Dáil debates

Wednesday, 7 March 2012

Priority Questions

Energy Conservation

1:00 pm

Photo of Niall CollinsNiall Collins (Limerick, Fianna Fail)
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Question 1: To ask the Minister for Communications; Energy and Natural Resources if he received a warning that the cuts he announced in the warmer homes better energy scheme would result in job losses; and if he will make a statement on the matter. [12920/12]

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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The Sustainable Energy Authority of Ireland, SEAI, administers the low income housing retrofit programme, Better Energy: Warmer Homes, on behalf of my Department. As I announced in the context of the budget, the Government has committed significant funding of €76.146 million to the wider better energy programme this year, of which €17.146 million is allocated to its Better Energy: Warmer Homes section.

The 2012 allocation of €76.146 million for the overall better energy programme, including Better Energy: Homes, is an overall decrease of 19% year on year. I was able to secure an additional €30 million from the jobs initiative last May. This figure, combined with the 2011 budget allocation of €60 million and €6 million in savings, brought the 2011 total to €96 million. This is a substantial allocation at a time of severe budgetary constraint and in the context of the overall reduction of €750 million which the Government had to make on capital expenditure in 2012. The programme continues to underpin significant economic activity, supporting at least 4,500 jobs and realising significant energy savings for households. The relative prioritisation accorded to the programme is a recognition of its economic, employment and environmental impact.

Grant levels for half the measures under Better Energy: Homes have been adjusted for 2012 in light of market developments and to ensure a better link between grant support and dwelling type. For instance, the reduction in the external wall insulation grant reflects increased price competitiveness in the market and the relative cost of undertaking this work on the various house types.

Additional information not given on the floor of the House.

Since the start of 2012, there has been a decrease in applications across all measures in Better Energy: Homes. The factors behind this trend are unclear and I have asked my Department and the SEAI to report urgently to me in the matter. For example, take-up of the external wall insulation measure has decreased by the least amount, despite the grant level for this activity being reduced by the highest amount. Nevertheless, I would be concerned by any adverse employment impact resulting from the adjustments in grants, while accepting that the scheme must be operated within the allocated budget in 2012.

It is difficult to assess the extent, if any, of job cuts on Better Energy: Warmer Homes as it has a smaller allocation than Better Energy: Homes and is primarily delivered by community-based organisations, of which 26 typically operate back-to-work schemes. In locations where no community based organisation is active, the SEAI ensures measures are delivered by private contractors who are appointed on the basis of a competitive tendering process. In this regard, an invitation to tender was recently published by the SEAI in the EU Journal to establish a new panel of contractors to augment the community-based organisation network. The procurement process will take a number of weeks to conclude and a panel should be in place in May.

This year will see a shift in focus in the Better Energy: Warmer Homes scheme to take account of the publication of the affordable energy strategy and the involvement of energy suppliers in meeting their energy savings targets agreed as part of their voluntary agreements with the SEAI. This new approach will see greater focus placed on introducing an area-based approach to low income housing retrofits. This will result in more opportunities for both community-based organisations and private contractors.

Photo of Niall CollinsNiall Collins (Limerick, Fianna Fail)
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We all agree the scheme has been successful in terms of energy efficiency, securing savings in energy bills and reducing our carbon footprint. This is important in respect of climate change, which is another agenda on which we must focus. Will the Minister nail down the up-to-date position regarding the 2,000 additional jobs mooted as part of the jobs initiative? Is the sum of €30 million provided under the jobs initiative a once-off contribution to the better energy programme? Were the 2,000 jobs realised and, if not, how many jobs have been created under the scheme? Was the Minister warned, prior to the budget, of potential job losses if the budget for the scheme was reduced? Was this matter discussed?

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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The outturn figures for last year show that between 5,750 and 5,900 jobs were supported by the scheme. In other words, the 2,000 jobs promised under the jobs initiative materialised. Incidentally, I do not know if I should congratulate the Deputy or commiserate with him. Either way, my intentions are good. Unfortunately, as the Deputy indicates in the question, the allocation to the Better Energy: Homes scheme has been reduced owing to the overall reduction imposed on the Government by the memorandum of understanding. However, the allocation still compares favourably with the figure from the 2011 budget. While the latter provided €60 million for the scheme, the 2012 budget provides €76 million for the scheme. As Deputy Collins noted, I was able to secure an additional €30 million from the jobs initiative last year, and this boosted employment. It is our expectation that the scheme will support approximately 4,500 jobs this year. Whether this figure will be exceeded, I cannot say at this stage.

Photo of Niall CollinsNiall Collins (Limerick, Fianna Fail)
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Information obtained under the Freedom of Information Act indicates the Department was warned by the Sustainable Energy Authority of Ireland that a budget of €71 million would sustain 4,000 jobs. It is critical to nail down the precise number of jobs that will be supported under a specific measure. The Minister indicated the total amount allocated to the scheme in 2011 was €96 million. Does this figure include money that was carried forward?

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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As to the advice given by the Sustainable Energy Authority of Ireland, which administers the scheme, its assessment of the €76.146 million is that it will create or sustain 4,500 jobs. That is the SEAI's advice as of today. Almost all of the budget for 2011 has been spent. The uptake, which was high in 2011, has decreased in the first two months of 2012. I have asked the SEAI to give me an analysis of this decline. Prices in the marketplace are more competitive and the scheme has been finessed as it has progressed. The idea was to kick-start awareness of the merits of energy efficiency, for all of the reasons Deputy Collins cited. However, whether as a result of the finessing of the grant levels, the exceptionally mild winter or some other reason, the figures are down, as the Deputy noted. I am not sure one can make a judgment on the basis of two months and I have asked the SEAI to report to me on the matter.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I remind the House that we have six minutes per question.