Brendan Kenneally (Fianna Fail)

The purpose of this Bill is to provide, inter alia, for the raising of the statutory borrowing limit of the ESB from £1.6 billion to €6 billion as set out in section 1. It is necessary to amend the legislation where the borrowing limit is stipulated, something which has not been done for 22 years. This revision is necessary so that the ESB can fully, and in accordance with its statutory obligations, implement its capital expenditure programme. I am pleased to note there is no implications in terms of Exchequer costs or its staffing levels. I have no doubt this measure will find general favour, particularly in the light of the service which this organisation has given to the State and its people since it was founded in 1927.

The ESB has to be regarded as one of the success stories of Irish business and also one of the most successful of the many semi-State companies set up to bring us out of the economic stagnation of post-colonial Ireland. It has been involved in generating power since it built the first major power plant at Ardnacrusha, County Clare, in the late 1920s, a venture which was not without its critics and sceptics at the time. Now the company is at the leading edge of power generation with its newest plants, including the latest combined cycle gas turbine power plant at Poolbeg in Dublin. The ESB, and we as a nation, have come a long way in the past 77 years but it is essential that we examine the role of the ESB in a society which has changed dramatically since the board was founded over three quarters of a century ago.

For example, the ESB has stated that Ireland has one of the fastest growing electricity markets in the developed world. It grew by over 40% over the past ten years, far ahead of growth in the rest of Europe. The growth in the economy and the increasing number of new housing units and businesses is also reflected in its returns. In the past year alone, a total of 63,000 new customers were connected to the electricity network.

This Government has been trying to encourage competition in what is both a sizeable and lucrative market, and a vital national resource. We have lived with this service for so long and, in fairness to the board and its employees, have been served so well by them that we sometimes take them for granted and have little interest in finding out just what they are about and the size of the organisation. The ESB has never been a drain on the public finances because, by its very nature, its product has been in demand and it has had a monopoly position for decades. The ESB accepts that the days of that monopoly in the generation of electricity are over and that it has special responsibilities in regard to the distribution of that power. The ESB's policy is clearly outlined on its website. It states:

With the progressive opening to competition of the electricity market in Ireland, it is essential that ESB Networks, which will remain a monopoly business in the new market, provide services in a transparent and equal basis to all electricity customers, irrespective of who their electricity supplier is. This requirement is clearly set out in the legislation that established the new electricity market structures in Ireland, and is incorporated into the licences issued to ESB by the Commission for Energy Regulation.

Like any major corporation, the ESB has had its share of critics over the years and has occasionally attracted bad press. Most of us at some stage have had occasion to grumble about power failures, missing street lights or a perceived absence of proper voltage. On the other side of the coin is the service its employees have given, often under the most extreme conditions. They have bravely worked to repair the damage caused by snow storms, major flooding and storm force winds, more often than not before those extreme conditions have abated, so that as few people as possible would be inconvenienced for the shortest time possible. It is appropriate to recall the individual acts of courage and heroism and acknowledge the contribution the workforce has made, often beyond the normal call of duty. Their safety record is to be envied, and in any broad assessment they must be seen as a company and workforce which have delivered for the State and its people.

Their operations have not of course been confined to the home market. A valuable arm of the ESB's business is in international consultancy, an area which has provided valuable revenue and also enhanced both our national and international reputations and that of the board worldwide. According to its own statistics, ESB International has a presence in over 25 countries worldwide and has carried out projects in over 100 countries. That is about half the entire number of countries around the world. Few, if any, Irish commercial companies can boast such an international presence. The company is currently developing power projects in Bilbao in Spain and Coolkeeragh in Northern Ireland. It employs over 1,400 people, 200 of whom are outside Ireland, and has representative offices in London, Cork, Bilbao, Glasgow, Bahrain, Abu Dhabi, Belgium, Vietnam and Malaysia.

If there is a reservation in anyone's mind about the possibility of interests from outside the country becoming players in the Irish electricity market, we might remember that the ESB itself and, by extension, we as a nation have benefited from its involvement in nearby Britain, where it has operated the country's first independent power plant at Corby since the early 1990s. It had been using that system in the north wall since the early 1980s and it was the first station to use that modern technology in Europe.

In its annual results for 2002, the ESB group reported that turnover was €2.1 billion and profit before interest and tax increased to €250 million, an increase of 26% on the previous year. Capital investment was €864 million, the highest ever recorded by the company and an increase of 58% on the previous year. The ESB and its divisions are engaged in an investment of over €3.5 billion over the next five years, the largest ever by any company in the history of the State.

As I stated earlier, the ESB, in common with every other business in the country, has to take cognisance of the changing face of society and look to accommodate desirable changes and aspirations in Ireland. Among those is a desire on the part of the majority of people for a cleaner environment. One need only look at the enthusiastic way in which the people of Ireland have embraced two very desirable initiatives introduced by the Government in the last few years. First, there was the plastic bag levy designed to take unsightly and widespread litter from our roadsides, fences and hedgerows. It has been successful and implemented willingly by the people, who have been quite happy to forgo the dubious benefits of plastic bags for an enhanced environment. The second initiative was the smoking ban, which is almost universally accepted as a success and the benefits of which I need not labour here. I will limit myself to saying that the stiffest opposition did not come from smokers, who largely welcomed the measure, but from vested interests, meaning that it had a much narrower focus than that of the Minister for Health and Children.

Equally, the ESB is moving away from the less desirable methods of electricity generation and closing down several peat-burning stations. All of the existing peat generation units are due to be replaced by two brand-new peat stations, which are currently under construction and will be located at Shannonbridge and Lanesborough. That move has not been without industrial relations problems, but the plan is being implemented and our environment will be all the cleaner for it. It is interesting to note that the company is the largest green generator and supplier of renewable power, with hydroelectric power stations on the Erne, the Shannon, the Lee and the Liffey.

A wholly owned subsidiary of the ESB, Hibernian Wind, has been developing wind farms at Carnsore Point in County Wexford and Moneypoint in County Clare. Those who can remember back three decades ago will recall the proposal to build a nuclear power station in Carnsore, a suggestion that attracted widespread opposition and was dropped shortly afterwards. Moneypoint, the second site of wind generation, has been one of the less clean generating plants, using enormous quantities of coal with its resultant pollution potential. I am surprised and not a little disappointed at the attitude of sections of society, not least those who would class themselves as environmentalists, who have voiced very strong opposition to the location of wind power masts in sometimes remote locations. Spurious arguments such as the noise of the vanes lend nothing to the debate, as they are founded on misinformation. I am quite prepared to accept that the masts may be visually intrusive, but it is difficult to believe that there are no suitable remote locations, such as valleys where the wind funnels, which could not accommodate such masts, would be out of general sight. We cannot have an ever-increasing demand for electrical power on the one hand without conceding something on the other and wind power must be the cleanest means of generation.

I would similarly like to see resources being set aside for a full investigation of the potential of wave power. As the most westerly country in Europe, bordering the Atlantic, there must be potential for the use of estuaries and other areas of water for the generation of electricity from wave power. Turlough Hill, the pumped storage hydro scheme in County Wicklow, is still a showpiece of electricity generation in Ireland and shows the kind of innovation of which the ESB is capable. While it may have been built in the 1970s, it is still a relevant example of what can be achieved if a commitment exists to the best principles of the proper use of resources and care for the environment. It is the fifth largest generating station in Ireland and is particularly beneficial as it operates as a storage scheme.

As the public company in the field of electricity generation, the ESB should be more proactive in both those areas, and studies should be carried out and reports and recommendations produced as soon as possible. Perhaps there may even be the possibility of exporting power, with resultant benefits for the economy and the balance of payments. We might well take a look at the Danes' experience. There appears to be new broad agreement in their parliament regarding a commitment to the principle of wind power and ensuring continuity of supply on the Danish market. The Danish Wind Industry Association suggests that Danish politicians recognise that the wind industry is an important engine for growth and welfare which contributes billions of euros to the Danish balance of payments, as well as employment for more than 20,000 people. A new agreement in parliament there will result in upwards of 750 MW of new wind power capacity in Denmark over the next five years. Electricity provided by wind will increase from 20% to more than 25% of the annual national consumption.

I am no weather expert, but it appears to me that we are as well, if not better, placed than the Danes to take advantage of wind power, exposed as this island is to Atlantic winds. I often wonder why such an obvious possibility should be so neglected, from the point of view both of encouragement of and investment in research. The concept of wind energy is far from new, with the windmill providing motive power for centuries all across Europe and the New World. With our modern technology and forward thinking, I have no doubt that it can still play a vital part in our development.

We are not alone in our reluctance to use natural and clean methods of electricity generation. Britain has only one commercially operating wave farm, Wavegen's plant on the island of Islay off the west coast of Scotland, which supplies power to about 400 local households. There may be a long way to go yet in refining that system, but it must be included as one of our options for the future. On the other hand, there are currently about 60 operating wind farms in the UK, supplying enough power for 250,000 homes each year or about 0.3% of total UK electricity consumption. There is also one commercially operating offshore wind farm which supplies enough energy to power up to 3,000 households.

There should be room also for the small operator in the power generation of the future. I know of one landowner in my constituency who is exploring the possibility of setting up a small hydro scheme on a stream running through his land which has the potential of powering a small town. Wherever there is clean energy available, we should encourage its use to the benefit of our economy and our environment. According to the ESB, 56% of the Irish electricity market has been opened to competition. The market will be fully open to competition in 2005, and the ESB has been facilitating that and made virtual independent power available at discount prices to the independent supply sector.

The electrical power industry is changing to accommodate modern thinking and the demands of today. It is up to the ESB to lead and shape that change, and it must be encouraged to do so wherever possible. We must facilitate that where we can, and increasing its required borrowing through this measure is a step in the right direction. I commend this Bill to the House.