Seán Power (Kildare South, Fianna Fail)

The challenging targets the Government has set are to increase the contribution of renewable energy to the markets for electricity, heat and transport to 33%, 12% and 10%, respectively, by 2020. In the case of renewable electricity, the quantified targets are 15% of electricity from renewable sources by 2010 and 33% by 2020. It is estimated that the 15% target requires an installed capacity of 1,650 MW. Capacity of approximately 1,200 MW already has been constructed. Moreover, a further 150 projects, with a combined additional installed capacity of approximately 1,500 MW, already have been accepted into REFIT, Ireland's feed-in tariff system. Because all the aforementioned projects have planning permission and a grid connection offer, one can be confident the 2010 target will be met and exceeded.

In January this year, together with my counterpart in Northern Ireland, I published the all-island grid study. This is one of the most advanced and comprehensive studies of its kind in the world. The study examines a range of generation portfolios for Ireland and ultimately shows the ability of our power system to handle approximately 42% of electricity from renewable sources on an all-island basis. It also examines the investment levels required both in respect of new generation capacity and the necessary supporting infrastructure and outlines the climate change and security of supply benefits that would accrue.

Ireland is firmly committed to EU targets on renewable energy in transport. The key question is how to define and implement a sustainability regime to maximise the benefit of bio-fuels without causing environmental damage or social problems, while simultaneously developing other technologies, such as fuel cells, biogas and electric vehicles.

The Government has made a commitment to achieve a target of 5.75% market penetration of bio-fuels by 2010 in accordance with the existing EU bio-fuels directive. It is also committed to achieving 10% market penetration by renewable energy in the transport sector in Ireland by 2020. This is the target proposed by the EU Commission in the draft climate and energy package. Significantly, the objective in that draft is for a 10% share of renewable energy in transport, not a flat inclusion of 10% bio-fuels in transport fuels.

The sustainability criteria under negotiation in Brussels are aimed at ensuring that bio-fuels counted towards EU targets deliver real and worthwhile net emissions savings, do not cause disruption to communities in the developing world and that important natural habitats and ecosystems are preserved. My Department is taking an active role in these negotiations and is working closely with the Commission and other member states to ensure that the final set of criteria is robust, effective and workable.

Furthermore, my Department is administering the bio-fuels mineral oil tax relief schemes that were launched in 2005 and 2006 and have resulted in 18 projects being awarded excise relief between 2005 and 2010. The schemes were designed as interim measures to accelerate the level of bio-fuels in the national fuel mix, in advance of the introduction of a bio-fuels obligation. As a result of these schemes, bio-fuels are already being mainstreamed in blends of up to 5% at a number of existing petrol and diesel pumps and higher blends are being sold to identified vehicle fleets, which are known as captive fleets.

The proposed new directive is under discussion at present with a view to securing a Council agreement by the end of this year. While the Government is committed to existing targets, they must be set in the context of a framework for robust sustainability criteria in respect of production and deployment.

I will be publishing a draft of the bio-fuels obligation document shortly, which will set out the manner in which I propose to meet the 2010 targets, and which also will provide a means of meeting a large part of the 2020 renewable energy in transport targets. The introduction of the obligation will require all fuel suppliers to ensure that bio-fuels represent a certain percentage of their annual fuel sales. The bio-fuels obligation will provide a long-term market-based framework for the development of a bio-fuels sector and delivery of bio-fuels targets to 2020, and will provide the market with the certainty it requires to continue to invest. The bio-fuels obligation will take full account of EU developments regarding bio-fuels and related sustainability criteria, once agreed. Our collective objective in the European Union must be to ensure that production and investment in bio-fuels is fully sustainable worldwide and does not have harmful consequences for developing countries in either environmental or food security terms.

I fully support the Commission's objective to set a sustainable framework for bio-fuels policy, which will see the EU taking a lead in this complex area. Bio-fuels are an important aspect of the Government's response to rising emissions in the transport sector. Through appropriate research, demonstration and development schemes, such as the Charles Parsons awards, it is incentivising the development of second generation bio-fuels, which will not use food stocks as raw material input. It is also examining the feasibility of other renewable energy sources for use in the transport sector such as biogas and electric vehicle use.

Electric vehicles, including hybrid-electric, plug-in hybrid or battery electric, offer an increasingly realistic solution in respect of reducing greenhouse gas emissions from transport and dependence on imported fossil fuels. There has been highly significant global investment in research and development in this field over decades and the technology is now maturing to a point at which large-scale commercial deployment appears feasible in the medium term.

Sustainable Energy Ireland has recently published reports on hybrid electrical vehicles and battery electric vehicles. These reports focus on potential measures that might be used to stimulate uptake in Ireland and make a series of recommendations with regard to how this might be best accomplished. These provide a useful template for the way forward and will be considered as part of the work of my Department's renewable energy development group and in the sustainable transport and travel action plan being finalised at present by my colleague, the Minister for Transport.

My colleague, the Minister for Transport, has indicated that public transport operators, which are the subject of public service obligations, have been instructed to move to a 5% biodiesel blend in the current fleet immediately, with the view to ensuring that all new buses, as part of future fleet replacement, can operate on a 30% blend, subject to technical and logistical constraints. It is expected that the obligation will be implemented in 2009. The Department of Transport will also continue to look at the technical and economic feasibility of buses and heavy goods vehicles operating on 100% pure plant oil as well as any potential regulation of engine modification or suitable fuels.

In February 2008 the Department of Transport launched its document "2020 Vision: Sustainable Travel and Transport: Public Consultation Document", which sets out the Government's vision for a sustainable transport system by 2020 and seeks to elicit response from stakeholders and the public on how certain policies and measures could be introduced to reduce discretionary demand for travel and improve energy efficiency. The need for a sustainable travel and transport action plan emerged during the preparation of the Energy White Paper, "Delivering a Sustainable Energy Future for Ireland" and the revised National Climate Change Strategy 2007-2012, when it was recognised that adverse trends in the transport sector in Ireland had to be addressed.

In the context of our renewable energy ambitions we need to mobilise as yet untapped biomass resources, including the potential offered by marine algae or seaweed. Work is currently under way to determine what the marine environment might contribute to developing the national bio-fuels capacity. The analysis will include identifying the necessary research, development and demonstration projects to realise any such potential.

The greener homes scheme, launched in March 2006, provides support to homeowners to invest in a range of domestic renewable energy heating technologies including solar panels, biomass boilers and stoves, and heat pumps. The scheme has proved popular since its launch, with 22,000 grant offers in place across the three technologies. Already 13,750 of these offers have been paid following the successful installation of the systems, resulting in the investment of $42 million to date. These completed systems have resulted in annual reduction of 33,000 tonnes of CO2 emissions. The scheme has helped establish a strong supply industry for the products, services and fuels while the application of strict product standards and installer training and quality schemes has ensured that consumers are both informed and confident in their choices.

The scheme is constantly under review. Earlier this week my colleague, the Minister, Deputy Ryan, announced phase III of the scheme. This was timed to coincide with the recent coming into force of the revised building regulations 2008 which for the first time see a compulsory requirement for some component of renewable energy in all new homes.

It is recognised that the installation of renewable heating systems in existing homes is typically more complex and therefore more expensive. As a result it is appropriate to continue to provide support to this sector while the market reaches ultimate maturity. Therefore, the main change under phase III of the scheme is that henceforth only existing — at least one year old — houses will be eligible for support. There will be a small reduction in the levels of support for the existing biomass technologies.

In addition, as part of this new phase, gasification boilers as part of a new biomass technology is being added to the scheme and becomes eligible for support. All details will be published on Sustainable Energy Ireland's website when the scheme reopens for applications on 22 July 2008. Gasification boilers for the domestic sector will be supported at a fixed rate of €2,000.

SEI also runs a renewable heat deployment programme, called 'Reheat', which provides capital support for organisations wishing to install renewable heating technologies in their premises or to conduct analyses as to the suitability of the technology. A total of 416 applications have been received since the launch of the programme, 136 of which have been received since the start of 2008 representing an increase of 109% on the same period last year. Of those applications, 355 are for capital investment, with grant commitments now over €6.5 million across 329 approved applications. Of these projects, 154 are for biomass boilers, 96 are for solar thermal installations and 39 are for heat pumps.

SEI also runs a combined heat and power deployment programme, which has recently been expanded to take into account biomass CHP and anaerobic digestion CHP. A total of 77 applications have been received, of which 53 are for capital investment, with 55 approved for a total commitment level of over €2.5 million.

We have seen a rapid increase in our levels of renewable electricity in recent years where it now amounts to almost 9.5% of our overall electricity generation. This is double the figure of three years ago. We have seen the success of our greener homes scheme, where we have created markets with approximately 10,000 domestic renewable energy systems a year being installed. Two or three years ago this figure would only have been in the hundreds. We have trained hundreds of renewable technology installers all over the country and local supply chains are developing to harness our local biomass resources to substitute for imported fossil fuels. We have just introduced new domestic building regulations, which are among the most challenging anywhere in Europe from an energy efficiency perspective and which have underpinned the renewable energy sector by making renewable technologies compulsory in new buildings. This is just the start, as we are now significantly accelerating our renewable energy programmes to ensure we deliver on our 2020 targets as we strive to eliminate carbon from our future energy supply.