Jim Walsh (Fianna Fail)

The section primarily provides for an increase in the borrowing allowance of Bord Gáis from the current amount of €1.7 billion to €3 billion. We understood from Second Stage that the €1.7 billion would be reached in 2009. We note that while that borrowing may take place in euro, foreign currency is also included. Given the volatility we have seen in the currency markets in recent times, it begs the question as to the policy that will be pursued by Bord Gáis Éireann with regard to hedging. How will that currency risk be managed? It is an important issue because obviously any revaluation of the currency in which it borrows would have an adverse impact on the €3 billion — it could limit it. Obviously if the currency decreases the company would gain. However, that is like betting on a currency. Given that we are members of the euro, which is now probably one of the two or three strongest currencies on world market, why is it necessary to allow that foreign currency element within it? Presumably all the borrowings will be for investment in our system here whether that is in the networks or in new generating capacity.

In recent weeks we have heard much about the cost of our energy. I know this is a matter in which the Minister of State has taken a keen interest. I have heard him both in this House and at our parliamentary party meetings on a number of occasions deal with queries in that regard. It has become a major issue for consumers and business. Competitiveness in the economy is a very topical and important issue. In recent days I read newspaper reports that the entry of Bord Gáis Éireann into the electricity market will have a beneficial impact on prices. I believe I read that it would result in a 10% reduction in the price of electricity. If that is going to generate real competition in that sector, obviously that is a good thing.

The purpose of increasing the borrowing allowance in this section is to allow for the large Bord Gáis capital programme up to 2012. That will be both on the procurement and supply side. Of other countries with natural resources, one comes to mind. Approximately 20 years ago people in Sweden, which one associates with considerable timber supplies, approached Ireland seeking wood trimmings. I am familiar with it because it was exported to Sweden through the port of New Ross. I remember asking representatives of the Swedish state company Domänverket, the counterpart of Coillte here, what was the purpose, given the strong supply of forests in Sweden. They told me it was to conserve their own supplies of wood. I regard this as a very astute approach. I wonder what we could be doing with regard to procurement of gas which is a finite natural resource although we were fortunate in finding more gas off the west coast.

I note the intention to improve the network so that the supply of gas can be enhanced. I refer to my area and the other seven counties out of the 32 which currently do not have a gas supply. It is imperative to redress this situation as these counties would figure low on any scale of economic indicators. As a consequence a natural gas supply to those counties would be a particular aid to attracting industry and improving competitiveness for existing industries in those counties. I hope something can be done in that regard. I acknowledge there are cost factors and that an evaluation has been carried out. In the times in which we live, the remit of Bord Gáis should be to ensure a 32-county supply of what is a natural resource.

I note the borrowing will also enable them to invest in increased generating capacity, both conventional generation of electricity and renewables. I have stated on other occasions in the House that gas is a primary fuel and it is a very clean fuel for the generation of electricity. However, it seems to be somewhat wasteful of a primary fuel and a natural resource to use it for the generation of electricity, particularly given that it is a clean fuel. Fossil fuels and oil form a major role in electricity generation. While gas is playing its part we also have coal-fired generation but the nature of coal is adding to our CO2 problems. There is an expectation that clean coals will become available and could be used. In my view we should aim to preserve our gas supply. I am not an energy economist but I question the use of such an important fuel which is within our jurisdiction for the generation of electricity. The concentration on renewables should perhaps be the sole concentration of the investment in electricity generation. A target of 30% by 2020 or 2025 for the use of renewable energy has been set. We also need to have energy independence given the finite resource and the volatility of fossil fuels. There are also issues regarding CO2, fuel and climate change but there will also be a significant price to pay. It is predicted that the cost of oil, although currently depressed, will increase considerably once there is a global economic upturn. The Department has been pursuing a policy of renewable use.