Lynn Boylan (Sinn Fein) | Oireachtas source

I do not need to tell the Minister of State that the cost of energy is spiralling out of control. We know that renewables are cheaper than oil. The economic argument for transitioning to renewables has never been stronger and made more sense. However, the more we can produce electricity from renewables, the more we can protect households from the high prices of imported fossil fuels. My question for the Minister of State today is why, when we hear so much about our excellent wind energy resources, are our prices so high?

In 2020, we had our first auction where wind energy cleared at €74 per megawatt hour. This was the highest in Europe in 2020 and in 2021. No one else was in the 70s. We see prices in the 50s. Even in Spain it was in the 20s. At this week's Committee on Environment and Climate Action, we heard from witnesses that the costs and risks associated with navigating the system are excessive and that grid connection costs are in the upper echelons. This is having a particularly negative impact on community-led onshore wind projects that would naturally have less money in the bank. According to the industry itself, it is saying that it can produce the electricity from Irish wind at half the current price.All that is in the way, it seems, is Government policy. The choices the Government is making have given us the highest price and the choices it makes going forward will determine whether Irish households are paying the lowest or highest possible prices for renewable electricity.

Looking forward to the second auction on 2 May for onshore only, how confident is the Minister of State that the price will fall? Will prices in renewable electricity support scheme, RESS, 2 be lower than in RESS 1? That would seem very unlikely, given what is happening in the commodities market alone. The price of steel, which makes up 80% of a wind turbine, has quadrupled. I know the price of steel is not within the remit of the Minister of State, but it comes on top of already very expensive wind energy. The focus should be on reducing the cost where we can do so. Commercial rates for wind farms have risen between 200% and 300% in the past couple of years, unlike those for fossil fuels. The planning system, as we know, is under-resourced and this is leading to planning delays. Those delays are factored into the bids in the auctions. In addition, the failure to strengthen the grid since 2000 means substantial amounts of renewable power are being lost because the transmission system cannot cope with the volumes of renewable electricity available. As more wind and solar farms are being built, larger amounts of power will be lost, whereas a stronger electricity grid could actually cut costs by 18%. All of this is being factored into the bids when we have these auctions.

What is the Government's joined-up approach to reduce costs, especially in areas where it has the power to do so? The industry has called for a high level cross-government group to sit around a table with a brief to identify where the costs are. For example, it would discuss resourcing the planning system and grid connection costs. The group would then feed back every six months to Cabinet with proposals, having identified where the problems are and how to fix them. Has the Minister of State considered that proposal? Will he accept it? Will he look at the other areas where he has the power to bring down the cost of renewable energy?