Tuesday, 28 June 2022
EirGrid, Electricity and Turf (Amendment) Bill 2022: Second Stage
I move: "That the Bill be now read a Second Time."
Having regard to the unprecedented pressures on the energy sector, I am pleased to have the opportunity to commend the Bill to the House. I will open the debate by setting the context for the actions to be taken on foot of the Bill. Although many Members will be familiar with these issues, it is important to take this opportunity to set out the complex situation we will find ourselves in with regard to security of electricity supply and the wider pressures on the energy sector. I will also describe the sections in detail and, with regard to its main provisions, I will set out the background and why they are needed. However, my overarching message is that while the provisions the Bill will establish are part of a broader programme of actions, it is critical that it be passed prior to the Dáil rising and, therefore, I seek Members' support to achieve that.
First, I will discuss the generation capacity gap that the provisions in the Bill seek to address, along with outlining the broader programme of actions and measures being taken to address security of electricity supply over the coming years, including how the measures in the Bill support the transition of our electricity grid to up to 80% renewables by 2030. Second, I will reaffirm the urgency of the Bill to maintain a secure electricity supply for customers. Finally, I will outline the necessity of the Bill in protecting customers against rising electricity costs through the establishment of a process to allow for the public service obligation, PSO, to be credited as a benefit to electricity customers when the Commission for Regulation of Utilities, CRU, calculates a negative PSO.
On the factors affecting security of electricity supply, Deputies will appreciate that we in Ireland face additional pressures due to our geographical location, low levels of interconnection with other countries, fossil fuel dependency and the smaller scale of the Irish market compared with many other European countries. However, the most immediate factor that will affect security of electricity supply in Ireland over the coming years is a potential generation capacity shortfall that was identified in EirGrid's all-island generation capacity statement, GCS, published in September 2021. This potential capacity shortfall arises in periods of peak demand and largely due to non-delivery of previously contracted capacity, increasing electricity demand and the increasing unreliability of existing plant.
The CRU has statutory responsibility to monitor and take measures necessary to ensure the security of electricity supply. It is assisted in this role by EirGrid, which is Ireland's electricity transmission system operator, TSO. On 7 June 2022, the CRU directed EirGrid, the transmission system operator, to procure, using the most expeditious means available, approximately 450 MW of additional generation capacity from the winter of 2023-24 up to the winter of 2025-26. This is to ensure a secure electricity supply. This temporary generation capacity will be in place until more enduring capacity can be delivered through regular market auctions.
The specific nature of this CRU direction requires the legislation that is before Members today to ensure EirGrid can fulfil the direction as required. This legislation includes supporting provisions for EirGrid in its role of securing the temporary generation units with equipment manufacturers and contracting for its deployment and operation by electricity generators. The legislation also ensures the necessary financial support can be given to EirGrid to achieve the objective.
While this legislation facilitates security of supply through the provision of temporary generation, which ensures there is sufficient reserve capacity on the system to enable security of supply in the peak periods when there is low wind and low interconnection available, it is important to note that this will not impede any of our plans for renewables, interconnection, batteries, demand-side response or energy efficiency.
Having this reserve capacity allows EirGrid to have more confidence in scheduling network outages for new connections to the grid, such as new wind and solar farms from the recently announced renewable electricity support scheme, RESS, 2, list of projects. Having this backup capacity gives more confidence to the grid operator to make these necessary connections and upgrades without jeopardising security of supply. This is very much in keeping with Government policy of delivering up to 80% renewable electricity by 2030.
Further to this, the Bill also provides for an increased borrowing limit for both EirGrid and Bord na Móna. This enables EirGrid to invest in the Celtic interconnector with France and other necessary investments to ensure our grid can accommodate up to 80% renewables by 2030. It also enables Bord na Móna to further develop its brown to green strategy and deliver new investments to former peat harvesting regions.
In order to ensure the security of our electricity supply over the coming years, it is vital that this legislation be passed prior to the Dáil rising to ensure certain measures can be initiated in time, in particular, that EirGrid, from July 2022, can acquire electricity generation, sell and transfer the electricity generation plant to an electricity generator and enter into an agreement with an electricity generator for the operation of the electricity generation plant. I press the urgent nature of this situation and reiterate that it is of paramount importance that this legislation is passed immediately.
Crucially, as well as providing for the provision of temporary generation for the coming winters, the Bill establishes a process to allow for the PSO to be credited as a benefit to electricity customers when the CRU calculates a negative PSO. This provision will enable the delivery of savings to electricity customers.
Under current legislation, the PSO levy is charged to all electricity final customers to fund renewable electricity generation schemes designed by the Irish Government in support of national policy objectives. The RESS has introduced a two-way floating premium, which means if the wholesale market price is higher than the bid price, the supplier pays moneys back to the customer through the PSO mechanism. The existing legislation does not provide for crediting a negative PSO levy.
In recognition of the rising cost of living and the impact on households and businesses of increasing energy bills, the Government approved, on 14 June 2022, legislative amendments to enable PSO payments to be credited as a benefit to electricity customers when the CRU calculates a negative PSO. This legislation is required in order for the CRU to be able to direct that the PSO can be credited to customers over the period from the fourth quarter of 2022 to the third quarter of 2023. This credit has been provisionally calculated by the CRU to be in the order of €75 for the average domestic customer, which is a net saving from the current charge of more than €127. The CRU will make its final decision on these amounts in July. It is vitally important in these times of rapidly rising energy costs that we allow passage of this Bill to deliver this saving to households and businesses and, in particular, financially vulnerable residential consumers.
I will devote my remaining remarks to the subject matter of the Bill. This Bill is designed to enable EirGrid to take certain emergency measures, including acquiring electricity generation plant and entering into agreements with electricity generators in relation to electricity generation plant, for the purpose of ensuring and protecting security of supply, pursuant to a direction of the CRU. For that purpose, the Bill provides for the Minister for the Environment, Climate and Communications to give financial support to enable EirGrid to take certain measures. The Bill also increases the borrowing limit of EirGrid through an amendment of the Electricity Regulation (Amendment) (EirGrid) Act 2008. The Bill includes an amendment of the Electricity Regulation Act 1999 to provide for payments to final customers of certain benefits relating to compliance with a public service obligation. The Bill also increases the borrowing limit of Bord na Móna through an amendment to the Turf Development Act 1998.
I will provide a section-by-section summary of the Bill. There are 14 sections.
Section 1 is a standard provision which provides for definitions.
Section 2 sets out that expenses incurred by the Minister in the administration of the Act are to be paid out of moneys provided by the Oireachtas to the extent sanctioned by the Minister for Public Expenditure and Reform.
Section 3 provides that EirGrid shall take urgent measures as required under a direction from the CRU to ensure security of electricity supply, including acquiring electricity generation plants, selling and transferring such plant to an electricity generator and entering into an agreement with an electricity generator to operate the electricity generator plant. It provides for the operation of generation plant in line with the CRU direction and for operations to cease upon the earlier of the fulfilment of the direction or 31 March 2027.
Section 4 prevents EirGrid from operating generation plant acquired by it pursuant to a direction from the CRU and provides for it to enter an agreement with an electricity generator to sell the emergency generation plant and undertake its operation. This section also ensures that the electricity generator may only receive reimbursement of reasonable costs and a reasonable return as may be approved by the CRU for undertaking this activity, and that upon termination of the agreement, the electricity generator shall dispose of the electricity generation plant in an arm's length transaction in accordance with any direction of the commission. This section includes a provision that in all circumstances EirGrid shall be paid the full price of the electricity generating plant and any profit received on a sale of the plant by the electricity generator.
Section 5 provides for obligations on EirGrid to take measures as required under a direction from the CRU to ensure security of electricity supply and ensures that EirGrid obtains no benefit other than reimbursement of reasonable costs and a reasonable return as may be approved by the CRU.
Section 6 ensures that all functions performed under this Act shall be in compliance with laws and treaties of Ireland and the European Union.
Section 7 provides for the Minister to provide financial support to EirGrid in an agreed form and manner, with the consent of the Minister for Public Expenditure and Reform. It obliges EirGrid to use financial support for the purposes of complying with a direction of the CRU only and that the use of any income or revenue received in connection with the agreement with electricity generators shall only be used for the purpose provided or the purpose of making distributions to its shareholders as determined by the directors of EirGrid.
Section 8 provides for a quarterly report by EirGrid to the CRU.
Section 9 provides for the CRU to make further directions to EirGrid, the public electricity supplier or an electricity generator to address the temporary electricity emergency and, where such a direction is not complied with, to apply to the High Court to make such order as it thinks fit.
Section 10 provides for the CRU to report upon progress to the Minister not later than 31 October 2026 and for the Minister to make an order to extend the period for which the emergency generation can be operated by one year, upon approval by both Houses of the Oireachtas.
Section 11 provides for an increased borrowing limit for EirGrid up to a value of €3 billion.
Section 12 provides for the amendment of the Electricity Regulation Act 1999 to allow for PSO payments to be credited as a benefit to electricity customers. Calculation of the annual PSO levy is a matter for the CRU.
On 14 June, the CRU issued a draft determination that gives the potential for a refund of approximately €75 for the average domestic customer with the passage of this enabling amendment.
Section 13 provides for the amendment of the Turf Development Act 1998 to increase Bord na Móna's borrowing limit to €650 million. Section 14 provides for the Short Title and commencement of the Act.
I have outlined the main provisions of this emergency measures Bill and provided additional detail on the sections. I hope this will be of assistance to Deputies. I look forward to an informed and meaningful debate and to working constructively with the Deputies on all sides of the House.
I would like to register my concern at the rushed nature of this Bill. Deputies only got sight of the Bill last Tuesday and it has not undergone any pre-legislative scrutiny, although we had a briefing on it, which was welcome. We in Sinn Féin and others in opposition had other important questions we wanted answered and we wanted to hear from stakeholders. There are still very many unanswered questions but we did not have the opportunity to deal with them. As is often the case, the Government had the numbers so pre-legislative scrutiny was waived and we are where we are. The Bill is now being rushed through all the legislative Stages as the Government scrambles to ensure the lights will stay on in winter 2023. That is an incredible situation to have left us in.
We will be constructive and we will engage, but we need to shine a light on the issues that got us to where we are. Successive Governments have walked us to the cliff edge and this Government is now in a rush and panic. Opposition parties got just one day to read the Bill and submit amendments, and I will touch on a number of Sinn Féin amendments. I make the point that rushed legislation often results in bad legislation and bad law. For a Bill dealing with a number of separate and complex issues, including the borrowing limits for semi-State companies, a change in the operation of the electricity PSO and the procurement of €350 million of emergency gas generation capacity, I want to state on the record that this is no way to do business.
The main aim of the Bill is to allow EirGrid to procure 450 MW of backup electricity generation capacity to ensure we have enough electricity to meet demand over the coming years. This mismatch in electricity supply and demand is a direct result of failed, incoherent Government policy. The Minister of State very quickly in his 12-minute speech referenced non-delivery of previous contracted capacity, increasing electricity demand and the increasing unreliability of existing plant. We could delve into each one of those issues and unpack the policy decisions, assessments, judgments and public signals that were made in regard to them that took us to a very different place than either had been intended or prepared for. We would have to ask how on earth we got to a point where there is a threat of electricity blackouts and we need emergency legislation to literally keep the lights on.
Data centres are at the heart of this problem. They now use as much electricity as all the homes in rural Ireland combined and this is set to at least double by 2030. This is putting huge pressure on our generation capacity and it cannot be consistent with our emissions reduction targets. The last Fine Gael Government rolled out the red carpet for data centres and sought to make Ireland the data centre capital of the world, with no thought about the impact this would have on our electricity supply or carbon emissions. The current Government has not changed approach, despite our more ambitious climate targets and the increased threat of electricity blackouts and amber alerts. The prospect of amber alerts is now in the common parlance and the vernacular of people in a way that it never was, certainly in my lifetime. Sinn Féin will move an amendment on Committee Stage tomorrow, again calling for a moratorium on the connection of new data centres to the grid. We literally are not in a space where we can be confident that they will not force the lights to go out.
Another reason the Green Party in particular might be keen to rush this legislation through is to gloss over the fact that it is a spending splurge on new fossil fuel infrastructure. This Bill will give EirGrid permission to spend €350 million on new generation capacity, which is likely to come in the form of backup gas-fired generators. Can the Minister of State confirm that €350 million is the ceiling, not the floor, of this expenditure? This spending flies in the face of commitments to move away from fossil fuel infrastructure and will further damage emissions reduction efforts in the energy sector.
In 2021, we saw an increase in our carbon emissions of about 6% and in 2022 we are unlikely to see any reduction either. We are now building new gas generators to ensure we can keep the servers running in data centres. The €350 million for these gas generators could have been used to install solar panels worth €5,000 on 70,000 homes across the State, reducing energy poverty in those homes. That would have reduced electricity bills and provided an income from microgeneration. Instead, it is these very people living in energy poverty who will likely foot the bill for the cost of this extra capacity via higher electricity bills.
How much will be added to household bills based on this proposition? The Minister of State referenced the €75 to be returned to people with the new configuration of the PSO because of the high price of gas, which is welcome, but, on the other side, is there an additional cost to households based on these proposals and, if so, to what extent? Will it offset the €75 that will be returned? Did the Minister of State examine the prospect of requiring large energy users to cover the cost of this backup capacity, given it is not homes in rural Ireland or anywhere else that are causing this demand, and it is largely attributable to data centres? There are a host of unanswered questions which I would like the Minister of State to address in his closing remarks or on Committee Stage tomorrow. As I said, there was no opportunity for pre-legislative scrutiny.
Will the Minister of State clarify if this additional capacity will be oil powered or from gas generators, or what form will it take? We have put down an amendment for tomorrow – I would like to see the Minister of State support it - that seeks to ensure priority is given to renewables and to zero or low-carbon options or those that are most easily retrofitted into zero or low-carbon alternatives so there is a prioritisation within the capacity we seek to bring on board. What criteria will have to be met for the new capacity to come into operation? Will this be an option of last resort or will it be scheduled for operation during the winter? Can the Minister of State outline what happens when these generators are no longer needed? Will they be decommissioned and, if so, in what way, will they remain in place as a backup to renewables, or will they be sold on to private energy companies?
The Bill will amend the Turf Development Act 1998 to increase Bord na Móna’s borrowing capacity to €650 million to help it fund its expansion into renewable energy. This is welcome, given the urgent climate crisis. We want to see the State, through semi-State companies, lead the way on investment in renewable energy to ensure the State retains as much ownership as possible of our energy production capacity. We know there is room for the private sector, which has an important role in our energy transition, but we want to see the State lead the way.
In regard to the amendments we will bring forward tomorrow, we will seek to prioritise renewable energy or low carbon backup electricity generation where possible; require EirGrid to have regard to the human rights record of electricity generators with which it enters into agreements; seek to introduce a moratorium on grid connections for new data centres; seek to provide for the sharing of information about the procurement of these additional generators from EirGrid and the CRU with the Joint Committee on Environment and Climate Action; seek the publication of the energy security review; seek a report into the policy failures of electricity supply and demand that led us to the point where we need to procure emergency additional capacity; and seek a report to be commissioned into the impact that Ireland’s participation in the Energy Charter Treaty, ECT, will have on our path to net zero and whether Ireland will be open to litigation by fossil fuel companies under the provisions of the ECT for taking action to phase out fossil fuels. That is particularly relevant in regard to the potential for lock-in on this new capacity. I would like to hear from the Minister on those matters in the Committee and Report Stage debates.
I am glad of the opportunity to speak on this Bill. The war in Ukraine has brought a new urgency to the discussion on all aspects of our energy, its use and where it is sourced. The political upheaval, added to the climate and biodiversity upheaval wreaking havoc among communities across the planet, brings a new urgency to our energy considerations, not only practically and economically but also, as my colleague said, ethically and morally. In the context of the latter considerations, the amendments Sinn Féin will propose on the human rights records of any company or plant with which EirGrid enters a relationship are timely and fitting. Clean energy must be clean in all aspects of its sourcing. I will digress a little to address climate-related matters and point out that the same must apply to electric vehicles, including the conditions affecting those mining for materials used in their production.
Sinn Féin's proposal that no new applications from data centres for grid connections will be approved by EirGrid until such time as the Minister for the Environment, Climate and Communications directs otherwise is equally important. Renewable energy sources are critical. However, it is equally critical that we use less energy on our planet and convince people of this urgent need. This will be a serious challenge for all of us in this State and everywhere else in our world. We cannot continue on a business as usual basis. In our case, hearing from expert witnesses at the Joint Committee on Environment and Climate Action about the moratorium on grid connections for data centres being lifted or extended is absolutely vital
In regard to energy security we are entering new and uncharted waters. Governments throughout the EU are walking a delicate path where they are both warning and reassuring their populations about the reliability and availability of energy into the autumn and winter. In light of the publication of the energy security review, it is necessary to do as we propose, namely, that within one week of the completion of the energy security review, the Minister for the Environment, Climate and Communications must publish the report in full along with all supporting documentation.
Politicians and Governments have revelled in being able to provide certainty to our electorate. This is somewhat old-fashioned in the face of climate change and can also be rather patriarchal. We must level with people because it is perfectly clear to anyone who has been paying attention that we have now entered a new political and climate reality whereby everything is possible but nothing is really certain. All that is certain is the further, quicker and deeper climate disaster that we face if we keep up our gung-ho pursuit of profit and economic growth no matter what the cost to the planet, be it to people or biodiversity, of which the human species is part and upon which we depend for our survival. I hope the Minister will look favourably on the amendments we will put forward.
To start with the positives of this legislation, the best thing I can say is that thankfully, despite the name of the Bill, it has nothing to do with turf. The increase in Bord na Móna's borrowing capacity to €650 million to help it fund its expansion into renewable energy is a positive step. Regarding the projects in which Bord na Móna is involved, it must respect the community in Oweninney, keep the promises it made and do everything to alleviate the stress of homeowners who must live with those projects. I ask that the Minister look at that issue because it is not acceptable.
We all want to see the State lead the way in the investment in renewable energy to ensure the State retains as much ownership as possible of our energy production in the future. The transition to renewable energy opens a window of opportunity in this regard. The Bill allows EirGrid to procure 450 MW of backup electricity generation capacity. The need for this has been caused by the abysmal management of electricity infrastructure and planning by successive Governments. The legislation also makes it possible for the PSO levy to move into negative to give a discount on people’s bills. This is certainly very welcome. It is estimated that this will save households about €75 in 2023. However, the Department’s recently produced national energy security framework estimates a 45% to 60% increase in electricity costs above 2021 levels later in the year. That amounts to an increase of between €500 and €700 per household. The impact this is having on small and medium businesses is ferocious. It is straining the viability of many such businesses and further driving inflation. This is the direct result of rising gas prices. The price of gas dictates the price of all electricity prices despite the fact that almost half of the electricity comes from wind. Unless you own a wind turbine, this is bad news. Too many households cannot take much more bad news when it comes to bills.
Mayo, in particular the north of the county, has some of the highest levels of energy poverty in the State. I have raised the need to look at the EU prescribed system for pricing electricity with the Minister and the Taoiseach over the past year. Each time, the issue has been dismissed out of hand. If this was out of a desire to be the best boys in Europe, please note that two weeks ago the President of the European Commission, Ursula von der Leyen, said this market system does not work any more. We must reform it and adapt to the new realities. Thankfully, other governments across the EU have not been as passive and have pushed for reform within the European Commission. We should be leading the way on this, as I have said many times.
I will repeat the point made by others that it is far from ideal when such significant and complex legislation is rushed. This Bill has significant implications, the most significant of which relates to allowing EirGrid to acquire new emergency electricity generation capacity. As Deputy O’Rourke flagged, it is unfortunate that our electricity supply is under such pressure partially as a result of the enormous footprint of data centres. The Bill also increases the borrowing limit of EirGrid and Bord na Móna, a proposal that needs to be considered further. Bord na Móna has a crucial role to play. It also reforms the electricity PSO levy to allow refunds to customers.
I will primarily focus on EirGrid. EirGrid is likely to be one of the most significant semi-State companies over the next 15 to 20 years. It has a crucial role in our climate transition strategy. There is a need to upscale the existing capacity rapidly, not only in electricity generation but also in planning and preparation for oncoming wind energy and other renewables.
My primary point on this legislation, which is one I have repeatedly made to the Minister, Deputy Eamon Ryan, is that wind, particularly offshore, has enormous potential. Cork Harbour has the potential to become a world leader in offshore wind. To do that, we need to address skills shortages in some areas and we must ensure that rather than having to bring in the bulk of the expertise, we are able to provide it at home and create employment domestically. We need to ensure that those responsible for planning, regulation and related Civil Service modalities are in a position to do so. I have in mind EirGrid, the Maritime Area Regulatory Authority, MARA, the Planning Regulator and everyone who will have a hand in examining applications and ensuring sufficient capacity exists.
I return to the point made by Deputy O'Rourke. The sheer scale of the footprint of data centres is extraordinary. That it is now effectively equivalent to the footprint of rural Ireland represents an extraordinary amount of energy. We need to consider a moratorium on these centres very carefully because they are clearly having a disproportionate impact on electricity supply and, potentially, our future energy security. That must be considered very seriously at this stage.
I am conscious that the main purpose of this Bill is to ensure we have sufficient electricity generation in place for this winter through to 2026 following the direction from the CRU to EirGrid to procure an extra 450 MW of power generation capacity. We appreciate the Government was left in the unenviable position of having to get this legislation through as quickly as possible to ensure EirGrid can legally procure the generators and have them in place. We understand EirGrid will then sell and transfer those to an electricity generator and enter into an operating agreement.
What we must ask is why this Bill is being rapidly pushed through the Oireachtas at such a late stage in this term. I urge the Minister of State to address the question of how we find ourselves so exposed to supply shortages and why this legislation is only being brought through now. I raised during the Order of Business, as did colleagues, that it is not good legislative practice to see legislation, especially when it is complex, being rushed through in the last few weeks of the summer term without pre-legislative scrutiny and without being given the time that would usually be spent on considering it. My understanding is the CRU direction was issued on 7 June, the Bill was approved, I think the Minister of State said, by the Government on 14 June and a waiver of pre-legislative scrutiny was granted on 21 June. This is an important and complex piece of law, designed to comply with EU energy rules, state aid law and procurement regulations and in a context, of which we are all conscious, that we may be facing an emergency in supply. We appreciate extra generation capacity cannot just be added in overnight but we believe this legislation could have been brought forward at an earlier date.
If we go back to last autumn, significant questions were even then being asked about the prospect of the lights going out. That was before the war in Ukraine began and before the brutal invasion by Russia. Even then, concerns were raised about the tendering process for generating capacity. The current crisis cannot be blamed on the war in Ukraine alone or on the rapid increase in gas prices, although the brutal war has clearly exacerbated energy security and supply issues internationally. We also appreciate that the current crisis represents a failure of long-term planning in this country on the transition to renewable energy sources. Throughout last summer and into the autumn, the pressure on electricity supply grew due to the growing demands from data centres, which the House has debated, as well as the transition from dirtier fuels like coal and the balancing needed to support the generation of wind power. This was constantly highlighted even before the war on Ukraine began.
We know 1 MW is considered enough to power 1,000 homes, so the capacity we are procuring is sufficient to power nearly 500,000 new houses and apartments. Considering only 33,000 or so units are likely to be built per year, if we generously assume 150,000 new homes are built over three years, that still leaves surplus capacity. Where will that energy go? There is no real transparency on this. This is another of the issues that arise. Some proportion of the new capacity will power new developments in the economy. The CRU stated in its announcement that these emergency measures were needed due to the increased risk of older generators becoming unavailable and ageing out. The older generators are also not as efficient as newer ones and have higher carbon emissions. However, we are concerned the measures will still lock in new fossil fuel generation capacity. The Minister of State might advise in his wrap-up speech if the announcement just last week of census figures showing record population growth, and the follow-on demands on housing, social services, workplaces and so on, have been factored into the proposed energy needs and planning for future winters.
Another important question that arises, even after this emergency procurement measure, is whether a similar exercise will be required next year or the year after. Again, the issue of planning for future needs arises. This legislation is possible because it deems there to be a "temporary electricity emergency", but how do we do we know whether an emergency is likely to take place in 18 months' time? Indeed, if that is to be the case, when does it start and end? Once we go down the route of getting the transmission system operator to source emergency extra capacity, it will become the default option if the electricity generation market is not operating properly.
A central question about these generators is what fuel they will run on. Again, there is a concern about enhancing our fossil fuel dependency. Will EirGrid be told what to procure?
Another question is what will be the cost to the State of developing and running such generators. Reports say it will be recouped from customers over a three-year period. Is the State putting up the capital spend in the first place? The Minister of State might clarify where the €350 million of capital funding for these generators is coming from. According to the announcement, "the Government [had] approved the necessary capital funding – in the order of €350 million for EirGrid". That is where we see that figure. We are told that this will support and enable implementation of the initiative for winter of next year, 2023-24. Will the Minister of State indicate whether this is direct capital aid from his Department's budget or if it represents borrowing by EirGrid? If it is from the Exchequer, will the capital allocation for the Department be increased and, if not, are there projects that may remain unfunded due to the need for this funding? We need to hear from the Minister of State what the additional cost will be and if there will be an additional cost to households.
This is happening at a time when energy companies are making extraordinary and unexpected profits due to the soaring prices of fossil fuels. The Labour Party has called for a windfall tax on excessive profits as a measure that could and should be included in budget 2023. The revenue raised could be used to fund additional climate mitigation and energy efficiency measures that would reduce further our reliance on energy imports at a time when we are seeing unprecedented insecurity of supply, largely due to the brutal Russian war.
While we are rushing through this law so these new gas generators can be put in place this summer, it has not been adequately explained why the ESB, a publicly-owned company, previously pulled out of a contracts to build a number of gas power plants. There has been extensive reporting in the Business Postby Daniel Murray on this and the matter has been raised in this House as well. We understand the size of the plants that were to be built would have been almost equivalent to what EirGrid will now have to procure. The question remains as to whether this has contributed to the supply crisis that underpins the legislation. Is one of the reasons for this legislation an expectation we would have additional capacity for power generation but can no longer rely on it? Is it likely that the ESB will be one of the electricity generators contracted to deploy and operate this emergency supply? A number of questions arise regarding the introduction of this emergency legislation.
A significant concern I and my Labour Party colleagues have about this proposal, one that I have already mentioned, is that it will lock in more fossil fuel generation. Will the emergency plants be decommissioned after the winter of 2025-26? How will that impact on our climate emissions targets and our capacity to reach those targets by 2030? We know some less efficient generation may be replaced but is this in effect a way to quickly put in place extra capacity that renewables cannot deliver in the short to medium term? Does this amount to a tacit acceptance we cannot meet our targets? If so, that is obviously of immense concern.
Again, is this new extra capacity really to allow for the development and operation of data centres? So many questions have been asked about data centres and their feasibility at a time when we are under such pressure to meet crucial emissions reduction targets. Friends of the Earth has asked a number of important questions about what alternative measures have been considered, such as demand-side management. Again, we have debated that issue in this House, including the question of imposing a moratorium on new data centres. I am aware that several Committee Stage amendments have been tabled on data centres and energy security and supply. I urge the Minister of State to give them serious consideration. We also ask that the social, economic and environmental impacts of the generators be carefully monitored. Will the Minister of State clarify how the placement, approval and licensing of these emergency power plants will be assessed?
Another provision in the Bill is to increase the borrowing capacity of Bord na Móna to €650 million to support its brown to green transition. That is obviously a hugely important programme, although as a previous speaker noted, the reference to turf in the Bill is unfortunate. We might all agree on that, whatever our other views, especially considering the aim of the company is to move away from peat extraction. That move is very much to be welcomed but it would be useful for the Minister of State to outline what projects or investments this borrowing will support and give a commitment that a strategy from Bord na Móna will be presented to the Oireachtas joint committee. We have an opportunity in Bord na Móna to build out a national wind company and a national retrofitting company. This would be State-led development that would secure our energy transition and underpin a just transition.
Regarding the public service obligation, PSO, levy, not all members of the public may be familiar with this levy on their electricity bills. It is set annually by the Commission for Regulation of Utilities, CRU. It appears as an €8.60 charge, before VAT, at the bottom of bimonthly bills. At present, the annual charge for households adds up to just over €56 a year after VAT. This came into effect in October 2021. The core purpose of the PSO levy was to support renewable energy, peat and security of energy supply plans. Generation from turf ended some time ago, however. My understanding of the CRU decision is that the increased wholesale price of electricity due to rising fossil fuel prices and the increased demand means that further collection of levies to support renewables are no longer immediately needed. I ask the Minister of State to address that point. Questions must be asked in respect of how successful the PSO has been in delivering on its objective of security of supply, given that the Bill has been introduced and we have been told its main purpose is to allow emergency procurement by the grid operator of sufficient supplies for the winter after next, with a secondary purpose being to refund PSO levies.
The question remains as to what went wrong in the long-term planning if we are now seeing a reversal of the PSO programme. It was previously announced by the Government that the PSO would be set to zero from October, providing for a saving on bills. The Minister indicated this mechanism would be used to offset the carbon tax increase. However, for the first time, the CRU earlier this month issued a draft determination that there should be a refund. As the Minister of State outlined, section 12 of the Bill will provide for a refund of approximately €75. The Government is calling it a saving but it should not be forgotten that this is a refund of money people have already paid and, although the PSO levy will not have to be paid from this winter, families and households are paying for the cost of inaction. Essentially, households are paying for our collective failure to build sufficient renewable capacity, combined with our ever-growing reliance on imported gas for energy generation. This means households are paying for a lack of energy security through increased fossil fuel prices. Will the Minister of State, when wrapping up the debate, indicate his views on the future use of the PSO and whether it will be reapplied in future?
I am conscious that I have asked a significant number of questions. I see the Minister of State is nodding. I do not need the full 20 minutes allocated to the Labour Party to point out that the Bill raises several critical questions for households who are already in fear. They are facing a winter when there will be real fears in respect of insecurity of supply and lights literally going off. To be fair, that is not just the case in Ireland, as this is an international crisis. However, many of us in opposition have been calling for the Government to adopt targeted measures in the form of a mini-budget or emergency budget. What is needed is a series of targeted measures to alleviate the hardship being faced by many households. This comes in a context where we in the Labour Party are saying Ireland needs a pay rise. Households need to have increased income in their pockets to meet the significant rises in the cost of living, of which the huge increases in energy bills are just one aspect. The Labour Party is conscious the prices of food, childcare and many necessary essentials for households are also rising. It is in that context that I am raising all these questions. They are fair questions to put as we debate the Bill.
I will conclude on a point that is also in the context of the cost-of-living crisis faced by many households. The Labour Party is conscious the PSO is a fixed charge on households, irrespective of energy use or household income. That means those who use the least energy and those with the lowest income pay the same amount as others. The Society of St. Vincent de Paul pointed that out previously and called for a review of the application of the PSO to low-income and struggling energy customers. The Minister of State might consider that. We know from recent ESRI publications that one third of households are already in energy poverty. The Society of St. Vincent de Paul has called for the introduction of social tariffs for energy supplies, a policy we in the Labour Party support. We again call on the Minister of State, and all Ministers across Government, to examine this serious issue of energy poverty as part of a comprehensive cost-of-living package, preferably this summer but certainly in the October budget. All present anticipate that substantial measures will need to be introduced in October if the Government does not move any sooner. The fear that already exists among many households in respect of the further hardship that will be caused by rising fuel and energy prices in winter is a serious issue. I know that is appreciated by all present. It is in that context I raise these questions on the Bill, its provisions, impact and purpose and the background to its introduction. It is unfortunate it is being brought through the Houses so speedily and without the pre-legislative scrutiny that, ideally, it should have undergone.
I welcome the opportunity to contribute to the debate. The energy sector underpins much of the nation's affairs. The effects of price fluctuations in the energy market have knock-on effects for almost every aspect of the economy and can make a real impact on the lives of consumers and their daily decisions.
The invasion of Ukraine has appalled the moral and civilised world. The loss of life and direct attack on people's sovereignty is a dark moment in European history. The war has also marked a significant turning point in energy policy across the European bloc and, indeed, the world. In this context, we must begin a comprehensive discussion on the future of energy and energy production and supply in Ireland. As I mentioned previously to the Minister of State, that discussion should take place sooner rather than later. The war in Ukraine and the subsequent sanctions on Russian oil and gas have disrupted the flow of supply to Europe. In light of these developments, there has been a perhaps overdue spike in awareness across Europe that we must redouble our efforts to increase energy independence within the EU and Ireland. We cannot have scenes and speculations such as those we witnessed last autumn and winter, when questions over blackouts and brownouts were rife. That is why planning ahead is so important.
The single biggest way we can do this is by rapidly expanding our capacity to produce renewable energy, such as through wind and solar. We have known for some time this was where we would have to go in the context of climate change. We now have the immediacy of energy supply disruptions to compound the issue. Ireland has the potential to become a major energy hub. Our geography, weather and demographics place us in a position to play a unique role in the production of energy. Not only can we dramatically increase our production for domestic use in the years ahead, we can also begin to transform the economy to become an energy exporter. We are already on the road towards delivering an increase in the share of renewables flowing through the national grid. This process has been increasing year on year for some time and the figures will be bolstered by the completion of the Celtic interconnector, which will deliver clean electricity, mostly derived from nuclear power generated in France. I recognise, however, that these are matters that will take time to resolve. Changes in planning regimes, the development of the Maritime Area Regulatory Authority, MARA, and certain anomalies that need to be addressed will not be solved overnight. Today I noted that the Cabinet signed off on a new legislative amendment to streamline onshore wind energy generation. That is to be welcomed.
As we look to the here and now, and to the immediate future, we must ensure we have the ability to meet the demands of society. I welcome the fact that plants that were previously deactivated for essential maintenance are now back in service. That will ease some of the strain on the grid we witnessed last year. We must invest in the national grid to respond to the growing energy demands and the growing population. This includes using the grid technology as it was designed rather than the stop-start approach that was adopted and led to the two plants being out of commission in the first instance. The grid needs dramatic funding increases and I think the Bill goes some way towards that. I question, therefore, the comments of certain Deputies in respect of the perceived urgency of the Bill. It is urgent that the grid is upgraded and that we have the capacity to borrow to purchase the necessary equipment to meet the demands of the nation. I question the comments of the Opposition, particularly the Sinn Féin Deputies, in respect of pre-legislative scrutiny. The Bill addresses a very urgent matter, namely, the €75 PSO rebate. In the context of a mini-budget, for which the Opposition is calling, the Government is stepping forward and stating it will bring this about immediately and there will be a €75 rebate.
That legislation is being put through the House right now. Some of the Deputies opposite serve on a committee of which I, too, am a member. They suggested we enter pre-legislative scrutiny. The Ceann Comhairle will know that extensive charts were prepared to illustrate how long it takes a Bill to go through pre-legislative scrutiny before a committee such as that on which Deputy O'Rourke and I serve.
It showed the minimum turnaround time was approximately eight weeks. That timeframe would push the Bill into August when the House will not be sitting. Therefore, the Bill would be delayed until September at a minimum and probably October. How are we supposed to put through a budgetary measure in a tight timeframe to benefit every household in the country under that proposal? One would only propose it if one is playing politics, which clearly is what the Deputy is doing.
I get very frustrated when I hear Members opposite claim they did not have an opportunity to scrutinise this legislation. There were questions put by the Deputy to representatives of the Department and his questions were answered. He stated in the House that he had unanswered questions. In fact, he did not ask any questions that were unanswered.
Not only must we remain vigilant to the nonsense the Members opposite go on with, we also must remain vigilant to the fact we have a situation whereby the emergency supply of electricity places this nation under extreme pressure from time to time. While there was no immediate risk of blackouts and brownouts, there was a slim possibility of such. This measure by the Government will go some way to alleviating that issue in the winter of 2023-24.
As the Minister of State outlined, the Bill increases the level of borrowing available to EirGrid and Bord na Móna. This will expand the scope and ability of those organisations to address the needs of the country and the changing energy landscape both at home and abroad, including by way of grid investment. I welcome that. As I have stated, we need a modern management system within our critical infrastructure, resources for which should be made available to ensure we avoid unnecessary disruption to plants' production and that the older plant is used as it was designed to be used. I stress that we have been told repeatedly by the experts that the equipment was not used as it was designed. It was being throttled, or some such terminology, which is the reason it required servicing and, thus, was out of service.
I look forward to continuing this debate in the months and years ahead and, indeed, to contributing to the important planning we need to do at this time in order to meet the demands of our growing population and the increasingly diverse demand on our energy supplies.
If I may, I will briefly address some of the messing and the nonsense raised by Deputy Alan Farrell. I am sure the Minister of State will confirm in his later contribution that Deputy O'Rourke not only asked a lot of questions but a lot of extremely important ones.
The issues around capacity were raised last September. We are having this debate today because we are now facing an emergency.
I welcome the opportunity to contribute to the debate. I welcome some of the aims of the Bill, including to increase the backup electricity generation capacity to ensure we have enough to meet demand over the coming years. That is needed to avoid blackouts. However, we cannot escape the reasons we have arrived at this juncture. We are debating this legislation today as a direct result of failed Government policy. I know that is true because when it is pointed out to Government Deputies, they get very sore and fractious and they start to interrupt people.
The shortfall in electricity supply is primarily due to the rapid expansion of data centres in this country, which is fuelled by Government decisions. Are we surprised by this? No, we are not. We need only look at the damage vulture funds have done to the housing market in this State while paying hardly a red cent in tax. It was Fine Gael that let the real estate investment trust, REITs, into the State to wreak havoc and it is Fine Gael that has allowed data centres to pop up everywhere. Time and again, we hear Fine Gael politicians talking about Ireland Inc. That is how they view our State - as a business, not a society with a community of people. There should be no confusion that would lead people to believe the problems the State faces are accidental or somehow happened by mistake. Very often, they have arisen as a result of conscious policy decisions. The red carpet was rolled out for data centres. Fine Gael sought to make Ireland the data centre capital of the world, with no thought for the impact this would have on our electricity supply. This is what happens when a political party acts like a portfolio manager or agent for big business, rather than acting as a Government, the job of which is to safeguard the energy security of our citizens.
It is patently clear we have a problem with the prevalence of data centres. This legislation reveals the Government has finally realised that. There are now 70 operational data centres in Ireland. Dublin has become the largest data centre hub in Europe. Moreover, in north County Dublin, a number of new centres are under construction. We know where the problems lie, what has caused them and where to lay the blame as we find ourselves in this emergency situation.
We have a very long two and a half years ahead if we must continue to face this Punch and Judy show between Fine Gael and Sinn Féin. There is an issue in regard to pre-legislative scrutiny and the processes behind it in respect of this Bill. It is not acceptable that most of us are standing up with questions for the Minister of State rather than being able to debate from a position of information. The committee received the documentation on these proposals five minutes before we were asked to have a briefing on them. There was no pre-legislative scrutiny allowed. That obviously has led to a large gap in our knowledge base regarding the Bill, its purpose, how it will be managed and what is proposed around it.
None of us wants to see any blackouts in the coming winter or any winters thereafter. I accept there is a need to deal with the situation urgently. However, the issue was raised last year. The CRU published a security of supply information note in September in which it identified a shortfall. This legislation could have been worked on and drafted at that point. Indeed, my party brought forward a motion at the time calling for a data centre moratorium because we recognised there would be a shortfall and a risk of blackouts. We offered the Government a solution for dealing with part of the problem but, unfortunately, it was ignored. It is not the case that this issue has come like a bolt out of the blue. It was foreseen. We are in this emergency situation because, unfortunately, the Government has not dealt with it in a proactive manner.
There were comments earlier about the PSO levy and how these provisions will reduce the bills for domestic levies. However, there has been no acknowledgement from the Government that it is giving with one hand and taking away with the other. While the Bill will reduce the PSO levy, it will also place additional costs on domestic bills because of the cost of the additional generation.
I am concerned that the Bill is pretty much open-ended. There is no alignment between what the CRU has said it needs and the dates by which the Bill will be in operation. The Minister of State indicated in his statement that the provisions in the Bill will cover a period out to winter 2025-26, which is not what the CRU requested. The latter has said the measures are required until the winter of 2024-25. Will he clarify this discrepancy? It seems we are giving the CRU and EirGrid carte blanchein respect of the legislation. There is also no limit on the amount of generation that can be purchased. Going through all the data, I am confused as to exactly how much will be purchased through these provisions.
The security of supply programme the CRU published identified that 300 MW of temporary emergency generation will be required for winter 2022-23.
Is that provision separate to this Bill? While the CRU welcomed the Government's decision in respect of this Bill and the procurement of 450 MW, that is actually for the winter of 2023-24. Questions arise then over exactly how much electricity generation can be procured through this Bill. Is it instead, as is my fear, completely open-ended?
The CRU stated it would need an additional 450 MW of temporary emergency generation. This amount could, however, increase to 700 MW if the security supply actions the CRU has highlighted are not implemented. Therefore, there is a risk that this Bill could, essentially, be treated like the magic porridge pot and that its provisions will just continually grow and grow. My amendments are intended to try to put some structure in place in this regard and to ensure that there is a cap on the amount of electricity that can be generated. I refer as well to the reporting mechanisms, because we want information in this regard to come before the Dáil. It cannot be the case that this legislation is giving permission just to continue to grow energy demand. I hope the Government will take these amendments on board, because it is important to have some threshold and that oversight can be brought to bear on it. The CRU also stated that an additional 200 MW have already been identified and are in the process of being procured. If this is the case, and the requirement is obviously above and beyond the 450 MW, how is that happening in the absence of this legislation or will that procurement also be covered by this legislation?
Turning to the issue of costs, it has been estimated that the 450 MW will cost approximately €350 million. Regarding the other 200 MW that I mentioned, I imagine that would then add an extra €180 million or something like that. Will the Minister of State address whether this is an additional cost that we must also deal with? Equally, if an additional charge of €40 is going to be put on domestic bills as a result of the procurement of 450 MW, and if an additional 200 MW is going to be procured outside this process as well, will that mean that another €20 will be going on each bill? I ask the Minister of State to clarify in his closing remarks exactly how much additional money will be put on domestic bills as a result of this temporary emergency generation capacity increase.
I listened closely to the Minister of State's contribution and a few things were left out. Key among those is the issue of data centres. The reason we are in this situation in reality is not because of external shocks, external demands or international issues. We are in this situation, and this has also been acknowledged by the CRU, because of the high growth of large electricity users, primarily data centres. It is unacceptable that this Bill is going through without any discussion on how we can manage the increasing demand being placed on our system by data centres. It is unacceptable that there has been no acknowledgement of this fact either in the Minister of State's speech or in this Bill. Again, an amendment in this regard has been submitted by the Social Democrats. The intention of the amendment is to identify that this is an emergency Bill and if it is an emergency Bill to deal with electricity demand and to prevent the high risk of blackouts and brownouts, to specify that emergency measures should also be brought in regarding data centres. I refer to a moratorium. Therefore, once again, we are asking that the Government bring in a moratorium on the development of data centres until there is a strategic overview of how many data centres we should have, what their benefits are, what conditions we will place on them and what we will ask them to do to be part of the solution as opposed to being the problem, which is essentially what they are now.
One area I raised with Tánaiste last week was that, despite what we are talking about here and despite the potential investment of €500 million to deal with the fallout from all these data centres, the Government has still not published its statement on data centres. It was promised for quarter 1 of this year, then for quarter 2 and then the Tánaiste told me last week that it would not be available shortly and that he has not yet received a copy or has not seen it. The question then is what exactly is the Government doing when it comes to data centres. What is its strategic focus? What is its planning? What is it taking into account? Is it just because of some bureaucratic administrative process that data centres are under the remit of the Department of Enterprise, Trade and Employment and therefore everything else is sort of operating in the absence of it? That would be a real worry. Therefore, we are asking the Government to be strategic about this issue and to take this aspect into account and to plan. A failure to plan in this regard has been clearly obvious from the actions of the Government regarding energy supply, particularly in the last year.
The other thing that we have not heard from the Minister of State, and it is quite surprising when he has come to the floor of the House to request that this additional fossil fuel generation be implemented, is an acknowledgement or mention of our climate targets and the impact this additional generation will have on us meeting our targets. In the Joint Committee on Environment and Climate Action today we discussed the sectoral emissions ceilings. It is incredibly ironic that we spent the morning talking about that issue, while we are now coming in here and we are going to undermine many of the actions and efforts the country is trying to undertake in that regard by signing off on this emergency Bill. The fact that the Minister of State has not addressed this aspect and is not taking it into consideration is a real red flag for me. There are concerns in this regard.
I have mentioned before that when the Government is dealing with the areas of energy and how we are going to manage our security of supply, the focus of the Government is currently on individuals. It is always on individuals. The impost is on individuals to deal with it. When we are looking at our transport sectoral ceilings, we are talking about electric vehicles, EVs. When we are talking about household emissions, it is about retrofitting. The responsibility is always placed on the individual to solve this problem for the State. Yet the Government absolutely refuses to make the largest users of energy accountable for their energy use and also refuses to place any limitations on their energy use. This is unacceptable. When we are talking about data centres, we are talking about energy users that account for every single rural house in Ireland. Every single rural household in Ireland could go out and retrofit, and we will expect them to do so and it will be costly for many people and many will not be able easily to find the money to do it, and yet this is what the Government is expecting those households to do.
It would have been much fairer to have managed data centre requirements to ensure that those individuals would not have to spend the money to slow or reduce their emissions, and for the Government to have pointed at and focused on the real problem here, the big energy users. It is similar when it comes to EVs. We will expect people to pay a great deal of money to buy an EV. Many people will not have the money to do that. Instead of asking the data centres to control their energy usage or of controlling the energy usage of data centres, we are putting the responsibility on individuals to deal with this problem. Even in this Bill, because of the amount of energy that data centres are using, individual households will have to pay at least an extra €40 due to procurement of capacity. I do not understand how the Government’s focus can be on the individuals and not on where the real problem lies. When legislation and policy is being developed, I ask the Minister of State to bear this point in mind.
What we are seeing is the burden is being put on the wrong people.
The Social Democrats have tabled a number of amendments to the Bill. As it has been an expedited process and there has not been an opportunity to have the discussions we should have when developing legislation, I ask the Government take into account the amendments we will put forward. They are relatively simple and include a cap on the amount of energy, reporting mechanisms, and reducing the timeframe available so that the Government can control this process a lot better than has been done previously. There is also the moratorium on data centres, but to be honest, I reckon that horse has probably bolted. If we are at a point where we are now forking out hundreds of millions for generation capacity to deal with them, I imagine many of the data centres that were planned are already up and running. However, I ask that the Government consider and take on board the moratorium because we do not want to make the situation worse while we are in this emergency.
I welcome the Bill, the Minister of State's opening statement and today's debate. I certainly agree with him that we should seek to be constructive in our debate on this legislation. Many of the points made have been constructive. I have not seen the amendments put forward, but I am interested to see them. If they are constructive and add to the Bill, we should consider accepting them.
I listened to the debate while in my office and I heard many speakers characterise the Bill as being necessary to facilitate data centres on the grid, but this simply is not true. While I hate to say this, it betrays either a technical ignorance or it is playing politics, or it is both. This legislation is required for the State to get off coal and oil. We have a big coal-fired power plant in Moneypoint with an output of about 900 MW, and we have a power plant in Tarbert, across the Shannon Estuary, which burns oil. As demand increases and we seek to electrify our heating and transport sectors, we need this Bill and this capacity.
It was said earlier that the situation we find ourselves in reflects "the abysmal management of electricity infrastructure ... by successive Governments." This is a ridiculous thing to say because the one huge success story of our efforts to transition away from fossil fuels has been that 40% of our electricity now comes from renewables. Electricity generation is an area in which Ireland is a global leader. The comments by some Members to the debate are a real disservice to the thousands of people working in the sector who are the unsung heroes of climate action in this country. The comments are, of course, a dig at this Government as well as at previous Governments that put in place the plans that got us to the 40% renewables rate.
Speakers said it was unfortunate we are in this position. Some Opposition Members are bewildered as to why we need this legislation and have said it is a result of a failure of planning. Do they not realise we are in this position because we are pushing the boundaries of what is possible for variable generation on an asynchronous electricity grid? This is not a failure; it is a consequence of success. Members do not seem to understand the importance of having capacity in the system. This electricity generation plant will be available but it will be used very rarely and only when renewables are not available, so it does not compromise our ability to get to 80% of our electricity being generated from renewables. The Minister of State was very clear on that in his opening statement. This legislation will help us get to the 80%. We cannot have ambitious renewables penetration in the system unless we have this kind of capacity as well. We are in the lamentable situation in which the Opposition will berate the Government for not developing renewables, even though we are global leaders, and then try to impede our ability to go further by seeking to block critical, enabling legislation such as this Bill.
Yes, we need demand side management, but let us move beyond the data centre trope. Sensationalist and selective facts are thrown about as if they are some kind of slam dunk. The reality is electricity generation accounts for between 10% and 15% of our emissions and data centres, by EirGrid's projections, will account for about 27% of that 10% to 15%. Only a few percentage points of Ireland's emissions in 2030 will be attributable to data centres. A moratorium on data centres was mentioned. It should be put on the record of the House that there has been no connection of data centres for about two years in this country. Therefore, there is an effective moratorium in place. We have to go beyond talking about data centres if we are to be true to the phrase "demand side management" and to reduce emissions in that way across the system. However, no one in the Opposition seems to want to talk about demand side management in any meaningful way. We need to talk about how we reduce demand in heating and transport, which is through retrofitting and a modal shift in transport. These are and will be much bigger emitters in 2030, even by our own projections.
There is an opportunity for Ireland to become a net exporter of clean energy to Europe. The 80% target for 2030 is one of the most ambitious targets of any country in the world, but there is actually potential for Ireland to provide power to Europe. Europe is in a very difficult situation where it has relied on Russian fossil fuels, in particular during the past ten to 15 years. Ireland could provide clean energy to Europe. We could go beyond the 80% target - well beyond it, in fact - and that would be very good for our efforts to decarbonise our system as well as for our economy. This legislation is critically important for us to reach and go beyond the 80% target.
I welcome the debate. There have been some constructive comments made but there have been some very ill-informed comments made as well. When this is reported on, I hope the old trope about data centres and this Bill being needed to enable data centres will not be seen as the central point of this debate because this is not true.
The Bill will allow EirGrid to procure 450 MW of backup electricity generation capacity to ensure we will have enough electricity to meet growing demand in the coming years. Sinn Féin has no choice but to support the Bill. It is essential if we are to avoid electricity blackouts. It is a sad reflection on Government policy, or the lack of it, that we are in this situation. This is a direct result of failed Government policy. Failing to plan means planning to fail.
This shortfall in electricity supply is primarily due to the rapid expansion of data centres. The Government has failed to manage the development of data centres. Of course, we need data centres but they must be in proportion to our data usage. Fianna Fáil and Fine Gael have made this country a data centre dumping ground, which has allowed other countries to abdicate their responsibilities. Every country must share the burden. Data centres account for 14% of all our electricity usage, as much as all the homes in rural Ireland combined, and this usage is heading for 30% by 2030. It is simply not sustainable. The extra electricity generation that will be necessary is likely to come from additional gas generators at a cost of €350 million. The cost will be paid by electricity customers - they will love that - over a three-year period, and we have the scenario of a Green Party Minister investing in fossil fuels. It simply does not make sense.
The war in Ukraine should have been a wake-up call to take action in ensuring our energy supply is secure.
The energy security review must be published immediately. There has been far too much dithering, and we need a credible plan to prevent brownouts and blackouts. The gap between supply and demand of electricity has been caused by the major drain data centres are placing on the grid. The previous Fine Gael Government welcomed data centres with open arms and sought to make Ireland the data centre capital of the world, with no consideration of the impact that would have on our electricity supply.
Sinn Féin will propose a number of amendments to the Bill, as the Minister of State will be aware. We must prioritise renewable energy or low-carbon backup electricity generation where possible. We need a moratorium on grid connections for new data centres. We need a report on the policy failures of electricity supply and demand that have led us to the point at which we need to procure emergency additional capacity. Finally, we need to update wind energy guidelines and we need those updated guidelines to be published. The current guidelines are 16 years old and out of date. We need to protect our rural and scenic areas. The midlands has reached saturation point with industrial wind turbines. The obvious answer, as we know, is offshore.
I listened to other Deputies earlier. Deputy Whitmore said it will be a long two and a half years. I do not agree because people are sick and tired of this Government and want rid of it at this stage.
People Before Profit objects to the way in which this Bill is being pushed and rushed, to the fact that we were denied pre-legislative scrutiny of it and to the fact that it will be forced through all Stages tomorrow. It is not that that in itself is a bad precedent because it is a regular occurrence and there may be times when emergency legislation needs to be fast-tracked. We have known about this issue for some time, however, and it is clear from the briefing we received in private session from officials that many issues should have been examined but will not be because of the rushed panic now.
Like others, I ask where this rush is coming from. Essentially, we are being told of very dangerous blackouts in the coming winters if we do not immediately purchase additional emergency plant, most likely gas-fired, to tie us over for a limited period. How limited that period will be, however, is unclear. It may be three years or it may be more. Why? Old plants are being retired, we are told, but it is explicitly clear from the EirGrid and CRU statements that the real reason for the panic is to facilitate data centres, pure and simple. We need this measure because the State and the Government have refused to deal adequately with the unhinged proliferation of data centres, something a previous Deputy called a sensationalist old trope. He is completely wrong because, as has been said, 14% of our electricity is consumed by data centres now. That is set to rise to 28% and to 30% in the coming years. As a State, we are a complete outlier. We are essentially the data capital of Europe and, indeed, probably the globe. This is not because we are all streaming videos or constantly using Twitter. It has nothing whatever to do with the data consumption of the people in this country. It is driven by the needs and desires of big tech, regardless of whether it is sustainable globally or nationally.
There have been attempts by people who should know better to say that data centres are not a problem but a solution to the climate crisis because they produce smart devices and smart tech that can help us reach our emissions reductions. We have even been told that streaming Netflix is not as damaging in terms of CO2 emissions as was previously thought. That is nonsense. The only figure we need to keep in mind is the amount of electricity the data centres consume now and what they will consume in the years ahead, which is 30%, massively ahead of the global national average of between 2% and 4%, as in most other states. It needs to be said that technology, whether in the form of data centres, carbon capture and storage or feed additives for cows, will not stop the climate catastrophe now unfolding. Only actual reductions in CO2 emissions will. That requires deeper and more radical changes, not business as usual with a high-tech gloss on it. Instead of simply acceding to every whim of the technology industry and to every command from Amazon, Google, Facebook or whatever else for every data centre they ask for, we need to ask what purpose this serves society. It is an astonishing figure.
Some studies suggest that 51% of all data processed and stored is what is called dark data, that is, data that are essentially, by any measure, useless, unusable and unused. These are old files and old reservoirs of information that remain unused. Aside from that 51%, how much of the remaining data does society need to have stored and processed? How much are data processed and stored that could aid us in various ways in the future to deal with the climate crisis? In reality, we do not know because behind the walls of these data centres is a wall of secrecy, with an intent to keep it secret. We know, however, that a huge chunk of it is what is called surveillance capitalism, that is, the desire of corporations to monitor and to monetise all our personal data to sell us stuff. We know that a sizable chunk of the data is purely about the business models of modern capitalism, all of which have very little to do with saving the planet and a lot to do with extracting every inch of labour from workers and selling every product possible in any way possible.
I, therefore, do not accept that we must at all costs facilitate the proliferation of data centres as if our lives depended on it. It is an insane policy. It was clear from the briefing we received form officials that the so-called new restrictions on data centre applications apply only to new applications. We have, I believe, many existing applications that are open and approved, with promised connection to the grid. They will not be affected. This panic to bring in €350 million worth of gas-fired plant is designed solely, it seems to me, to facilitate these data centres. We have no study or impact assessment as to what these new plants will mean for our emissions targets or if they risk locking us into gas use. They may also strengthen attempts to build LNG terminals here. None of this has been looked at because of the rush and panic involved in pushing this legislation.
I wish to comment on some of the spin around the PSO levy. We are told that savings on people's bills could amount to €127 a year from the scrapping of the current levy on electricity bills and the potential for further refunds. I am sceptical about that. Again, it seems it would have been useful to drill down into these figures that are thrown around. We welcome any savings for consumers, but this is relatively small beans and we have no assurance as to when the refund will happen. We know, however, that the cost of this emergency plant may land on people's bills in the years ahead.
As for another aspect of the Bill, we have no issue with that the ability of EirGrid and Bord na Móna to borrow greater amounts as such. It seems sensible to allow State companies to invest and to borrow greater amounts given the scale of the crisis, what we need to do and the pace at which we face it. Again, however, we need to be assured that the borrowings and investments of State companies drive the transition away from fossil fuels and do not end up in any way facilitating continued reliance on fossil fuels or, indeed, bogus plans and strategies such as some forms of biomass, etc.
Finally, I will make a more general point. Much of this legislation is built around the restraints on EirGrid and other State companies in providing the plant and the planning for its use. Time and again we are told that the market must be protected and its working must be respected. A lot of this Bill is about safeguards as to who gets the plant and how it must not be interfered with because of the workings of the market. It seems clear that the current crisis in energy prices and the massive surge in the numbers of people in or in danger of energy poverty are not just about the war in Ukraine but also driven by the profiteering of various companies in energy, fuel production and electricity generation. The profits of many of those companies have never been better. This State went from having one of the most efficient and cheapest generators of electricity to having one of most expensive today. That has nothing to do with the war in Ukraine. It is a direct result of the deregulation of the energy industry in the early 2000s. This becomes more than an academic debate when we consider the climate crisis and the need to make investments in the grid and in renewable energies in the years ahead. It is clear that making allowances for the crazed market system we have here and in Europe is not an aid to better or more efficient use of energy.
It guarantees the opposite through profiteering, investment decisions based on what is best for individual companies and continued investment in fossil fuels. Indeed, the rush to build and import LNG from the USA in recent months has put a great question mark over our ability to hope to limit temperature increases to 1.5°C or even 2°C, with all of the horror that this means for our planet and its people.
It is becoming clearer as each record is broken and as each new crisis throws us off our path of reducing our CO2 emissions that the market is not a solution and is a big part of the problem. We need a rationally planned system to deliver energy and a rationally planned way to invest in renewables on the scale needed and this cannot be done in the current market system with competing companies vying for profits. All these crises, including energy costs, the possibility of power cuts and the need to move away from fossil fuels and invest in renewable energies, point to the need for the State to take a direct part in the future of energy. We need a State-owned and directed company to invest in the grid and in renewable energy and to deliver, as we did previously, the energy we need in an affordable way for citizens. We need to remove the danger of more and more people being submerged in energy poverty.
We are dealing with rushed legislation on an issue we all, to a degree, saw coming down the tracks. Long before we entered into the disaster of the war in Ukraine, we had been speaking about whether we had difficulties with energy security. We knew that there was the possibility of blackouts and wondered whether they could be avoided. There was also the issue as to whether anyone could make a promise and whether anything that a Minister or Minister of State said was or was not a promise in ensuring that we could keep the lights on. We all know that there has been a failure to deal with the issue of data centres. That is not even from the point of view of stopping and saying that we cannot have them but from the fact that we have once again not dealt with that element of planning.
My colleagues have dealt with the issues on which we will table amendments. They will deal specifically with the fact that if we are talking about increased generation capacity, we very much need to put an emphasis on renewables. I probably did not think that I would be saying that to a Green Party Minister of State but that is the work that we need to do. We are all aware of the work that needs to be done on a wider scale on offshore wind, in particular, and I have heard it said more than once in this particular august auditorium that we can be an absolute powerhouse in that respect. We can be a superpower in wind energy and that is the place that we have to put ourselves.
No member will give out about changes to the PSO levy if we can put money back into people’s pockets. Our party has said more than once that people are really struggling at this point in time. We need to do what we can while accepting that we cannot do everything to mitigate the worst aspects of this, which people are dealing with.
We are talking about some specifics in the borrowing capacities of EirGrid and of Bord na Móna. People will not have difficulties with those specifics once we can see that the pieces of work that they will do with these renewed or updated capacities are what we require to provide a holistic solution to what we need.
Previous speakers said that we need to see the results of the review on energy security. That is completely necessary. We are dealing with this emergency legislation that should have been dealt with at a far earlier stage. We should have got the fundamentals correct but we are now in the place that we are in and we need to ensure we are punching in the correct direction.
I welcome the opportunity to contribute on this important issue. Security of energy has been brought into focus generally by the fact that we have seen over the past number of months how fragile a nation we are when it comes to our energy supply. This has been reflected in a lack of investment over a number of years. It is important that we examine what we are doing now and how we address this problem so that we do not have to face it again.
The legislation needs to ensure that the consumer does not pay for this and the people who should are those who are using it in the main. We have had people talking about data centres and their footprint across this country. Data centres are important but they need to up their game to pay for the energy. We as a country should develop our data centre network in pace with the available electricity capacity we have. We need to look at that.
I reiterate to the Minister of State what I have said in the House previously, which is that when we have people who want to create something different and produce their energy in a different way, they are sometimes penalised. For instance, homeowners who installed microgeneration solar panels in their roofs to capture the sun to create electricity in their homes always operated under the assumption that they would feed back into the grid and would benefit from that. That was supposed to have been in place from 1 July last year. I still have people contacting me who have no information as to when they are going to get paid, how they will be paid, or the rate at which this payment will be made. There has been a complete lack of communication. When we talk about all the things we are going to do in this country, microgeneration is an area whereby people will produce electricity. At the moment, they are feeding it back into the grid. These people feel more aggrieved at the moment because the price is going up and they feel that the product that they are giving back into the grid is more valuable. Yet, they are giving it away, are not getting any money for it and do not even know how much of it is going to the grid because the meters are not there to measure it.
We have not planned this very well and have created a very bad taste in people’s mouths because they have made this effort and have done this. When someone goes to their house and looks at the system they have put in and everything is fine, people then say not to touch it until we have the plan in place as to how they will get paid. At the moment, this plan is supposed to be in place and people are supposed to have been paid from this month. It has not happened yet, however, for many people in my constituency of Galway East. That is something we need to address.
When we look at the transition we have to make, in which we all have a responsibility, we must ensure that it is planned, that is, not so much just a broad plan or a big headline about money but we have to develop it in a way whereby everyone knows what is going on.
There is major potential in this country to develop green energy that will help people make the transition. The offshore energy potential on the west coast is second to none. I fear that the pace at which we are looking at that will mean that much of the benefit that will accrue from that will go some place else and not to Ireland. We need to develop our ports to ensure they can take the capacity and potential that is there to ensure the servicing of pylons and all of that type of work is done in our country. That maintenance work should not go to Norway or some place similar. It is important that we get the value added to whatever we are doing in this country. We have significant assets on our shores and it is important that we ensure we harness those to their full potential for our entire population and economy. If we concentrate on that as much as we have concentrated on the data centres coming into the country, we will be able to have more data centres as we will have green energy. The data centres themselves, however, will have to pay for the energy that they are using at a correct rate to ensure they are contributing to the cost of the electricity.
I have said before that we have done things in the past that have not been right.
I will give what is a typical example of the wind farm erected in Derrybrien in my constituency. It was a disaster from the word go. When the works were happening there was a huge mudslide. It was terrible for the environment and the area. We got it to a stage whereby it went into production and it was producing electricity. It also had many other benefits for the community. All sorts of masts were helping with communications. I have received a letter from the Taoiseach stating that it will be decommissioned and will not go ahead. The advice is that a mess was made of the planning from the start. We do not seem to learn. This project has gone on a journey to hell rather than to purgatory. There seems to be no way out for it other than to let it burn away.
When the pylons come down they will be very valuable to somebody. They will probably go to another country where they will be used to generate wind energy. We can give out about it but we should not let this lesson go without correcting it for the future. We have to make sure it is corrected in a way that we can simplify how we realise the potential of using offshore and onshore renewable energy to develop our electricity supply. We have the potential. We have everything going for us. This is a classic case where we introduced legislation that handcuffed us from the start. We have poor transposition of European laws and we have handcuffed ourselves in many areas. The Derrybrien situation should be examined not in ten years time but now to see how we correct it so it never happens again and we do not end up in the courts in Europe or paying fines or heavy penalties for something we did wrong in the eyes of Europe.
The Bill is important for energy security. Much of what we do is a knee-jerk reaction to situations as they arise. We need to make sure we are not including strategies, plans and announcements. We need to make sure that what we put in place is workable and that we see the results fairly quickly. There is great potential but there must also be investment to make sure it happens. We have tabled amendments to the Bill and I hope they will be taken on board.
I welcome the opportunity to speak on the chickens coming home to roost Bill. None of what is before us should come as a surprise to anyone, particularly anyone in government because over a long number of years they have been made well aware of the issues we are facing now. We are told the objective behind the Bill is to provide temporary electricity generation to replace older power plants and meet the growing demand for electricity caused by data centres. Interestingly, on 7 June 2018, after a very long, protracted and detailed set of discussions at Cabinet, the Government published its statement on the role of data centres in Ireland and the enterprise strategy related to it. In the report there is a section on electricity infrastructure that highlights the growing demand that would be placed on the electricity network by continuing to allow data centres to be given connections to the grid and granted planning permission. The report states a large proportion of existing and planned data centres were due to connect to the electricity system in the Dublin area and, based on the committed expansion of existing data centres and expected growth, the total demand could treble within ten years. Sadly, the legislation we are dealing with today is in large part a result of the unhindered approval of data centres connecting to the electricity grid.
The report raises the question of who will pick up the tab for the increased investment that needs to be made in electricity generation, electricity transmission and the distribution networks. Ultimately it is the electricity users who have to pay for it. The customers of the electricity suppliers have to pay for it through their electricity bills. This is done in part through the public service obligation levy to meet the generation aspect. Then we have the transmission costs paid to EirGrid. This particular report, produced in June 2018, highlighted the impact this would have on higher network charges and increased PSO levies. It stated mitigating measures should be taken to minimise these charges to ordinary electricity customers. To date absolutely nothing has been done to mitigate the cost of this. Families throughout the country are struggling to pay their electricity bills. They have to decide between paying electricity bills and putting food on the table. They are subsidising the green electricity going into the data centres and its transmission costs and distribution costs. The Government continues to sit on its hands on this issue. As I told the Cabinet back in 2017 and 2018, it is immoral to be asking families who are struggling to pay their electricity bills to pay for the cost of this additional electricity going into the data centres. That is exactly what the Government is proposing to do with the legislation before us.
Part of the need for the 450 MW of electricity is because we have decommissioned power stations. The impression being given by the Government is that this is to replace older power plants but it is not. We are also replacing some new kit. I brought this to the floor of the House on 3 December 2020 when I questioned the Tánaiste on the two power plants in Lanesborough and Shannonbridge. Mr. Ciaran Mulvey, the Government's just transition commissioner, had said in a report that on its visit to Shannonbridge and Lanesborough the just transition team was impressed by the pristine state of the power stations. Why would they not be in a pristine state? At that point in time they had a ten-year lifespan remaining. I pointed out to the Tánaiste on the day that we were effectively wasting €176 million of electricity customers' money that had been paid towards the cost of those two power plants which were being mothballed because of the decision taken. I said at the time that electricity customers in particular would foot the bill for the demolition of those pristine plants and that they would have to pay for the alternative technology to provide replacement stability on the electricity grid. Here we are today bringing forward legislation to do just that.
What is frustrating about this is that we convinced the Government, and it was written into the programme for Government, that there would be a review of all of this before any decision was taken. A steering group was established. Of course the steering group involved the ESB, which had its own vested interest in ensuring both of the plants were decommissioned.
Sadly, electricity customers have not only paid for the cost of those two plants, which had a ten-year lifespan left, they are now paying for the replacement 250 MW of electricity that could be produced by both of those plants today in the legislation. Just over two years ago, I said we should not make the mistakes that we made in the past, when we demolished our sugar plants in Mallow and Carlow. I argued against those demolitions at the time. Let us not repeat those mistakes. Sadly, we are now repeating them and asking the electricity customers of this country and the families that are struggling to pay their electricity bills to foot the cost of this irresponsible decision that was taken.
The argument will be made that we cannot continue to burn peat. I do not make that argument whatsoever. I did not make that argument in 2019 or 2020, nor did I make that argument when I was Minister. There is substantial biomass available if we issued licensing for the thinning and felling of forestry in this country. Plenty of brash could be brought in and supplied to those two power plants today. Bord na Móna had set up BioEnergy at the time, to source indigenous biomass. In fact, with just €33 million in investment, we could get farmers to plant €10,000 ha of willow over a three-year period, to supply both of those power plants. That can be done tomorrow morning if the political will is there to do so.
The argument will be made regarding planning permission. It would require emergency legislation be brought forward, as it would with regard to Derrybrien. Does it make sense in the middle of a climate emergency to bring forward emergency legislation to invest in fossil-fuel power generation when we have biomass and wind energy alternatives available to us? The Government is not prepared to engage on that objective.
Many of us received correspondence today from the Irish Farmers Journalregarding the emissions reduction targets that agriculture will have to achieve by 2030. This issue will be debated, quite heatedly I suspect, at Cabinet over the coming weeks, as to whether we should be looking at a 22% reduction in agricultural emissions or a 30% reduction, or somewhere in between. The reality is that managing our land far better would take CO2out of our atmosphere, reduce the harmful effects of climate and improve our oceans far quicker than just shooting down agriculture.
One of the ways to do that would be to support farmers to grow biomass within the vicinity of our three peat-fired power stations - Lanesborough and Shannonbridge, which have been decommissioned, and Edenderry, which is the only plant that is currently operational. If we supplied 100% locally-sourced biomass to those plants, this would reduce agricultural emissions on local farms by 600,000 tonnes of CO2per year. That would be the equivalent of removing 130,000 cars off our roads. It would generate €465 per hectare, with a price of carbon at €100 per tonne. It would also create 4,000 seasonal jobs in harvesting and guarantee incomes to farmers in the midlands. We could use the Bord na Móna rail network that is still in place to transport that biomass to those three power plants, rather than bring it on road.
It is about a small bit of joined-up thinking. This should not come as a surprise to Government. These are discussions I have had at Cabinet with some of the members of Government that are there today. I have engaged in these discussions with the Department of the Environment, Climate and Communications, and people are well aware of the alternatives. We are told we are better off investing in fossil fuels and asking struggling families to pay for it. I believe that is immoral.
Regarding the wider and often overlooked point about our national electricity grid, it is opportune to outline that there is only one electricity grid in Ireland. It is operated by EirGrid and owned by the State. Today, 40% of Ireland's electricity is generated by gas; 40% by wind; 10% by coal; and 10% by peat, oil and solar energy. Another point worth noting is that the grid is largely constructed for fossil fuel usage. This means that it is not capable of handling large volumes of renewable energy. Any energy analyst worth his or her salt will say that the two energy sources do not mix well. That is why the Government's ongoing claims and sweeping statements of having 80% of Ireland's electricity come from renewables by 2030 are hollow and empty, without the considerable investment in the grid that is currently needed.
Estimates by Eirgrid suggest that a minimum investment of more than €2 billion is needed to upgrade the national grid. Thus, based on what is contained within the Bill, EirGrid will be allowed to proceed with higher borrowings to meet such future investments. The outcome of the approach is crystal clear in that the Government's policy plan will mean much higher electricity bills in the future, as this money is recouped through higher charges to energy suppliers, which will ultimately be directly passed on to the consumer.
Various reports have been leaked or published that set out the position and warn that Ireland will not have enough energy to meet the demand for the next five winters. One report by EirGrid explains that this is due to the Government's decision to close power plants, coupled with an increase in demand for electricity. The current Government's frenzied green policies of pushing ahead with effective bans on peat harvesting, together with bans on the extraction of domestic energy sources, mean that this one-dimensional, sole focus on cleaner fuel sources, at some point in the future, will force a situation in which the lights go out.
Energy costs and security have never been more central in public discourse. As the war in Ukraine rages, we are now acutely aware of just how fragile energy security is throughout Europe, but especially in Ireland. That is why the Rural Independent Group moved a Private Members' motion two weeks ago in the House, which sought to force the Government to act. However, just as it does all proposals from the Opposition benches, the Government blocked it and voted against developing Ireland's domestic energy security roadmap. Developing the oilfield off Barryroe could have been a solution to some of our fuel crises, as it could be one of the largest oilfields off Europe.
Since this extremist Green, Fianna Fáil and Fine Gael Government has taken over power in Ireland, it has been constantly posturing about its glossy plans to build renewable capacity and achieve power, with 80% of our energy needs to be met by renewable sources come 2030. However, the race for renewables has not even begun preseason training and lacks any credible action plan. This extremist Green, Fianna Fáil and Fine Gael Government accuses us of never having solutions to all the crises that are happening, one after the other. I handed the Minister a solution more than a year ago. It was a proposal for a floating LNG terminal, on which he failed to act. The Government failed to act on our motion two weeks ago relating to the Barryroe oilfield off the coast of Cork. I tell the Government not to ban turf. It is very simple. The Government failed to act on that. We have plenty of our own briquettes. The Government should stop importing them. The carbon footprint from importing must be massive and it is completely ignored by this Green Government. Only EirGrid in Ireland, owned by the Government, could reduce the price of electricity for every man, woman and child. The Government should stop taking tax of nearly €1 on every litre of fuel. Those are solutions that at least improve the lives of the people in this country.
These are the solutions but this extremist Green, Fianna Fáil and Fine Gael Government do not want to listen. Every member of this Government is responsible for the downfall and what is to come of Ireland. Talking about not listening, it is obvious what is going on from when I brought up the fuel issue with the Taoiseach today. Boats are tied up at piers because they cannot afford to go out. Standing orders were suspended in the council yesterday to talk about this. One Fianna Fáil councillor said he knew someone for whom it would cost €42,000 to go out for his catch. He was tied up and was not going to move. The same goes for other boats. The Taoiseach said today that he did not understand and that he did not hear me. In the name of God, is that the sympathy he has for the people of west Cork?
Is that the sympathy he has for the farmers and fishermen who are struggling severely? He must remove himself from his position if he is not able to understand their position. They are not able to farm the land because contractors cannot pay €1 extra for the price of diesel, which the Government has let go out of control. They are not able to fish because they have had to tie their boats to piers; they cannot pay the €40,000 or €50,000 to go out fishing. The Government is in trouble and its Members will know it in the next election. It must come very quickly.
It is very clear to me and many others in this Chamber and around the country that the Minister's Government is running scared. This is a Bill to try to ensure we do not have blackouts. The Government has paid €450 million for gas generators but where will it get the gas? It could get cornered with that because the Ministers do not want to listen to anybody.
We have an opportunity in Kerry and a very worthwhile company has had a proposal in the offing for many years at Shannon LNG, where we could source gas and bring in the gas from western countries that might be inclined to sell it to us rather than dealing with Putin and others. We are in trouble with Brexit and Britain's Prime Minister Johnson as well. Deputy Micheál Martin is now the Taoiseach and went around north Kerry canvassing with Councillor Norma Moriarty when he promised the people of north Kerry he would support Shannon LNG. What has he done? He allowed his Minister for the Environment, Climate and Communications to object and put in a submission against it. We had our own gas and people went drilling off the coast of Kerry. Of course, the Tánaiste, Deputy Leo Varadkar, stopped that. We had a proposal in the Chamber a few weeks ago involving Barryroe but that was shot down, despite the possibility of any amount of oil and gas being there.
There has been much talk here today about data centres but we should strive to put people in households, homes and business before the data centres, please. That is all I will say about them because much has been said about them.
There has been much talk about turf. We have it and it is our own but there is now a war in Europe that is threatening to be the third world war. What have we done only closed Bord na Móna when we had the possibility of generating our own electricity. Every day since it closed, the cost of electricity has increased. Everybody in the country knows that. Everybody we ask, whether in homes or business, will say the cost of electricity has increased every day since Bord na Móna closed.
We cut our own turf and there has been much talk about turf. We have had seven generations cutting turf; I was the sixth generation and my daughter and sons are at it now. We will make no apologies to anyone for cutting the bit of turf and keeping our homes warm. We are proud to do that. The people before us did it and it is part of our culture. There are many other people like us who will continue to do it.
If we closed the entire country, the difference would amount of 0.013% of global emissions. We can see that Germany, China, Poland and many others have gone back to coal. There is much talk about turf but no word about planes. People need planes but we need a discussion about them. There were 200,000 people flying out of the country last weekend. We must have planes but the Government's focus seems to be on turf. The Minister, Deputy Eamon Ryan, has gladly ensured more people are now cutting turf.
I know somebody who has spent €35,000 or €40,000 on solar panels but gets nothing back for what they supply to the grid. I know several others who are contemplating getting panels but they cannot get going because there is no assistance. The Government is two years in office now and all it will be remembered for is increasing the carbon tax.
We have several methods of creating alternative energy. We are blessed with so many rivers. Kenmare was electrified by the O'Sheas back in the 1930 when they set up turbines in the Sheen river. It was the same with the Sweeneys, the gifted family in Shandrum in Kilgarvan, who generated their own electricity. The Government gives no consideration to such people now.
Failure after failure after failure; that is the result of the policies from this Government when it comes to energy, fuel and how to manage our economy. As was already stated, the Government closed Bord na Móna without thinking it through and we are now bringing in briquettes from Germany. Nobody thought of or mentioned the horticultural industry until one day in here I started a debate about it. All of a sudden, everybody woke up and realised that the Government had completely forgotten about horticulture and peat was required in that very important industry. Anything that has replaced it since is not as good as what we had ourselves. The Government threw the entire industry to the wolves. Now that I mention wolves, there is a Minister who wants to reintroduce those wolves to the country. That is a different subject.
There are unprecedented increases in the basic necessities of life, including fuel to power and heat this country. The Government seems to be completely ignoring the fact that other parts of the world are waking up to this. The Green Party in Germany, for example, had a minister announcing plans to reopen coal mines. How long will it take for the people here to realise that we will have to start looking at reintroducing licences for people to drill off our coasts? There was nothing whatever wrong in doing that. People will have to realise that we must consider using everything, from turf to renewables like solar or wind farms. We should not narrow the focus to leave us so vulnerable that something like what is happening with Russia can lead to the tap being turned off, leaving us high and dry. That is wrong.
I welcome that last week the Minister, Deputy Eamon Ryan, came to Kerry and Mr. Tom O'Shea from Spunkane in Waterville presented him with a sod of turf. I am very glad it was in front of him for over two hours because he got a good chance to look at it, think about it and know that he was in Killarney in County Kerry, which has a proud tradition of saving turf. During the war, when turf was needed, where was it supplied from but all over the country, including County Kerry. People left Kerry and went working on the Bog of Allen. Great jobs were created by Bord na Móna over the years but there is nonsense spouted about going from brown to green. People should read the book Brown Gold: A History of Bord na Móna and the Irish Peat Industry, and after that they might realise the mistake made with Lanesborough and Shannonbridge. What was done was a disgrace and the Minister will be remembered for that for a long time.
We have excellent companies that want to carry on exploring around our coasts. We have a massively underutilised resource off our coasts but in the Dáil we seem to have people racing to the bottom. Anything of any use or any good that we can supply or do ourselves is rejected because it may be harmful to the environment.
In 2016 I was very glad to ensure that Shannon LNG was put into the programme for Government and it was stated as an aspiration that it would be developed by the Government. When the Green Party came into power, it insisted that it be taken out of the programme and not put in again. That was an unusual act because it seems it was suitable for one programme for Government but not the next. There are now members of the Cabinet objecting to it, which is a disgrace. I was very glad to attend a meeting recently where I complimented local Fine Gael councillors who went against the leader of their party in stating very publicly their full support of Shannon LNG, as others did.
That is what we want. We want a liquefied natural gas facility because it is badly needed. The war has compounded that and shown it up to be a fact. The sooner the Minister of State and the rest of the Government wake up to that reality, the better for the people of this country.
The Rural Independent Group asked for the opening of oil and gas exploration, against which the Minister of State voted here in this House, until we have an alternative. Central Statistics Office figures show that the data centres used 14% of our metered electricity last year, now rising to 30%. The European Commission in 2020 put data centres as using 2.7%. We are at 14% and we are heading to 30%. Where is our energy security? We must produce our own energy, otherwise we will continue to import all our energy needs. Put into the mix our current relations with the UK and the war in Ukraine. Is that our energy security? Many reports were leaked over the weekend warning that we will run out of electricity in the next five winters. That is not that far away. The Government is going to run out of road by the time the next election comes.
I had a stall at an agricultural show for the first time in Charleville in County Cork, just my neighbouring parish. Some 99% of the vehicles with the cattle and all the produce that came to this agricultural show were petrol and diesel vehicles. They have no alternative and if they had, they could not afford it. What does the Government do? It bans peat harvesting and extraction of energy sources. Where is its plan for alternatives? Lots of talk but no action; there is no surprise there.
Ireland is an island surrounded by water yet there is no mention of tidal energy or wave energy resulting in cheap hydro-energy. Is there any update on the hydroelectricity? Gas generates 46% of Ireland's total electricity needs. Wind generated between 30% and 40%. In 2021, because the wind did not blow, it only generated 29% of Ireland's electricity. We are totally dependent on gas to supply our electricity. The Rural Independents Group is the only Opposition grouping that has been constant since the very start of this Thirty-third Dáil and before in our views of having fuel for the country until we have an alternative. We are 0.001 on emissions. The Government is going across the whole world and ships are coming in every day with fossil fuels when we have a natural resource off the coast of Ireland which would take out all the global shipping costs. It has been mentioned before. It is the same skies. Again, with horticulture it is saying there is no alternative to imports. Let us close down Bord na Móna. Let us close down everything. It goes back to what I stated at the very start. The Cabinet is city based and has no experience outside the city. Ministers seem to think they can walk to a shop and the stuff just appears there. My God, it is magic. They have no concept of how this country runs.
As I said, I was at the agricultural show. It took me a day to recover with the amount of people who came to me, not only the elderly but young people saying they could not afford their apprenticeships. These are the trades we want to encourage to rebuild Ireland. They said with the cost of living they cannot afford it. The Government is so out of touch with reality. We should protect what we have now, have alternatives and then create change. No, they want to create change with no alternatives. The alternative will be a different Government come the next election.
While Sinn Féin supports the Bill, it is a direct consequence of the failure of the Government and the ones that came before it to prepare for increased demand with changing demographics and, of course, the prevalence of energy-hungry data centres. This Bill will allow EirGrid to acquire new emergency electricity generation capacity. This will be done by increasing EirGrid's borrowing limit and that of Bord na Móna. It is being done because policies of this Government have taken on additional demand for electricity but have not made any provisions to meet the increased demand. That is particularly the case in the area of data centres. The last Fine Gael Government rolled out the red carpet for data centres and sought to make Ireland the data centre capital of the world with no thought about the impact this would have on our electricity supply. Today we are dealing with the consequences. The pressure these centres are putting on the grid is immense. They are now using 14% of all our electricity, as much as all the homes in rural Ireland combined. This is set to rise to at least 30% of all the State's electricity by 2030. While the ESRI estimates that nearly a third of Irish households are experiencing energy poverty, we are dealing with the possibility of blackouts because the last Fine Gael-led Government did not make provision for the strain data centres would put on supply and ultimately the availability of electricity for households.
This Bill, when passed, will see EirGrid's borrowing limit increase to €3 billion to allow for investment in the Celtic interconnector with France and other investments that are necessary to ensure the grid can accommodate up to 80% renewable energy by 2030. While we will support the Bill, in our amendments we are asking for information about the procurement of these additional generators to be shared with the Joint Committee on Environment and Climate Action. We also need to see a report on the policy failures that led us to the point where we need to procure emergency additional capacity. Those who brought us towards this situation need to be held to account.
The Bill will also increase Bord na Móna's borrowing capacity to €650 million to help it fund its expansion into renewable energy. This is welcome because we need the State to retain as much ownership as possible of our energy production capacity. We also need to see real progress in the provision of renewable energy, again with the State retaining ownership. Finally, we need to see the publication of the energy security review so we can accurately assess the threat we are faced with in terms of our ability to provide for this country, especially when we have to prepare for the future in the midst of increasing international uncertainty.
I welcome the opportunity to speak on this legislation. In the last few hours it was on the news that the G7 has said very clearly that unfortunately for them, because of the situation that is evolving, they are now making sure about fuel security and that fossil fuels have to be used more. I have said this for the last few years but people did not want to listen. That is the reality because of the situation and they have to just live with it. A bit of reality has to come into it. Why have we a shortage of power here? Why have we amber alerts? There are more people working, thankfully, but there were also stations that needed refurbishment and we lost Bord na Móna. We lost Bord na Móna because of EU law. The environmentalists went to the courts here and made sure to try to stop it. Unfortunately, no Government since has decided to try to repeal any of those laws. That is the reality, no more than the horticulture sector. Bord na Móna has been shut down for the last few years and now it is coming home to bite. While no one has a problem with offshore wind, and I hope I am proved wrong, to get everything up and running we are talking about 2030 between planning and all the different things. I saw the other day in Killybegs there was an agreement signed with the fishermen.
However, going through all the different processes that are needed, and the same environmentalists will probably object again regarding the Porcupine Bank off the west coast and so on, will slow the job down. The wind is not consistent enough inland, so there is no point. There are days when we do not have wind and we have to up the ante on gas especially.
Deputies asked if there will be additional emissions in this country. The Minister of State can correct me if I am wrong but my understanding is that energy produced for electricity supply is part of the European Union emissions trading scheme, ETS, and it is not counted in the country producing it. The ESB was given 1 million carbon credits under the ETS free of charge when it was burning peat in power stations. The same was done in other countries. Where have the 1 million carbon credits gone? They were surely worth €24 or €25 each, which makes €24 million or €25 million. Who has them or where are have they gone? That is a big question.
The Green Party is in government in Germany and today it had to announce the reopening of the coal mines, as the Minister of State said.
There is a huge opportunity in energy. We have the likes of anaerobic digestion but nothing is being done on it. Right around the country people are crying out to have a go at that. There is solar power from farm buildings and all of that. There is a move starting but everything is so slowly that it is not counteracting. People are probably worried, especially about prices. We will get an interconnector with France but we do want nuclear anywhere in this country. Everyone nearly jumps up in the air when they hear about it. However, we do not mind taking in the 450 MW of electricity that will come in from the interconnector in a year or two.
I presume the new generators will be gas powered. The Minister of State might let me know if that is right. They will probably be on the east coast because the gas pipeline is mostly in the east. What I cannot fathom is that we do not want an LNG terminal below in the Chair's area but we are happy to take it in through a pipe from the UK or wherever else. It is all right if it comes through a pipe but it is not all right to create a few jobs in areas where we require them. I cannot fathom that mentality. Whether we like it or not or whether people jump up and down or not, the reality is that for the next 30 or 40 years, we will definitely be relying on gas and, in my opinion, a fair amount of diesel as well. We have to face up to these facts. The wind does not always blow. If we go offshore, we have a better chance of having wind constantly but the Atlantic has not been tested with offshore turbines. The Atlantic is a ferocious beast when the wind is blowing at full throttle at night or in the day. It is one of the toughest seas. While offshore wind has worked, in fairness, off the east coast, which is great, there is a problem there.
I welcome the provision that people will get a €75 refund. We should acknowledge and welcome what is good in a Bill. The sooner the refund is in place, the better. Given all the amber alerts we have experienced in the past 18 months, people do not have a problem with making sure we have energy security. We must have it; that is the bottom line. However we draw or achieve that, we have to do it. The Government or the ESB has to do it. We have to make sure we do not let the lights go out in the country, as happened in Sri Lanka yesterday where the lights went out because not enough fuel got into the country. We do not want to see situations like that. We must make sure of two things. First, we must have food security, and I worry about the road farmers are being brought down at the moment. Second, we need energy security. If you do not provide those two basics for your people, you are in serious trouble.
I will now talk about how valuable a sod of turf will be to ordinary people next winter. I was talking to a fuel merchant yesterday. An ordinary bag of coal cost €22 last year. The price went to €27, then €35 and then €42, and it is expected to be €50 next winter. An ordinary person cannot afford that. The bit of turf that people cut if they rent a plot for €500 or €600 will do them for the winter. People can jump up and down. In ten or 12 years’ time, that generation will have moved on to something else. Have a look at the bag of coal costing €22 that will cost €50. Can we blame people for looking for alternatives? The bottom line is they need to do so. There will not be enough money to go around for everyone. Those people will act on their own initiative and make sure they get what they need.
I am blue in the face hearing about renewables and all of this. People need to get into their heads that no one has a problem with new technology or new stuff coming. I read an interesting article the day before yesterday. A columnist in one of the newspapers wrote six years ago that we would have self-driving cars and people would be able to sit in them and they would go around the place. It would be hunky-dory and everything would be lovely. He acknowledged in the article I read that he was wrong, and fair play to him for admitting it. I have been hearing about renewables for the past ten or 12 years. There are some renewables and we are able to cater for more of them but if we look at the technologies that are coming, we are ten or 20 years away from perfecting hydrogen, offshore wind and so on. We need to live in the real world and acknowledge that we have to use these other fuels for that length of time. We will have to straddle them or have them side by side. We must not knock off the light in one room to find when we go into another room that the light will not turn on. In other words, do not go telling people they cannot use something and then when they look to renewables they find they do not work. I want to let Deputy Connolly speak.
I welcome the opportunity to look at this legislation. I am horrified by Deputy Leddin's comments and the ill-informed content of some of the debate. He talked about the data centre trove. I rarely personalise debate but I certainly find it a little worrying that information could be twisted in such a way by a Green Party Deputy. We have here legislation for which the date for amendments has already passed and the Bill digest was only produced today. We have one go at discussing this. I have done been my best and struggled with this legislation. The Deputy spoke about ill-informed comments. The best way to avoid ill-informed comments is to allow for a considered debate with maximum information, and that has not happened here. It has not happened in the context of this urgent legislation. I fully understand that we need security of energy supply and the Bill is ostensibly about protecting the security of energy supply, as well as providing for a refund of the PSO levy, allowing for Bord na Móna and EirGrid to borrow more money and allowing the Government to give EirGrid money in the context of a direction from the CRU in relation to security supply. On a theoretical level, I fully understand where this legislation is coming from. What I do not understand is why it is being presented in such an urgent manner, with the date for tabling amendments having passed before we even discussed Second Stage.
I have struggled, and while I have some idea, it is not clear to me what we are doing here. For Deputy Leddin to talk about ill-informed comments is totally unacceptable, given the Government has allowed this situation to develop.
Deputy Naughten referred to the Government Statement on the Role of Data Centres in Ireland’s Enterprise Strategy, which was an absolute hymn of adoration to data centres, with no restriction whatsoever, back in June 2018. Less than a year later, we were declaring a climate emergency and a biodiversity emergency. We have still had no review of that policy. The biggest thing the Government wanted to do under that policy was to classify data centres as strategic infrastructure and to change the legislation to allow them to be put through. It was stated, “This statement outlines the role data centres play in Ireland’s ambition to be a digital economy hot-spot in Europe.” We are certainly a hot-spot in more ways than one. It went on “The Government is amending the planning process for data centres over certain size thresholds to reclassify them as strategic infrastructure”. Again, for the benefit of the person who made the comment about ill-informed comments, let us look at what else was said in the statement, which continued, “While investments in a range of sectors are utility intensive and will increase demand, it is important to acknowledge that data centres pose considerable challenges to the future planning and operation of Ireland’s power system.” This warning was given in June 2018. It also stated:
Such challenges arise in terms of renewable energy policy/objectives ... community acceptance ... By recognising these challenges, [which were clearly outlined] the Government can take steps to mitigate them so that Ireland optimises the benefits that these strategically important investments bring.
The challenges were recognised and steps were to be taken, which clearly were not taken. It is a very short document and it clearly was ignored. On page 12, it is stated, “The Commission for the Regulation of Utilities ... plans to work with EirGrid to develop a range of measures, potentially including locational signals, to ensure that local and regional security of electricity supply is maintained and to facilitate demand growth associated with data centres”, and, of course, other high energy user companies as well.
Here we are today, looking at a Bill with 14 sections, ostensibly to protect our security, and we are rushing it through. There is no pre-legislative scrutiny, no regulatory impact assessment and no proper time to tease out the issues. We have a situation where the risks were clearly highlighted years ago and we failed to act on those risks. Today, we have no analysis and we just have to take the Government's assurance in regard to this matter, where the market we have glorified has failed. This is an acknowledgement the market has failed. The Government is now stepping in to help the market until it performs again in the manner we want it to perform in. We are going to allow EirGrid to acquire plant infrastructure and then we are going to direct it to sell it. It cannot operate the infrastructure itself because it is a network and it distributes, but it is going to be used to buy a plant network, including acquiring electricity generation plants. The way energy plant and electricity plant is used is very strange. We are not told anything about how those plants will be fuelled. We are not told how it will be sold to the operator. There is a sunset clause with a built-in extension, so we are talking about five to six years. Then, that operator will be told to sell it off at arm’s length and something will come back to the Government, but we have no idea about that. Does that not sound totally bizarre?
At the very least, we should acknowledge there is clearly a warning to us that the State should be involved in regard to utility provision, as Deputy Bríd Smith outlined earlier. If we have learned anything, it is that we cannot continue on with the growth model. Of course, I want a thriving economy, but I have learned that a thriving economy as defined by neoliberalism is a disaster. We have had Covid, we have declared two emergencies and we are still going ahead, boasting that Ireland is one of the fastest growing countries in Europe and the world. We do not seem to realise we must question that model. We must question data centres. Of course, they have a role and, of course, we need them, but we need to question what is their role and how they can be sustainable.
We have looked at the capacity statement from EirGrid from more than a year ago and it told us there were four options. The one that is currently in place is the developer-led model, as set out in the statement from EirGrid as a prelude to its consultation. Nowhere in the speech given today by the Minister of State is there any context about where we are now going as a small country with, in theory, fantastic supplies of wind, water and sun, actually, and how we are going to use those sources of energy so we can have independence and maximise the output to the people, so we bring them on board, as opposed to the endless consumption model we are working from. At the very least, there might be an apology for having had no review of the data centres, for the hymn of praise back in 2018, and for not knowing where the review is, or there might be a recognition that there has to be fundamental change. EirGrid’s all-island generation capacity statement outlines that data centres could account for 23% of energy demand. This is a median estimate and not even the worst scenario, and we have in excess of 70 data centres at the moment.
I have repeatedly stood up in the House and said I am an absolute supporter of the Green Party in its recognition of a climate emergency and a biodiversity emergency, but what is happening here is that we are pretending we can go on with an endless consumption model and deal with a climate emergency. It is not possible. What we are doing here today is rushing through legislation in the guise of an emergency when that emergency has been apparent for years. We are twisting language on its head and talking about ill-informed comment when all of that has been allowed by the Government in the manner in which it is rushing this legislation through without context, without discussion and without allowing us to see what all of this actually means, when EirGrid buys an electricity plant and then sells it on. Does that not make us question what is going on here in regard to market failure and what we learn from that?
I thank all the Deputies for their insightful comments on this emergency legislation. It is, indeed, emergency legislation. We are trying to address an immediate problem, the security of electricity supply, and to get more credit to people's electricity accounts for the coming winter. It is vital we deliver this legislation to enable these priorities. I appreciate the Deputies’ comments and I appreciate the widespread support from Deputies from all parties that there is a need for secure electricity supplies and for credits to be given to electricity customers, even if there are other things we should do as well. There were a broad range of contributions, including on renewables, the cost of living, data centres and the role of the Commission for Regulation of Utilities. I will keep my comments focused on this Bill. I am going to address some of the contributions of Deputies but I will not be able to do them all justice right now, and I think we can address them better on Committee Stage.
One general question was why are we legislating in this emergency way. Our general direction of travel on climate action is towards an electrification of society. We are moving towards our transport being electrically powered, both public and private transport, and moving towards our homes being powered by electricity because heat pumps are powered by electricity. We are moving towards a general electrification of everything and at the same time a reduction in use and in demand wherever we can through a circular economy. That means more electricity. This Government has decided to move faster towards our emission cuts, which means more electricity towards 2030.
However, anyone who has travelled around the world in the past few years without going very far will have noticed, including just north of the Border, solar panels on roofs, in Wales offshore wind turbines on the horizon and in Germany anaerobic digesters in every village. One might wonder why that is not happening here. It did not happen here for the last decade so here we are. We are where we are. What has to be done now is to legislate for this. There will be an independent review into the reasons we are in this situation. That said, there are some direct questions about these new generators that I will quickly address. How are they to be powered? They will likely be powered by a combination of gas or distillate although that has not been specified. Are they to be used all the time as general generation? They will not. They are intended to be used as a last resort. They are peaking power to be used on a day when there is no wind or a number of generators have gone down for whatever reason and these are needed in an emergency. That is their intended purpose. What will happen to them afterwards? They will be sold and removed from the grid. What is the source of the €350 million? That money will be added as a supplementary estimate to the budget to Vote 29 this year which will have to be voted on by the Oireachtas. It will be used for upfront capital costs to EirGrid.
My overarching message is that it is critical that the provisions in this Bill are put in place before the summer recess to ensure security of supply and to provide a PSO credit to electricity customers. I seek the support of the House to achieve that. I appreciate the supportive comments from Sinn Féin earlier. It is a matter of serious concern to the Government that recent electricity and gas price increases caused by international conditions are putting increasing pressure on consumers, especially those in a more vulnerable economic position. I appreciate the important points that Deputies have made on the pressure being felt by many households from the rise in the cost of living. It is important to see the PSO credited as a benefit provision in this Bill as one of a suite of measures being taken by Government.
The provisions to enable EirGrid to deliver on the CRU’s direction to procure about 450 MW of temporary generation capacity are vital to the secure supply of electricity for the coming years. I seek the support of the House to deliver these provisions. The Government is determined to act quickly to help people further with these high energy prices. It is worth restating the purpose of the Bill as well as the operation of the emergency measures. The Bill provides for the CRU to direct that the PSO for the coming PSO year can be credited as a benefit to electricity customers. It also provides for EirGrid to purchase temporary backup generation units and to negotiate with generators to deliver this backup capacity over the coming years to bridge the gap in our transition to an electricity grid which comprises up to 80% renewable energy by 2030. In general I appreciate the support of Deputies across the House in this. It is a practical thing. It is emergency legislation and I look forward to continuing in more detail to answer Deputies' questions on Committee Stage.