Dáil debates

Thursday, 12 March 2009

Other Questions

Alternative Energy Projects.

2:00 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Question 6: To ask the Minister for Communications, Energy and Natural Resources the position regarding the ocean energy fund; the amount of the fund that will be spent in 2009; the projects that will benefit from it; and if he will make a statement on the matter. [10428/09]

Photo of Jack WallJack Wall (Kildare South, Labour)
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Question 48: To ask the Minister for Communications, Energy and Natural Resources his target for ocean energy technology; the megawattage of ocean energy connected to the grid; the number of applications received; the amount of the €26 million announced for ocean energy that will be spent in 2009; and if he will make a statement on the matter. [10507/09]

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)
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I propose to answer Questions Nos. 6 and 48 together.

The Government is giving high priority to supporting the development of Ireland's ocean energy potential. Not only will ocean energy contribute to Ireland's renewable energy targets, it has considerable potential for inward investment and enterprise activity in support of economic renewal.

The multi-annual ocean energy package, which I launched last year, involves a number of initiatives, namely, the establishment of the ocean energy development unit based with Sustainable Energy Ireland, the creation of a state-of-the-art national ocean energy facility at University College Cork; the development of a grid-connected wave energy test site off the west coast; the establishment of an ocean energy prototype fund; and the introduction of a new feed-in tariff under the REFIT scheme for wave and tidal technologies of €220 per megawatt hour. I am pleased to confirm that all initiatives under the package are well under way and are being implemented with the full involvement of stakeholders. Some €7 million has been allocated by the ocean energy development unit to the ocean energy package in 2009. This is in line with projected expenditure this year, subject to obtaining Department of Finance sanction on a quarterly basis.

The ocean energy development unit has launched the industry prototype development fund. To date, 20 expressions of interest, leading to seven firm proposals, have been submitted by developers. Contracts for the funding of three projects will be issued within the coming weeks. Four proposals are currently the subject of technical and business evaluation. Funding decisions will be made in light of these evaluations. Expenditure on the prototype fund in 2009 is projected to be at least €4 million.

The Government has set a target of 500 MW from ocean energy by 2020. At present, there are no ocean energy devices connected to the grid in Ireland. This technology is still very much in early development. Current assessments show that across the globe only a small number of test projects, totalling under 10 MW in size, are connected to the grid. The ocean energy development unit, in partnership with the Marine Institute and ESBI, undertook an extensive process over the past two years to identify the most suitable wave energy test site. The development partnership will now develop a grid-connected site off Annagh, County Mayo. This will test operational pre-commercial wave energy devices directly connected to the electricity network.

The project team is undertaking detailed technical consultation with prospective industrial users of the facility. It is also completing engineering specifications and progressing onshore and offshore lease applications, network connection and necessary onshore works. Expenditure on the project this year is expected to be at least €2 million. The project is scheduled to be completed by 2010, subject to external factors including offshore sea conditions during the development phase.

The ocean energy development unit is also working with UCC to upgrade the existing wave basin located at the hydraulics and maritime research centre, HMRC, at UCC. This wave basin provides research and testing facilities for a variety of offshore purposes. The upgrade of the existing facility will include new wave generating equipment, new experimental test rigs, improved workshop facilities and advanced computer solutions for numerical analysis and modelling. Expenditure on the facility in the current year is estimated at €1 million. Proposals for a new national ocean test facility, NOTF, will be developed by 2012 as part of a proposed maritime and energy research centre to be located adjacent to the National Maritime College at Ringaskiddy.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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When one cuts through the spin, one can only judge the priority the Government gives to a particular area by the amount it is willing to spend. This time last year the Government, with considerable fanfare, launched an ocean energy programme and stated that €26 million would be spent over three years. Last year it spent €1 million and the Minister of State indicated it plans to spend €7 million this year. The only new information he provided is that this money will be subject to sanction from the Department of Finance on a quarterly basis. By the end of the second year of the three-year programme, the Government will only have spent €8 million. It is supposed to spend €26 million on the entire programme. The Minister of State has indicated that even the €7 million for this year is not certain.

Is the Minister of State in a position to indicate that the entire €7 million will be spent this year? Can the Minister also offer some certainty about fulfilling the commitment that was made of expenditure totalling €26 million by the end of next year? Of all the industries that require a boost, this is a potentially huge employer and in the current environment it is one of the areas that justifies significant capital expenditure.

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)
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The Deputy judges the priority the Government gives to something by the amount of money it spends on it. There is probably some truth in that. The Deputy mentioned this on the last Question Time and the Minister explained clearly——

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The situation is worse now because the Minister has just told us it is subject to Department of Finance sanction.

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)
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No. For capital expenditure the Department of Finance is taking a hands-on approach. It is doing that in the interest of the country to ensure that what we are spending needs to be spent and that we are getting good value for the spend. I am being honest with the Deputy. I agree that there is huge potential in ocean energy. A study carried out by Bacon/ESBI calculated that up to 1,900 jobs could be created in the sector by 2020 if we invest in ocean energy technology. A great deal of work is taking place and our objective is to support research and applied research leading to full scale commercialisation of the technology. As I mentioned earlier, however, the technology has not yet been fully developed but it offers huge potential. We have been working on trying to put the nuts and bolts together and on putting a good team in place to ensure that we maximise the potential that exists.

Photo of Liz McManusLiz McManus (Wicklow, Labour)
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There is a certain amount of concern at the approach now being adopted to the €26 million that was announced not long ago with such positive statements by the Minister. As I understand it, the only Irish prototype that is connected to a grid is connected to the British grid. Are the 20 applications all of Irish origin? The Minister said that approximately €4 million can be provided for the seven successful applicants. Can he confirm that the money will be available to them or is he saying that it is up to the Department of Finance? This is pioneering work and there must be some certainty for people who are, in effect, taking a step into the dark. Is the Minister saying the €4 million grant aid is subject to the Department of Finance stranglehold? Looking ahead, can the Minister say when he expects the first project to be connected to the Irish grid? What is the calculated date for connection?

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)
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So far there have been 20 expressions of interest, leading to seven firm proposals being submitted by developers. Contracts for funding of three of those projects will be issued within a few weeks. Four proposals are currently the subject of technical and business evaluation. Funding decisions will be made in light of these evaluations. The expenditure on the prototype fund in 2009 is projected to be at least €4 million. With regard to the moneys, there is little point in me repeating what I have said about finance. Obviously, given our difficult financial situation, the Department is taking a keen interest in what Departments are spending.

The point of view of the Department is that ocean energy offers great potential. It needs investment and we will make every effort to ensure that not only do we have the right people in place, but also that we provide the necessary funds. The supports we are providing this year include €1 million towards the world class state-of-the-art national ocean energy facility in UCC and €2 million to support and develop the grid connected wave energy site near Belmullet in County Mayo, which is very important.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Since the Minister is being blunt and honest about the funding, will he clarify if the announced €26 million over a three year period still stands? If the Minister spends everything it is planned to spend by the end of this year, and hopefully the Department of Finance will sanction it, it will amount to €8 million. Does that mean there is still €18 million that the Government plans to spend next year? People need to know this. They are investing their own money as well as the grant aid from the Government. This research and development area has exciting prospects but people will not invest if they do not have certainty on State finance. If the €26 million is not available or is revised, can the Minister please say so? People can plan on that basis. Can the Minister say if, next year, the Government commitment of €18 million of the three year programme will be forthcoming?

Photo of Liz McManusLiz McManus (Wicklow, Labour)
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There is an issue about certainty. With regard to the contracts that will be signed in a couple of weeks with three contenders, is there a clause in the contract stating that moneys will be subject to approval by the Department of Finance? I understand that an bord snip nua has not yet met with the Minister or the Department. Is it possible that recommendations would come from that group advising that this fund be slashed? The fund appears to be vulnerable, at least to attack, because of its nature. What assurance can the Minister offer? People are investing their money and commitment in developing an important energy resource and they should not be treated in a way the Minister appears to foresee they might be treated.

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)
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We are all probably vulnerable to attack in these times. With regard to the announcement of €26 million, that figure was given as the amount required to be invested in the short term to develop the industry and provide the type of support needed for research and applied research leading to the full scale commercialisation of the technology. One of the first companies operating in this area was Wavebob. A significant Swedish player has come on board for a joint operation with Wavebob to try to develop the technology further.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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There is also Oceanenergy. There are two big companies.

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)
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I have outlined the €7 million we plan to spend now. We have clearly set out the priority we are giving to ocean energy and we are providing the necessary funds to allow that sector to develop.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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We must move on to the next question.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I asked a question.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I will allow a very brief supplementary question, not a statement. We are well over time on this question.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Will the Minister confirm whether the Government is still committed to spending €26 million to kick-start this industry? Is €7 million the new commitment?

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)
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We never gave a commitment to spend €26 million over——

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The Government did.

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)
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Let me finish.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Allow the Minister to reply.

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)
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We never gave a commitment to spend €26 million over a particular 12 month period.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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It was three years.

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)
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That is different. We gave the figure of €26 million, which we considered to be the investment that was required over the three-year period. That has not yet happened. We have had to develop the strategy and get the right people on board. That took a little longer than anticipated. We are quite clear about the strategy we have adopted and I have outlined the €7 million we will spend this year in going further on this road.

Photo of Liz McManusLiz McManus (Wicklow, Labour)
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I asked the Minister about the contracts.

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)
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The contracts will be finalised over the next few weeks.

Photo of Liz McManusLiz McManus (Wicklow, Labour)
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Is it likely there will be a caveat in them?

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)
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I cannot divulge what those contracts will contain.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I call Question No. 7.

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)
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Excusez-moi, s'il vous plaît?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Vous êtes excusé, Monsieur le Ministre.