Dáil debates

Thursday, 18 May 2006

Energy (Miscellaneous Provisions) Bill 2006: Second Stage (Resumed).

 

Question again proposed: "That the Bill be now read a Second Time."

12:00 pm

John Dennehy (Cork South Central, Fianna Fail)
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I welcome the opportunity to contribute on this Bill. It is a topical issue, as we have already heard with references to the price of petrol in the House this morning. The Bill will address all-Ireland markets, electricity interconnection, gas and electrical safety, full gas market opening, greater powers of policy direction for the regulator and safety measures.

With the rapidly changing situation in China and former Soviet states, and the general problem of diminishing supplies of oil and gas, it is important that all energy users examine their own use of fuels and that we examine in a logical fashion with the national interest to the fore all possible sources of energy.

Without wishing to interfere, the difficulties that have arisen in Mayo concern me. In the past, we found offshore gas fields at Kinsale and managed the supply and use of that gas and I welcome the renewed interest in offshore exploration by a number of companies. People who claim we should spend money on exploration ourselves, however, are asking us to do much the same as putting the State's money on a horse. Oil and gas exploration are among the costliest commercial exercises in any area and we do not have the wherewithal to get involved directly with them. It is easy after the event to say how much a company has made from a find but the exploration costs show that we would not have been able to get involved.

We begin to appreciate the value of any commodity at a time of shortage, we never miss the water until the well runs dry. At a time of shortage we get the best proposals for alternatives. During the last major shortage, there was action on combined heat and power projects and it is a pity we grew lazy. I recall a combined ESB and Bord Gáis heat and power project in Cork University Hospital. I would have seen those groups as competitors in the past but they got together and did a good job that repaid the money invested in a short time.

Energy conservation and the maximisation of our natural resources have never been so much in focus with the continuing fluctuation in the world's energy markets. There are increasing demands on fuel resources, the majority of which are totally outside our control. This need to develop an all-Ireland electricity market and liberalise the gas market demonstrates the importance of this legislation.

Section 3 of the Bill will allow for the all-Ireland approach. It is 16 years since we held discussions at the British-Irish Interparliamentary Body on a unified, all-island approach to energy supplies, particularly electricity and natural gas. We discussed the interconnector gas pipe from Scotland and a North-South electricity connector. The greatest impediment we faced was not engineering or commerce, but the real possibility of such links being blown up during or after construction. Thankfully we have moved from that situation to one where we can do what is needed for people North and South and, by working together, minimise the wholesale cost of electricity and offer alternative gas supplies. It will allow users to shop around and encourage value for money driven initiatives among energy providers. We saw the value of this approach in the telecoms market, with the increased competition and cheaper prices when the market was opened up.

The energy debate in Ireland is framed within the context of the need for a common European policy, availability of supply and the control of such supplies. Those are among the serious concerns being addressed by the Minister in this Bill. The recent stand-off between Russia and the Ukraine over gas supplies demonstrates the potential seriousness of this issue and shows how those with supplies can control matters for those who remain dependent on them.

Under various sections of the Bill, the Commission for Energy Regulation will be equipped with increased powers. The independent regulatory body will play a significant role in implementing the provisions set out for the gas market and the facilitation of competition in the electricity market. The CER will be responsible for the registration of electrical contractors and gas installers and will be empowered to inspect works carried out by these registered members, review training procedures and suspend or revoke membership for unsafe or unsatisfactory work. It will also have greater powers in the area of public safety, an important aspect of the Bill.

I recall the change-over in Cork city from household gas to natural gas. There were dangerous incidents, with footpaths glowing as a result of flames burning underneath because full engineering consideration had not been taken of the cleansing power of natural gas, which wiped away the old lagging used in lower specification household gas pipes. I am glad there is now total control over safety. The commission will have some say over the level of gas in the Mayo pipeline. We need a permanent, independent governing body to monitor such situations.

The British and Irish Governments are committed to achieving a market that allows for mutual advantage in terms of pricing and security of supply. We must ask if the two energy markets on the island are better off operating as two small entities or should they come together and operate together. Many of us have argued for years that health, tourism, fisheries, agriculture and energy would benefit enormously from the latter approach. I co-chaired the interparliamentary committee which dealt with the energy issue in the early 1990s. It was obvious that great benefits could accrue from such co-operation. Studies would have been carried out for our benefit and we would have received information which was not released to the public. It showed how crazy the situation was, involving as it did the detouring of the gas interconnector, which involved putting elbows into it to take it away from the danger zone and moving it miles at considerable cost, as well as pylons which could not be constructed at the time. There are considerable benefits to be had from working closely on an all-island basis.

Effectively, this Bill also means that domestic users of gas will benefit from the liberalisation of the market, which has, to date, been enjoyed solely by industrial and commercial agencies. I can draw on my previous experience in Irish Steel, which saved more than £100,000 per week by simply shutting down for ten or 15 minutes by agreement with the ESB at a given time. This shows the type of benefits enjoyed by industry but not by ordinary households. The Bill also affords us a platform on which to look at the energy market in Ireland more closely and gives us a chance perhaps to widen the debate and look at alternative energy sources to counter our dependence on imports.

One need only look outside the front door most days to realise the potential of wind power. Spain is an EU leader in this regard and if it can use wind power, we can certainly harness coastal wind power in a better fashion and utilise it more efficiently. Apart from being a more environmentally friendly way of providing energy, wind power would allow us to play to our natural strengths. We must examine, as a matter of urgency, the objections to wind farms to see what can be done to ensure there is no valid reason for people to object to them. Many issues, some of which arouse emotions, such as the future survival of a species of bird, have been drawn into the argument. Many of these arguments have not been tested but we must test them to find out whether there are valid objections to wind farms.

Biomass, energy crops and tidal power are also alternatives which we should actively examine and consider for our future needs. There is a tendency for some critics to ridicule any suggestions in that regard. They usually say that these sources could only supply a fraction of any power required but if this is the case, we should utilise every possible source and unit of power to lower our dependence on other suppliers. These small numbers of units will mount up if they are properly utilised and put together.

Some years back, Cork City Council harnessed the outlet of methane gas from the former landfill site at Kinsale Road. This source now supplies the equivalent of the needs of approximately 1,500 houses. It is an old question as to whether we wait to curse the darkness or work to gain that one candlewatt of power. When looking for alternative sources of energy, we should concentrate on our strengths, whether they are the sources to which I have referred or any alternatives available to us.

When it comes to alternatives, some sectors are adding fuel to the fire by talking up the potential of nuclear energy. The fact that this year we are commemorating the 20th anniversary of the worst ever nuclear disaster in Chernobyl in 1986 means we should tread carefully in this regard. We should bear in mind that the Government is also battling to close down the reprocessing plant at Sellafield which itself has plans for expansion. Nuclear power does not appear to be the logical way forward and if we work hard at our alternatives, it should not be necessary.

People are now much more aware of their responsibilities towards the environment. This awareness is obvious from the high take-up of recycling and other such waste management schemes. There is also a growing consciousness of the need to be more efficient when it comes to the whole spectrum of energy sources, such as gas, oil, electricity or coal, which is why alternatives should be examined in the same way that recycling has overtaken landfill as the preferred way of dealing with waste.

One alternative which has become caught up in the question of large-scale incinerators is the option of converting waste to energy. Individuals who mention this option are almost demonised. Commentators, some of whom do not appear to be very knowledgeable about the issue, tell us that it would be an environmental disaster if any waste were to be burned. I admit to having a limited knowledge of the environmental and engineering aspects of the topic, although I worked for 20 years in steel-making which involved using the largest ever incinerators. However, I would not set myself up as an expert on the topic. I have tried to talk people down in respect of it.

I was interested to read in the Irish Examiner last week that Matt Murphy, of Sherkin Island fame, suggested such a course of action. I understand that he was not referring to massive multi-thousand tonne incinerators but that he believes there is room for waste-to-power projects. Of all of the commentators I have listened to or read on environmental matters, Matt Murphy is the one to whom I would listen most carefully. In addition to his excellent work at the Sherkin Island Marine Centre, Mr. Murphy was caring for our environment long before it became a popular topic. Those who would question the motivation or integrity of the rest of us would do well to listen to him when he puts forward such a suggestion and listen to his views on the subject. All his life, he has been willing to walk the walk rather merely talk the talk in respect of the environment. His commitment to the environment is legendary and his work speaks for itself. He is politically unbiased. When he gives an opinion on an environmental issue, it behoves people to listen to him.

I briefly discussed the topic with him at a social occasion and following the publication of his comments in the Irish Examiner. He told me of his grave concerns about the cost of transferring waste paper and other materials and the mountain of material on our hands and of his belief that there is room for a waste-to-energy facility and outlet in this country.

This issue should be teased out and discussed, particularly in view of Mr. Murphy's comments on it. He has never been known for floating topics simply to get a newspaper headline. He has always examined issues in depth. He believes the present method of recycling is unsustainable. The costs involved in transporting material, the considerable storage problems, the continued need to put much of the residue into landfill and the fact that the mountain of material now finds fewer sources for alternative use must be examined. We need an honest and open debate on the issue. There is a considerable range of possibilities but we must be honest about it and address any difficulties which arise.

It is easy to oppose everything but we must be honest about this issue. It is far better to examine any problems associated with recycling and related energy issues before they become insurmountable rather than ignore them on a point of principle. I stress that most Members from all parties in this House are opposed to super incinerators and super landfill sites. However, we must examine this question and some of our current practices.

On 4 April 2006, Forfás launched its oil dependency study. This is a baseline assessment of Ireland's oil dependency and key policy considerations in this regard. To put it bluntly, the report makes frightening reading. Ireland is one of the largest users of oil per capita in Europe. Obviously, it does not have any independent supplies and, as an island, must transport all its oil. I was involved in the construction of the original refinery in Whitegate and continued to take an interest in it. However, we do not appear to support early initiatives. We need to think 20 years ahead, an approach taken by the Minister in this Bill and in respect of this issue. The Minister has been willing to stand up and say what he believes is right rather than what is popular. It is essential that the Government does this. If I were in Opposition, I would take a different tack on various subjects and might take the populist route rather that the accurate or futuristic route. We must be honest about our needs and what we are doing. The Bill relates to one niche in the market and will stabilise some of the situations with which we have been dealing. I hope a better future in respect of energy will arise from this debate.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Tá áthas orm deis a fháillabhairt ar an mBille Fuinnimh (Forálacha Ilghnéitheacha) 2006. Ba mhaith liom mo chuid ama a roinnt le mo chara, an Teachta Gogarty.

Is ceart féachaint siar agus ansin chun cinn. For many years, we have known about the limitations of the types of energy we use. Media reports date back decades and 1973 was the start of a real debate on the finite nature of the energy sources on which we depend. The significant increase in demand corresponds to some extent with population increases. Between 1860 and 1991, the world's population increased by a factor of four but the use of inanimate energy increased by a factor of 93. This is unsustainable and the issue must be dealt with.

It is neither popular nor politically expedient to set out all of the answers but it must be done. If this case is to be argued, skilful political debate is required because we are discussing the future well-being as well as the current well-being of people living on this planet. While the extraction of crude oil has doubled in each decade, the basic understanding of what needs to be done requires more education and energy literacy instead of technology. My colleague, Deputy Gogarty, is the Green Party's education spokesperson and has regularly spoken about literacy but energy literacy is not prominent in our education system. We are busy getting the other types of literacy up to standard. However, energy literacy is becoming more important.

This is a considerable issue. The earth is nearly 5 billion years old. In that time, solar energy has beamed down irrespective of whether it was used by or suited people when they came along. It has been trapped in some ideal conditions. Today, we use it as oil, coal and gas. Effectively, a large battery or storehouse of solar energy has beamed down over millions of years. If we believe we can replace this accumulated store of energy with oilseed rape, windmills or the other 21 types of renewable energy technology available, there is a fundamental mismatch in our mathematics. That intense energy, which we use as oil or kerosene to get large aeroplanes into the air, has accumulated over millions of years.

Unless we wait another several millions years for more to accumulate, we must change our way of living. However, we have engaged in an orgy of energy use. The fact that the energy was there and will remain for a time, albeit in increasingly small amounts, has produced an addiction to its consumption. We have taken it for granted. This is the problem that politics must face. Partly due to energy illiteracy, the denial of this addiction, which is known as agnosia in terms of people who suffer strokes but do not recognise their symptoms, is a problem.

We find ourselves listening to debates on nuclear energy and statements to the effect that it will still our addiction and help us along. However, the supply of uranium, on which nuclear energy depends, is also finite. People say that it can be reprocessed, but this leads to the additional problem of significant waste in liquid form. Not only the current generation must deal with it, as it has a half life of 250,000 years. What type of legacy is this? Where is the morality and what can be said to justify that legacy? It is deeply selfish to consider it as an option. It will not even address our energy needs in terms of transport, our fastest growing energy demand sector. Significant costs in terms of waste, security, construction, the transportation of nuclear material, decommissioning and insurance — as Deputy Dennehy mentioned, this might mean the cost of accidents such as occurred at Chernobyl — make this option unaffordable and immoral irrespective of its environmental impact or the effects of radiation, such as cancer.

We have a choice. Do we use money to go down that dangerous and expensive road or do we spend it more cost effectively on insulation? I am proud to say that my area's local authority has been leading the national debate on energy insulation and has doubled the number of new energy efficient houses in its development plan. It has passed the point that Sustainable Energy Ireland believed we could reach. I am beginning to sound like the introduction to a "Star Trek" film.

Fingal County Council is pushing the frontier in terms of energy insulation by requiring a 30% renewable energy component in new housing in Balbriggan north-west, Ballymun and other areas. The Minister has acknowledged this requirement, which should be replicated around the country. That is beginning to be the case but it should be done as the norm rather than as the exception. It highlights the fact that we must plan for a post-oil economy. For example, every roof space should have solar panels and every house should have maximum insulation.

The Bill addresses the powers of the Commission for Electricity Regulation, but that is only a small element in facing our energy challenges. The situation must change. It is interesting to read in New Scientist and other scientific journals that if we were to burn all of our current energy resources, there would be a climate change of disastrous proportions. It is not a matter of finding the last drop, as Deputy Dennehy said. From the points of view of world security and health we cannot afford to burn that last drop.

The Green Party has tried to get all parties to work in the same way as social partnership. This matter goes beyond the term of a single Government and ensures that we set ourselves the targets that 50% of all of our energy will be derived from non-fossil fuel sources by 2020, which could be made more achievable through reducing energy demands, and that we should be totally oil-free by 2050. As the situation will grow worse, I hope we do not wait that long before reaching that target. Sweden has aimed for 2020 in this respect.

These targets are not overly ambitious. Rather, we are trying to be realistic, pragmatic, scientific and responsible in our long-term planning. As a country we are becoming less competitive and one of the main reasons for this is our 90% dependency on imported energy. That has to change.

We cannot wait for the oil to run out. The permafrost in Siberia is melting, releasing enormous amounts of methane, which is 20% more powerful than carbon dioxide. The Gulf stream has slowed down by 30% in the past 50 years. The warning signs are already clear. We must create a solar society and communities where people walk and are not oil dependent. We must also develop clean energy sources, intermediate technologies during the transition from fossil fuel use and reusable energy resources.

The "waste to energy" tag is used in an attempt to sanitise incineration and make it more acceptable to people. However, people in the recycling industry are aghast that the tag is not challenged in trade description. If one was serious about generating energy from waste, one would re-use the material rather than burn it. Once it is burnt, it must be replaced. It takes twice as much energy to replace PET plastic, for example, as is generated from burning it. In that sense, one is wasting energy by burning waste material. It is a lazy, stone-age methodology and no matter how manybells, whistles or filters on an incinerator, it is essentially a method of waste disposal that should have gone out with the Ark. We must be serious about energy literacy so that we are not using terms like "waste to energy" when we mean "waste of energy" and that argument stands up to scrutiny.

While I appreciate that today we are dealing with the Department of Communications, Marine and Natural Resources, every Department must become involved in this area. The agriculture and education sectors, the health sector in terms of the energy we use in our hospitals, for example, will be affected by high energy costs. I urge the Minister to develop a cross-departmental approach, similar to what is happening in Sweden and, as a former Minister with responsibility for the environment to encourage all local authorities to adopt the same standards as those set by Fingal County Council.

Photo of Paul GogartyPaul Gogarty (Dublin Mid West, Green Party)
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My party leader and Deputy Eamon Ryan have eloquently and cogently outlined the energy crisis and the lack of a meaningful response from the Government. I will focus on the issue of gas safety, which I have raised in this House before. I welcomed the statement on 3 February 2005 by the Minister of State, Deputy Killeen that the Energy (Miscellaneous Provisions) Bill would deal with all of the safety issues. However, having studied the legislation, I see that this is not the case.

There are sections of the Bill which I welcome because they will go some way towards improving the situation with regard to gas safety from now on. Section 11, which proposes to insert the new sections 9F to 9K, inclusive, in the 1999 Act, provides for a fine of €5,000 for a person who is not a registered gas installer or, on conviction on indictment, a fine not exceeding €15,000 or a term of imprisonment not exceeding three years. I welcome this because it sends out the message that cowboys will not be tolerated.

I am concerned about the issue of the discharge of duties. Under the proposed new section 9K, the commission "may appoint persons to be gas safety officers" for various purposes. I hope the Minister will consider replacing "may" with "will" or "shall" because it is important that gas safety officers are appointed. We also need to know how many such officers will be appointed and the funding that will be provided to allow them to discharge their duties. Otherwise, the situation will be similar to that pertaining to the Department of Education and Science, where an Educational Welfare Board is in place but only a fraction of its staff are working on the ground, discharging the board's statutory remit. We must ensure that if rules, regulations and strict fines are in place, we have the required number of personnel to tackle the cowboy operators. There is no evidence in this Bill that this will be the case. Giving powers to commissions allows Ministers to pass the buck in terms of answering questions in the Dáil. If I ask the Minister a question in the future on gas safety, he will say it is a matter for the commission. As an elected representative, I have no way of influencing a commission so the legislation enacted must enable me and other Members of the Oireachtas to raise with the Minister issues relating to how operations on the ground are progressing.

I was thrown out of this House on a previous occasion when I raised the issue of gas safety. The proposed new section 9H states that "The Commission, having consulted with such persons as it considers appropriate, and with the consent of the Minister, may by regulations designate a class or classes of gas works to be designated gas works". Again, the word "may" should be replaced by "shall". I hope the commission and the Minister will make sure that a triple lock mechanism is put in place to ensure that any cowboys are dealt with from now on. However, I am more concerned about the cowboys who have been operating up to now. As I have argued before, and my comments during the adjournment debate on 2 March this year were accidentally misrepresented, the Government must order a nationwide audit of domestic gas installations from meter to house. This is necessary because a considerable number of gas installations do not conform to IS 813, which clearly states that the gas pipe must be properly insulated, both inside and outside the house. Such insulation has not happened and is still not happening. I have been informed that there are gas installation works currently under way in a housing development at City West where the proper insulation standards are not being met. Some operators may not be adhering to the standards through ignorance, but ignorance is no excuse.

When I raised this issue on 2 March, the response from the Minister of State at the Department of Enterprise, Trade and Employment was that "the Minister has been advised by the Department's chief technical adviser and by Bord Gáis Éireann that as the pipeline contains gas, not a liquid, there is no requirement for thermal insulation on any pipe work from the meter to the House". That advice directly contravenes IS 813, which states that insulation from the meter to the house and within the house is required.

Most types of concrete will eventually corrode a gas pipe and nobody has ever denied that fact. Representatives of Bord Gáis Éireann said on TV 3 that this might only happen to a small number of pipes. No one, either inside or outside the House, has ever shown me scientific proof that concrete does not corrode the copper in gas pipes. There are tens of thousands of houses that are not properly insulated to IS 813. Some of the pipe work will eventually corrode. Some people will be lucky and that will not happen, but it is a lottery of life and death. Some of the pipes will corrode and when they do, the gas will escape and find the quickest way to the surface. If it is outside, the gas will travel under the concrete and may end up inside the house. If it is already in the house, it will build up to a certain quantity and if the oxygen content in the air is at the correct level, the gas will explode.

If the provisions in the current Bill are implemented properly, the Minister may stop the cowboys in the developments that are taking place right now, but what does he intend to do about the houses that have already been built, where the gas pipes are not insulated? I have called for a nationwide audit so that every householder knows what the situation is with regard to the gas installation in his or her house. Even if this was only done on the pipe work from the meter to the house, that would be a step in the right direction with regard to safety. Otherwise, perhaps in five years' time in an older house, someone will burn to death in an explosion caused by leaking gas. If the Minister does nothing, it will be his and the Government's responsibility because they are supposed to tell Bord Gáis to implement the regulations and, if there is a problem, to deal with it. It may try to hide it and the issue has not been covered by the media for whatever reason but scientific evidence shows that concrete corrodes gas pipes and that gas pipes are not installed with the proper insulation. I hope it is not the case that someone will die and that, instead, the Government will take cognisance of the threat to people.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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On a point of information, the Deputy mentioned a response given to an Adjournment matter he raised may have been inadvertently misleading. I acknowledge the fact there was a misunderstanding about the terms of the Private Members' motion and I will ask people to correspond directly with the Deputy to correct it.

1:00 pm

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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I welcome this opportunity to speak on the Bill. It also gives Members an opportunity to speak on the broader issues of energy, conservation and how we progress as a nation. Interest is shown by the number of speakers on the Bill. Many people alluded to the problems this country and the world will face in years to come because of our dependence on fossil fuels.

While I acknowledge the major concern which now exists, much of it is driven by financial reasons and the fact that the price of oil has substantially increased in recent times. It seems like it is set on an upward trend. That has concentrated people's minds which, in itself, is positive because at least it encourages people to examine alternative ways of addressing the future energy crisis.

Ireland has probably been very slow in understanding the need to move away from fossil fuels and our dependency on imports of oil and gas. Our consumption per capita would be judged as very dependent. We provided for hydroelectricity at an early stage of the State's existence, but we seemed to stop and gave no further consideration to innovative ways of delivering energy to the people other than importing oil without addressing other issues.

I must pose a question on energy consumption. If we oppose nuclear energy on moral and ethical grounds, is it right for us to import electricity generated in nuclear stations in other European countries? As a country, we highlighted our view that nuclear energy could impact on mankind for generations to come. However, we are willing to sit at home by our electric heaters and watch our televisions possibly using energy produced in a nuclear station in another part of Europe.

It is the same ethical principle as the arms trade. A neutral country which condemns the arms trade should not allow any company based in the country to get involved in that activity. A recent report recommended that Ireland should examine a nuclear option to address what will happen because of the future shortage of fossil fuels. We should debate that. Years ago we protested in Carnsore Point when it was proposed that we place a nuclear plant there. There is a strong feeling that we should not engage in nuclear power. We should debate whether it is ethically or morally right to purchase electricity. The liberalisation of the electricity market in Europe is becoming a very pertinent issue. While we condemn nuclear power out of hand, we are happy to use the energy from it generated in other countries.

This country has a great opportunity to develop wind energy, wave energy, solar power, biofuels and biomass. We have the innovation and we have built up an entrepreneurial instinct to come up with innovative ideas on the provision of alternative energies. Encouraging innovation needs assistance from the State on a number of fronts, such as tax exemptions or reliefs. We have major potential for wave and wind energy.

Regarding wind energy, we have a dilemma in that while it is positive from a position of protecting the environment from global warming, windmills and turbines have a visual impact on communities and scenery. Most wind energy projects seek planning permission in scenic areas on the western seaboard in high ridge mountainous areas. Guidelines and guidance must be brought forward on how one applies for planning permission for windmills and turbines. This should be given to local authorities and An Bord Pleanála. One regularly reads in newspapers that an application for a windmill or a wind farm has been rejected by a local authority or an appeal to An Bord Pleanála has been turned down.

If we keep turning down applications and do not allow wind energy to become part of the solution to the problem we face, it creates a poor base from which to start. We must have real debate on how we provide alternatives. I am sure if applications were made for wave and tidal energy, we would have similar difficulties. That refusal saps people's abilities to develop wind energy farms. I am not sure whether they must be placed on high ridges on the seaboard. In other countries they also seem to be near the coast.

We could come up with imaginative ideas which would protect us from our dependence on fossil fuels and, as important, protect the scenic amenities of the areas in which they are developed. The councils do not have the expertise or intimate knowledge to adjudicate on planning applications for large-scale wind energy farms as many planners deal with normal planning applications. Perhaps this could be included in the Planning and Development (Strategic Infrastructure) Bill in terms of a certain number of turbines.

We should be able to exploit wind energy but it does not seem to be getting off the ground as quickly as we would like. Much of it is owing to difficulties and objections at planning stage. I understand why people object. However, if we are to progress, we must have clear guidance. Perhaps if this debate leads to further debate, guidelines will be drawn up and local authorities will be instructed on how to approach them. If it is Government policy, An Bord Pleanála should be encouraged to support applications. We must also have balance with the sensitivity of scenic areas.

Previous speakers referred to solar power. I recently built a house and I must confess the only action I took to address dependence on fossil fuels was to ensure it had good insulation. Other than that, the traditional oil burner went into the garage and the traditional radiators went into the house. Local authorities should give thought to encourage the examination during the planning process of alternatives such as solar panelling on roofs and wood burning. A person submitting a planning application could be asked whether he or she is considering solar panelling, wood burning or other alternatives which are not fossil fuel dependent. That would at least make people aware. Often when people are building a house, they may be more concerned about their mortgage or the spiralling running costs that could come about. Long-term planning of how to heat the house and water may be far down the list of priorities. There could be some encouragement in the planning process for people to examine that option, and architectural and engineering firms have a role to play as well. The issue should be to the fore in the initial stages of planning a house or a scheme of houses.

Huge building projects are taking place with 80,000 units being built per year. Houses powered with solar energy or which have energy-saving measures built into them are few and far between, if one discounts the regulations they are obliged to meet anyway. The Minister has recently announced grants relating to greener homes, which is welcome. The issue should be encouraged. With many people, the priority is to construct the house and they may be struggling through a planning permission process which is laborious and tedious. They may be facing a big mortgage. and the idea of energy-efficient housing is far down the list of priorities.

The all-Ireland energy market is an area relating to issues such as the Good Friday Agreement and the need for cross-Border co-operation. We spoke of key areas, such as agriculture, tourism and infrastructural development, in that respect. Energy would clearly be a high priority. As time goes on, the liberalisation of the markets can only be beneficial to the consumer and it will ensure we are a cost-efficient economy. It will ensure we do not have spiralling fuel costs other than normal global rises. There would be no inhibiting factors in ensuring that we could get gas and electricity at the most cost-effective price possible in the open market. This has been a positive step and I commend the Minister on bringing this Bill forward and ensuring that we set up a commission to adjudicate on these matters.

I wish to refer to biofuels, an issue on which there has been much discussion in recent times. It was brought to the fore recently as a result of the closure of the Mallow sugar beet factory in County Cork. The question has arisen of whether beet can be converted into biofuels. I have a cutting from an interesting newspaper article from Spain entitled "Deadline is near for bioethanol wheat contracts". A Spanish company is producing bioethanol from wheat.

I have done some research on the Internet and spoken to some people who have a greater knowledge of biofuels than I. We should explore the use of crops such as wheat, oilseed rape and potatoes in this manner. We know definitively that we will run out of fossil fuels. If we had the foresight of knowing we were going to have a vibrant economy with large budget surpluses, we may have started our infrastructural development some years earlier than we did. Now we are trying to play catch-up.

With regard to future generations, we must become innovative and encourage the idea of biofuels. There are large tracts of land which are under-utilised because of surpluses and quota restrictions, etc. This is a key area which we should consider. The company in Spain, Abengoa, is even importing wheat for this purpose. It has been looking to the UK for wheat growers.

We must explore the area of biofuels, and I know the Minister is supportive of this and there is goodwill towards the issue. Any difficulties and obstacles to progress in the area should be lifted as quickly as possible to allow innovation and allow such fuels to become cost-effective. Speaking to people who are trying to develop biofuels, the biggest problem appears to be the economies of scale. These people need to reach a certain economy of scale whereby the producers can become cost-efficient and profitable in providing alternatives to fossil fuels.

Bus companies, Iarnród Éireann and others, such as local authorities with large fleets of vans and trucks for carrying out work, should be encouraged to use biofuels. Dublin Bus, for example, belches out fumes on a daily basis in the inner city. These key areas, where it is known that a certain amount of fuel had to be delivered to Dublin Bus or Cork County Council, for example, should be considered. These bodies could become innovative, investing their money and knowing that at least they have a good chance of getting a contract. They could reap rewards on their investment.

That is a difficulty at the current time. There is no point in discussing the matter unless we can get those economies of scale. Currently we have people scratching at the surface trying to develop the area but still caught because they cannot get companies to take on biofuels on a long-term basis. Cork City Council has been innovative in that area, and the park and ride buses which Bus Éireann runs for the local authority are run on biofuels. This is a positive step, although it is only a few buses. It is a start, but we must be really imaginative in encouraging local authorities and bus companies to use biofuels. Obstacles should be removed.

With regard to the Bill, previous speakers have mentioned the need to ensure safety in the provision of services, which is important. This Bill deals with certain aspects of that matter. While we have a liberalisation of the market, it is equally important to have a system in place which can monitor and ensure works carried out, with electricity or gas installations, for example, comply with certain safety standards. I am sure the Minister, those who drafted the Bill and everybody else involved knows this as an issue of concern. We do not want to alarm people, but the issue of safety should always be to the fore.

I commend the Bill to the House. It is clearly necessary in the context of what is taking place in Europe and the liberalisation of the electricity market in 2007. It is time for us to consider our dependence, as a nation, on fossil fuels and imports of oil. We may be hoping that, next week or next month, there will be news of a discovery of a huge oil field in some part of the world and that oil reserves will be there for another five, six or ten years, meaning there is no immediate need to switch to other fuels. That is just prolonging the agony in a way. If we are to be innovative and have a hands-on approach, we should begin to encourage the use of alternative resources.

I mentioned the issue of nuclear power earlier in the context of morals and ethics. We should have a debate on it. Many people speak emotively on the issue because of what happened in Chernobyl and as a result of the strong commitment we have had since the protests at Carnsore Point in the 1970s. We should find out more about the issue so that we can inform people about the concerns and have an informed debate. I am not stating I am in favour of nuclear power, as I have already highlighted ethical issues relating to its use.

An informed debate would also be welcome with regard to incineration. Incineration is often debated in an emotive way, and emotions can sometimes be irrational. We should have a genuine and informed debate on the matter. I support the principle of incineration because I do not believe that we can, as a country, continue to export waste to other countries. Following the polluter pays principle, we should deal with our waste. I am concerned that incinerators encourage people to burn waste that is eminently recyclable. I worry that, rather than reusing and recycling, people will go back to throwing everything in the bin to be incinerated. I ask the Minister to avoid feeding the monster of incineration, as has happened in other countries, at the expense of recycling, where people separate their waste into two or three bins to leave out on different days for the local authority or private collectors. Incineration is not designed to allow people to throw everything in the bin, eventually to go up the chimney. It should be used sparingly and only for waste that cannot be reused or recycled.

I commend the Bill to the House. I know the Minister is committed to biofuels and other alternative energy sources and that over the next year or two some guidelines will emerge on the issues to which I have referred, particularly on wind energy.

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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Like previous speakers I welcome this Bill and I am delighted to have the opportunity to make some points on the subject of energy. I welcome the main provisions of the Bill — to expand the functions of the Commission for Energy Regulation and to underpin its work on an all-Ireland energy market. There should be far more co-operation between both sides of this island and most of our policies should operate on a 32-county basis.

I also welcome the provision allowing emergency measures to be taken by ministerial order in the event of a sudden crisis in the energy market and the creation of an open gas market.

I will reflect on a number of issues. First, the Fine Gael energy policy is set out in a national plan for alternative energy in the future. It was criticised by a number of people, including the Minister. Sometimes we are criticised when we do not bring forward a policy. Then when we do the policy is criticised. As somebody who has a deep interest in energy policy I have not seen many policies brought forward by parties in the past, apart from the Green Party, but the Fine Gael policy was comprehensive. Just because we are in Opposition we do not agree with everything the other Opposition parties bring forward. However, we recognise good elements that deserve to be adopted if they can be of use.

The policy on biofuels should be taken seriously. With the diminishing role of agriculture and farmers leaving the land there is a major role for biofuels. For the first time the IFA is taking biofuels very seriously. The fact it meets with the Green Party on a regular basis to discuss energy policies reflects a major change in attitude on the part of the IFA toward that party. It is a new era and the proposals for biofuels in the Fine Gael policy warrant fair consideration.

It also deals with energy in the home. Solar energy is not considered to the extent it should be in this country. My home town football club in Kerry decided to install solar panels to heat the water in the dressing room and they work very well. I am encouraged that a number of other clubs in Kerry have contacted me to find out how they work and how effective they are. I recently asked the Minister to include in the capital development programme for national lottery funding a provision for the installation of solar panels, as well as dressing rooms, lighting, pitch renewal etc. Because of the cost and our huge dependence on oil and the general cost of electricity, solar panels have the potential to reduce clubs' energy bills. Perhaps the Minister will take the matter up with the Minister for Arts, Sport and Tourism with a view to securing grant aid for that purpose. Fine Gael proposes a number of grant incentives for people to install solar panels in houses.

The use of turbines for domestic energy needs is a practical way forward but there is a problem obtaining planning permission. Recently a person from Holland, where they have wind turbines everywhere and make effective use of them, inquired as to the possibility of a wind turbine to meet his energy requirements. When I inquired of Kerry County Council, the planning section did not give an enthusiastic response, despite the fact it has a positive wind policy. County Kerry designated preferred areas for wind turbines before any other area. I was taken aback by that response and, as a result of that policy, very few houses in the whole of County Kerry use wind energy.

The wind industry in Europe is currently worth approximately €30 billion and produces over 30,000 MW of power. Ireland is one of Europe's windiest countries but our wind resources remain largely untapped, and are likely to remain so in the future. The wind resource in Ireland is the envy of Europe. Earlier speakers mentioned what has been done in Spain. If any Member visited the Canaries he or she would see wind turbines on all the islands. Even now they are locating them on the hills, having previously had an embargo in that regard. We have never grasped the advantage we have with our wind energy, nor capitalised on favourable wind speeds, as they have done in other European countries. One of the reasons for that is that we are still very dependent on coal and oil which are, in a sense, the easy options. Also, because we cannot store energy we cannot make use of surplus energy, which is why the interconnector is so important. What is the current position regarding the interconnector? Unless an interconnector is provided, Ireland will never be fully able to capitalise on its wind energy resource.

I recently learned of a practical problem facing people involved in providing wind farms. The case in question concerned three farmers who propose to move into wind energy generation to earn additional income, as farmers are being encouraged to do. However, this is proving a difficult process. Having received planning permission and secured connection to the grid, which is fortunately close to them, the farmers in question are faced with the prospect of waiting for two years for the turbines to arrive. This is the waiting period for delivery of a turbine once an order has been placed, a long time given that technology and circumstances can change in the meantime. As the Minister is aware, an average turbine, which produces approximately 2.3 MW of electricity, costs roughly €1.8 million. This is a major investment particularly as one quarter of the cost must be paid up-front and no income is generated for two years.

Demand for turbines, which are manufactured in Germany and the Netherlands, is especially strong in the United States where all types of turbine are permitted. In Ireland, however, the rules appear to be more demanding in that only one turbine — a more sophisticated model — is compatible with the national grid. Has consideration been given to manufacturing turbines here to avoid the lengthy wait for delivery? Given that most products can be manufactured in Ireland and this country has a technological edge and several other advantages, we should be able to manufacture turbines. This question may not be directly related to the provisions of the Bill but Second Stage debate usually affords Deputies an opportunity to raise a wide range of issues. I ask the Minister to comment.

As regards wind energy, I understand planning permission has been given for facilities that would produce approximately 4,000 MW of electricity and average daily requirement for wind energy is approximately 4,000 MW. Is it the case that any farmer, company or other individual or entity who decides to enter the wind energy market will not be permitted to develop a project until 2013 because the grid will not accept further wind energy resources until that year? How does the Minister, who will probably be replaced in his portfolio within a year, possibly by Deputy Durkan, expect the wind energy market to develop?

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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He may end up as Leader of the Opposition.

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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As the Minister will be aware, yesterday evening the ESB announced plans to close Tarbert Island power station. This came as a major shock to everyone concerned, particularly the plant's workforce, because it had earlier been proposed to make a major investment in the station which would guarantee its role in electricity production until at least 2015. For this reason, while I accept the need to reduce Ireland's dependency on oil, I question the decision to close down the facility. Tarbert Island power station has a generating capacity of 620 MW of oil fuelled power. Yesterday, for example, it produced 500 MW of power, while on Tuesday, working at full capacity, it produced 625 MW of power. The decision to close the plant, therefore, strikes me as strange. As the Bill provides that the Minister may take emergency measures by ministerial order in the event of a sudden crisis in the energy market, I ask him to take an interest in this decision.

To give a brief history of the electricity generation station at Tarbert, the ESB purchased the 65 acre site for an oil-fired power station in the 1960s. The choice of location was based on the availability of deep water facilities for off-loading fuel oil tankers and an abundant supply of cooling water. Oil tankers carrying more than 80,000 tonnes of fuel have unloaded at the ESB jetty in Tarbert, which has a storage capacity of 250,000 tonnes of fuel. Such reserves provide security against temporary disruption and contribute to the national strategic reserves. The site's other advantages include its connection to the grid, the availability of major infrastructure and the fact that it is one of the best sites for a power generating station in Europe. Will the Minister comment on the strange decision to close the facility?

As a result of the closure of Tarbert Island power station, the locality will lose 129 jobs. While the employees concerned will be redeployed within the network, nevertheless the unit in which they work, which provides direct employment for 129 people, will be lost to the area which has experienced no State, semi-State or private development in recent years. Despite being acknowledged as one of the prime natural ports in Europe, the area has been largely neglected due to its lack of basic political clout — no representative from north Kerry has had ministerial responsibility for some time. In addition, as many as 200 people working with service providers, such as maintenance operations and suppliers of the restaurant, will also be affected by this highly questionable decision. I ask the Minister, who is in charge of the ESB, to review the company's decision and discuss it with a delegation from Tarbert as soon as possible with a view to finding a way forward. Failing a move to reverse the decision, Tarbert Island must be singled out for a new power station. Maybe that is what the ESB intends to do but we should hear the ESB's view on this matter. We have a prime site, strategically located with all the infrastructure in place, and with a connection to the national grid, which apparently represents 50% of the provision of a new station. It is in place with an abundant supply of water and is located in what could be the nerve centre of the future development of the mid-west region. A major review of this decision should be undertaken.

I welcome the opportunity to make some points concerning wind energy, having been involved in such a project. The issue of biofuels is important for the agricultural industry, as is the question of solar panels, although we do not seem to have any policy to promote solar energy.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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The jolt of increased energy prices, whether gas or oil, in the past year has served to focus minds on the conservation and renewal of energy as well as examining new ways of producing it. The controversy surrounding gas supplies through Ukraine was a wake-up call for everybody, demonstrating how interdependent we all are when it comes to energy supplies. Deputy Deenihan referred to the ESB's decision on Tarbert but, according to the same report, the Ringsend power station in Dublin may face the same fate. We need to examine that matter.

Yesterday's announcement by the British Prime Minister that he will pursue a nuclear energy policy with renewed vigour was unfortunate but he is free to make it. Given the renewed debate at national, European and international level, it is particularly appropriate that this Bill is being considered by the House. When enacted, the Bill will provide an important component in driving forward the Government's progressive energy agenda. In this context, I welcome the Bill and compliment the Minister for introducing the Second Stage debate.

At national level, we have been discussing the changing energy landscape internationally, including how to deal with the recent increases in oil prices, while striving to liberalise our national energy market. That will not be easily achieved and we should all be acutely aware that there will be winners and losers. Places like Tarbert could be among the losers.

With regard to competition, I pay tribute to this Minister and previous Ministers for working towards a more liberal energy market to allow an opening up of competition. We have new independent power plants in Mulhuddart, Galway and Shannon. I can speak with some knowledge of the one operated by Viridian at Huntstown, which is a fine, modern plant producing an important component of electricity into the national grid. There has been progress but as the slogan put it, "A lot done, more to do".

At European level, there have been discussions on the need for a common European energy policy. The Bill is timely, given Europe's dependence on a small number of external suppliers and security of supply issues, such as occurred in Ukraine. Increasing demand on fuel resources and concerns about long-term availability of supplies are driving the need for consensus on a wide range of energy issues. There are two sides to the energy crisis coin: supply and consumption. If we consider that energy is at the core of any economy, being vital to the way people live and work, it is imperative to put in place the proper structures to manage both our supply and consumption of electricity. The challenge can be ascertained from thriving emerging economies such as China and India. Europe has been somewhat complacent about energy issues for quite some time. Although Ireland is not unique in this respect, we have certainly taken our eye off the ball in terms of seeking alternative sources of energy and have been over-reliant on traditional ones. I will revert to that point later.

The Bill is significant in terms of energy supply and a key feature is a move towards all-island markets and electricity interconnections, which underscores the interdependency to which I referred. We must ensure that both economies on this island and all communities have access to safe, secure and sustainable energy supplies obtained through competitive energy markets. There is no doubt that this challenge can be met more effectively, and to our mutual benefit, if we work together. From my contacts with our parliamentary counterparts in Northern Ireland and Britain through the British-Irish Interparliamentary Body, I know issues such as an all-island energy market and the need for proper interconnections have come to the fore. I envisage that body will play a proactive role in the ongoing debate.

I welcome the fact that in the forthcoming national development plan there will be a concentration on all-island development, including all-island energy regulation and production. The Bill will provide a legal basis for the energy regulator, the Commission for Energy Regulation, to engage in the development of an all-island energy market. Such a project involves collaboration on issues ranging from improved interconnection, competitive markets and harmonised trading arrangements to generation adequacy, security of supply, sustainable energy and energy efficiency measures. No so long ago it was not possible to operate the famous interconnector linking North and South, but as a result of the peace process the facility is now functioning without fear of interruption. I hope supplies will never be interrupted again.

A milestone date of 1 July 2007 for a single electricity market North and South has been established. There is a long way to go in terms of how the two regulatory frameworks, North and South, will marry. Fortunately, there is extensive and wholehearted support for the all-island energy market and this legislation marks another step in that process. I hope that when the Northern Assembly and executive are fully functioning, with North-South bodies, we will see a renewed effort in this area.

The benefits of an all-island market are clear. This larger market will remove market distortions and minimise the wholesale cost of electricity. That is the objective which I hope will be achieved. There should be open and transparent competition at all levels and for all energy sources, including combined heat and power, and renewables. It will also mean a more stable and attractive investment location and provide a boost to the competitiveness of the wider industrial sector. There are times when we underestimate our capacity to avail of what is literally at our shores, doorsteps and mountain tops. I am referring to wave and wind power, to which I will revert later. Our natural gas and other resources should be fully explored and exploited. I compliment the Minister on his initiatives in this regard, including the current issue at Rossport in County Mayo. I hope that source of supply can be exploited safely and for the benefit of all, including the people of that hinterland, at the earliest possible date.

The major test by which the value of an all-island market will be judged is that energy users throughout the 32 counties are better off than they would be in two smaller markets. Clearly, that is a welcome development.

Another important aspect of the Bill is the redefinition of the energy regulator's role. At times, it seems the regulator's responsibilities have been in conflict with each other and the question is one of prioritising them. As a lay person, there have been times when I have not been clear about the regulator's policies and decisions. Unfortunately, until now, political direction could not be given. However, it is essential that there is political direction stemming from a coherent and agreed policy. The Bill allows for this.

Accessing electricity and gas within more competitive markets is another facet of our energy supply policy. The Bill includes provisions enabling the Minister to introduce the full opening of the gas market by ministerial order. Benefits of liberalisation have previously been enjoyed by industrial and commercial consumers, a point that has been undersold. It is a few years since liberalisation was introduced. When one talks to significant employers throughout the country, they are very conscious of the benefits that have accrued to their companies from this new approach. The opening of the market has benefited customers by broadening customer choice and already some 42% of the market is supplied by independent suppliers.

There is now scope for all customers, household and non-household alike, to seek out keener prices in the competitive market, which must be welcomed. While the process is more difficult than the telecoms industry shifting from one telecoms provider to another, nonetheless, a clear policy needs to be established by Ireland, on its own and within the European Union, to facilitate a greater level of competition leading to reduced prices in a more competitive market.

As many speakers have noted, the dominance of the ESB is a major hurdle to true competition. The all-island market will deal to some extent with the dominance of the ESB, as will other sectors of the market. I welcome that the Bill provides that some utility other than the ESB can provide interconnection facilities. It has been suggested the market is so small that there may not be a great take-up for this, but I do not agree. If there is the environment, the take-up will follow. Independent energy companies are keen to provide this and I hope the Minister will be favourably disposed towards it.

We must take strong action and take care how we proceed on the question of dominance. Airtricity has indicated that the market is not viable and we must take its reservations seriously. The question of regulation, which changes so often, and the lack of a coherent policy make it difficult for companies to conduct business here, or so they suggest. I hope the Bill, by providing policy direction from the Minister, will facilitate progress in this area.

Through rationalisation of functions in regulation and system operation, the Bill also aims to bring about more efficient and secure energy generation. In doing so, it will undoubtedly result in longer-term savings, including in rationalisation and consolidation.

The Bill includes provisions to enhance further the safety of energy consumers and the public, ensuring Ireland continues to meet international best practice in respect of electrical and natural gas safety. When one considers the horrific incidents near Lagos in Nigeria last week, one realises how serious we need to be in terms of safety.

The regulator has been given robust new safety functions which include the regulation of electrical contractors and natural gas installers. Considerable progress has been made in this area but further progress is necessary. Thankfully, we have passed the stage where we had a fair number of — I am sorry to use the phrase — cowboy operators in this area. I compliment organisations such as RECI which have done a great deal in the area of self-regulation of the electrical industry. The regulator has also been granted additional powers to ensure rigorous enforcement, including the power to designate safety supervisory bodies, as well to establish standards for training and registration, introduce certification schemes and prosecute rogue installers.

In the current environment, where there is high employment and many new employees are coming to our shores to work, it is imperative the highest safety standards apply to all. If this necessitates the introduction of multilingual training and safety programmes such as those run by the Health and Safety Authority on construction sites, for example, that should be done. As that process has possibly begun, the House will forgive me if I refer to what is already happening.

While the Bill will bring about very real and welcome benefits, it is certainly not the answer to all concerns surrounding the energy issue. For example, although we are making progress on improved energy supply in terms of electricity and gas, there has not been enough progress in the adoption of new technologies. We all realise that we will be playing catch-up. However, if we invest in a targeted way in research and development, we probably can catch up. The Institutes of Technology Bill which was before the House yesterday will enable the institutes of technology sector to become more engaged in research in that area. I realise they already have some involvement in this regard but the institutes are not a significant actor like the mainline universities. This research should be spread more widely into the institutes of technology sector.

We have not provided enough encouragement to the wind energy sector. We often seem to be taking two steps forward and one step back in terms of encouragement and discouragement. I appeal to the Minister to do all he can to radically encourage a dramatic increase in supply from the wind energy sector. Today's weather forecast anticipates that there will be wind speeds in the region of 100 km/h before evening. Perhaps we should be battening down the hatches. I note that Deputy Durkan is already looking concerned about the prospect, although I do not want to be facetious. A resource is available and we ought to be able to exploit it. When one considers that the Danes produce approximately 20% of their energy requirements from wind energy, there is no reason Ireland cannot do the same.

Another under-exploited area, given that the west has some of the most spectacular waves in the world, is that of generating energy from wave power.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We are good at making waves also.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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The Deputy can never resist the temptation to laugh at his own jokes.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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It would not be because of the material coming from the other side of the House.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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We should exploit the resources we have. While we are playing catch-up, let us try to make use of wind and wave power.

Some of our problems in this area arise from the moratorium placed on the wind industry by the regulator in December 2004, the results of which we are only now experiencing. We need more radical proposals before the House to encourage not only wind energy but also the solar, ethanol and biofuel sectors. A caller to a radio programme this morning suggested he was interested in installing solar panels in his house but to buy two panels would cost €4,000 and to install them would cost more. We need to consider new ways, and the Minister for Communications, Marine and Natural Resources and the Minister for Finance have——

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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The grant is too small.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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Grants are rarely the issue. Rather, it is the selling and marketing of the idea that is important.

On the consumption side, we must continue to do more to reduce our dependence on natural fossil fuels. The Government is doing much in the competition sector but it needs to do more in the consumption area and needs to encourage, by subsidy or otherwise, the use and production of alternative fuels. Progress has been made in the past two years. Everybody from George Bush up, or down, depending on one's point of view, is proposing all sorts of plans to exploit renewables. More research should be carried out in this area. From my limited knowledge in this regard, I am not convinced, for example, that sugar beet can be exploited as a major provider of energy — I understand Fine Gael proposes this in its energy policy document.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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We do. However, inspiration from the other side of the House is sadly lacking.

Photo of Pat CareyPat Carey (Dublin North West, Fianna Fail)
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When ideas are brought forward, they should be well rehearsed because there is always a danger that we might rush in and suggest something that is not fully worked through. My understanding, from those who claim to know of these matters, is that the suggestion that sugar beet could be a significant provider of energy is exaggerated. I would not condemn anyone for suggesting the issue should be explored but we must seriously consider whether it is worth pursuing over a longer term.

Some progress has been made in this area over the past two years. In 2004, the Minister for Finance introduced a relief from mineral tax on pilot projects producing biofuel and testing the technical viability of biofuel as a motor fuel. In the most recent Finance Bill the Minister significantly expanded this provision into a five-year scheme for mineral oil tax relief to commence in 2006 and end in 2010. This will cost approximately €20 million this year, €35 million next year and €50 million in each of the following years. When fully operational, the relief scheme is expected to support the use and production in Ireland of about 163 million litres of biofuels per year.

The developing world is ahead of us in exploiting alternative energy sources. Brazil plans to become self-sufficient in the biofuel sector within the next five years and African and Caribbean countries are seeking to exploit sugar cane as an alternative fuel source.

Energy has shot to the top of the political agenda and will remain there for quite some time. Coherent energy policies are needed in Ireland and internationally. We have to develop innovative and efficient ways of developing new energy sources. I commend the Bill to the House.

Photo of Séamus HealySéamus Healy (Tipperary South, Independent)
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Speaking on this Bill, the Minister for Communications, Marine and Natural Resources stated: "This is a key statutory initiative driving forward a progressive energy agenda against a backdrop of a new global energy landscape with increasing demands on fuel resources." According to an explanatory note from the Department of Communications, Marine and Natural Resources, the intentions of the Bill are:

to expand the functions of the Commission for Energy Regulation (CER) to underpin its work on an all-island energy market;

to remove a legislative constraint to facilitate regulated electricity interconnection not owned by ESB;

to provide for the taking of emergency measures, by means of Ministerial Order, in the event of a sudden crisis in the energy market;

to confer power on the Minister to issue policy directions to the CER;

to provide for the regulation of the electrical contracting sector by the CER;

to make provision in relation to gas safety in the context of the new multi-operator environment;

The Bill also provides for other technical measures pertaining, for example, to EU directives and the Electricity Regulation Act 1999. While these measures are welcome, the Bill is minimalist at best. We need robust policies if we are to challenge the current difficult energy environment.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Hear, hear.

2:00 pm

Photo of Séamus HealySéamus Healy (Tipperary South, Independent)
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That environment has not come about overnight but has developed over many years. We have become more conscious of the challenge because oil and gas prices have increased significantly in recent times and have put huge pressures on commerce and economies throughout the world. Oil now costs $70 per barrel and will probably remain at that price or even increase, a prospect which will not be easy to manage. The dispute between Russia and Ukraine over the cost of gas brought home to us our dependency on fossil fuels. We need to take a broader approach to conserving energy and making best use of our known and potential energy resources if we are to meet the demands made by the cost of energy.

People of my age cannot easily accept that energy resources are finite and will not last forever. Some argue that more resources will be found or that the problem can be solved by means of interconnectors between North and South or between Ireland and the European Union, but that is not the case. Over the past century, the world's population has increased fourfold but energy consumption has increased one hundredfold. It will not be possible to continue to produce energy from a finite resource. As a matter of urgency, we should introduce energy modules into primary and secondary school curricula to ensure the population in generation and young people in particular are made aware of issues such as energy, conservation and environment.

A number of countries have set targets for reducing the use of oil and one Nordic country, Sweden, expects to be 50% oil-free by 2020 and completely oil-free by 2050. Deputy Carey referred to other countries which are almost self-sufficient in terms of biofuel production. We should set similar targets to reduce our oil and gas usage, conserve energy and diversify energy sources.

A number of energy sources were mentioned, including wind energy. I am surprised that a country like Ireland, which is surrounded by hills, has been slow in developing wind energy. Difficulties arise in respect of equipment, connections to the grid and the environment. Clearly, wind farms need to be sensitively built not to interfere with areas of natural beauty. However, they have the potential to grow and to give us a significant amount of energy in the future. They may also be a source of additional income to some farmers experiencing significant difficulties in terms of farm income. Wave energy should also be considered, given that we are an island nation, with seas all around our coast, and it has the potential to produce significant energy resources.

The issue of nuclear energy and fuel has been put back on the agenda this week by the British Prime Minister. Nobody in this House believes we should pursue that option. It involves major initial cost and there is serious downstream difficulty with reprocessing uranium, while the pollution issue rules the option out. Safety is another issue and this year we have the 20th anniversary of the Chernobyl disaster.

We should look at biofuels. It has been mooted that the Mallow sugar plant, now closed, could be used for the production of ethanol. While it may not produce significant amounts of energy, in a situation of finite energy resources and major energy costs, every new process that produces even a small amount of energy should be looked at and welcomed as part of an energy strategy and policy, particularly for a country such as Ireland.

In line with what I said earlier with regard to education, the energy question should be dealt with on a cross-departmental basis because it touches all Departments. All aspects of life, whether in the health or education services, roads or industry, are touched by the energy debate, energy resources and their cost. It is only by means of a cross-departmental approach that the real importance of the issue will be brought home, not just to us but to the country at large.

In the event of this Bill passing, I hope we will not have a situation similar to that in many other areas, whereby the Minister of the day effectively evades his or her responsibility by referring all Dáil questions and queries to the Commission for Energy Regulation. This is something we have most recently seen in the Health Service Executive and also with the National Roads Authority. Members of this House have found it impossible to get replies either from the Minister of the day or his or her Department with regard to those issues. I trust this will not happen in this instance.

On the issue of insulation and conservation of energy, while I welcome the grants for solar panels and so on, as introduced recently by the Minister for the Environment, Heritage and Local Government, they are inadequate and must be increased significantly. Insulation and conservation of energy are issues which must be tackled urgently. The building regulations could be used to do this. We need at least twice if not three times the recognised level of insulation in our buildings. That should be introduced by means of building regulations. It has been done in a couple of local authority areas and it should be done countrywide. The only effective way to do that is to introduce it by way of regulation or legislation, whichever is the most appropriate.

Photo of Seán HaugheySeán Haughey (Dublin North Central, Fianna Fail)
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I welcome the Second Stage debate on the Energy (Miscellaneous Provisions) Bill 2006. The Bill is comprehensive, dealing with a number of aspects of the energy sector. It provides for regulation on all-island markets, it deals with electricity interconnection, with gas and electrical safety, with the full opening of the gas market and the issues that arise from this. It also deals with the need for greater powers of policy direction for the regulator. A number of other emergency measures are provided for in the Bill. By any standards it is a comprehensive Bill and deserves a thorough debate in this House.

It is timely that we are discussing energy matters generally in the House, as energy is fast becoming a major political and economic issue and is now on top of our agenda in this House and on top of the Government agenda. I say that because of a number of factors. There is the issue of ever-increasing oil and energy prices. Currently, a peak in oil production is forecast. We also have the issue of the Kyoto Protocol and the need to significantly reduce our carbon and other greenhouse gas emissions. As Chairman of the Oireachtas Joint Committee on Environment and Local Government, I am very conscious of that problem. It is an issue that is beginning to catch the public imagination. Certainly, business is now familiar with the obligations placed on it to adhere to the national allocation plan and our obligations under the Kyoto Protocol. There is also the global situation with regard to the exponential growth in demand from China, India and other dynamically growing economies. It is obvious, therefore, that a debate on energy regulation and energy supplies is overdue. We must deal with these major issues now.

There has been much debate recently, and particularly this week, about nuclear power. The debate was initiated by the publication of a Forfás report on energy and by developments in the United Kingdom, particularly remarks by the British Prime Minister, Mr. Tony Blair, in advance of a consultation process in the UK on energy needs. The British Prime Minister has put nuclear power firmly back on the agenda in the UK and has expressed the view that the nuclear option is the way to proceed, having regard to the issues I mentioned.

We should reject many of the recommendations in the recent Forfás report on energy. We should reject the tone it adopted in recommending that Ireland develop a nuclear energy strategy. The Government and the Minister are strongly opposed to nuclear power. A Fianna Fáil-led Government introduced the Electricity Regulation Act 1999, which makes it illegal to produce nuclear energy in Ireland. Those who have suggested there are good economic or business grounds for pursuing the nuclear option need to look at the full picture.

We cannot sacrifice the future of the environment for current electricity demand. Neither can we allow the debate on nuclear energy to be hijacked by concerns about global warming and energy supplies, despite the recent decision by the UK Government to reconsider building new nuclear power plants. There is no justification for the adoption of a nuclear energy policy. The industry carries with it serious environmental, nuclear proliferation and safety risks. The Oireachtas Joint Committee on Environment and Local Government visited the Sellafield nuclear reprocessing plant earlier this year and what the members witnessed there was uninspiring and certainly would not encourage those who suggest we should pursue a nuclear energy policy.

It is the Government's duty to protect the health and well-being of its citizens. The introduction of nuclear power in Ireland would jeopardise this, despite the Forfás recommendation. The Forfás report ignores the real economic costs and the unsustainable environmental legacy for future generations. The solution would in the long run be worse than the problem.

The environment committee visited the Sellafield nuclear reprocessing plant. There have been many accidents during the years at the plant. The members of the committee were anxious to investigate the recent accident at THORP where a leak occurred but was undetected for a long time. I welcome the efforts of the Minister for the Environment, Heritage and Local Government to hold the authorities in the United Kingdom to account for these incidents. The Minister has been strong on this issue. In a press release earlier this month, he welcomed the decision of the UK safety regulator to bring a criminal prosecution against British Nuclear Group Sellafield Limited in respect of the leak at the THORP plant in 2005.

The members of the environment committee sought explanations as to why the leak was undetected and sought assurances regarding the response of the authorities at the time. We did not get those assurances. The decision by the UK safety regulator to being a criminal prosecution is welcome. I hope lessons will be learned from the incident.

The Sellafield plant continues to be a major issue for Irish people. It is a threat to our environment and to the health and safety of the people, particularly those living on the east coast. The recent RTE drama on this issue, while a little over the top, did some good in that it focused attention on the issue and on how we might respond to such an accident should it occur. The Minister is pursuing a number of legal actions under the United Nations Convention on the Law of the Sea. Following an initial legal action taken by the State, it has established a right to be informed of all events relating to Sellafield. A genuine dialogue and consultation is taking place.

I accept there are problems with the legal action initiated under the United Nations Convention on the Law of the Sea. We have received the judgment of the Advocate General of the European Union suggesting that this case should have been initiated in the EU institutions. The final judgment on this issue is awaited. We must be alert to that judgment and be ready to pursue every available option through the EU institutions to highlight our serious concerns about the operation of the Sellafield nuclear reprocessing plant. I have every confidence in the Government to deal effectively with this. In March the UK authorities decided to privatise the Sellafield facility, which raises concerns in Ireland. There is no suggestion that privatisation is automatically bad. We need, however, to be conscious of the structure of the UK nuclear industry and how privatisation may compromise health and safety in the operation of these plants. The UK Prime Minister, Mr. Tony Blair, has put nuclear power back on the agenda with his recent suggestion that ten new nuclear power plants be built in the United Kingdom. For Ireland, it raises concerns over which locations will be chosen for the sites. It seems several locations will be on the United Kingdom's west coast and the Wylfa site, particularly, is under discussion.

There are also concerns about the waste generated by nuclear power. That waste will be brought to the Sellafield reprocessing plant. When it comes to waste, nuclear fuel is not a clean option. The Joint Committee on Environment and Local Government viewed the highly active storage tanks at the Sellafield plant. It was an interesting experience to stand atop a large concrete silo and feel the heat on the concrete coming from the stored waste underneath in what I thought were like Guinness kegs. I could not wait to get out of that particular section of the plant. What can be done with nuclear waste in the long term? Should it be buried deep in caverns in the Irish Sea? Are we postponing the problem for several more generations? Although global warming raises concerns, the nuclear option also has serious environmental consequences.

There is also the issue of a terrorist attack on any of these nuclear power stations. While there are confidential exchanges between the Departments of Justice, Equality and Law Reform and Defence and the UK security authorities on the issue, it does raise serious concerns.

Yesterday was national biodiversity day. I congratulate the Irish Independent on the supplement it produced to celebrate the day. It contained a series of interesting articles on the subject that reflected on the fragility of our biodiversity systems and how they can be impacted upon. Energy is one particular factor which can greatly impact upon a system. There is more renewed interest in biodiversity.

I congratulate the Minister for the initiative he recently announced for the production of electricity from renewable energy technologies. It intends to double the contribution of renewable sources in electricity production to 13.2% by 2010. Additional capacity will supply the electricity needs of 260,000 homes. The renewable energy feed-in tariff programme will support the construction of an initial target of at least 400 MW of new renewable energy powered electricity generating plants.

I welcome the announcement earlier this year of grants for the domestic sector for renewable energy. Grants are available for householders who wish to install solar panels, wind generators and so forth. Television programmes by Duncan Stewart and others have demonstrated there is a large interest in this technology which has been underestimated by the House. Many people are installing these devices on their own initiative. I warn the Minister that there will be a huge take-up of the grants scheme and he may want to watch the financing of it.

This is an important Bill that has initiated a worthwhile discussion on our energy needs and I commend it to the House.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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I belatedly wish all Members a happy biodiversity day. I am surprised Hallmark has not already merchandised it and established an elaborate marketing scheme so we can all exchange biodiversity cards on the auspicious day.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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That is because there are no biofuels to make the cards.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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I am sure every fossil fuel available will be burned to produce millions of cards for the day. That is, however, a rather cynical analysis of the situation.

The Bill has been introduced at an important time when oil prices are high and renewable energy technologies are being improved. Challenges with planning and infrastructure are being addressed by the Planning and Development (Strategic Infrastructure) Bill 2006, which will be debated in the Dáil next week. The cost of renewables is much greater than that for oil and gas. The question is whether the gap can be closed and, if so, what can the Government do to assist in closing it. Although it is still cheaper for an individual to run his or her home heating off oil and gas, certain changes have occurred. When 2006 is considered 40 years from now, the offers of support for renewable energy sources may be described as quaint. However, they are on the right track and I am pleased with the Government's support for it. Ireland has a rare opportunity to take advantage of renewable energy sources because of our exposed position on the western seaboard of Europe. It has been said that Ireland could be the Saudi Arabia of renewable energy, which would be very exciting, we would all become sheiks and be very wealthy and have our own golf courses. It would be fantastic.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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That will happen under the next Government.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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All joking aside, Saudi Arabia experienced great wealth from oil but everyone is now saying we have reached peak oil point and it is now making its slow but inevitable exit from the energy market to be replaced by something else. If oil had not reached that point, however, there would still be a moral imperative to pursue renewable energy.

We have been here before. The oil price crisis in the 1970s saw huge amounts invested in renewable energy and quite a few people had their fingers burnt at that time. Many said they would never go near the area again and that it was a total waste of money. Since the 1970s things have changed. In the past year the price of oil has risen from $40 a barrel to $70 a barrel. Even when it was $40 a barrel, the cost of production of renewable energy was closing the gap in terms of efficiency. It is now attracting venture capital from the major energy companies such as BP and Shell, which are investing huge amounts of money in renewable energy. It no longer requires baby-sitting by Government regulation, it is attracting private investors who have seen the closing of the gap in technology and who have learned the lessons of the 1970s.

The unusual individual nature of the renewable energy sources, such as the variability in delivery of solar power because of cloud cover and the variable nature of wind power, caused problems in the past. There are now smart solar metres which charge on the basis of time of delivery and there has been growth in the size of wind turbines, steps forward since the 1970s. This technology is closing the gap, along with Government regulation and oil price rises.

Ireland faces a challenge. We are blocked by our NIMBY outlook, something of which we are all guilty. These changes are necessary. The planning and infrastructure Bill will fast-track some of the more important gas and oil projects that must be developed while we develop renewable energies.

The debate today has also touched on nuclear energy, particularly since the British announced their intention to expand their nuclear programme. Deputy Kelleher noted that we use electricity that comes from a grid fuelled by nuclear energy and asked if it is not the height of hypocrisy if we object to it on a moral basis. France has around 60 nuclear power stations and would not survive without nuclear energy. It is not far enough away that we would be immune to a terrorist attack on a nuclear facility there. The fall-out from Chernobyl in 1996 severely affected countries as far away from the Ukraine as Sweden. The threat from Britain is greater but the threat from nuclear power in other countries will not go away. We must consider that and see if we are posturing about this issue.

The same could be said about incinerators. Whatever the challenges about building incinerators around Ireland, trying to deliver a thermonuclear reactor in a constituency would be nearly impossible.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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We could build it in Dún Laoghaire.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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We have no space there. There are places elsewhere where I would be happy to support a nuclear reactor. However, I am only joking. On a visit to the Netherlands recently, a Dutch politician explained to me that 17% of the electricity in the grid in Amsterdam is a by-product of incineration. Amsterdam city council is run partially by the Dutch Green Party and the Dutch Labour Party. We might be behind our cousins in those countries.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Is there no Dutch Fianna Fáil Party?

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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I have always said the Labour Party is Fianna Fáil in disguise, a rump that never evolved in the same way as the rest of us.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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We might take the party over yet.

Photo of Barry AndrewsBarry Andrews (Dún Laoghaire, Fianna Fail)
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That is a philosophical question that might not be appropriate to today's debate.

Local authorities can play a role in this. Earlier this year we were the first country to auction carbon emissions and greenhouse gas allowances. Businesses were able to pay off their obligations. All small and medium size businesses should be told that if they make strides in terms of adopting renewable energy, they will be rewarded and encouraged. The local authorities collect commercial rates and should be able to offer a waiver for those businesses that adopt best practice in renewable energy. That would require a change in legislation but local authorities could use such an opportunity to make progress in the area.

I commend the Bill to the House.

Photo of Johnny BradyJohnny Brady (Meath, Fianna Fail)
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I welcome the opportunity to speak on this Bill. I compliment the Minister on the tremendous work he is doing in the Department of Communications, Marine and Natural Resources. Anytime I have requested a meeting, he has been forthcoming. Recently I have been in contact with the Minister's office about two groups from north Meath, one of which has put a great deal of work into wind energy in the area and another that has bought premises and will create jobs in alternative energy sources. I know that when the Minister receives the request, he will meet both groups. These groups comprise very energetic people who are prepared to put their money where their mouths are, do everything in their power to examine alternative energy and at the same time create jobs in north Meath, which would be very welcome.

The Joint Committee on Agriculture and Food recently discussed this issue in great detail. An official from the Department of Communications, Marine and Natural Resources gave an excellent presentation on energy at the meeting. The committee also heard from an official from the Department of Agriculture and Food and an official from Teagasc. I agreed to Deputy Blaney's request to hold a meeting on this issue because agriculture is changing so rapidly. The growing of biofuel crops is one of the topics discussed in meetings I have held with some of the farming organisations in recent months, both on behalf of the committee and in a private capacity. I welcome the fact that the farming organisations, particularly, the IFA, make considerable efforts to encourage their members to grow biofuel crops.

This is a wide-ranging Bill, which when enacted will play a vital role in driving forward a progressive energy agenda in a new global energy environment with ever increasing demands on fuel resources. A key feature of the Bill is a move towards an all-Ireland market. The Bill also addresses east, west, north and south electricity interconnection, which is a significant part of energy policy. Interconnection provides strong physical links with Northern Ireland and the rest of the UK and will integrate Ireland into a wider European market. The Bill removes a current impediment in law by facilitating regulated electricity interconnection which is not owned by the ESB and gives the regulator the power, with ministerial consent, to secure interconnector bills by various means, including competitive tendering, direct authorisation or through the transmission system operator.

The Bill provides the legal basis for the Commission for Energy Regulation to engage in the development of an all-Ireland energy market, with a date of 1 July 2007 set for the establishment of an all-Ireland single electricity market. This single market will, over time, remove market distortions and minimise the wholesale cost of electricity. It will also create a more attractive location for new electricity generation investment and help improve the security and reliability of electricity supplies throughout the island.

It is vital to ensure that both communities and economies have access to safe, secure and sustainable energy supplies obtained through competitive energy markets. There is no doubt that this challenge can be met more effectively to the mutual benefit of both parts of the island if they work together. This is particularly fitting when considered in the context of the regional approach to the development of energy markets being pursued as part of the EU drive to create an EU-wide internal market in electricity and natural gas.

The creation of an all-Ireland energy market involves collaboration on issues ranging from improved interconnection, competitive markets, harmonised trading arrangements, generation adequacy, security of supplies, sustainable energy and energy efficiency measures. A key priority is to establish all-Ireland wholesale electricity trading arrangements, while another priority is the establishment of an all-island gas market in line with the commissioning of the infrastructure. It is also vital to maximise the benefits of environmentally sustainable energy from rapidly maturing wind generation and the combined heat and power business through to the growing rural biomass energy industry and the future promise of substantial energy from the sea.

There is extensive and wholehearted support for an all-Ireland energy market. Sometimes, competing issues are involved and not all of the benefits can be achieved immediately. However, the long-term reward will be a market which is much better placed to meet the future energy needs of the island. Given that a cross-Border energy market already exists, there is an acknowledged requirement for us to ensure that policy developments both North and South are progressed in a way that advances the goal of improved economic and energy supply benefits for both parts of the island.

We must also act to ensure that policies are developed to exploit opportunities for enhancing the value of the energy industry in the island through external links with Great Britain and continental Europe. The energy policy agenda must be widened beyond traditional market development issues to take account of national and international concerns about combating climate change. More particularly, there is a requirement that we follow renewable energy and energy efficiency opportunities where benefits can be enhanced by acting on an all-Ireland basis. Market structures must be integrated and infrastructure investment secured to improve island-wide efficiencies.

Co-ordination is needed in the activities of the regulatory authority and transmission system operators. In the final analysis, it must lead to unified regulatory and system operator arrangements for the entire island which are geared to the delivery of measurable benefits. Energy issues are complex, frequently interconnected and often related to long-term investment decisions. One must also take into account the different stages of development between the electricity and natural gas markets and infrastructure. This means that achieving the most advantageous outcome for the entire range of energy policy issues will be protected.

The support, dedication and active co-operation of all stakeholders will be required if the benefits of an all-Ireland market are to be secured. Ministers North and South have confirmed that any policy, legislative, structural, institutional or resource issues that may arise during the course of implementing this strategy and unfavourably affect the development of the effective functioning of the all-Ireland energy market will be carefully examined and addressed in conjunction with the relevant agencies. The aim will be to pursue complementary actions as far as possible.

The test by which the value of a fully integrated all-Ireland energy market should be judged is whether users on both parts of the island are better off than they would be in two smaller markets that are mutually supportive good neighbours but trade together rather than systematically. The potential benefits of a mature all-Ireland energy market would include a large single market with competitive prices. There should be open and transparent competition at all levels and for all energy sources, including combined heat and power and renewable sources. It should also mean a more stable and attractive investment location. It should provide a boost to the competitiveness of the wider industrial sector. There would be a greater security of supply, an integrated infrastructure and a sharing of a more diverse energy mix.

Greater energy efficiency will undoubtedly result in long-term savings through the rationalisation of functions in regulation, system operation and transmission areas, asset planning and ownership. It will also facilitate greater consumer choice of energy supplies or services and enhance the organisation of energy research to allow for the emergence of an all-Ireland network of academic and industrial expertise. The Bill includes provisions to further enhance the safety of energy consumers and the public, ensuring that Ireland continues to meet international best practice in respect of electricity and natural gas safety.

The regulator will be given robust new safety functions, including the regulation of electricity contractors and natural gas installers. The regulator will also be granted additional powers to ensure rigorous enforcement, including the designation for the first time of electrical and gas safety supervisory bodies and the establishment of standards for training and registration, the introduction of certification schemes and powers to prosecute rogue installers.

3:00 pm

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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I thank contributors to the debate, the general tone of which I found to be constructive and positive. I thank Members for their welcome of the Bill's provisions and I welcome the opportunity to reply to those various observations. I was not available for the early part of the Second Stage discussion on 6 April and I formally thank my colleague, the Minister of State, Deputy Browne, for taking the debate. It has been a frank and open discussion and I look forward to a continued positive response during subsequent Stages of the Bill.

As Deputies indicated in their contributions, a number of the concepts in the Bill are of a technical nature. I hope the accompanying detailed explanatory memorandum was of assistance to Deputies in their consideration of the Bill and it will be helpful on Committee Stage. I welcome the overwhelming support of Deputies for sections 4 and 11 relating to safety issues and the regulation of electrical contractors and gas installers. I appreciate comments relating to the important work carried out by industry bodies such as RECI in providing for the self-regulation of electrical contractors. The Bill will considerably strengthen this area and will provide a firm and transparent legal foundation for such regulation, which all sides will welcome.

It was not long after I became the Minister for Communications, Marine and Natural Resources that I was lobbied by individuals involved in RECI and individual contractors who were concerned that regulations and objective standards on safety should be put in place. In the absence of regulation or a legal framework, it was difficult to tackle the issue of a small number of "cowboys" operating in this sector. They gave registered, good quality contractors a bad name and caused difficulties in the industry. The Bill's legal foundation for the sector's regulation will be welcomed by everyone.

I also appreciate the welcome extended by Deputies to section 6 relating to a proposed new ministerial power to issue policy directions to the CER. This is based on similar provisions in the Communications Regulation Act 2002. While it is intended to use this power sparingly, it remains a necessity. Such a measure will provide a mechanism for the political leadership mentioned by Deputy Eamon Ryan while also respecting the independent role of the regulator as mentioned by Deputy James Breen.

Crucially, the safeguard in and benefit of having this type of policy direction is the public consultation process associated with the development of such future policy directions. I also thank Deputy O'Flynn for raising this issue. It is important to have that discussion and make a decision in an open and transparent fashion.

Comments and criticisms have been aired in recent days, and over the last 12 to 18 months, when various applications were made for increases in electricity and gas charges and the Commission on Energy Regulation granted large increases to the companies concerned. Some of that criticism was based on the belief the commission was only looking at one aspect of the issue, that is, providing an economic return for the companies and trying to attract other competitors into the market. While I am not saying I agree with that criticism, it was expressed widely. People raised concerns about consumer protection, which is also a role for the regulator and one it has tried to balance with the competition elements of its remit. It is foreseeable that in future, depending on the operation of political leadership, a Government or this House might be unanimous in the view that the balance between the weighting the CER gives to issues like competitiveness as opposed to that given to consumer protection is wrong. The power provided for in section 6 of the Bill will allow the House and the Government to have a say on such matters, in an open and transparent fashion.

I wish to refer to concerns raised by various Deputies during the course of this debate, particularly those expressed by Deputies Eamon Ryan, Boyle, Durkan, O'Flynn and Coveney, many of which will be addressed by the forthcoming green paper on energy policy, which I intend to publish by the middle of this year. The general thrust of the statements made by Deputies on all sides was that there is a need to set out medium and long-term perspectives and directions for national energy policy and I strongly agree with that. It was for that reason that I set out on the route of drafting and putting in place an energy policy paper, shortly after I became Minister in the Department of Communications, Marine and Natural Resources, approximately two and a half years ago. There was not much discussion about energy policy on either side of the House at that time but energy is a critical issue and is inextricably linked to our economy and competitiveness.

I recently read a document on energy policy which was published in 1978 by a former member of this House, Mr. Desmond O' Malley. I will deal with nuclear energy later, but I noted there was also a debate about nuclear energy at that time. One of the fascinating elements of the document is how it dealt with the nuclear issue. I was surprised to note that the price tag in 1978 for a nuclear power station was £350 million, indicating that it was a very expensive way to generate power even then.

The green paper will set the debate in the context of the considerable and complex future challenges for Irish energy policy. It will take into account developments at EU level, including the recent publication of the European Commission's green paper on energy. It will also take into account the global trends. The paper will be open to people to comment upon and the whole policy development process will be finalised by the end of the year. There has been a considerable degree of discussion on various aspects of energy policy, particularly in the last 12 months and in that context, there is no need for a very long, drawn out consultation process.

With regard to renewable energy, we have spoken to various expert groups and a number of reports that have been, or are about to be, published will also inform the policy document. Deputies in the House, through the work they have done in the committees that shadow the Department, have made constructive contributions to the debate on the issue and their document will be a useful part of our deliberations.

Deputies Durkan and Broughan raised the question of the publication of the Deloitte and Touche consultancy report on the electricity sector. I intend to publish that report around the time of the release of the green paper. It is important that we have the wider energy policy document in the public domain before the specifics of the electricity document are——

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Will the report be taken into account in the green paper?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It will, generally, yes. Obviously it will set the context but it is extremely important that the wider energy policy is put in place and the framework is outlined. Within that framework, one important element is the electricity sector and the structures needed to meet the energy needs of the country into the future.

One of the important functions of the Energy (Miscellaneous Provisions) Bill is contained in section 3, which most Deputies have welcomed, and relates to the development of an all-island energy market. The single electricity market is scheduled to go live by 1 July 2007. That is obviously a critical milestone and intensive preparation has been under way for some time now, both North and South. I thank everybody involved in that work in both Departments, the regulators and others. It is extremely important, technical work and it is vital that we get it absolutely right.

In light of comments made by Deputies Broughan, Connolly and Kelly, I advise the House that work on the single electricity market is now well advanced, on a joint basis with our Northern colleagues. The successful delivery of the single electricity market by July 2007 presents an enormously challenging timeframe for all concerned and I wish again to acknowledge the work of the all-island energy market joint steering group, its official title, which consists of senior officials in the Departments and the two regulators, who are driving it forward. I am sure everybody in the House will commend them for the work they have done to date and will agree that such a co-operative effort is a good model for North-South co-operation. I firmly intend, notwithstanding any legal difficulties, to have the final text of that Bill published before the summer recess.

In response to comments made by Deputy Eamon Ryan and Deputy Coveney on section 7 of the Bill, I emphasise that security of energy supply remains the key imperative for Ireland and the European Union. The relatively small size of the Irish electricity market underlines the need for greater interconnection as a means of enhancing security of supply. It also underlines the importance of promoting competition and integrating the Irish electricity market into regional and wider European markets.

In that context, it is very important we refer to the prospects of the east-west electricity interconnector, as a number of Deputies did, delivery of which remains a key priority for the Government. The date consistently mentioned is 2011, which remains a key date for us. I will shortly bring proposals to Government on progressing that strategically vital infrastructure. There is now a willingness and interest in delivering it quickly for a host of reasons. Security of supply is important, and if we are to develop our renewables significantly, especially intermittent renewables such as wind energy, it is vital that we have an interconnector to assist in that.

A number of Deputies, namely, Deputies Broughan, Eamon Ryan, Catherine Murphy, Coveney, Cassidy, Neville and Fiona O'Malley, raised Ireland's potential for the exploitation of wind energy. I agree with the Deputies, particularly Deputy Coveney who remarked that to meet our collective ambitions for enhanced use of wind resources, the necessary infrastructure must be in situ. We mentioned the interconnector, which is part of that. Work to ensure the infrastructure is in situ is already under way.

I refer Deputies to the recent statement by the national grid which clearly indicated that we have doubled our renewable generating capacity over the past two years with 846 MW of capacity now fully connected to our electricity system. That is a significant increase over the past 12 months. We have more than 50 individual wind farms with 574 MW of wind capacity connected to the grid and a further 630 MW is fully consented with signed connection agreements. With all of that, we are well on our way to achieving our 2010 renewable electricity targets.

In the recent past I heard a Deputy, who is not present in the House, stating that is not ambitious enough and we should aim higher, and I agree. However, 12 months ago the same Deputy told us that we would not achieve the target. Now that he knows we will achieve and probably exceed the target, he immediately states we are not ambitious enough.

The ability to reach those short-term targets is welcome. However, I do not intend to limit our ambition to this and an additional 1,300 MW of wind projects was released into the connection process in recent weeks. That clearly underpins our commitment to developing this area as quickly as possible. People seem to think we could have an entire electricity sector based on wind power.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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It is very windy outside at the moment.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It is. I have not been outside since early this morning. In some cases when the wind blows too hard, it is not good for wind energy.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The turbines would take off.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Those who think we can meet all our energy needs from the wind or want to connect 20,000 MW of wind to the system should cop themselves on a bit. A balance must be kept.

Deputy Boyle referred to the new renewable energy feed in tariff, REFIT, programme, which was launched recently. This programme will assist developers to construct new renewable energy powered generating projects. The programme, which will cost approximately €120 million over 15 years, will ensure the viability of these projects by offering 15-year contracts to developers.

While wind projects will contribute the bulk of any new energy sourced, I want to emphasise the programme is also available to projects based on the use of biomass, hydro-power and landfill gas emissions. This represents a major step by the Government in delivering on Ireland's commitments under the Kyoto agreement. It is a good beginning and we will reach and exceed our targets. However, we must be much more ambitious. Given that this programme is a direct response to market demand for a move away from competitive tendering, I encourage project developers to seize this opportunity, and deliver projects quickly. Some earlier schemes did not deliver as quickly as we wanted.

On the wider issue of renewable sources of energy, Deputies Broughan, McEntee, Neville, Crowe, Finian McGrath, Catherine Murphy, Coveney, Connolly, Cassidy and Mulcahy stressed the potential of renewable sources of energy. The renewables directive obliges Ireland to develop and implement a programme capable of increasing the amount of electricity from renewable energy sources to 13.2%, or 1,450 MW, of total consumption by 2010. As I already stated, we will meet this target.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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What is the target for 2030?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Deputy must wait and see the policy document.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister will not be concerned about it. He will not be in Government then. He will be on this side of the House.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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He will be the Leader of the Opposition.

Photo of Pádraic McCormackPádraic McCormack (Galway West, Fine Gael)
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Will the Minister give way to a question?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The question has been asked and I have answered that the targets will be clearly laid out and we will be very ambitious and realistic. There is no point in being ambitious without realism attached.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is worth considering.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It is clear that the Government is strongly committed to renewable energy and underpins the commitment with significant financial support. The multi-annual financial package announced in the 2006 budget provides for up to €65 million over the next five years for renewable energy schemes. These include renewable heat, electricity and transport initiatives, and cover the gamut of renewable energy sources, including biofuels, biomass and combined heat and power.

Under this initiative, and in partnership with my Department, Sustainable Energy Ireland launched the greener homes scheme in March of this year. This scheme provides for up to €27 million in grant aid for domestic renewable heat technologies. I am sure Deputies will be pleased to know that this scheme is already meeting with considerable success. More than 1,150 applications were made in the first four weeks of the scheme and the figure is now well above that. A package worth €205 million has been set aside to provide for a ramped up excise relief programme for biofuels.

I share the sentiments expressed by Deputies that nuclear energy is not an option for this country. It has been the policy of successive Governments to oppose the use of nuclear energy. It remains the policy of the Government, as was recently reiterated by the Taoiseach. Furthermore, given that section 18 of the Electricity Regulation Act 1999 specifically precludes the use of nuclear fission for the generation of electricity in this country, only the Oireachtas has the power to change this situation.

A great deal of discussion has taken place about nuclear energy. Those who are most vociferous in opposition to it generally speak in terms of the possible environmental impact of nuclear energy if something goes wrong. That is a factor and the major issue in everybody's mind in opposing nuclear energy. This emerges from the well-known accidents which took place, such as the Windscale fire, the Three Mile Island accident in the US in 1979 and the accident at Chernobyl in 1986. Those accidents, particularly at Chernobyl, which was horrific, ruled out any expansion of nuclear energy for a long time. The fear of nuclear energy is still strong with many people.

There are other reasons for nuclear energy not being an option in Ireland. Nuclear energy is poor in economic terms compared with fossil fuel options such as natural gas. This has become clear as understanding increases of the costs involved in the long-term storage of nuclear waste products and the cost of decommissioning nuclear power stations. The costs of the fuel are very low, amounting typically to only 2% of the overall cost of generation. However, there are capital costs in maintaining power stations. I mentioned to Deputy Broughan earlier that in 1978, some £350 million would——

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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What would be the modern equivalent of that?

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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There would be an over-run.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Deputy could multiply the figure by three or 3.5. It would amount to well over €1 billion.

Taking the environmental aspects into account as well as the economic aspects, nuclear power is not all that good. In particular, to put a sufficiently large power plant in Ireland would mean installing a plant capable of between 1200 MW or 1250 MW at a minimum. That would give rise to the same type of problem that would arise with regard to putting too much wind or other type of power on the electricity system. As a result of the size of our market, the largest plants we have would be between 400 MW and 500 MW. One or two plants would be slightly larger. One must be consistently aware of the possibility of outages on some of those and the effect this would have on supply.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Is the Minister concerned about the closure of the Tarbert station? It is capable of 650 MW.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It is capable of 620 MW, and I will come to that issue. I am not concerned as it will be a four-year lead in, according to the ESB statement. That gives us time. There is a requirement in law for the ESB, or another power generation company, to give us at least two years notice of closure of a power plant. That allows us to plan in advance.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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What about the temporary closure of Shannonbridge and Lanesboro stations?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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With regard to security of supply and capacity, it is not a concern.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Where does the Minister expect to leave the ESB as a percentage of the market generation in 2010?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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We can get into a discussion on matters like this, such as the percentage of the market met by the ESB. I am more concerned about the percentage of plants they have, which sets the price for everything else. That is about 99.7%.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Will it not be 67% in July of next year?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Is the Deputy referring to generation capacity?

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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No, I am referring to the marginal price, which will be at 67% next July.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The ESB sets price in 99.7% of the time. That is nearly 100%.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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What of the all-island market?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The all-island market will not make a significant difference to the ESB's capacity to set price. That is where a difficulty arises.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is correct.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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To get back to the Bill, Deputies Broughan, Eamon Ryan, Crowe, Finian McGrath, Mulcahy and Cowley referred to emergency measures relating to oil. The increased cost of oil, taken with the issues of dwindling resources and geopolitical tensions, are all a cause of concern. I advise Deputies that as a member of the International Energy Agency, Ireland is required to maintain oil stocks equivalent to at least 90 days of net imports in the previous year. The EU imposes a similar requirement based on consumption.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Are we in compliance with that?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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We are over our requirements.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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By how much are we over our requirements?

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Much of the stock is outside Ireland.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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Stocks are required to be available. We have such stocks and agreements. The last time I checked, which was several months back, there were well over 100 days available.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister had to check the dipstick.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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The Department has also associated obligations to maintain contingency plans, including arrangements for the release of national oil reserves to minimise the adverse effects of a major oil shortage within the framework of a co-ordinated international response. The Fuel Acts 1971 and 1982, and the European Communities (Minimum Stocks of Petroleum Oils) Regulations 1995, put in place measures to safeguard the supply and distribution of oil in an emergency, to meet EU and IEA stockholding obligations, and to ensure the gathering of adequate data regarding consumption, trade and stocks of oil products.

The European Communities (Minimum Stocks of Petroleum Oils) Regulations 1995 provide for the setting up of a national oil reserves agency with delegated responsibility for the maintenance of national oil stock reserves. On 21 July 2004, the Government approved the drafting of the national oil reserves agency Bill——

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Is this the NORA Bill?

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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It is NORA, dearly loved by Deputy Durkan.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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We have been waiting for NORA for years.

Photo of Noel DempseyNoel Dempsey (Minister, Department of Communications, Marine and Natural Resources; Meath, Fianna Fail)
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This will enable the national oil reserves agency to be established as a stand-alone body under the aegis of the Minister. I intend to publish the Bill before the summer recess.

The Fuel Acts provide for significant State intervention in the market in the event of a major disruption to oil supplies. It is therefore not necessary to provide for such measures within the scope of the Bill before us. That is the reason they are not in this Bill, as they are catered for in other legislation. Under these Acts, the Government may make an order authorising the Minister for Communications, Marine and Natural Resources to intervene "whenever the Government is of the opinion that the exigencies of the common good necessitate the regulation or control by the Minister on behalf of the State of the acquisition, supply, distribution or marketing of fuels" held by private sector oil companies.

I refer to a point made by Deputy Gogarty, who made a request some time ago during an Adjournment debate. It was to discuss "the need for the Government to order a nationwide audit of domestic gas installations from meter to house, where originally connected by Bord Gáis, as there is evidence that pipes have not been properly insulated in a large number of cases, leaving an ever-present risk of gas explosion". I reiterate that there was misunderstanding and I acknowledge that the Deputy was suspended from the House when he tried to raise the matter again. In preparing its reply, the Department was unsure whether the Deputy referred to thermal or electrical insulation. Because of the tight timeframe in which it was drafted the Department assumed he meant thermal insulation.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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That is an easy thing to do.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Is that the end of Second Stage?

Séamus Pattison (Carlow-Kilkenny, Labour)
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No, it is to be adjourned.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The Minister has two or three pages to read yet.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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A lot done, more to do.

Debate adjourned.