Simon Coveney (Cork South Central, Fine Gael)
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Question 5: To ask the Minister for Communications, Energy and Natural Resources if he has considered setting guaranteed fixed prices over a set term for energy produced from wave sources to secure supply and help develop the technology; and if he will make a statement on the matter. [29143/07]

Eamon Ryan (Dublin South, Green Party)
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The renewable energy feed-in tariff support programme, REFIT, provides guaranteed fixed prices to new renewable energy projects in proven technologies. It is possible to set guaranteed prices for technologies that are proven or are near to market readiness based on known cost elements. These guaranteed prices allow developers to recover the investment made over the life cycle of the project which can be between ten and 15 years or longer. I intend to expand the eligible categories under REFIT to send clear signals to the market about support for renewable energy technologies as they emerge from the research phase into proven technologies capable of commercialisation.

The development of ocean energy technology is in the research and development phase. The ocean energy strategy, which was launched in 2006, presents a framework for the development of ocean energy in Ireland. This strategy presents a phased road map towards the commercialisation of ocean energy in Ireland by 2020. The programme for Government sets a target of 75 MW of ocean energy by 2012 and the Government's energy policy framework sets an initial ambition of at least 500 MW by 2020. The accelerated development of Ireland's ocean energy resources is a key priority for me. The ocean energy strategy sets milestones along the way for assessing the state of technological development and determining the related actions needed to take the technology and commercialisation forward.

Phase one of the strategy currently envisages support of non-grid connected prototype devices operating in the Galway Bay test site. Indicative measures proposed for phase two include capital grant support for single grid connected prototypes, together with support for grid infrastructure and a possible price support mechanism. Phase three envisages possible support requirements for full scale offshore projects which include capital, infrastructure and price support.

Similar to the development of wind energy and in line with developments in other EU member states, wave and tidal energy technology will require long-term electricity price support until they have achieved sufficient production and deployment rates and have demonstrated the high reliability required to give confidence to investors. A price support mechanism for Ireland will be calculated based on an assessment of the resource and the state of technology development.

Simon Coveney (Cork South Central, Fine Gael)
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I thank the Minister for his reply. I am quite excited by the developments that have occurred, especially in the wave energy sector. It is not an exaggeration to say that Ireland is leading global research and development in tidal power. The key ingredient to commercialised wave energy is a fixed tariff mechanism which is set at a price that will allow companies to finance long-term wave energy projects. The sooner the Minister brings forward that proposal, with detailed pricing on offer, the sooner we can try to increase the likelihood of beating the 500 MW from wave energy by 2020. I think it is possible to achieve that target earlier, given the success of the prototype currently in the sea off the west coast.

We need to learn from the lessons of the AER schemes and the initial fiasco in promoting them by forcing developers to compete on price, driving it down to such a level that their proposals were non-viable and were therefore not built. In moving from a prototype to a commercially viable proposition for wave energy, what is the most ambitious timetable the Minister can outline?

Eamon Ryan (Dublin South, Green Party)
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I agree with the Deputy that we need to learn as we move along. That competitive tendering process for the supply of renewables would not be appropriate in this instance, and we are better off moving towards a fixed price structure. It will be phased and we are currently moving towards a test and research phase. We will then have a testing of the connected prototype, which will still be a non-commercial phase. That will require a certain type of fixed price support, possibly with a time limit. People will be encouraged to go out, test the facility and bring it back in and allow other operators access to whatever grid connection points they have. We will then move into the fully commercial non-prototype stage, where a commercial operation has a guaranteed fixed price over a period of years to give the investors the necessary confidence they need.

Each of the technologies have slightly different requirements, but I would include off-shore wave energy in this general development of ocean energy as it will also have a significant resource and some common characteristics such as grid connections and the need for a support price. I agree that we have huge potential and that we must show urgency in the development of that resource. The State's role in this is to ensure the regulations make it happen quickly, to provide grants and support prices where necessary, but also to leverage support from the private sector. If we can develop an international expertise and show a lead, we can take the technology from here, deploy it in other locations around the world and become a world leader. That is certainly my aim, as well the aim of the Deputy.