacing of the AER programme. That is something we could perhaps discuss in this House. Does the Minister intend to take any initiative in the coming months with regard to fiscal incentives?
There has been a great deal of guff in the media since the Minister and I last met. I recall Professor Moore McDowell, David McWilliams and other proponents of the dismal profession of economics urging us all to go nuclear. This campaign appears to have been started by the British nuclear industry. Will the Minister ensure that the economics and the dangers of nuclear power are adequately referred to in the energy policy document?
It is my intention that nuclear power will be mentioned in the energy policy document but only to reiterate the consistent position of the Government and of the Irish people. We made the decision a long time ago. That is not to say that we should not review decisions but I strongly believe that the potential environmental consequences of moving to nuclear energy far outweigh the environmental and, probably, economic advantages. There will not be a long chapter on nuclear power. What I have said is probably a summary of it. There are those who disagree with that position and there are environmental and economic cost reasons for using nuclear power, but we have made our decision on the matter.
I am not sure what the Deputy means by saying that the policy document has been postponed yet again. I only announced it in July and said it would be ready in 2006.
No, that is the electricity sector review, which is separate. The energy policy review was put in place when oil was approximately $35 per barrel. With regard to the security of gas supply, there is a tightness of supply which will probably get worse from 2006 to 2008. There are capacity constraints in the UK. The CER has warned about this. I have not yet received advice from the CER that it believes we will be without gas at any stage but that is a possibility. It has warned about scarcity of supply issues.
With regard to fiscal incentives in the budget, there is a tradition that no budgetary matters are discussed in the House prior to the Budget Statement. However, it is no secret that we are extremely pleased with the response on biofuels. We hope to encourage, through incentives, the use of renewables and energy efficiency. I made that clear previously and I will continue to push for it.
Will the Minister comment on the decision by the regulator some months ago to the effect that it was intended not to support wind generated electricity to any great extent in the future? To what extent will that impact on his alternative energy policy?
I warmly welcome the Minister's comments ruling out nuclear power as a future option in this country. I endorse those comments but I differ with him on one point. One of the main arguments against it, as well as the environmental one, is that economically it makes no sense. It is probably the most expensive form of power. Given that our renewable energy supplies are significantly cheaper at present than what the CER recognises as the price of a best new entrant gas supplier, the cheapest of the fossil fuels, what would limit the amount of renewables we should develop? This country has a remarkable abundance of wave, wind, biomass and tidal power. There are 21 different supplies of renewables. Why would we think of limiting it? Why not go for 100% energy from renewables within our lifetime?
That might be called selective hearing. I made a strong statement afterwards. I also made an active statement on the issue when introducing the latest feed-in tariffs, which are a help mainly to wind energy although not only to wind energy.
With regard to Deputy Ryan's question about what would limit this, currently there are physical limitations on the grid. ESB Networks is working on this. It has a huge investment programme. The physical constraints of the system is one of the limitations. In addition, wind energy is not the solution to everything. There must be a back-up for every megawatt of wind energy that is produced to cater for the days when wind is not available. That is the reason we need to move into other areas, which the Deputy supports, whether that is biomass, tidal or current energy.
I welcome what Deputy Broughan has said publicly and what Deputy Eamon Ryan has said to me privately on this area. We should, if possible, work together to arrive at an agreed policy on renewables. It would be useful because the one thing this sector requires is stability and the ability to know what will happen over a 20 to 25-year period. That is required for the type of decision that must be made about investment in this area.
The grid is a problem. Why are we spending so many billions designing it in a way that does not suit renewables? Will the Minister give a direction to the ESB or the CER to change the investment so that spending on the grid supports renewables rather than, as is the case at present, spending money which blocks renewables?