Thursday, 11 October 2012
To ask the Minister for Communications, Energy and Natural Resources the way he will ensure that Ireland adheres to the legal obligations under the EU Energy Efficiency Directive, adopted by the European Parliament on 11 September 2012; and if he will make a statement on the matter. [43716/12]
To ask the Minister for Communications, Energy and Natural Resources if he will confirm whether Ireland is not complying with the EU Energy Efficiency Directive and may face fines if more dwellings are not made more energy efficient; if he has reviewed the EU funded research conducted by the Tipperary based Sustainable Energy for the Rural Village Environment project which states that Ireland will miss its EU energy efficiency target by 2020; and if he will make a statement on the matter. [43582/12]
I propose to take Questions Nos. 7 and 17 together.
The existing energy services directive, Directive 2006/32/EC, was fully transposed by SI 542 of 2009, the European Communities (Energy End-Use Efficiency and Energy Services) Regulations 2009. Therefore, it is incorrect to say that Ireland is not in compliance with its existing EU obligations.
The current national energy efficiency action plan was published in May 2009 and outlined the framework for delivering Ireland’s energy efficiency targets by 2020. This action plan was a requirement under the energy services directive and further updates will be required in 2014 and 2017. The second action plan, which I will be bringing to Government shortly, provides a progress report on delivery of the national energy savings targets implemented under current EU requirements as well as energy efficiency policy priorities between now and 2020. The action plan will show that Ireland is on track to deliver the 20% energy saving target.
My Department has participated in a number of conferences organised by the sustainable energy for the rural village environment project, including most recently last Friday, 5 October, and is fully aware of the research undertaken to date.
The new energy efficiency directive, which will supersede the existing energy services directive, has been adopted by the Council of Ministers and European Parliament. It will translate elements of the European efficiency plan into binding measures on member states, including an annual rate of renovation for central government buildings of 3%; an inventory of central government buildings with a total useful floor area over certain thresholds; an obligation on public bodies to procure products, services and buildings with high energy efficient performance; obligations on industry relating to energy audits and energy management systems; and a common framework for national energy savings obligation schemes equivalent to annual energy savings of 1.5% of energy sales. The new directive will be published in the Official Journal of the European Union in November and will enter into force in 2014. Transposition of the directive will be progressed over the coming months.
The 3% renovation target for central government buildings represents a challenge for Departments and the Office of Public Works but the energy savings will greatly outweigh the costs of renovation. We will work closely with the OPW over the coming months to prepare a plan for the realisation of this target. In respect of the proposed 1.5% obligation scheme in article 7, which is at the heart of the new directive, it is clear this will be a difficult target to deliver. Our intention is to work constructively over the next 12 months with energy suppliers already engaged in delivering energy saving targets to construct a suitable obligation scheme.
Adequate private and public funding is critical to delivering on the objectives, particularly in article 5. In this context measures to address Government debt and accounting barriers are required if we are to realise the potential for energy performance contracting in the public sector. It is my intention to bring forward a memorandum for the Government in due course, following a consultation process on the new directive, to set out in detail the key provisions and challenges inherent in implementation, including the costs and benefits.
I note that the Minister will bring a memorandum to the Cabinet regarding the methods through which he hopes to meet the demands of the new directive. It is claimed that every year until 2020, some 90,000 Irish homes will need significant energy upgrades if the country is to adhere to its legal obligations under the directive. In light of research indicating that fewer than 50,000 homes will undergo energy upgrades in 2012, Ireland may be unlikely to meet this target. Does the Minister believe we can comply with the terms of the directive in the absence of full implementation of the national energy retrofit programme? We all acknowledge the fiscal constraints but can he provide an indication of what can be done to put alternative financing in place?
Budget 2012 cut grants by an average of 35%. The total allocation in 2011 was €99 million but the figure decreased to €64.6 million in 2012. The Minister introduced a new method of categorising grants which discriminates against mid-terrace homes and apartments, which by their nature tend to be occupied by those on lower incomes.
It is clear that a shift in opinion towards energy efficiency is needed. How does the Minister believe the shift can be best achieved, when does he intend to bring the memorandum before the Cabinet and when does he expect a decision to be made by the Government? It is only at that point will be able to decide how to meet the demands of the directive.
The energy efficiency directive will only be published next month and this will be followed by a prolonged consultation period because of the severity of the measures included. However, I welcome the measures and I supported the Danish Presidency at the Council of Ministers when it introduced them because they are hugely important. I welcome anything that gives an impetus to the renovation of public buildings. Without such an impetus we will continue to waste energy as before and some of these buildings will remain unsuitable. The 3% target for renovating central government buildings is important for these reasons.
The 1.5% imposition will be more problematic, however. The energy supply companies are already working on the issue but it is a stout target, particularly if the economy starts to grow once again.
On the reduction in grants under the retrofit programme, Deputy Cowen is not factoring in the additional €30 million I received from the Minister for Finance in the middle of last year.
It is against that figure he is taking the reduction.
It is true there has been something of a fall-off in applications. This may be because we have reached saturation, in terms of the 240,000 homes already done, which were willing and knowledgeable participants, or because we have been through a very mild winter after two previous exceptionally severe winters and there is a downward spike in terms of the visible applications, or perhaps because of the recession. It is important to put this point on the record with regard to the recession. Even where people avail of the grant, they must put their own finance up front also. In circumstances where people, even those who can afford to do so, are not putting their hands in their pockets, this is a factor. This worries me with regard to the future.
The buy-in of householders is the key point. How much must householders undergoing a retrofit pay from their own pockets? There is an issue too with regard to pay-back. How long is it before this is recouped? Given the fact that electricity and gas prices have escalated significantly, by 25% or 30%, since Deputy Rabbitte became Minister - an incredible state of affairs - what more can be done to encourage householders to take part in this scheme and to get a greater buy-in to it? Should there be more of an onus on the energy providers? Should there be more of an onus on companies like Electric Ireland and Airtricity? Should they be responsible for undertaking to assist households have more energy efficient houses? They have got away with murder in this regard. The target of 1.5% is derisory.
On the issue of new homes, I commend the Tipperary based SERVE study on this matter. There is often a feeling that even in the past ten years since we have taken climate change seriously, building regulations have not been followed and we have not built energy efficient houses. What does the Minister intend to do in that regard? Yesterday, we raised the issue of the collapse in the social housing programme with the Taoiseach. Will the Minister make it an ambition of his ministry, along with the Minister for the Environment, Community and Local Government, to ensure that all new homes will be energy efficient and therefore provide cheaper energy for householders? The encouragement of householders is clearly the first element of the programme.
The average would be a ratio of approximately 2:1. For example, if people are getting a grant of €4,000, they are expected to put up approximately €8,000. In the current climate, this is something to cause homeowners to reflect on whether to retrofit and this is one of the reasons I am in the process of compiling a new pay-as-you-save scheme, which will have the merit of not requiring the homeowner to put money up front. The idea would be that over a period of two or three years, the renovation would be funded from the savings that would accrue.
This is a far more complex undertaking than it may sound. I have had considerable discussions with the two pillar banks and with the two chief executives of the banks who would be required, as well as the supply companies, to come to the tape on this. The end product must be attractive to the homeowner because the message on energy efficiency is still not adequately made. I hope that whatever product we settle on eventually will be accessible, intelligible, simple and attractive to homeowners. As the Deputy has said, the quality of much of our built environment leaves a lot to be desired. Building regulations either did not exist or were flouted in the past and we are left with the legacy of that.
I have had discussions with my colleague, the Minister for the Environment, Community and Local Government, and my officials have met his officials to discuss what contribution they can make in the context of the affordable energy strategy we published some months ago.
Will the Minister consider revising upwards the target number of houses to be retrofitted? If we thought in terms of hundreds of thousands, not only would we make huge inroads on energy efficiency - 40% of energy use here is by domestic dwellings - but we would do something significant for job creation. Imagine what that would do with regard to removing people from jobseeker's allowance. It can be done if the political will is there to do it.
I agree there is a significant jobs dimension to all of this. Last year, the figures indicated that 5,500 were involved in the retrofit programme. Undoubtedly, there are jobs in this area. However, the current scheme is a demand-led scheme and there is limited investment in terms of what can be put into such a grants-based scheme. This is why we are working on the transition from that incentive scheme to a pay-as-you-save scheme. Hopefully, we can design a product that will both enhance participation and at the same time create jobs in the retrofit process.