Dáil debates
Thursday, 24 February 2022
Saincheisteanna Tráthúla - Topical Issue Debate
Energy Policy
4:35 pm
Ruairi Ó Murchú (Louth, Sinn Fein)
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I thank the Minister of State for taking this topical issue so late in the evening. I would have much preferred that the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, took this on the basis that I spoke to him previously in relation to it this week. I have sent information on to him. He was also involved in launching this scheme once upon a time in 2007. At that time at Carlinn Hall, the idea was that it was billed as the State's largest sustainable energy development. The homes went on the market as the houses of tomorrow. Obviously, we had the Celtic tiger crash, but later a developer bought it and he developed the majority of the 234 houses, which were then sold on. The heating system is a communal heating system. It was initially to be fed by biomass, but this did not work out and it was replaced with gas. I will say this in a straightforward way: it is an utterly inefficient system. It is basically losing 50% of the units of gas. It is operated by Frontline Energy. Frontline Energy does not make any money on the gas. It makes money on a standing order. Therefore, the problem is going to get worse, because of the disgraceful invasion by the Russians of Ukraine. Beyond that, however, we are now in a scenario where people are being charged on the basis of an inefficient system, combined with the huge price of gas.
The Irish Timeshas done a far better job than I will about this. It spoke about Tomás and his family who are paying a bill of €575. Its equivalent the year before was €258. John and his wife are paying a €375 bill and its equivalent the year before was €180. I spoke to Ann Marie who earlier in the year got a bill of €70. It is now up to €353.38.
A number of steps need to be taken. This is straightforward. The current system is utterly inefficient and this needs to be examined from a point of building regulation. Energia charges Frontline Energy on the basis of a commercial unit rate. Communication has happened with the CRU but it has indicated it has no responsibility in respect of these types of heating systems. This is not going to work. The only thing that will work, most likely, is legislative change and there needs to be a capping. We need to accept these are residential units. Families in Dundalk are being screwed and we need a long-term solution.
4:45 pm
Darren O'Rourke (Meath East, Sinn Fein)
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We now face significant gas price increases. Much has been rumoured in recent hours and while we hope it will not come to pass it looks as though it will if some of the people I have been talking to are anything to go by. Deputy Ó Murchú outlined the specific circumstances in regard to this case but I wish to make a broader point regarding the national heat study, which was published during the week. Carlinn Hall is a poor example of the opportunity that exists for district heating, but the report makes clear the need to move to these types of system to harness the waste energy and heat from industry and the great potential in that regard.
Frank Feighan (Sligo-Leitrim, Fine Gael)
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I thank the Deputies for raising this timely issue, given what has been happening today. District heating offers the potential to make use of renewable and waste energy to heat homes and businesses as part of a range of measures to reduce carbon emissions. In Ireland, district heating currently accounts for a small share of the heating sector, estimated to be less than 1%. The Government is committed, however, to ensuring that advantage can be taken of this technology to decarbonise the built environment. The Climate Action Plan 2021 contains actions that provide a solid basis for the appropriate expansion of district heating, including the establishment of a steering group to oversee the roll-out of district heating and to ensure a robust governance framework will be put in place. These actions will also ensure consumer protection, in accordance with the legislation.
The legislative basis for the regulation of district heating is contained in the 2012 energy efficiency directive, which was transposed by SI 426/2014 and SI 646/2016. The directive contains a requirement in respect of the metering and billing of thermal energy, including district heating. It was amended through the 2018 revision and requirements for metering and billing of thermal energy were strengthened by way of that revision. The European Commission has proposed a further revision to the energy efficiency directive, which, once finalised, is expected to strengthen further consumer protection and empowerment. In addition to provisions contained within the energy efficiency directive, the 2018 renewable energy directive contains provisions for making information available to consumers in respect of energy performance and the share of renewable energy in their district heating and cooling systems.
The district heating steering group, established in line with an action set out in the climate action plan, brings together expertise from a wide range of organisations to assist with the development of district heating and to make evidence-based recommendations to the Government regarding targets for district heating. The steering group will draw on the findings of specialised working groups focused on key areas pertaining to the roll-out of district heating, including regulatory regime, planning guidance and financial options.
Under the House of Tomorrow programme, the first phase of approximately 50 homes in the Carlinn Hall development were supported by the Sustainable Energy Authority of Ireland. The homes were built to a higher standard of efficiency than the then building regulations and were approximately 40% more efficient than was then required. This means that, when they were launched in 2007, they were approximately 40% more efficient than they would be if they had been built to the standards of that time. The district heating network was also supplied by a central boiler, which significantly reduced the carbon footprint of the homes, given the fuel was originally biomass. I understand, however, that the fuel source has, since installation, been changed to a gas boiler.
Gas prices are not capped in Ireland, whether at a commercial or residential level, and electricity and gas markets operate within a European regulatory regime, whereby electricity and gas markets are commercial, liberalised and competitive. Nevertheless, I take on board, not least in the context of what has happened today, that prices will increase and the Deputies gave some sobering examples of the effects of the price increases on residents which I will convey to the Minister.
Ruairi Ó Murchú (Louth, Sinn Fein)
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I appreciate the Minister of State's response and will follow up with the Minister on the matter. We all accept the benefits of district heating systems when they use overflow heat, which would otherwise be waste, but that is not the case here. From an environmental point of view, they are a complete disaster in the sense that they must use 100 units to get 50 units of heat. That is not going to work.
As anyone who has made contact with the CRU will know, it maintains it does not have responsibility in this field, and that needs to be rectified. One way or another, these people are paying an extortionate price for gas and it needs to be capped. We need to ensure the CRU can take action. There is a wider issue in respect of building regulation and heat energy assessment modelling. We cannot end up with heating systems such as this again. Long term, we will need a solution for Carlinn Hall, which I assume will mean a different form of heating system and possibly a different energy supply.
Darren O'Rourke (Meath East, Sinn Fein)
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On the opportunity arising from district heating, I return to the national heat study. We have seen the example of Codema and the data centre in Tallaght. In the past, there have been town gas and other communal systems. There is an opportunity in that regard but it has to be done right and embedded appropriately. My local authority is setting up an energy agency in co-operation with Kildare County Council and Wicklow County Council. There is opportunity but it will need to be co-ordinated.
There is potential for a significant increase in the price of gas. The Government has not acted in respect of carbon tax and has indicated it cannot act on VAT. It needs to go back to the drawing board to respond to the increase in the price of gas that is on the horizon.
Frank Feighan (Sligo-Leitrim, Fine Gael)
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Deputy Ó Murchú talked about the CRU needing the power to take action and I will convey those views to the Minister. He went on to state we need a solution for Carlinn Hall and I thank both him and Deputy O’Rourke for raising that issue. Deputy O'Rourke raised the issue of the Tallaght data centre and the provision of town gas. Unfortunately, gas prices will continue to increase and we hope the Government can bring in some measures that will reduce the serious impact that will have.
The position of successive Governments for almost 20 years has been that competitive energy markets result in greater choice for consumers and businesses in terms of suppliers, products and prices and support competition to drive down prices. The CRU ended its regulation of retail prices in the electricity market in 2011 and in the gas market in 2014. Given prices are no longer regulated, they are all set by suppliers as an entirely commercial and operational matter. Each company has a different approach to pricing decisions over time and in accordance with factors such as the company's overall strategic direction and the development of its cost base.
However, as I said, all EU member states have been affected by recent high global energy prices to various degrees. Recent developments, as in what happened today, have underpinned the importance of moving away from our reliance on imported gas and instead accelerating developments of renewable energy generation across the country.
A central part of the solution lies with cost effective energy efficiency measures and accelerated deployment of renewable energy sources. It is of utmost importance to proceed swiftly with the treatment of the Fit for 55 package to achieve climate neutrality by 2050. A well-managed energy transition is not the cause, but part of the solution to keep prices affordable and predictable.
I thank both Deputies for raising this issue.
4:55 pm
Ruairi Ó Murchú (Louth, Sinn Fein)
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It was probably remiss of me not to state we have already started chasing this up with Energia, which is the gas supplier.