Catherine Murphy (Kildare North, Independent)
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Question 3: To ask the Minister for Communications; Energy and Natural Resources if he intends forwarding an application to the European Union for State aid clearance in respect of a refit support mechanism for the electricity generated by offshore wind, wave or tidal power; if so, when he expects to make such an application; and if he will make a statement on the matter. [2898/12]

Pat Rabbitte (Dublin South West, Labour)
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Ireland's deployment of renewable energy sources in electricity has been increasing steadily in recent years as we work, North and South, to deliver a 40% level of renewable electricity consumption by 2020. There has been good progress from 5% renewable electricity in 2005 to around 15% renewable electricity at present. The challenge is to steadily increase renewable electricity generation in the all-island market from onshore wind and bio-mass year on year to 2020.

I am confident that Ireland has the capability to achieve its targets for domestic renewable electricity from the onshore wind projects already in the existing gate processes despite the difficulties being encountered and the undoubted planning and financial challenges that remain for a number of projects. In this context I am pleased to confirm that the REFIT 2 onshore wind programme has this week received State aid clearance from the Commission. This welcome certainty on the feed in tariff support for onshore wind will now enable investors to finalise their plans to build out projects over the next number of years.

While offshore wind is already being deployed in some member states as part of delivering on their national renewable energy targets, it is still a very expensive technology to deploy. Offshore wind currently costs in the region of €3 million per MW to deploy compared to the cost of onshore wind which is about half of that.

Wave energy technology is still very much at the research and development stage and the commercial and technical feasibility is not yet proven. While there are very promising wave technology devices in development, they are at pre-commercial stages.

Additional information not given on the floor of the House.

Ireland has a very small electricity market, with around 2 million electricity consumers. The public service obligation levy which is paid by all electricity customers in this small market currently encompasses support for peat, some conventional generation and onshore wind generation. Given the very significantly higher price of developing offshore wind compared to the lower cost onshore, it makes economic sense that we focus on developing our lower cost onshore wind resources to deliver Ireland's binding EU targets for renewable electricity. In parallel we will actively pursue the potential opportunities for renewable energy export which offshore wind represents. I will be working with my UK colleagues through the British-Irish Council and with my EU colleagues through the North Seas offshore grid initiative to deliver on this potential. In the present economic circumstances and given the challenges for Ireland's competitiveness, of which energy costs is a key component, the Government has agreed with my decision not to proceed with the application to the European Commission for State aid clearance for a feed in tariff to support offshore wind in the Irish electricity market. Given the inordinately high costs which would be incurred by business and domestic electricity consumers to support such a tariff, we need to focus instead on the opportunity to develop a renewable electricity export market for the offshore wind sector. The best future for Ireland's offshore wind resource lies in becoming an export industry.

Catherine Murphy (Kildare North, Independent)
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It is welcome that REFIT 2 is taking place. The Minister has differentiated between onshore and offshore energy. The Minister linked Northern Ireland and the South in terms of wind energy and renewable energy but there is a different approach being taken in the North. An article in The Sunday Business Post two weeks ago considered how this development is happening in one place but not another. The article was interesting and pointed out that an 800 MW round for offshore wind was announced last month in Down and Antrim. The complaint in the article was that this presented a stark contrast between North and South. How is it viable in the North but not viable in the South? Given the conditions and the fact that Ireland is an island nation, we have a unique advantage that we are not exploiting. While we have enormous ambition about delivery, it is limited if we do not exploit offshore energy. Has the Minister sought clearance from the European Union in respect of offshore energy? If not, why not? The investment that can be made strikes me as something that is well worth exploring. There may be jobs in a range of industries and expertise in the offshore area. Has the Minister sought clearance? If not, why not? Does he intend to seek clearance and when will he do so?

Pat Rabbitte (Dublin South West, Labour)
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I thank the Deputy for her question. I am pleased that we have, at last, got feed-in tariff approval from Brussels in respect of onshore wind.

The answer to the Deputy's question is that I have not made such an application in respect of offshore wind and it is not my intention to do so at this time. It is not simply that I have made a distinction between onshore and offshore wind generation. There is a manifest distinction. Offshore is at least twice as expensive. I am satisfied, on the best advice available to me, that we can make our targets from the development of onshore capacity, biomass and related technologies.

I do not say the Deputy's information about Northern Ireland is not correct, but it is certainly news to me. We are doing relatively well vis-À-vis any member state of the European Union, let alone Northern Ireland. If one were to develop an 800 MW farm, as the Deputy suggests, it would impose more than €220 million on the cost of the PSO. The Deputy's question concerns the fact that, because we are an island, we are blessed with bountiful resources in the wind area.

The issue is whether we can develop an export capacity in respect of that and whether the development of such an export industry requires a subsidy. I have looked at that issue and, in my view, we have that prospect. There is no example of this in Europe. There is no cross-border intergovernmental agreement for the export of offshore wind. However, I have spoken with my British counterpart on this matter on a number of occasions and I believe it is possible to develop an intergovernmental arrangement for the export of excess energy from here. However, I do not think it would be a good use of scarce resources to provide a subsidy to do that. We can do it without a subsidy.