Dáil debates

Thursday, 12 March 2009

Priority Questions

Alternative Energy Projects.

2:00 pm

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

Question 4: To ask the Minister for Communications, Energy and Natural Resources his views on whether the export tariff recently announced to facilitate the sale of electricity onto the grid from small domestically owned microgeneration is sufficient to kick start significant investment in this area; and if he will make a statement on the matter. [10715/09]

Photo of Seán PowerSeán Power (Minister of State with special responsibility for the Information Society and Natural Resources, Department of Communications, Energy and Natural Resources; Kildare South, Fianna Fail)
Link to this: Individually | In context

The Minister recently launched the microgeneration programme, which is being operated by ESB Customer Supply and supported by ESB Networks. The programme will provide up to 4,000 domestic customers investing in microscale projects with a financial payment for electricity exported back to the grid. It will also enable two way metering to be installed without additional charge to the customer. The electricity producer will be paid a price of 19 cent per kilowatt-hour, which will help to offset the start up costs. The microtechnologies in question include wind and hydro as well as combined heat and power.

It is the case that microscale electricity production will benefit the participating customers up-front by offsetting their purchase of electricity from their electricity suppliers. The additional incentive of a guaranteed price for electricity exported back to the grid is a significant encouragement to invest. This competitive feed-in tariff will apply to the first 4,000 microgeneration installations countrywide over the next three years.

Sustainable Energy Ireland has also launched a microgeneration pilot programme involving research and field trials, including support for between 50 and 60 installations on a pilot basis, of microscale projects. The field trials will address a range of issues including grid connection and technical standards to ensure the power security, safety and quality of installations.

The Minister is satisfied the guaranteed price under the new programme and the grant support available from SEI for testing technical issues will attract sufficient market interest to ensure investment and underpin the steady development of a national micro generation capability.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

I welcome the Minister's move as a start to what can be a whole new industry. Ireland should be aspiring to have a large percentage of its households generating their own power in an efficient and environmentally sustainable manner, selling it back to the grid at night-time when not using power.

However, other European countries offer far more attractive incentives to encourage people to invest in microgeneration in the home. For example, in France the home electricity producer is paid a price of 30 cent per kilowatt-hour with a 50% tax credit for installation costs. An incentive of 42 cent per kilowatt-hour has resulted in Spain being ranked fourth in the world in home microgeneration. In Italy, the feed-in tariff ranges from 45 cent to 49 cent per kilowatt-hour with up to 80% of the capital costs available under grant aid.

Ireland, with a Green Minister who aspires to decentralise power generation into people's homes, farms and small businesses, is giving a miserly tariff of 19 cent. Will the Government examine increasing this rate to give the microgeneration industry a boost?

Photo of Seán PowerSeán Power (Minister of State with special responsibility for the Information Society and Natural Resources, Department of Communications, Energy and Natural Resources; Kildare South, Fianna Fail)
Link to this: Individually | In context

I am glad the Deputy welcomes the scheme. We have worked with the energy regulator and the ESB in developing the scheme. It is in its early stages but has the potential for enormous development. With the current difficult economic times, people are looking for new opportunities. This is one area that could present opportunities for families across the country.

On the cost, it should be remembered the ESB will be providing the import-export metering free of charge to the first 4,000 domestic customers installing microgenerators over the next three years. Comparing prices with other countries sometimes does not tell the real story. It is a relatively new scheme and it will be interesting to see the take-up for the scheme. If people believe it is worthwhile, they will get involved. I believe it will appear as an attractive scheme to many.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

Unfortunately, the price tells the whole story.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
Link to this: Individually | In context

A brief question, please Deputy.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

The price will persuade people to invest or not. It is a commercial decision. Will the Minister of State agree that the roll-out phase of a programme such as this is the time to get a high return on investment to kick-start it? We can return to 19 cent per kilowatt-hour in five years time when the scheme is up and running with 15% of households producing their own power. Will the Minister of State accept Ireland is very poorly positioned in the context of how it benchmarks itself against other countries that are serious with regard to decentralising power generation and encouraging micro-generation?

Photo of Seán PowerSeán Power (Minister of State with special responsibility for the Information Society and Natural Resources, Department of Communications, Energy and Natural Resources; Kildare South, Fianna Fail)
Link to this: Individually | In context

I do not agree that Ireland is poorly positioned.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

Is the Minister of State in a position to name any other country which pays less in the context of tariffs?

Photo of Seán PowerSeán Power (Minister of State with special responsibility for the Information Society and Natural Resources, Department of Communications, Energy and Natural Resources; Kildare South, Fianna Fail)
Link to this: Individually | In context

We are embarking on a process which probably should have commenced 20 or 30 years ago. However, it is not possible to turn back the clock. We have made what will prove to be an attractive proposition to many farming households.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
Link to this: Individually | In context

Can the Minister of State name any other country which pays less in the context of tariffs?

Photo of Seán PowerSeán Power (Minister of State with special responsibility for the Information Society and Natural Resources, Department of Communications, Energy and Natural Resources; Kildare South, Fianna Fail)
Link to this: Individually | In context

I do not have in my possession information relating to the prices charged in other countries. The price we are proposing was not plucked out of thin air. We devised the scheme in consultation with the regulator and the ESB and we are of the view that it will be quite attractive. It is only natural that changes will have to be made and the scheme will be reviewed on a regular basis. If the rate of take-up is not sufficiently high and if there is a need to make the scheme more attractive, we will take action.