Dáil debates

Tuesday, 28 April 2015

Ceisteanna - Questions - Priority Questions

Energy Production

5:55 pm

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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3. To ask the Minister for Communications, Energy and Natural Resources when he will publish the cost-benefit analysis report of wind energy and its potential effects on consumers' energy bills; the reason for any delay in publishing the report; and if he will make a statement on the matter. [16482/15]

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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This question relates to the cost benefit analysis report on wind energy and the impact it could have on the energy bills of consumers. When will the report be published and if it is delayed, what is the reason for the delay?

Photo of Alex WhiteAlex White (Dublin South, Labour)
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Analysis undertaken by the Department, the Sustainable Energy Authority of Ireland, EirGrid and the Commission for Energy Regulation has assessed the costs and value of choosing the path towards 40% renewable electricity generation in 2020, compared to a scenario where renewable electricity remained at 2013 levels. This analysis has informed a report which will be published shortly.

It is important to note that our transition to renewables has been underpinned by a number of previous studies. The all-island grid study, published in 2008, assessed the technical feasibility and the relative costs and benefits associated with various scenarios for increased shares of electricity sourced from renewable energy in the all-island power system. The scenarios were informed by the resource available, technological readiness of the various generation technologies and cost required per generated unit. The mapping for the analysis also assessed the deployment potential, based on where the resource was and an overview of environmentally designated areas. The 2008 study informed the position for a contribution of 40% renewable electricity in Ireland by 2020. It concluded that, based on assumptions set out in the report, wind energy represented a cost effective source for electricity generation.

The abundant wind resource in Ireland means that each unit of installed wind generation capacity generates more units of electricity when compared with other countries and hence needs a lower rate per generated unit of electricity in order to recover the overall costs of the project. The existing feed-in tariff, REFIT, which is funded from the PSO levy on consumer bills, is a cost effective tool to support this development, as indicated by a report published by the Council of European Energy Regulators earlier this year. This position has been underpinned by various reports and analyses which have examined the effect of renewables on electricity prices. The ESRI, the Irish Wind Energy Association, the SEAI and EirGrid have undertaken such studies and published the results of same. Furthermore, wind generation in Ireland in 2012 is estimated by the SEAI to have displaced fossil fuels, almost all of which would have been imported, to an estimated value of €177 million, with the value of avoided CO2 emissions being a further €11 million.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I take it the report will be published shortly, whenever that will be. It is vital the report is comprehensive and that we know the facts. There have been reports in a number of other European countries where subsidies towards renewable energy have led to significant increases in household bills for consumers. We are in a situation where a huge investment needs to take place in the transmission network in order to facilitate the development of wind energy across the country. When we consider that EirGrid intends to spend over almost €4 billion upgrading the transmission network to facilitate wind energy, this seems to be a costly exercise, particularly when there are other technologies available, such as biomass, which could be used to meet the targets without the need for the massive infrastructural investment.

Will the report examine the impact this will have on consumers' bills? Will it provide a breakdown of the impact as costs are passed on to the consumer? It is vital consumers are made fully aware of this.

Photo of Alex WhiteAlex White (Dublin South, Labour)
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As I mentioned, a number of reports and analyses have examined the effect of renewables on issues such as electricity prices. The Deputy is correct there is a cost involved. There is a cost associated with any of the technologies in terms of the supports and incentives we need to put in place. This issue is about accessibility of technology, the state of development of technology and the cost of technology in terms of investment. However, it is also an economic issue for the Exchequer and the Government, because it involves supports and incentives. Therefore, it is a State funding issue also.

The ESRI and IWEA studies considered the 2020 position, while a joint SEAI-EirGrid study looked at the position in 2011. I can give the Deputy additional information later or in a further supplementary response.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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Will other technologies be investigated in terms of the potential costs? The wind energy programme was established in 2007 and at that time technology pointed to wind as being a solution. However, technology has moved on since then and biomass is very much a solution, requiring a significantly lower investment. I have seen figures that indicate that with 10% of the cost of the upgrading of the electricity infrastructure, we could convert the likes of Moneypoint to biomass and meet our Kyoto targets and our 40% renewable energy targets. The report must look at the potential for other technologies and must recognise that technology is continually advancing and that it may be time to look at the viability of wind against these newer technologies.

Photo of Alex WhiteAlex White (Dublin South, Labour)
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People make assertions about the level of investment involved and sometimes they think other technologies are cheaper, but when we delve into the issue and examine and analyse it, that is not always the case. However, we must keep these issues in mind in the context of the White Paper and the decision we will make later in the year. If we were to consider taking the biomass approach at Moneypoint for example, its capacity is 915 MW and its demand for biomass would far exceed the available biomass or potential biomass available in this jurisdiction. Some estimates suggest that 260,000 hectares of energy crops would be required, whereas to date, some 3,000 hectares have been planted under the bioenergy scheme run by the Department of Agriculture, Food and the Marine. Therefore, if we took that approach, the plant would be heavily reliant on imported biomass. Such large levels of import would raise considerations as to environmental sustainability of the operation.

I am keeping an open mind in regard to all of the new technologies, solar and others, in the context of the definitive White Paper we will publish in September. I would welcome the input of all Deputies on the issues, particularly in regard to renewables. Wind cannot solve all of our problems. It has been cost effective, but the Deputy is correct. We must ensure we look at all of the other available technologies. However, we cannot assume, without comprehensive analysis, that some of the newer technologies will be cheaper or more viable.