Sean Barrett (Independent) | Oireachtas source

I echo Senator Keane's sentiments in favour of Senators Kelly and Whelan for their interest in this area. As always, I welcome to the House the Minister of State, Deputy Jan O'Sullivan. I share the environmental concerns that have moved the Senators to introduce the Bill and they undoubtedly will deal with them. However, it raises concerns that windmills are noisy and they disturb neighbourhoods. It is a matter of opinion as to whether they are visually intrusive in the countryside - it is my personal view that they are.

However, I wish to raise the economics of this matter with the Minister of State. I hope the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, will also take up this issue. The OECD review of the Irish economy called for a "discontinuation of supports for offshore, wave and tidal energy". Environmentalists have been very successful in putting forward the view that this is all free. However, this is not the case, as it is highly expensive energy. Moreover, it adds to the costs of energy in Ireland. The cost in 2011 of the public service obligation, PSO, scheme to support high-cost energy was €157 million, of which €43 million was for renewables. While I might have some view that it is bad if environmental concerns are raised by Senator Whelan and his colleagues, it is a matter of some concern that those who are doing it, thereby making the cost of electricity in Ireland dearer, are subsidised.

In the international comparisons I have considered, Denmark, which is held as the great centre of the wind industry, invariably has the most expensive electricity. Is this related to the amount of wind energy Denmark is using? It costs €0.29 per kilowatt-hour there, as opposed to Ireland's rate of €0.21 per kilowatt-hour and importantly, the equivalent figure of €0.16 per kilowatt-hour in the United Kingdom. How are we supposed to make electricity here with wind and export it to the United Kingdom, when that country already appears to have electricity prices that are approximately one fifth lower than Ireland's? Why are subsidies required to do it? In other words, the Minister, Deputy Rabbitte or the Minister of State, Deputy Jan O'Sullivan, should at some time ensure Members actually get the numbers on what this costs. One should not simply make this fashionable, environmental and so on. If it is damaging the economy, that is serious.

To put it another way, if wind energy is so good, why is the sector always seeking subsidies, in addition to annoying Senators in their neighbourhoods? What price of alternative fuels should we build into the model? Documents were circulated to Members of the Oireachtas by the Shannon LNG proposal, which, as Members are aware, is to import liquefied natural gas to the mouth of the Shannon. The group states that compared with a United Kingdom price of $9.17, they can import gas from the United States at $2.59. While one wishes to prevent imports - I appreciate Senator Keane's point in this regard - perhaps some imports are actually better value than are the windmill-based projects. There is a revival under way in the economy of the United States at present based on its ability through fracking to become energy-independent. I acknowledge fracking has environmental aspects and our colleague, Senator Mooney, is concerned about its impact in County Leitrim, as are others in respect of County Fermanagh. However, the United States has become independent by using sources of energy such as fracking and gas. What if this then becomes the shadow price against which Ireland should evaluate wind and tidal projects? The OECD tells us we should phase out the subsidies under the renewable energy feed in tariff, REFIT, which is a kind of back-door subsidy to the windmill industry. While the subsidy is relatively small, the OECD recommends it should be phased out over a period. What will the market look like then? In addition, it points out that if one opts for high wind energy targets, another problem arises in the cost of connecting it to the grid, as the latter goes through people's farms and so on. An ESRI estimate indicates it could add up to 9.8% to an already high cost of electricity in Ireland. This is from the Forfás Review of Energy Competitiveness Issues and Priorities for Enterprise dated December 2011. It also states the only way in which Ireland is remaining competitive is through a rebate scheme for large users of electricity and this is due to be phased out this year. Consequently, why would we wish to add to our electricity bills? Why should we seek the imposition of these PSO levies? Why did the OECD, to say the least, cast a bucket of cold water over some of the renewables in the circumstances in which Ireland finds itself?

Consequently, I would like the economics underlying this issue investigated much more thoroughly. All Members have heard the advocates of wind, waves and so on but my question is whether it stands up in an economy in which, as Members learned yesterday, the impact of the recession has been borne overwhelmingly by people under the age of 45. We are trying to get the country back on its feet after the disasters between 2008 and 2010. Is this a luxury, as has been shown in Denmark, we cannot afford? Should Ireland not be looking at the low-cost countries producing electricity, which are the United Kingdom and France, as that is what Ireland needs to be internationally competitive?

In addition to the environmental aspects, there is a lack of economic expertise in the Department. There are many advocates and engineers who will build everything if we give them grants to do so but it is not necessarily in the wider national interest. The consumer interest, in addition to the environmental interest, may be overlooked.