Thomas Pringle (Donegal South West, Independent)
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43. To ask the Minister for Communications, Energy and Natural Resources the status of the introduction of a domestic renewable heat incentive to stimulate biomass demand, and given the Conference of Parties 21, if he will implement policies to further develop the biomass industry as part of Ireland's contribution to tackling climate change; and if he will make a statement on the matter. [44806/15]

Thomas Pringle (Donegal South West, Independent)
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Will the Minister comment on the introduction of a domestic renewable heat incentive to try to incentive the biomass industry and to meet our renewable energy targets, particularly in light of the COP21 negotiations last week

Alex White (Dublin South, Labour)
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The 2009 EU renewable energy directive set Ireland a legally binding target of meeting 16% of our energy requirements from renewable sources by 2020. This is not without its challenges, as I have said, particularly in the areas of heat and transport. The potential of the bioenergy sector to make a significant contribution in this regard is well recognised. I published a draft bioenergy plan in 2014 which was, in part, designed to capture this potential through the development and introduction of measures to encourage the growth of Ireland’s biomass and bioenergy sectors. One key demand-side measure identified in the plan was the introduction of a renewable heat incentive, RHI. Following analysis of various options, including increased carbon taxes, the option with the least modelled cost is an appropriately focused renewable heat incentive targeted at larger commercial and industrial heat users, at least in the first instance, and not at the domestic sector.

As part of the process to design an effective RHI scheme, my Department published the first of three consultations in July this year to identify a range of technologies in the heating sector. Currently, all responses to this first consultation are under review. Two further consultations are expected in 2016 in order to finalise the new RHI support scheme subject to Government approval and state aid clearance from the European Commission.

The current renewable energy feed in tariff, REFIT, 3 support scheme is designed to incentivise the use of biomass and bioenergy. This support scheme has already stimulated growth in the Irish biomass sector and the SEAI have reported that in 2014 the overall use of biomass grew by 13.2%. There is little doubt that shifting from fossil fuels to sustainable biomass and bioenergy more generally can help reduce overall emissions and tackle climate change.

Thomas Pringle (Donegal South West, Independent)
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I thank the Minister for his reply. It is clear that the contribution will be solely driven by the commercial sector and the large industrial users and it seems that those are the sectors the Department is targeting in terms of incentivising production. It is vitally important that we meet the heat targets set. The Minister pointed out that we are only reaching 6.6% of renewable energy production through the heat sector. We need to target domestic users. There are more than 2 million homes in this country, the vast majority of which are heated by fossil fuels - by oil and gas. If we are serious about achieving the targets and getting buy-in from the public in terms of tackling climate change and meeting our renewable energy targets, the Government needs to incentivise domestic users. There are organisations around the country, such as the Donegal woodland owners co-operative which are developing models and market streams for wood as a fuel for households, and they would benefit greatly from a domestic incentive that would encourage more farmers to go into the area of forestry, develop it and create jobs in the rural sector. It is vitally important for the Minister to encourage that.

Alex White (Dublin South, Labour)
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I appreciate what the Deputy said about the domestic sector. We have large industrial users in place in the country. We might not like many of these big operations and companies and so on but there is no point in us believing that we should not bring them into the picture and ensure that we incentivise them. I understood that was the point the Deputy was making with respect to a cut at the larger users and I apologise if that is not what he meant. He is right about the domestic sector in that we need to incentivise it.

The analysis we carried out suggested that it would not be cost effective at this stage to include the domestic heating sector in the RHI scheme. This is due to a number of factors, including the much higher support tariff per kilowatt hour of energy that would be required to incentivise households to change heating systems as well as the significantly greater cost associated with administering the scheme for a large number of households in what is an unregulated sector compared to the approximately 3,000 or so commercial and industrial installations envisaged for the scheme. However, there is much we can do in the domestic sector. Electricity has a role to play. Traditionally, we have shunned the idea of electric heat, for reasons that we all understand, in that we regard it as expensive and so on. There are many outstanding new developments happening in the sector where we can see that electricity can, in many ways, be the answer, or one of the answers, in the domestic environment.

Thomas Pringle (Donegal South West, Independent)
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I was not saying that the industrial users should not get an incentive. I would argue as to whether they require an incentive because in drawing up their financial plans for the future they can see that they will be a return on it. However, domestic users would need an incentive not only in terms of meeting our targets but stimulating an industry across rural Ireland that could develop, grow and provide jobs. That is where the importance of providing an domestic incentive comes into the equation. The Government has decided that it will incentivise business and the business sector gets many incentives. It is time for the householder to get an incentive and for domestic renewable heat production to be incentivised.

Alex White (Dublin South, Labour)
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We would like to try to do both. In terms of the scale of what we are proposing and the analysis we have done in regard to the RHI, it would not be suitable at this point to direct the RHI scheme into the domestic sector. There will be much that we can do in the domestic sector. We will discuss this in the White Paper which is due to be published tomorrow. We will publish an affordable energy policy early in the new year. A huge amount of work has been in that area in regard to energy efficiency. There is a massive amount that we can do in the domestic sector. I agree with the Deputy on that. It is just that this scheme may not be the most appropriate one to address the domestic sector, but biomass will definitely have a role to play.