Deirdre Clune (Fine Gael)

This is an important debate. We look forward to the Minister's production of his energy policy in 2012. That will be important. The International Energy Agency is currently carrying out an in-depth analysis of our energy policy in line with the IMF agreement. We look forward to that and to what it will mean for us in terms of efficiencies in the electricity and gas markets, which the Minister mentioned. It is important to review energy policy every so often in light of changing international circumstances and changes in engineering and technological advancements.

We are heavily reliant on fossil fuels. Imported fossil fuels accounts for 90% of our energy requirements. In 2010 oil accounted for 55% of our energy needs and gas accounted for 33%, yet 61% of our electricity came from gas. We are almost totally reliant on oil for transport bar a few exceptions.

I refer to the Forfás report, mentioned by Senator Barrett, which was produced at the end of last year. The cost of energy for commercial enterprises is extremely important. At the stage we are in our economic history, we have to support business and enterprise and reduce costs, where possible, for enterprises. It was recommended that research and development in wave, tidal and offshore wind energy development should be funded from the private sector rather than from Government grants. The OECD report, which was mentioned, recommended a complete discontinuation of support for offshore wave and tidal energy, although it did not mention wind energy. Offshore wave energy development is very expensive. From an engineering point of view, of which I would be very supportive, it is possible but it is expensive and the question arises as to whether we can afford it our current economic circumstances. It recommended that the full cost of grid connections from offshore wind projects should be charged directly to the project. The public service obligation levy must be examined in terms of our overall energy policy. The levy is being borne by enterprise and it is a major concern for that sector. None the less, the renewable energy sector is important to encourage from a security point of view. Currently, only 6% of our energy comes from renewables. All these questions should be up for discussion.

I recommend that the Minister reads a report from the Irish Academy of Engineering, produced this time last year, which examined the economic decline since 2007. We do not need to produce as much energy as we did. The rate of use of our energy is declining and it probably will remain relatively stagnant over the coming years. A question raised in that report is whether it is feasible to invest €10 billion over the next ten years in wind energy when what we should be doing is looking after what we have, introducing efficiencies in our production. That would include in the ESB, as was mentioned. Wind farms were also mentioned The best place to site wind farms is next to the grid, to reduce the connection costs. We all know that will not be possible but that is the most efficient place to site them.

Gas is extremely important. There have been many changes internationally in that technology which have made it cheaper to access gas and to find more gas reserves. There is the controversy over fracking, over which I have great concerns. Internationally, gas is more available. We have invested in gas generating capacity on this island in recent years. The use of natural gas should remain a major plank of our energy policy. We should not go down the road of focusing entirely on renewables and neglecting investment in the infrastructure we have built up in recent years. It is important that the Corrib gas would be brought onshore as soon as possible. That is essential for our security of supply. Technically, natural gas will be more available. We need to ensure that we have adequate storage facility for natural gas on this island. We need to develop LPG storage facilities.

The North-South and east-west interconnectors are extremely important and we should also look to France. The Minister spoke about working with other countries to develop energy policies. We should have a broader approach. We are committed under EU agreements to reducing our energy usage and greenhouse gas emissions but could we not examine working with a group of countries and tying in with them in terms of our interconnection? There are many questions on energy policy. The most important point to make is that in light of the current economic circumstances and the cost of energy to industry and to small and medium enterprises it is extremely important that our energy policy must be practical and pragmatic as we approach developing energy policy this year.