Tony Mulcahy (Fine Gael) | Oireachtas source

I agree with Senator O'Sullivan that there is too much on this agenda to cover in one day. I welcome the Minister to the House and will begin on the issue of energy.

During my years as Seanad spokesperson on communications, energy and natural resources, I have on a number of occasions met with Department officials, the CER, NewEra and the previous Minister. What I have come to understand is that there is a huge gap between the policy makers and what is required to deliver real investment in renewables outside of State agencies. The direction the Department has taken is very much in line with that of its advisors as per its website - Bord Gáis, ESB, Bord Na Móna, Eirgrid, and SEAI - and the draft renewable heat incentive, RHI, fits well with Coillte. However, the market is meant to be open and energy is supposed to be made more affordable for our citizens.

How does the draft bio-energy plan help us achieve our green energy targets? Our overall renewable energy target is 16% of the energy we consume, of which 40% is for electricity, 12% for heat and 10% for transport, which is a binding target. The Department's own data for REFIT 3 assumes that the majority of energy projects are going ahead, in particular the biomass CHP proposals. This could be a grave assumption. Having assisted with three of the projects, I feel it is fair to say that they have encountered many blockages and hurdles. Even if they all go ahead, we still come up short on our overall energy targets by 2% cent, thereby exposing the taxpayer to a possible cost of in excess €300 million by having to purchase carbon credits.

If all of these projects do not go ahead, there is the possibility - according to the Department's figures - that we will come up with a 10% shortfall in our energy targets. That shortfall is equivalent to a €1.5 billion cost to the taxpayer, as we would be forced to purchase carbon credits from countries that have exceeded their targets. The only other way of avoiding these costs is to put up wind turbines to produce another 1,000 MW of energy, in addition to the 1,750 MW still to come on board from REFIT 2. This would equate to from 1,400 to 1,500 extra wind turbines up and down the country. We know the grief that will cause.

The Minister can address this issue. The EC directives support realising private investment to achieve our overall targets of 16%. As Seanad spokesperson on energy and having assessed a number of biomass projects and proposals that have been stuck in the Department for the past four years, I believe the core reasons these plants have not proceeded to date are that the energy efficiency thresholds set at 75% to 80 % by the Department are way above the requirements set in other European countries, which are as low as 45%. Furthermore, the Department refuses to recognise the primary energy savings, PES, method of approving these types of plants, which would benefit the roll-out of district heating networks. These networks would displace vast amounts of fossil fuels - coal, oil, gas etc. - in many regional towns and gateways. There has been a lack of action and understanding by the Department in regard to providing clear, bankable terms and conditions with respect to REFIT. These are the main reasons there has been no progress. On the issue of jobs, in supporting biomass at local level the Department of Energy in the United Kingdom has established that every megawatt of biomass energy equates to 14.5 jobs, as against the wind energy equivalent of 1.5 jobs per megawatt.

It is important to outline and put on the record that the Department will currently support with a full refit tariff of a biomass plant that will just dry its wood-biomass and effectively blow its heat up a chimney into the atmosphere. It would burn twice the amount of fuel to generate 50 MW of electricity, but with no thermal district heating and no fossil fuel displacement. Despite this, the Department will not support 2 similarly sized plants that will use half the fuel to generate the same amount of electricity and roll out a district heat network, thereby displacing 20 million tonnes of fossil fuels. These projects will deliver many thousands of sustainable jobs in farming, forestry and industry.

I ask the Minister to review the timelines to allow these projects to come together. I note from today's comments that the Minister intends to issue a new policy in September. However, the problem is that by September 2016, any of these large-scale projects commenced would have to be three quarters of the way built by then. The 2030 target to draw down the refit cannot be extended as it is fixed. Therefore, the timeline for companies to invest and realise their investment is getting shorter all the time. I also urge the Minister to look at what has been done in Sweden and Denmark to realise their targets. We must maximise our natural resources and reduce all reliance on oil and gas.

I welcome the honest presentation made by the Minister here, which I had not read in advance. I will work with him in any way I can, as will people I know, in this area and believe Department officials will try to deliver as best they can on this. The Minister has said that our use of biomass is critical for the future. In the past, I have pointed out to the Minister that there is no way we should be burning biomass to generate electricity only. We must maximise the burning of biomass to generate heat also.

I welcome the broadband plan. I believe we will deliver on it and support the Minister in that regard. We need broadband throughout the country. I welcome the appointment of Bobby Kerr as independent chair of the post office network. I have met many of those who work in our post offices and with representatives of the Irish Postmasters Union. We need to widen their operations as best we can. I understand AIB banking works with them, as do car tax authorities, but the social welfare contract will be difficult to deliver. No stand-alone post office will survive in the future. I attend meetings where people say they want to retain their local post office and I ask them when they last bought a stamp or posted a letter. Nowadays, people use their mobile phone or e-mail to contact others, but yet they want to keep their local post offices open. I wish the Minister well on that difficult issue.

My main focus today has been on energy and I appreciate the Minister's statement on that. As I mentioned earlier, I did not have the benefit of seeing or reading it before coming to the House.