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

I thank the Whips for organising this debate so soon after the publication of the Green Paper. I think it is important that we have such a discussion in this House and perhaps, towards the end of the consultation period, it may be opportune to discuss the matter further. There have been many policy papers and a great deal of analysis of the Irish energy sector in recent years. Following consultation, the Government published a Green Paper on sustainable energy in 1999 which set out the framework for sustainable energy strategies. This framework has served as a solid basis for energy policy, notably regarding renewables. Seven years on, there have been significant worldwide developments in energy. The Government's new Green Paper sets out the energy challenges in light of those developments. The Green Paper is set against a global and EU backdrop of high energy demand, volatile oil and gas prices and environmental challenges. It is also set in the context of the specific challenges facing Irish energy policy.

The Government attaches the highest significance to energy policy. There is almost no other policy area which is so fundamental to the economy and society. We have crucial decisions to make in terms of energy policy options for the country into the future. The new energy policy framework will meet the national goals of ensuring safe and secure energy supplies, a sustainable energy future and competitive markets for Irish consumers and business. Previously held assumptions about security of supply and costs must now be seriously challenged. Those challenges are being confronted globally and by the European Union, as well as by Ireland. Addressing these challenges requires an integrated approach across Government. Cohesive thinking by Departments and agencies will be the hallmark of energy policy from here on, as outlined in the Green Paper.

The Green Paper underlines the imperative for energy policy to address the three pillars of energy policy in a fully integrated way. Those three pillars — security of supply, sustainability and competitiveness — are mutually reinforcing. It is in that context that we have set out the vision for 2020. By 2020, Ireland will have met the challenge of security of energy supply through integration and interconnection, a diverse fuel supply regime, world class energy storage facilities, enhanced infrastructure and robust emergency planning and expanded oil and gas strategic reserves.

More integration and interconnection with other markets is crucial. This will deliver increased security of supply as well as positive competitive effects for the benefit of consumers. It will also support the renewable energy agenda. There will be enhanced electricity interconnection with Northern Ireland and the development of a new electricity interconnector. Further interconnection, possibly with the European mainland, will be under way or in place by 2020. This will add to our security of supply while increasing our competitiveness. The all-island energy market project is the logical first step towards creating a regional market with Britain and in due course with Europe.

The single electricity market will be completed in 2007. It will have the capacity to deliver the conditions needed to promote an efficient and secure electricity market that contributes positively to competitiveness and it will also boost our security of supply. Increasing our fuel diversity is another way to ensure security of supply. Long-term high dependency on piped natural gas from distant suppliers will result in increased exposure to price volatility and interruption of supply. We have already witnessed a period of sustained global price increases for oil and gas and we are currently witnessing a period of volatility, with prices seesawing on the global market.

By 2020, a much changed fuel mix in our electricity, transport and other sectors should be the norm. To achieve this, key actions will include using clean-coal technology, co-firing peat with biomass and significantly expanding renewable energy production to reach the 30% target. Renewable energy is a key to sustainability and we have emphasised it in terms of meeting our environmental obligations, which is extremely important. Renewable energy is also a key to ensuring future security of supply. We must tackle energy demand itself through systematic energy efficiency strategies.

The Green Paper envisages an ambitious target of having 30% of electricity produced by renewable energy by 2020. There has been a fair amount of comment on this target. Some believe it is too conservative while others argue about the significant technical and competitive cost challenges it will pose. However, I believe we struck the right balance and have set the bar high. We are backing up realistic ambition with concrete measures.

One feature of the Green Paper which has not been subject to much comment is the fact that instead of allowing a full 30-year period to pass before we produce another Green Paper, White Paper or policy document on energy, we will be able to review the existing Green Paper, White Paper or policy document every five years. If targets need to be changed or increased because of significant technological advances in some of the areas we are outlining, this can and will be done.

There is a distinct possibility of our being able to raise targets in the area of ocean energy technology. It is the stated aim of the Government to ensure the best commercial ocean energy technology will be Irish. Our ocean energy strategy is aimed at positioning us at the cutting edge of development in this area.

Biofuels and biomass will play a major role by 2020. This is underpinned by the new bioenergy strategy which is being led by the ministerial task force. Through greater energy efficiency, individuals and businesses have the power to contribute to the 2020 vision. This will mean a change in behaviour and attitudes to achieve a 20% reduction in energy demand by 2020, as outlined in the Green Paper.

I recently launched the national energy efficiency campaign, Power of One, which will extend well beyond encouraging behavioural change. It is a multifaceted campaign. Setting higher standards, regulating for change and, where necessary, incentivising such change will be part of the agenda to secure increased energy efficiency. The campaign will also target individual sectors. I and other Members believe very strongly that the public sector, for example, must set the pace and lead by example. The national priority being afforded to energy efficiency is in line with EU policy in this area.

On research and development, by 2020 we will see a vibrant Irish energy research sector and a significantly ramped-up energy research capability. That research capability will reflect an energy research policy aligned with wider energy and sectoral policies. Our energy research effort will be strongly focused on the renewables areas as well as innovative approaches to infrastructure and grid challenges. This is fully reflected in the Government's Strategy for Science Technology and Innovation 2006-2013.

We need a stable and transparent, regulatory and investment market framework underpinned by infrastructure technology. This will enable the energy sector to be competitive and support a high-growth economy and inclusive society. High global energy costs are now a fact of life. The current volatility in oil and gas prices does not herald a long-term return to low prices, as underlined by recent decisions by OPEC. A large proportion of the higher prices experienced in Ireland is currently explicable by our fuel mix and the existing structural constraints of the market, including its size and the fact we are not interconnected. The current volatility does not help medium-term to long-term planning either.

These factors limit our ability to manage or mitigate future energy price increases. Our focus in the Green Paper, therefore, must be on addressing controllable costs. One option for dealing with controllable costs relates to the funding of strategic energy infrastructure. The scope for funding strategic energy infrastructure initiatives in the national development plan is highlighted as an issue for consideration in the Green Paper. I will be interested in the views of Deputies thereon.

By 2020, the Irish energy market must be characterised by its having a number of players and a light-handed regulatory regime. We commissioned Deloitte & Touche, in the context of preparing the Green Paper, to undertake a review of the electricity sector to provide us with comprehensive, in-depth analysis of institutional arrangements and market structures. Its report was published at the same time as the Green Paper. Deloitte & Touche confirmed that the size of the Irish market is a significant factor, as is the perceived and actual dominance of ESB arising from its ownership of a large and diverse portfolio of plant and from its ability to set prices. The report states that, without changing the current structure, we will continue to face difficulties in attracting new entrants to develop competition and choice for consumers. The market will evolve slowly without competitive downward pressure on prices. As I made clear at the launch of the Green Paper, this scenario is not in the interest of market players or consumers, nor is it in the interest of the ESB. It is certainly not in the interest of economic competitiveness.

The Deloitte & Touche report is a useful contribution to the energy debate and provides much useful analysis of the electricity sector. It informed the Green Paper and was of great help in this regard. It makes a number of specific recommendations, one of which is to fragment the ESB. The Government recognises the fundamental role played by the ESB in economic and social development and the strategic value of maintaining it as a strong and commercially viable company, particularly in the context I have outlined. The Government does not favour the fragmentation of the ESB for the very simple reason that it would not reduce prices and could endanger security of supply and economic competitiveness. Deloitte & Touche acknowledges that the creation of a number of smaller companies from the existing ESB would take very substantial time and resources. It would also, it has to be said, be costly.

However, significant investment in power generation is needed. This presents us with the opportunity to break out of the current cycle and deliver more competition, more innovation and more choice. Structural reform is necessary in the interests of the market, the consumer and the ESB, and we intend to deliver that reform. The need for rationalisation of the ESB power generation portfolio is part of that window of opportunity. We need a radical repositioning of ESB power generation in its own interest and in support of a competitive electricity market. The introduction of a single all-island electricity market next year is a key context.

Increased competition in generation will act as a catalyst for improvements in operation and maintenance costs, productivity, availability, flexibility and innovation. The Green Paper suggests the creation of a landbank, giving access to suitable generation sites in Ireland for new entrants. This would remove a significant barrier to new entry and has been used successfully elsewhere to encourage new entry. The Deloitte & Touche report laid considerable emphasis on the benefits of such an approach and I agree with it. I have already had initial discussions with ESB and CER. The Irish market is not very attractive for someone coming in to try to put a power generation plant on a greenfield site, where the extra costs involved in strengthening a grid would be prohibitive. That is why the use of the landbank and its availability for new entrants to the market is crucially important.

The launch of the Green Paper opens a two-month period of consultation. It is a tight timeframe but we intend to use the interval productively — including direct dialogue with all key stakeholders. Informed by the outcome of the consultation process, we will finalise the energy White Paper early in the new year.

The policy choices and targets set out in the Green Paper provide a coherent basis on which to position the Irish energy sector. I believe that we have set ambitious aspirations, which will be underpinned by concrete action. We will build in regular review and benchmarking to take account of developments over the years ahead. By 2020, Ireland will be a sustainable, secure, efficient, affordable and competitive all-island energy market, supporting environmental, economic and social policy objectives. The market will have secure and reliable supplies, competitive prices and more diverse energy sources underpinned by robust interconnection, optimum infrastructure and ambitious technology investment.

The Green Paper is a proposed blueprint for building that sustainable energy future and I commend it to the House.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

I welcome the long overdue publication of the Green Paper, while recognising its limitations. We could have done with this a year ago. It would have been useful to have had it in the public arena. We should have had the opportunity to put proposals to the Minister, to ensure that as we proceed into the future, energy supplies would be soundly based, incorporating security of supply and the need to serve the customer in a competitive, reliable and cost-effective manner.

The Green Paper is vague in certain areas. While I know this is just a discussion document, any debate of this nature should entail some degree of costings. Members on this side of the House who had to produce policy in this area, had to review the dangerous area of costings in order to maintain some degree of reality, and that was worthwhile. There are some matters that should be touched upon in this debate, which have not been covered. The experience we have had so far as regards regulation has not been a happy one from the viewpoint of either industrial or domestic consumers. That is a sad fact of life which needs to be addressed. It is not addressed in the Green Paper and neither is it likely to be unless some major changes occur.

All the emphasis, for example, seems to be on driving prices upward in order to make it attractive for more people to enter the marketplace. What is actually needed, as referred to elsewhere in the Minister's speech, is real investment in research and development which in turn will bring to the market the required expertise, as well as a manufacturing and processing capacity that will be cost-effective and competitive. If we proceed as we have done in the past year or so, it will augur poorly for policy in the future in this particular area. I must emphasise, as will others, the absolute importance of energy at this juncture, for two reasons. First, we have a heavy energy requirement at present, which is likely to increase dramatically as time goes on. More important, however, if we are to be serious players in providing alternative energy in our economy, then we must take the investment route now, as a matter of urgency. We must bring together the various Departments that have an input and have them singing from the one hymn sheet — not like the nonsense we have had in the past year as regards the phasing out of the sugar industry, where those being forced out could only receive compensation provided they did not grow sugarbeet which might be used for alternative fuel purposes. That is not how we shouldproceed.

The Minister needs to drive his ministerial colleagues along the right course. I know the pursuit of alternative energy is Government policy at present, although sadly, the initiative came from the Opposition. I agree with what the Minister has to say as regards the national development plan. It is a positive step, since the energy providers will be major players in the industrial sector and this must be incorporated in the national development plan. It must be brought forward at the same time to avoid a serious problem in the future.

I am not so certain about the effectiveness of the landbanks. The only way to introduce proper competition in the marketplace is to encourage those who have a tendency, interest and willingness to go the route of alternative energy, and who are doing so, albeit on their own to a great extent. The way forward is to encourage them, providing them with the necessary scientific backup and research and development right across the board to ensure they can get into the marketplace much more easily than at present. There is some practicality, however, in the landbanks initiative, in that they are adjacent to existing installations and obviously will be readily convertible from the point of view of gaining access to the grid, etc.

We are all agreed on one issue, namely, that the break-up or fragmentation of the ESB is debatable. Some pundits are in favour and others are not. Personally I believe it could be dangerous. We have seen, for example, the way deregulation or the lack of regulation has worked in other areas in recent times. The vulnerability of the economy in a vital utility sector must be borne in mind in this regard. The grid should be totally independent of the ESB, however. A move has been made in that direction, but I am not sure it has been progressed to the extent it should be. There is only one rider. It should remain within the State or semi-State sector. We must learn from our mistakes such as the sale of Eircom and perhaps others. We must introduce new measures to prevent the continuation of a monopoly. However, in order the protect the consumer — industrial or domestic — we should add the rider that within the marketplace there must be a major player to ensure some part of the infrastructure will remain within State control and cannot be used for monopolistic purposes. We would then have the benefit of both ideologies. We would have a free moving private sector feeding into the grid and a national controlling interest provided through ownership of the grid.

The grid and how it operates will be important issues in the future. Ready and inexpensive access will be hugely important. For example, there would be no sense in allowing delays in accessing the grid for companies providing alternative energy supplies. The integrity of the grid is another crucial issue, on which much discussion has taken place in the committee, the House and elsewhere. The grid is only as reliable as the components feeding into it. If there is an unreliable component, there must be a backup to compensate for it. Circumstances where there may be a delay in providing a supply must not be allowed to arise; a supply must be readily available at all times.

We must realise our commitments under the Kyoto Protocol. Whether we like it, we must live up to them. If we do not, we will have to pay large fines. I am sorry the Green Paper does not deal with this issue more realistically. We must balance the likely cost of fines against the much more attractive but similar cost of investment in research and development to ensure the consumer is looked after.

For several years we have listened to discussion on the importance of and need for competition. What can we tell our constituents, consumers in the industrial and domestic markets, in the light of recent events? International fuel prices are on a downward trajectory and have been for several months. It has happened to such an extent that the oil producing countries are now discussing reducing oil production to prop up the price. What do we do? We decide to increase the prices of gas and electricity and hammer the unfortunate consumers as if to teach them a lesson. There were no circumstances under which this could have been justified. I am sorry to be critical of the Minister on this issue but the time has come for him to review his observer status in this area. He should clearly indicate to all and sundry, including regulators, that this is not acceptable and the economy cannot stand it. Neither manufacturing industry nor the domestic sector has any provision made for it where it can offset the imposition indicated in the recent raft of price increases.

The degree to which competition can be introduced and the benefits this delivers to the consumer must be examined as a matter of urgency. The Minister will know there are a number of heavy energy users in his constituency that are under severe pressure as a result of the most recent price increases. He should look seriously at requesting a review of the price increase decision and seek to restore prices to their previous level. That would be a positive gesture and do an awful lot for the competitiveness of the economy.

I do not want to overreact, but today a committee of which I am a member discussed the concept of European regulations on competition and how we must conform to them. However, there are problems and the regulations do not seem to be working for us as yet. The Minister should spend serious time on getting this moving in order that it will deliver a positive, beneficial impact for the economy. He needs to meet the various bodies involved. We cannot afford the luxury of another year floating along as regards energy, regulation and the apparently unjustifiable price increases. I feel churlish in having to repeat this to the regulator and the providers. However, there is only so much consumers can withstand. The time has come for ministerial leadership, to acknowledge what is happening and ensure changes are made to have a beneficial impact.

We must move the industry forward as one, whether it is the production of one fuel or another, one technology or another, or in one area or another. This is not a nuclear country, nor is it likely to be. We all welcome this. While some suggest we should have a debate on the issue, we should conserve our energy and use the debate to provide the alternatives.

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Unless we have a Progressive Democrats Taoiseach.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

One could never tell what would happen with the ongoing machinations.

We need to concentrate on developing the alternatives. Each Department with responsibility — five or six have such responsibilities — has a major contribution to make. One will not be able to do it on its own. However, serious progress can be made with a co-ordinated approach.

I have referred to the cessation of the sugar beet industry. This was a lost opportunity from the perspective of utilising an existing industry and converting it to another use. There is no reason those who previously had contracts for growing beet for sugar production purposes could not receive compensation in the same way. However, by virtue of its interference, the European Union decided it must proceed in a particular fashion. Neither the Minister nor the Government had the courage or wherewithal to stand up and stop it.

I hope this debate generates positive elements. We need to call upon all our national resources, whether onshore or offshore, including wind, tidal and wave energy. Each has a contribution to make in its own way. No single alternative will provide the answer. The answer will come from a combination of contributors from various areas who together will be able to provide this country with a reliable energy grid which we hope will be independent of all others in terms of import substitution. It will be economically beneficial but, most important, nobody will be able to switch off the interconnector and leave this country without a power source.

The Minister might clarify further the issue involving the interconnectors. One of the Minister's colleagues, showing divine capabilities, said he could be certain that nuclear generated electricity would not be imported here via the interconnector. It is a unique technique to be able to tell where such electricity is generated. I will not elaborate on that further other than to say it is, without doubt, necessary to put the east-west and the north-south interconnectors in place as soon as possible to ensure security of supply and continuity of service.

The Minister indicated in this paper and associated documentation the proposal to build an interconnector. I understand private sector investment and considerable research and development in terms of the preliminaries have gone into that area. The Minister might give some indication as to the way he intends to operate the mix of the private and public sectors in that regard or if it is intended to devote more to one or the other. If we can generate confidence among those likely to provide services in the area, we must be equally aware that private and public sector investors in that type of project must have advance warning.

I welcome the publication of the paper but am concerned about its limitations. I hope that in the discussion that takes place from now on there will be an improvement and that when the final White Paper emerges, it will be something to which we all made a positive contribution and that the consumer will be the winner in the end.

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

Since its publication, the Green Paper has been rightly characterised as being high on aspiration and low on action. That characterisation arises from the fact that a lengthy policy vacuum has developed in respect of energy policy. It is only in the past few years that the Government has begun to address the issue, which is the most important facing our country, and give the subject the importance it deserves. I welcome the fact that at long last we have this Green Paper.

I welcome also the commitment from the Minister — although it may not be a commitment he will carry out; other Members here might be involved in it in the future — that reviews will be done at least every five years. I know there are long lead-in times in developing new fuels and renewables and in developing generation but even taking account of that, five years is a long time.

The three pillars upon which the Green Paper is based — security of supply, environmental sustainability and economic competitiveness — are a valuable basis on which to build our energy strategy. Like the Green Paper, the goal of the Labour Party, at its most fundamental, is to deliver affordable energy for all consumers, ideally resourced locally, which will last into the future and that does not do long-term damage to the environment. In that context, the Minister might have extended his three pillars to include and stress affordability and energy equality. Since access to energy resources is a basic human necessity, a critical component of any responsible energy strategy must be to ensure it is affordable for everyone, including the poorest in our society.

It was deliberate that on the very day Irish families and businesses were being hit with the massive 34% increase in gas prices, the Government finally released the Green Paper, accompanied by the Deloitte & Touche report. A statistic in the Deloitte & Touche report that leaps out at the reader is the fact that almost one in five Irish people is defined as being fuel poor. That is an astonishing and unacceptable statistic and it is amazing that it did not lead the Minister to put much more far-reaching measures in tackling fuel poverty at the core of this document.

There is nothing new in the Green Paper on fuel and energy poverty apart from a vague pledge that consideration will be given to the extension of current policy initiatives to address the issue. Those programmes include the remedial works programme, the warmer homes scheme and the central heating scheme. A review of the design guidelines for local authority houses is also promised but there are already numerous existing energy efficiency regulations in the building sector which are not being properly implemented and monitored. As I said on the day the Building Control Bill was passed by this House, a huge tranche of new housing — up to one third of our housing stock — has been developed without reference to improving energy efficiency or developing renewable energy sources.

While there are valuable elements to some of those programmes, the existing policies have not prevented a huge number of our people being condemned to fuel poverty. Figures from Bord Gáis and the ESB show that the average household in the Republic currently pays approximately €1,658 a year in fuel bills and with the onset of the new price hikes, the total average cost will rise to a massive €2,107 by the new year — a 27% increase — while in Britain the average annual bill is approximately 42% less at between €1,230 and €1,291. As a result of that the Society of St. Vincent de Paul stated recently that approximately €3.5 million of its annual budget of almost €34 million will be used in the coming winter months to help families pay gas and electricity bills. It is striking that in the Green Paper before the House less than a page — six lines in the introductory section and two thirds of the second last page — is devoted to fuel poverty. The Labour Party believes strongly that the poorest in our society should not have to pay for regulatory failure or for the real cost of introducing renewable energy technologies.

No single renewable energy technology can meet all our energy needs. It is clear there may be limits to renewable energy but a much strengthened renewables policy must be pursued from energy security, environmental and economic perspectives. With Ireland's frightening statistic of having over 90% dependence on imported fossil fuels and the declining global supply of fossil fuels accompanying climate change, it is a well acknowledged imperative that we must diversify our fuel supply as a matter of urgency.

I realise it is easy to set targets and much more difficult to ensure they are realised but the 15% by 2010 and 30% renewable target for 2020 set by the Minister show a lack of ambition. A more energetic Government might have sought to supply the bulk of Ireland's electricity supply by renewables by 2030. Due to systemic Government failure, Ireland remains at an incredibly low base of 2.6% of total primary energy needs coming from renewable sources.

I am sure most of my colleagues from the Opposition parties who attended the recent Irish Wind Energy Association conference in Ennistymon will agree that we had an interesting and stimulating debate. The achievements of the wind industry struck many of us at the conference. The Minister must be commended, and I do so now, on introducing the REFIT programme and attempting to assist the promoters of wind energy through developing REFIT and replacing air.

In terms of biomass and biofuels, the Green Paper refers to a national bio-energy action plan that should be ready for the end of 2006 and will set a road map and targets for biomass. However, with the track record of this Government of delivering policies and programmes on time, especially in the area of renewable energy, it is highly unlikely we will see this much needed plan remotely within the designated timeframe.

The Government has rightly ruled out the nuclear power option, which reflects the beliefs and values of this House. The Leas-Cheann Comhairle is interested in the possibilities provided by clean coal technology, given the resources we have available. One of the failures of the Government is the lack of development of biofuels and the failure to reach the 2% target set for 2005, opting instead for a meagre 0.06% by 2005 and 2% by 2008. This will make it difficult for us to reach the EU target of 5.75% by 2010.

The failure of the Minister and the Taoiseach to insist on establishing a clean fuels ministerial fleet represents a missed opportunity. The Minister launched his Power of One campaign last week but why did he not start with one Minister? He could have started the energy efficiency campaign by changing his famous ministerial vehicle.

Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context

What about steam?

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

There are four already.

Tommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

The Green Paper states technological advances are the key enablers of energy policy but the budget of €3.6 million of Exchequer funding for the energy research technology development innovation, RTDI, programme, in conjunction with third level institutions, seems tiny. The target for the period 2006-13 is €3.8 billion. The Minister might have examined the global allocation for energy research and development. He launched the Power of One campaign to highlight energy efficiency but we are still awaiting the energy conservation plan. Will he indicate when it will be published? It is disappointing that no measures have been launched to introduce smart metering or effective product labelling to show energy use and carbon implications. The Minister could also propose introducing energy matters to the national education curriculum.

As well as failing to discuss fuel and energy poverty, the Green Paper does not refer to microgeneration. The CER consultation document on the subject was finally received by e-mail today. It seems strange that this document which is aimed at the period 2025-30 contains very little about the matter. We receive complaints from constituents about the failure to deliver an effective wood chip transport system and to liaise with the Minister for the Environment, Heritage and Local Government on small wind turbines. In London Mayor Ken Livingstone has launched a city energy strategy with the ambitious target of 7,000 domestic solar panels and wind turbines in the London region by 2010. Regrettably, the Green Paper does not address microgeneration.

Regarding energy security and the market, the Financial Times stated "energy is too important to be left entirely to the magic of the market". The market in gas seemed to be on the verge of collapse at the time. The Minister has stated he will not support the fragmentation and atomisation of the ESB as discussed in the Deloitte & Touche report and the Green Paper. The Labour Party will hold him to his pledge.

The introduction of an all-Ireland market has been delayed again under the Minister's watch until November 2007. The ongoing, organic evolution of the Irish market and the commissioning of the east-west interconnector and other interconnector developments means that the ESB will lose its power to set the marginal cost of electricity. Thus, it will have a much higher residual supply index.

In the past few days we have seen the remarkable outcome of the debacle of the privatisation of Aer Lingus following the privatisation of Eircom. It is critical that the State retains control of the electricity and gas transmission and distribution network. In view of the energy security issue, the key generation assets of the ESB must remain under public control. The authors of the Deloitte & Touche report make this point when stating the retention of State control of key generation assets is favoured. The report makes clear that the retention of a strong, commercially viable ESB, providing certainty of direction for staff, shareholders and customers, must be a key element of Irish energy policy. This echoes Labour Party policy. I welcome the commitment given in the Green Paper to developing the second North-South electricity interconnector by 2012 and the delivery of the east-west interconnection by the same date.

Members of the House have been irritated by having to jump up and down like a jack-in-the-box during the Order of Business to ask about electricity Bills. The Minister proposes to recast the current Energy (Miscellaneous Provisions) Bill after one day of debate on Committee Stage. It is regrettable that this legislation was not published earlier, as is the fact that we are still awaiting the single electricity market Bill. The mathematical calculations necessary do not appear to have been completed. This is a blow to Irish families and business struggling to meet soaring energy bills. It is deplorable that the legislative basis will be produced in the dying days of the Government.

The Green Paper has high aspirations but lacks meat. It provides an opportunity for the creation of a White Paper that might serve as a useful blueprint for energy policy. I regret that energy and fuel poverty have not figured in the paper so far and that microgeneration is barely considered. I echo my colleague's comments on renewables, biofuels, research and development, and efficiency. The Minister has taken the first step in a vital national discussion that will be continued at the Joint Committee on Communications, Marine and Natural Resources. I commend him for bringing the Green Paper before the House.

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

I wish to share time with Deputies Ferris and Cowley.

Energy is moving up the political agenda because we face two fundamental, long-term challenges, the first of which is the imminent peak in global oil production. This does not mean we will run out of oil but that after that date we will see an inexorable decline in the availability of cheap oil each year of 2% to 2.5%. Oil which has fuelled our economy in the past 150 years will become more scarce and more expensive. Ireland which derives 60% of energy from oil is utterly exposed and will have to seek alternative sources of energy to run cars, heat homes and provide food because of the role oil plays in fertiliser and pesticide production.

We also face a second, starker, more urgent challenge, namely, the consequences of having burned fossil fuels in the past 150 years. This is pushing our planet into potentially catastrophic climate change. We must urgently reduce emissions by at least two thirds if we are not to see feedback mechanisms remove this matter from our hands. The melting of the Siberian tundra, methane release and the melting of the Arctic ice cap, leading to greater heat being absorbed, could lead to this. I will not deal with the science of climate change, as I know the Minister is aware of the significance of the issue. Coincidentally, both it and the imminent peak in global oil production, although from different directions, require a similar outcome about which we can be clear today. Whenever the peak occurs in global oil production, we know that the days of easy, accessible and cheap oil will be over by 2050. Likewise, we know that we do not need to wait for international agreements to be worked out to realise that the correct and moral thing to do in addressing climate change is to reduce our emissions by at least 60% of 1990 levels by approximately 2050. Therefore, the task ahead of us is very clear. An energy policy must be honest with the people and set such long-term targets. There should be an annual, rather than a five-year, review of whether we are following the incremental path we need to take to achieve the two long-term targets mentioned. If not, the Minister for Finance should be compelled to adjust budgetary policy, the Minister for Transport should be compelled to adjust transport policy and the Minister for the Environment, Heritage and Local Government should be compelled to adjust housing policy to ensure we move towards the proper path.

I regret that this energy paper did not seek the opportunity, as other countries have done in theirs, to set proper long-term targets. This country has done so before. In the 1950s it transformed itself from a closed to an open economy. It took 40 years for this to bear fruit in terms of the current economic boom but this was the long-term thinking which T. K. Whitaker and Seán Lemass brought to this House and it worked. We need something similar now in energy because we cannot delay. In that regard, this paper represents a failed opportunity.

Where the Green Paper sets targets in electricity generation, the question of whether it is being too ambitious is a matter for debate, whatever about setting a target figure of 30% for renewables by 2020. If one examines what is happening, the reality is that in the next four or five years we will build at least three gas-fired power stations which will increase our emissions and make us more dependent on security of supply of a distant, volatile and expensive fuel source. The current cost is 8.6 cents per kilowatt hour. In the three areas the Minister set out in terms of energy policy, security of supply, price and environmental considerations, the reality is that in the next four years twice as much electricity will be produced with fossil fuels.

I agree with the proposal as set out in the Deloitte & Touche report and, I understand, by the Government, that the issue of ESB dominance should be handled by the allocation of certain land banks to alternative players in the market. I agree with the report that we must go further. One cannot cherrypick from its recommendations. I am not in favour of the atomisation or fragmentation of the ESB, as some have proposed, in terms of the division of its generation and supply businesses. However, I see no reason the assets of the transmission and distribution networks should not be held in State hands in a company separate from the ESB. The perception of dominance and high prices will remain as long as this recommendation is not implemented.

The Minister asked about infrastructure in terms of the funding arrangements we should have under the national development plan. We have been examining this matter for three or four years. However, I am far more interested in finding out when the Minister plans to make the decision and proceed with building the interconnectors. Funding is not the fundamental issue. The question of how they will be funded has not been worked out in the last three or four years. I put it down to approximately 14 letters — SEI, CER, DCMNR, ESB. This matter has been characterised by lethargy. The bureaucratic institutions responsible for energy matters have been unable to make a decision. Political leadership is now required to highlight the urgent need to make changes and to ensure infrastructure is delivered quickly.

The Green Homes scheme is welcome but a drop in the ocean. Why does the Minister for the Environment, Heritage and Local Government not set proper building regulations standards tomorrow in order that houses of the future, including the 100,000 or so that will be built this year, will be energy-efficient? The second and possibly larger issue is what mechanisms are we devising to promote the insulation of existing homes and the development of renewable technologies. Unfortunately, urgency is missing in an area which crucially accounts for one third of energy usage.

Another hugely important area is transport. I again lament the fact that it is not sufficiently addressed in this energy paper. Our level of oil use is running away from us. This requires an urgent reappraisal of our transport plans. The roads programme makes no sense when one looks at the framework for 2050 and the fact that oil and petrol for cars will no longer be available. This self-evident truth requires a change in government thinking which is not occurring.

I have two final words of warning. While I support the development of biofuels as a strategic energy reserve for security of supply reasons, we must be careful in respect of the emissions reductions which will result from the use of such fuels. Fundamentally, we need a change in planning systems to recognise the future we are facing. The sprawl in development which will lock people into energy-inefficient lifestyles cannot continue. It is the lack of a broad vision and purpose in this energy paper that is disappointing and which needs to be changed if we are to properly address the long-term energy issues we face.

Martin Ferris (Kerry North, Sinn Fein)
Link to this: Individually | In context

It is timely that we are discussing a Government Green Paper on energy at a time when gardaí are enforcing the will of a multinational company on the people of County Mayo. At the same time as we are debating the implications attached to future fuel supplies and the need to provide alternatives, the Government appears happy to allow the Corrib gas field to be developed with a minimal return to the State in terms of revenue, the price of gas or even supply. In that context, I am curious to discover what the Minister was referring to when he interrupted a request by my colleague, Deputy Ó Caoláin, to adjourn the Dáil under Standing Order 31 last week to say "€2 billion". I hope he was not trying to suggest the State stood to benefit from the Corrib development in these terms. If he was, I am interested in hearing how that might be the case.

On the broader issues related to the Green Paper, we all welcome the commitment to increase the share of renewable energy sources and thereby reduce our dependence on the importing of fossil fuels. As happened in the not too distant past, current oil prices hold us hostage to instability not of our making. However, I was slightly concerned to note that in the reply to my parliamentary question of Tuesday, 3 October regarding the 5.75% target for biofuel penetration by 2010, the Minister replied that to achieve this target, a significant change in land use patterns or a level of imports might be required. I certainly agree with the contention that land use needs to be changed and many of us believe this will be facilitated by the new conditions pertaining under the single farm payment. My concern relates to the reference to imports, given the potential for growing energy crops here. Why would this country not be in a position to grow the necessary feedstock and process it into biofuels? The level and structure of grant aid seem to be factors as to why only several thousand acres are currently in receipt of such aid. However, another key factor is the absence of processing facilities and the apparent absence of any real desire by the State or private enterprise to provide them. I visited County Wexford two weeks ago. I met a planter who told me that the potential amount harvested this year was 6,000 acres. There will be a reduction of 1,500 acres next year, which is very worrying. I was also told that the only way planters could address this reduction was through imported rapeseed.

A good example of the lack of interest on the part of the State and private enterprise in providing processing facilities is the winding down of the sugar sector. With others, I have made the point that the beet grown and the existing plant could be redirected towards the production of bioethanol. However, Greencore seems to have no intention of pursuing any productive enterprise and is intent on stripping the former Sugar Company of its assets and using the former factory sites for property development. One might have thought that the Government might have attempted to persuade Greencore that this was not the best use to make of former public property but this did not happen. It seems it is also content to see apartments built and large profits made where once hundreds of people were employed and thousands of tonnes of sugar were produced. What happened to the golden share to protect the workers and growers?

If the State does not take greater steps to promote growing and processing energy crops, we will replace our dependency on fossil fuel imports with a new dependency on imported biofuels, which is extremely concerning. While there is little we can do about the former, it would be an utter disgrace if a country such as Ireland found itself in the latter position.

The target of 15% for renewables by 2010 and 30% by 2020 is laudable and I commend it. However, I am not satisfied the Government's current practice matches its vision. I see no evidence that what is being done will allow us to reach the point envisaged by the targets being set. For that to take place we must mobilise our land, forestry, wind and hydropower resources and ensure that in replacing our dependence on imported oil and gas we build a solid basis of indigenously supplied and processed energy sources.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

All I have to state is that as far as I can see, we do not have an energy policy. Similar to health, there is no policy and there are vested interests throughout. Local people are robbed and abused by forces of the State. This House is silent on the matter and, shamefully, other Mayo Deputies are also silent. I was in County Mayo in recent days. The local community is under attack from the Government. It is a shameful situation, whereby Shell received concessions such as never before were given to a private company. It has compulsory purchase order power to take land and foist this illegal pipeline on the people without receiving consent for this ill-fated project. The purpose is to satisfy the agenda of a private multinational company which, together with its partners, makes millions of euro profit every day.

Hundreds of gardaí do Shell's work for it, not at Shell's expense but at that of the poor long-suffering taxpayer who must pay for this terrible abuse of power by the State. Only five extra gardaí were sent to Moyross. We read two days ago that the poor lady whose two children had been burnt had to leave her house because of an attack by local thugs. The hundreds of gardaí should not be in County Mayo; they should be minding that poor woman and her children.

The last feeble justification given for the intolerable situation in County Mayo is that we need it to ensure security of supply. That is a complete and utter laugh. A few days ago the Financial Times reported that gas had been given away for nothing in the United Kingdom because so much of it had come in from Norway through the largest pipeline in the world. People were paid to take the gas.

What is the sense in all of this? We discuss waste and electronic voting machines. What about the hundreds of millions spent on the Bord Gáis pipeline to Rossport, paid for by the taxpayer? Energy prices have increased by 34%. All this means to the people is increased costs. The arrival of Corrib gas supplies will mean nothing to them except more expense. It will mean more profit for Shell.

The fiscal terms governing oil and gas finds must be revised to ensure adequate returns to the people. We require the taxation, royalties and equity shares which were previously available. We need a proper deal to compensate the people for the pollution and global warming effects of the exploitation of fossil fuels. These revenues should be ringfenced and used for investment in and development of renewable forms of energy.

Energy policy should be directed towards the development of renewable sources, with oil and gas finds used only as transitional fuels and to finance that transition. Communities affected by the exploitation of oil and gas finds require compensatory payments and investment funding. In the Grianan model 10% of gross profits is diverted to affected communities. This could be enforced through legislation. In the Shetland Islands the local community exercises considerable control over the industry. That is another potential model.

The debacle of the Corrib gas project illustrates what happens when community concerns are ignored by the industry, and it is continuing. It is shameful to see what is happening. The Government has turned upon the local population to progress an ill-fated project which means nothing to the local area or this country but means millions of euro pouring into the coffers of private concerns. It is an absolute disgrace. I ask the House to resist what is happening. Will the four other Deputies in County Mayo speak out about the terrible squandering of resources and use of State resources to further the agenda of a private company and fill up its coffers?

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
Link to this: Individually | In context

I welcome the publication of the Green Paper on energy. Energy is the most exciting political challenge we face, not only on a national basis but also internationally. Dealing with the energy challenge affords us the opportunity to become statespeople and play out parish pump politics in other areas. We heard evidence of this in the contributions of the previous two speakers.

The question concerns the international energy challenge.

Jerry Cowley (Mayo, Independent)
Link to this: Individually | In context

Deputy O'Malley's party gave away the——

Fiona O'Malley (Dún Laoghaire, Progressive Democrats)
Link to this: Individually | In context

I would be grateful if the Deputy did not interrupt me.

We must be clear about what is our objective in dealing with the Green Paper. We must agree that what the country and globe face is the question of how we will deal with climate change. We have issues at national level. The Green Paper points to the three pillars, namely, security of supply, environmental stability and economic competitiveness, of which we must be extremely cognisant nationally. Unfortunately, owing to international geopolitical circumstances our security of supply has been put under an increasingly tremendous strain. In our isolated position at the end of a gas pipeline through Europe, we must be determined to diminish our dependency on gas imports. The best way to do this is through the opportunities provided by renewable energy industries.

I welcome the high target proposed in the Green Paper. It is good to have ambitious targets because at least if one falls short, one still falls high. As the Minister stated last Sunday week when he launched the proposal, the target will be well superseded by the time we get there. Perhaps it was the Taoiseach who stated that but that is the type of thinking we need in the energy debate. One thing for certain is that we cannot continue with the way we deal with the energy crisis and the energy market in Ireland.

The possibilities are endless. I see major opportunities for Ireland in renewable energy industries such as onshore and offshore wave energy production. While offshore energy supplies may not be economic, we must think and plan for the future. That is what is important about the Green Paper on energy which will be formulated into a strong and coherent policy paper. Most parties in the House agree on what we must do for the country and how we will get there. It is incumbent on us as political leaders who care about this issue to come together and agree the basis on which Ireland must secure its energy future, particularly in terms of our competitiveness.

This month we saw high increases in energy costs, not only for domestic users but also for industrial users. We heard at the committee last week how detrimental high energy costs were to businesses here, something we must recognise because we cannot continue with these increases. We must arrive at a solution that will allow for smaller increases in energy costs.

I attended a debate last night in Trinity College on energy and the question was asked how we could get the public to engage with the process. From my experience canvassing in Dún Laoghaire people are beginning to ask about energy, even if only because of the bills they are getting. They realise that we must change our ways. The campaign launched by the Minister last week points to how we can make a difference individually.

The two month timeframe for the Green Paper provides ample opportunity for discussion, particularly for schools. I hope there is a programme for them to debate this issue. As we know from recycling, children are the ones who drive families to recycle. They have learned the value of such activity in school and know about the climate and nature. This provides a terrific opportunity to find people who will be great advocates for energy efficiency in the future. We must try to ensure greater efficiency in appliances, buildings and consumption. The Power of One campaign deals with our consumption, asking all of us how we use energy in our own homes and if it would be more appropriate for us to walk, cycle or use public transport.

The Government also has a responsibility to address this issue through the building regulations in the built environment where a huge proportion of energy is consumed. We must design buildings correctly. Public buildings should lead the way. I was in a school in Ballybrack two weeks ago where the product used for making the roof was very efficient 30 years ago but is not now. The principal is worried sick about energy costs. We must have a way to introduce fiscal incentives which will provide for public schools to achieve energy efficient buildings. All schools are constantly holding fund raisers in order that they do not need to see heat being lost straight through the roof. In the new built environment regulations must be much more stringent. It is in all of our interests to keep consumption down to help meet our Kyoto Protocol obligations on CO2.

Legislation prohibits nuclear power but there should not be such constant negative prohibitions. Life is fluid and nuclear power is used through the interconnector, as we must acknowledge. It is thanks to the strong nuclear industry in France and the rest of Europe that sufficient gas supplies can still enter the market when it is somewhat constrained. The Oireachtas Joint Committee on Communications, Marine and Natural Resources will have a debate on nuclear energy. Since we launched our report earlier this year, the whole nuclear industry has been discussed in a calm manner, which is welcome. Many Green Party leaders in Europe are now looking at nuclear power in a different way because it is seen as clean energy. We must not have such a negative stance. As Deputy Eamon Ryan said at the committee, we should look at the science and the economics and make a decision based on these factors, not on populism.

I welcome the ministerial taskforce on bioenergy. It is a huge area with enormous potential, particularly for rural areas. We could harness a lot energy. I have met many people who have benefitted from the fiscal measures in previous budgets. They want the market to be opened up, something I want to see because people have responded to it. When the Government introduced measures in last year's budget for grants for wood pellet and other heating systems, domestic users were very enthusiastic. We must encourage people to be as efficient as possible.

It shows great maturity on the part of both Government parties that after nine years of marriage and intimacy, we can have a difference of opinion on the future of the ESB. I read the Deloitte & Touche report with great interest. While I reserve judgment and accept what the Minister says, there is an argument to be made on the future of the ESB. We must build efficiencies.

I welcome the Green Paper and look forward to the White Paper that will come from it.

Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context

I had hoped the Green Paper would give more detail on the biofuel sector. I congratulate the Minister on the targets being set for 2010 and 2020 on renewable energy and biofuels but there is no detail on how we might kick start the industry to ensure we reach those targets.

Two critical steps must be taken immediately, the first of which is the establishment of grants for biomass and biofuel crops. At present a huge up-front investment of €3,000 per acre is required to establish an energy crop. Farmers will get this back over 20 years but it is frustrating that the same recoupment is possible from forestry, where farmers receive afforestation grants with built in incentives that are not provided for energy crops such as willow and miscanthus.

A number of farmers pointed out to me at the National Ploughing Championship that there was no mechanism in place to pass on carbon credit savings to those using or producing biomass products. We must address this if we are to develop a renewable energy biofuel sector. It is clear that farmers and biofuel processors are interested in developing the sector and that there is huge potential but there is no blueprint for how we go from where we are to reach those targets by 2010 or 2020. The Green Paper ignores this area when it is vital for us to set out the steps that will be taken by the Government to reach them. Unless we do this, we will not develop an industry. The Minister's failure to take a more active role by using the closure of the sugar industry as a vehicle for developing a renewable sector through the production of ethanol was disappointing. The debate on energy should have formed part of a restructuring of the sugar industry.