Thursday, 11 October 2012
Ceisteanna - Questions - Priority Questions
To ask the Minister for Communications, Energy and Natural Resources his plans to enable the State sector including the ESB to develop the offshore wind industry using European Investment Bank funding or otherwise in view of (details supplied); his views on whether the basis for the development of our renewable energy resource has been funded by the State through Sustainable Energy Ireland, the Department of the Marine, the Marine Institute, the HMRC in UCC and the ESB; his further views on whether his plans for the development of the resources will enable multinational energy corporations, including those based here, to extract profits from the development of this resource with no payback to the Irish taxpayer for their investment in this resource over decades. [43958/12]
Any alleviation of the burden on my shoulders that the Chair can provide for will be welcomed.
In 2011 Ireland had figure of 17.6% for renewable electricity, 3.6% for bio-fuels and 5% for renewable heating, which amounted in total to 6.5% of all energy consumed being generated from renewable sources. The Government is committed, to meet our 2020 binding targets, to increasing the figure for renewable energy to 40% in the electricity sector, 10% in the transport sector and 12% in the heating sector, which together amounts to 16% overall, in line with our target under the EU renewable energy directive.
New renewable electricity generation has been supported to date in Ireland by the AER and REFIT schemes. These schemes which provide guaranteed floor prices for renewable electricity are financed through the public sector obligation, PSO, levy that is funded by all electricity consumers and not through direct Exchequer funding.
Separate to the schemes mentioned which underpin delivery of our renewable electricity target, there has been a certain level of public funding allocated as research funding to the wave and tidal energy sector in recent years. This sector is still at the research and development phase and is not yet commercially viable anywhere in the world.
Ocean energy was recently identified as a priority area in the research prioritisation exercise undertaken by the Department of Jobs, Enterprise and Innovation, given its potential for the development of a future industrial sector. The development of ocean energy sources has been pursued in line with the 2006 ocean energy strategy published by the Department of Communications, Energy and Natural Resources. The Hydraulics and Maritime Research Centre, HMRC, in Cork has a wave test tank where early stage devices can be tested and has developed a systematic protocol for the scaling up and testing of wave technology. In addition, ocean energy research is engaged in at certain third level education institutions.
The Sustainable Energy Authority of Ireland, SEAI, ocean energy development unit has encouraged the ocean energy sector, including through the administration of a prototype development fund of grants, whereby up to 50% co-funding for scale testing and other research in the ocean area has been provided for industry.
Additional information not given on the floor of the House
SEAI, together with the Marine Institute, has been involved in the development of the Galway Bay wave test site and the Marine Institute, together with IBM, has been involved in the SmartBay project, creating ICT links side by side with the development of ocean energy technologies.
The number of long-term sustainable jobs that new renewable energy projects can deliver depends on a variety of factors. The employment figures quoted by the Deputy are estimates based on a variety of assumptions. A 2009 report by the Irish Wind Energy Association, IWEA, entitled, Jobs and Investment in Irish wind energy, estimated that the wind energy sector in Ireland can support 1.5 jobs per MW installed. At the end of 2011, 17.6% of our electricity was from renewable sources, with approximately 1900 MW installed. At an EU level, the European Wind Energy Association analysis found that at European level there were 15 jobs created per MW. Wind turbine and component manufacturing provide the majority of employment opportunities, representing 12 of the 15 jobs created in the European Union for every MW installed.
The ability to harness a high level of employment from renewable energy projects depends, to a large extent, on related industry such as turbine and cable manufacturing industry being based in Ireland. This would only occur if renewable electricity access to the much larger UK market was achieved as the Irish market on its own would not sustain such investments. The potential for export of renewable electricity was outlined in the strategy for renewable energy 2012-20 which I published earlier in the year.
The mechanisms by which renewable energy can be traded with another country are provided for under the renewable energy directive in articles relating to co-operation mechanisms. The use of these co-operation mechanisms under the directive requires formal agreement between two or more governments. I have had a number of bilateral discussions with my UK counterpart in this regard and we are actively exploring the possibility of trade in renewable energy between the two jurisdictions, with a view to reaching a memorandum of understanding by the end of the year.
A key principle for me in the event of export of Ireland’s renewable energy resources is to ensure an adequate return for the State from such activity. In the event, for example, that renewable power was being exported to the United Kingdom, for example, it will be necessary to ensure the costs associated with new transmission infrastructure to export the power and the cost of a support scheme for renewable developers are paid for by UK consumers, rather than Irish consumers. If the Government decides to enter an intergovernmental agreement under the directive with the UK or any other Government, it will ensure sufficient return and benefits to the State from such projects. This would likely include either a share of the renewable value of the projects or the imposition of a financial royalty type payment on exporting projects. Wind energy projects typically pay around €7,000 per MW installed to the local authority as a rates payment every year. On top of this, most projects typically pay between €1,000 and €1,500 per annum as a community benefit fund to the local community in return for any inconvenience caused in the locality. The export royalty payment which would be made directly to central government would be in addition to these existing payments.
The State energy companies, notably the ESB and BGE, are already engaged in the renewable energy sector. Further investments by these companies in the sector would be a matter for them, taking account of their commercial remit.
My question was about how the State would benefit from our substantial resources with reference to wave, wind and tidal energy, particularly as Ireland has one third of all renewable resources in north-west Europe. Decades ago the Minister was one of the stalwarts and leading lights in the resources protection group which produced some good material about our oil and gas industries, as well as the robbery anticipated in that regard. Now we have many private companies slobbering over the opportunities to profit from our wave, wind and tidal resources. What will the Minister do to protect these resources which could be used to benefit all of the people? Last night there was a meeting in Mullingar at which farmers were asked for sites for wind turbines for Mainstream Renewable Power and other energy groups. What does the Minister have to say about this company which is headed up by former Labour Party members Brendan Halligan and Eddie O’Connor and which stands to make substantial profits, potentially tens of billions of euro, from this resource? What is the Minister doing to ensure the people will benefit from it rather than private companies?
I apologise to Deputy Daly. The remainder of my answer deals with all of this but she must wait to read it on the record. Anyway, it deals with the matter at some considerable length.
I know the Deputy would prefer to have all the information. What am I doing to protect our indigenous wind resources? Potentially, we have the capacity to generate perhaps twice our own requirement. We would only do this if we had a market for the excess; otherwise, there would be no point. Generally speaking, one cannot store electricity. If there were a market then there would be potential for us to develop an export sector in this area.
I have been involved in discussions for some time with my opposite number in Britain. The objective is to conclude a memorandum of understanding by the end of this year to facilitate export from this island to the neighbouring island. Theoretically, it could be a win-win situation if we can generate excess renewable energy in this island and if the neighbouring island has a need for energy and a requirement to meet renewable energy targets. What is in it for Ireland? I assure the Deputy that it is not my intention that Ireland will get some jobs in construction and making the sandwiches. That is not the approach I am taking. I trust we will be able to make an agreement whereby the State retains a share of the renewable energy value or imposes some type of royalty.
It is somewhat unfair of the Deputy to seek to slander the particular company she mentioned. She alleges there are people with Labour Party membership in their present or past and that they are trying to rip off the wind. Eddie O'Connor has a proud tradition in this country, whether as an engineer in the ESB, as chief executive of Bord na Móna, as the founder and creator of Airtricity or, now, as the founder of Mainstream Renewable Power.