Wednesday, 8 February 2012
Energy (Miscellaneous Provisions) Bill 2011: Second Stage
I hope I have not detained the legislative side of the Upper House. I commend the Energy (Miscellaneous Provisions) Bill 2011 to the House and I am pleased to commence the debate on the Bill in this House. As I have previously stated, while this is an important Bill, it is not controversial. It is the result of a review by my Department of various Acts.
Before addressing its main provisions, I remind Senators of the purpose of the legislation. It is a Bill designed to revise, consolidate and expand existing energy legislation in areas such as the theft of electricity and gas and LPG safety to reflect the current structure of the market. It is also proposed to restate energy efficiency and other provisions that are currently provided for in secondary legislation. The Bill, the enactment of which will result in more robust energy legislation, was broadly welcomed in the other House.
Energy efficiency is an area of increasing investment and innovation. The Bill proposes to provide for the establishment of an energy efficiency fund which may be funded through contributions from energy suppliers, subject to an energy saving obligation. The fund's objectives will be to support the delivery of energy efficiency programmes and measures and promote the development of a robust market for energy services. This will be an important element of future funding mechanisms as we transition from State supports to a pay-as-one-saves framework, which is currently under development.
To facilitate concerns raised by Deputies on Committee Stage, a Government amendment was proposed and accepted on Report Stage in the Dáil. The amendment provides that the proposed energy efficiency fund may be used for the alleviation of energy poverty. I was pleased to reach an accommodation in regard to the suggestions on energy poverty proposed by Deputies on the opposite side, which ultimately strengthen the provisions in the Bill.
On actions to mitigate energy poverty, it should be noted that the Better Energy: Warmer Homes scheme remains open to eligible applicants. My Department is introducing changes in the structure and eligibility criteria of the programme to reflect the Government's affordable energy strategy which was published at the end of November. Priority will be given to households considered to be in extreme energy poverty, namely, those which spend more than 20% of their disposable income on energy. This initiative will ensure that those most in need will be the first to receive the benefit of energy efficiency measures.
In this regard, the interdepartmental group on affordable energy will work quickly with community based organisations and other relevant parties to finalise new eligibility criteria which ensure State resources are directed where they can deliver the greatest good. Demand for the Better Energy: Warmer Homes programme has grown to exceed available resources and it is necessary to innovate to ensure the resources available are directed at those who can benefit most.
Since 2006, some €81 million has been expended on providing energy efficiency improvements in more than 80,000 homes under the Better Energy: Warmer Homes programme, which is administered by the Sustainable Energy Authority of Ireland, SEAI, on behalf of my Department. My Department and the SEAI had a target of 20,000 homes in 2011. By year end, a total of 20,388 were completed, which equates to energy savings for recipients of approximately €2.62 million. The SEAI advises that more than 5,800 full-time jobs were being supported in 2011 and we expect to support 4,500 full-time jobs this year. Energy efficiency is an area of increasing investment and innovation in Ireland. Improving energy efficiency will pay dividends for the environment, energy security and competitiveness while also contributing towards meeting our European target of 20% energy efficiency savings by 2020.
The Bill proposes to further expand the functions of the Commission for Energy Regulation, CER. Since its establishment in 1999 with responsibility for electricity regulation, the remit of the energy regulator has expanded considerably. This is partly a consequence of European Union Internal Market legislation. We now have a strong, independent energy regulator. Most recently, the Petroleum (Exploration and Extraction) Safety Act 2010 gave the regulator responsibility for upstream gas safety.
The enactment of the Energy (Miscellaneous Provisions) Act 2006 gave the Commission for Energy Regulation responsibility for downstream gas, LPG and electrical safety. While the electrical and gas safety regime is now fully operational, it was found necessary to amend the 2006 Act to ensure LPG provisions adequately addressed the safety regulation of LPG and did not result in duplication of Health and Safety Authority and Commission for Energy Regulation functions. A two phase approach was undertaken. Amending legislation was enacted last year through the Energy (Biofuel Obligation and Miscellaneous Provisions) Act, which provided for the extension of the natural gas safety framework to LPG installers. As of June 2011, it is an offence for anyone to carry out LPG works unless he or she is a registered installer.
The LPG provisions in this Bill constitute the second phase of LPG safety legislation. In summary, it is proposed that the regulator will regulate the activities, from a safety perspective, of those LPG undertakings which make LPG available to domestic consumers via a piped distribution network. These entities supply LPG to housing estates and are generally located in areas not served by the natural gas network. The regulator will also have responsibility for promoting LPG safety. The proposals in this Bill, if enacted, will result in all aspects of the LPG chain being regulated from a safety perspective.
I will now outline the provisions of the Bill. For the convenience of the House, a detailed explanatory memorandum has been published and this provides a synopsis of the provisions. The Bill consists of 22 sections. Section 1 contains standard provisions concerning the Short Title and commencement. Section 2 provides for a number of definitions for ease of reference.
Sections 3 and 4 propose, following legal advice from the Attorney General, to restate in primary legislation superannuation provisions relating to certain employees of the ESB and BGE who transferred to EirGrid, ESB Networks Limited and Gaslink Limited. The proposals do not go beyond provisions set out in four sets of ministerial regulations made since 2000.
Section 3 proposes that an employee of the ESB whose employment was transferred to EirGrid and who was immediately before the transfer a member of a superannuation scheme can continue to have his or her superannuation benefits and the contributions payable in respect of his or her superannuation scheme membership paid out of, or into, the ESB fund into which that person was before the transfer paying superannuation contributions. An employee of the ESB who transferred to ESB Networks Limited and who was immediately before the transfer a member of an ESB superannuation scheme may continue to be a member of that scheme. Section 4 proposes that former employees of Bord Gáis Éireann who were members of a BGE superannuation scheme and who transferred to Gaslink Limited may remain in the BGE superannuation scheme.
Section 5 proposes to amend sections 15 and 16 of the Energy (Miscellaneous Provisions) Act 1995 by extending existing theft of electricity and gas provisions to independent suppliers and to the customers of those suppliers. This provision is required to reflect the current structure of the marketplace where a number of independent energy suppliers are operating in a competitive market. Irrespective of the energy supplier, it will become an offence for a person to interfere with an electricity or gas meter. The section also includes a new provision in respect of deemed contracts of supply, subject to safeguards. The aim is to provide, subject to strict criteria applying, for the recovery of debts by energy suppliers from the owner or occupier of a premise that has been consuming gas in the absence of a contract to supply energy being in place.
Sections 6 to 8, inclusive, propose a number of amendments to the Electricity Regulation Act 1999. The objective is to strengthen the enforcement powers of the regulator in regard to electrical and gas safety. Section 6 proposes to give powers to the regulator to appoint electrical investigation officers who will have powers to investigate unregistered electrical contractors and to also investigate designated electrical works from a safety perspective. Section 7 proposes to give powers to the regulator to require electricity undertakings to provide information on electrical safety to their customers and to the public.
Section 8 proposes, for the avoidance of doubt, to clarify the investigative powers of gas safety officers in regard to the investigation of gas works carried out by gas installers. Section 9 is a minor technical amendment relating to sections 9L, 9M and 9N of the 1999 Act. It restates sections 9L and 9M of the Act which provide powers to the regulator to require energy undertakings to ensure that tariffs are energy efficient. The provision also obliges energy suppliers to provide clear, easily understandable and informative details in consumer bills. These obligations are currently set out in the European Communities (Energy End-use Efficiency and Energy Services) Regulation 2009. The provision does not go beyond the 2009 regulations. The section also includes a second minor technical amendment relating to section 9N and Part IIA of the same Act.
Sections 10 to 16, inclusive, relate to energy efficiency. They provide for the restatement in primary legislation of provisions set out in the European Communities (Energy End-use Efficiency and Energy Services) Regulations 2009. The proposals in this Bill concern Part 5 of the regulations which relate to an energy efficiency obligation scheme for energy suppliers and distributors. I already referred to the fact that the proposals will provide a legal framework for the setting of energy efficiency targets to be met by energy suppliers and distributors. This will be achieved through the provision and promotion to customers of energy services and energy efficiency improvement measures. An energy efficiency fund may be set up which will be managed by my Department or an agent of the Department.
Sections 17 to 19, inclusive, propose a number of amendments to the Electricity Regulation Act 1999 relating to LPG and natural gas safety. The proposals in this Bill aim to address remaining safety gaps in the LPG chain that are not already regulated by the Health and Safety Authority or any other agency. The LPG proposals of the Bill extend the regulator's safety function to the safety regulation of LPG undertakings that make LPG available via a piped LPG distribution network to domestic customers.
As part of the enforcement regime, it is proposed to provide for a safety licensing regime to be administered by the regulator. The regulator will also have responsibility for promoting LPG safety. Gas emergency officers appointed by LPG undertakings will be provided with powers to investigate LPG leaks and defects to fittings.
Section 18 sets out enforcement provisions where a natural gas or an LPG undertaking is not operating in accordance with the safety framework or has contravened or failed to comply with safety requirements. The approach is based on the model applying to upstream gas safety as provided for in the Petroleum (Exploration and Extraction) Safety Act 2010.
Where a natural gas or LPG undertaking is not operating in accordance with the regulator's safety framework, the Commission for Energy Regulation may issue directions to an LPG undertaking requiring it to submit improvement plans. Where more serious safety issues arise, the regulator may serve improvement notices and prohibition notices.
The regulator may deem the activities of an undertaking to be so serious as to involve a risk to safety of human life, the safety of gas or LPG infrastructure or of property. In such cases, the regulator may make an application to the High Court for an order prohibiting the undertaking of activities by the LPG or gas undertaking until specified measures have been taken to reduce the risk to a low level.
It is also proposed that the regulator will be given powers to make regulations relating to the reporting and investigation of LPG incidents involving death or injury to persons or loss or damage to property resulting from the use, misuse, abuse, leakage, combustion or explosion of LPG. Section 19 proposes that the regulator may impose an annual levy on the holder of an LPG safety licence for the purpose of meeting expenses incurred by it.
Section 20 was introduced by way of a Government amendment on Committee Stage in the Dáil. It enables the Minister for Communications, Energy and Natural Resources to, by order, dissolve certain non trading statutory subsidiaries of Bord Gáis Éireann. The non-trading subsidiaries concerned are City of Waterford Gas Company, Clonmel Gas Company, Cork Gas Company and Limerick Gas Company. All of these subsidiaries were established pursuant to statute and as the establishing statute did not provide for a winding up mechanism, they may only be dissolved by means of statute. None of the companies is trading nor has any employees. All the property rights and liabilities of the four companies were vested in Bord Gáis Éireann 1997. BGE does not anticipate that the subsidiaries will have any assets or liabilities at the time of dissolution. However, as a safeguard, it is deemed prudent to include in the legislation standard transitional provisions regarding the transfer of any assets and liabilities to BGE. The winding-up of the four non-trading subsidiaries is in the interest of the good corporate administration of the BGE group, and will remove an unnecessary administrative and corporate compliance burden.
Section 21 of the Bill provides for an amendment to the National Oil Reserves Agency Act 2007. The amendment is in regard to the time limits set out in that Act in order to allow the agency to perform its functions more effectively with respect to biofuel certificates, and to facilitate co-operation and the provision of information by oil companies in respect of oil contingency planning.
Subsection (6) of this section proposes to insert a new section into the NORA Act of 2007 to ensure that the Minister has the vires to develop a contingency plan to allow a national response to an oil supply disruption. It also imposes a general duty on oil companies to work with the Minister and the National Oil Reserves Agency and other relevant public bodies in the development of national oil supply disruption contingency plans. Oil companies will be required to provide information to assist in the preparation of contingency plans and the response to an oil supply disruption.
Section 22 of the Bill provides for the correction of minor typographical errors in energy legislation. It also provides for the repeal of section 11 of the Electricity (Supply) Act 1927, and of section 17(2) of the Gas Act 1976. The latter repeals are proposed on the grounds that they are obsolete provisions which have been superseded by more up-to-date provisions.
This Bill is an important measure in delivering on our targets for energy efficiency. Furthermore, the Bill's safety provisions will deliver benefits to consumers and to the public in general. I look forward to working closely with the regulator on ensuring the speedy implementation of the Bill's provisions, following enactment.
Cuirim fáilte roimh an Aire. I welcome the Minister to the House yet again. I endorse what he said in his opening remarks that this important legislation has passed all stages in the other House without any controversy. The minor amendments tabled in the Dáil, important as they are, have been accepted by the Minister. I hope it will have an equally speedy passage through this House. For our part on this side of the House, we will be supporting the broad thrust of the measure.
The unstated objective of this Bill concerns our future energy needs. There are those who prophesise that if there are to be any further wars - and please God there will not - they will be fought around three ingredients: food, energy and water. I suggest that the Bill is coming before us in that context. It is to help us comply with the EU objective that Ireland will increase an increase of 20% energy efficiency by 2020. I am sure the Minister would agree that that is a somewhat modest ambition in light of the time involved and the fact that we are a relatively small island, although our population is expanding. In addition, the unbundling and deregulation of the electricity market has allowed many independent contractors into it.
I wish to deal with one or two particular issues. Last May, the Minister launched the Better Energy - National Upgrade programme last May in the context of the Government's jobs initiative. In his presentation, he said his Department is introducing changes in the structure and eligibility criteria of the programme to reflect the Government's affordable energy strategy, and that the warmer homes scheme remains open to eligible applicants. Perhaps he can clarify that point. I understand that there are currently 8,546 homes nationwide on the better energy warmer homes waiting list. Will the Minister indicate what will happen because there has been a reduction in the budget proposals for 2012?
I acknowledge that in the early part of last year, after a few months in government, the Minister said he had received an additional €30 million from the Minister for Finance which was allocated as part of the jobs initiative to the Better Energy programme. He also said that an additional 2,000 jobs would be created in 2011 on top of the 3,800 jobs already supported. However, budget 2012 shows that there has been an average 35% reduction in grants which implies cuts of almost 2,000 jobs. It does not seem therefore that it was even budget neutral; it looks like we have gone into reverse. Despite the Minister's best efforts in convincing his colleague, the Minister for Finance, to give him €30 million last year, all his good work seems to have been undone. Perhaps he might clarify that matter in his response. Nonetheless, I fully acknowledge the difficult job he is going in trying to keep his budget in line with the Government economic targets, as well as the fact that we are broke and must find €20 billion annually to make up the gap.
I also wish to raise with the Minister the impact of rising energy costs. A recent Irish League of Credit Unions survey found that one in four cannot cope with rising energy costs, that 15% must dip into their savings in order to deal with such costs. Some 8% said they were unable to cover household bills. We are hearing a lot of anecdotal evidence but I have always been somewhat wary of that. To put this in context, I remember many years ago there was a major debate going on about copyrights. The retail outlets were opposing the Irish Music Rights Organisation's attempts to protect the rights of songwriters from whom they took licences. The opponents of the proposal at the time cited the little old lady in a shop in the west who listened to the radio for comfort. The fact that she was pumping out music on the radio meant that she was legally obliged to pay the copyright on it. I am wary therefore when I hear similar stories about energy poverty. While I do not doubt that it happened, the most recent one I heard puts it in context. It is about the little old lady burning CDs in her fireplace in order to keep warm. I am not saying it did not happen, but we need to bring a certain balance into extremes of rhetoric. I like to think we are a country that looks after the most vulnerable in our society, in spite of the economic difficulties we are facing. There are - and should be if there are not - sufficient State supports to ensure that such an individual does not have to burn CDs in the grate to keep warm. The story, however, points up the reality of rising costs and especially energy costs.
My late mother - whose third anniversary falls this week - used to reduce the heat at home. She was in her eighties but she used to reduce the heat even though she did not need to do so for financial reasons. There was nonetheless a culture among the older generation that somehow they do not want to be seen to burn up too much electricity, yet it then has an adverse effect on their health. This arises in the context of information that is being provided concerning energy efficiency. I know the Minister is obliging the energy suppliers and distributors to provide more information. Even though we do have a competitive energy market with independent suppliers and distributors involved, I would hate to think that despite the costs involved, and bad and all as things are, that the Government would not reach out to those who are experiencing energy poverty. Perhaps this is more a matter for the Minister's colleague, the Minister for Social Protection, Deputy Burton. In any case, the State should help such people locally and nationally.
The Minister is extending the existing electricity and gas provisions concerning theft, to independent suppliers and their customers. I am assuming that existing legislation will apply to the traditional suppliers and that now because the market has been deregulated, it will go to the independent people. There is more than anecdotal evidence to suggest that people have been tampering with meters around the country. There is no question but that that is happening. I am glad to see that the Minister's inspectors will have some involvement in that process.
The other point concerns the legislation extending the offence provision to all electricity and gas consumers, irrespective of the supplier. Perhaps the Minister can outline what the experience has been to date. How significant is electricity theft? I know the Minister is touching on it in this legislation, but how widespread is it? If legislation is being introduced to extend it to all energy suppliers and distributors, it would suggest that it is pretty widespread. At the end of the Minister's presentation he referred to the powers the Minister will be given under this Act regarding the security of energy supply. Section 21(6) proposes to insert a new section to ensure the Minister has the legal right to develop a contingency plan to allow a national response to an oil supply disruption. Perhaps the Minister can take the opportunity in his reply to the debate on Second Stage to give the House an update on the consequence of his request to the EPA for an investigation into the environmental and other impacts of hydraulic fracking. This is an area of growing controversy and in the context of the security of energy supply, it affords him an opportunity to provide us with updated information on the investigation into the safety or otherwise of hydraulic fracking and whether the drilling licence will be given to licensed companies.
I welcome the Minister back to the House. The Daily Mail said that I did not have much to say for eight months but I am making up for it in the past five weeks. There are many reasons this Bill is necessary - fairness, theft of energy, energy safety in electrical, LPG and natural gas fields, and to encourage energy efficiency and combat fuel poverty. The EU required member states to unbundle both the electricity and gas transmission and distribution system operators under Directive 2003/55/EC and Directive 2003/54/EC. Then, SI 280 of 2008 applied to ESB Networks Limited, SI 445 of 2000 applied to EirGrid and SI 760 of 2005 concerned Bord Gáis and Gaslink. When this happened, some workers who worked for ESB or Bord Gáis moved to the new entities. This Bill is to ensure that former ESB workers who have paid into the ESB pension fund and who now work for either EirGrid or ESB Networks are entitled to access those pension funds once they retire. It will be a similar scenario for former members of Bord Gáis who now work for Gaslink. This will be enshrined in primary legislation. This ensures that these workers are treated fairly by the State. The Bills affected include the Electricity Supply Board (Superannuation) Act 1942 and the Gas Act 1976.
In response to Senator Mooney, theft of energy, whether gas or electricity, is hard to quantify. The CER believes that it could be costing consumers in the electricity market up to €30 million annually. In the UK, the theft of electrical copper cable used for signal transmission is a serious issue on railway lines. It is a potentially fatal practise for those engaged in it and for those using the railways. Those who steal electricity or gas must be identified and made to pay for what they have taken. One of the provisions is that they are deemed to be in a contract with the supplier. Those convicted of theft by the courts can face fines up to €150,000 and from six months to five years in jail. The Bill allows for certain bodies such as CER inspectors and energy transmission or transmission system operators to enter into and search land, premises or vehicles where theft of energy is suspected. Inspectors will be allowed to enter dwellings where they suspect such activity is being carried out without a warrant only where they suspect that while a warrant is being sought, equipment used to carry out the theft will be removed or destroyed.
Criminality, whether white collar or blue collar, is a crime and should be punished. The Bill will allow for the recovery of moneys owed. Bills that will be affected are the Energy (Miscellaneous Provisions) Act 1995, the Electricity Regulation Act 1999 and the Gas (Interim)(Regulation) Act 2002.
Too many times, safety is an issue that comes to the fore after an accident has happened and when a life is lost or someone is injured. Unfortunately, accidents do not happen by themselves; rather, they are caused. The best form of protection is prevention. The CER has a safety role in Ireland as we previously discussed in this House during the debate on the Access to Central Treasury Funds (Commission for Energy Regulation) Bill 2011. That related to the offshore petroleum extraction industry, whether oil or gas. This Bill will involve strengthening the role under the Electricity Regulation Act 1999 with regard to the powers to appoint electrical investigation officers as per the Energy (Miscellaneous) Provisions Act 2006 and also to deal with the appointment of gas safety officers as per the Gas Interim (Regulation) Act 2002. Under this Act, inspectors will have the power to enter such locations where they believe electrical work has been carried out to ensure that it has been carried out to the proper standards. Failure to comply with instructions from the inspector could result in fines up to €15,000. In consultation with the Minister, CER will establish an LPG and natural gas safety regulatory framework. Inspectors will be appointed to investigate incidents and to ensure that gas works are carried out to the standards set out in legislation. As mentioned before in regard to the electricity inspectors these personnel will be empowered to carry out certain functions for the common good.
Safety is of paramount importance. Energy suppliers and those working with energy equipment that will be used by the public have a duty of care to ensure the equipment is installed correctly. Those found to be in breach of the regulations face fines up to €15,000 or up to three years in jail. CER inspectors will be authorised to issue improvement notices and prohibition notices in certain circumstances if deemed necessary. Those found in breach of these notices can face fines up to €25,000. For LPG and natural gas in certain serious situations, fines up to €500,000 will be imposed. Fines should be proportionate to the ability of the guilty to pay and big companies with deep pockets should face big fines. There must be a deterrent for those who break the law.
As with all relevant sections of this Bill, the courts can be appealed to if a party believes that an action by the CER or the Minister is unjust. Other features of the Bill allow the CER to instruct energy suppliers to make their bills to customers clear and easily understandable. Energy suppliers can also be instructed to have a comparison on the bill of the customer's current energy consumption with that of the same period the previous year and the ability to compare the energy consumption of the consumer with that of an average benchmarked consumer. This will enable people to adjust their consumption if there is unnecessary use of energy.
Fuel poverty is of concern to every Member in this House and a household is considered to be energy poor if it is unable to attain an acceptable standard of warmth and energy services in the home at an affordable cost. If a household is spending 20% of its disposable income on energy services then it is in a situation of severe fuel poverty. With rising fossil fuel prices on the world market, it is getting harder for families and those on low incomes to heat their homes. We need to look at how we pay the fuel allowance to vulnerable families and especially to our elderly. This allowance is currently taken up by some 390,000 households. These are the groups that spend a lot of their money on heating. Elderly people who live alone are usually in properties that are very hard to heat because when they were built standards of insulation were non-existent. The Government has looked at this in the report Warmer Homes A Strategy for Affordable Energy in Ireland, which the Minister published last autumn. Proposals in this Bill are part of that strategy, along with policy from Europe.
Regulation 2 of the European Communities (Energy End-Use Efficiency and Energy Services) Regulations 2009 sets out how we should encourage energy efficiency for the consumer. By reducing the percentage of our disposable income we need to spend on energy, we will reduce the levels of fuel poverty in Ireland but the Government alone cannot solve this problem. Energy companies working with the State must play their part. This Government and the last Government have brought in measures such as the grant schemes as distributed by SEAI to help households reduce their energy consumption. The Minister has allowed for the creation of an energy efficiency fund, financed by the energy supply providers. These companies will have to deliver energy efficiency programmes and to encourage their customers to improve the energy efficiency of their homes. Companies will be able to offer competitively priced energy audits and show how customers can reduce their bills.
Information is the key to all the measures proposed in this Bill. By informing consumers of alternatives, we will empower them. Energy providers will also have to look get their house in order. The days of uncontrolled waste of energy are over. Money will have to be invested in the infrastructure that the power companies own to reduce losses of energy. We have to encourage more investment in the renewables sector, which is not being harnessed enough. Savings achieved must be passed on to the consumer.
I remind Members that, while we may disagree on ideology, this Chamber can come up with ideas that will challenge the status quo in the energy debate, as seen from last week's Private Members' debate. I refer to fracking. Last week we discussed having an informed debate when the report is back and the consultation has taken place. Then, we will have knowledge about it rather than knocking something before we find out about it.
I, too, welcome the Minister to the House. He is continuing his very important work and legislative programme. This is a positive and constructive Bill as it addresses a diverse and vast range of issues. It amounts to a housekeeping exercise for the energy sector and associated issues. I am glad the Bill is deemed to be so progressive and constructive that there are scarcely any grounds for dissenting voices. We will keep our fingers crossed. While there is a modest turnout in the House I am glad some Senators are not present because stag hunting or septic tanks would be thrown into the mix.
I spoke too early.
It is vital in the area of energy provision, just as in the provision of other resources such as water, that we not only address the challenges of generation and transmission but conservation and efficiency, which are equally important. It is to be welcomed that the Bill places a huge emphasis, as well as legal responsibility and responsibility, on energy supplies and distributors to fulfil and honour energy demand reduction targets. That is very important.
The Bill is also designed to address and consolidate measures in place to curb the theft of electricity and gas from the grid, which is important in terms of efficiency and an effective return on what is, after all, the State's investment and taxpayers money, in terms of the roll out of these utilities.
In a related matter, I commend the Minister for introducing the scheme last year whereby no energy supplier or utility would disconnect families, especially in view of the particularly harsh weather we had last winter. We escaped relatively lightly this year compared to our neighbours in Europe. I note in parts of Poland, where I have family, temperatures have fallen to -35° Celsius.
The new policy of working with customers rather than cutting them off is to be welcomed. Some utility companies were far too hasty in the past to disconnect families. Metering and pay-as-you-use payment plans can be used to assist families to manage their household budgets. I note Senator Cassidy's remarks on people being forced into a terrible situation of burning CDs and other such items.
------currently before the House, in his reference to the Minister of State, Deputy Sherlock, and the copyright issue.
I also commend the Minister for identifying installation and refit as key areas in supporting families, through the warmer homes initiative, as an effective and efficient way of tackling fuel poverty. In tandem with these measures, it is excellent news that the Bill, as it has evolved through the Houses, has accepted amendments to make provision that resources from the energy efficiency fund may be utilised for the alleviation of energy property. It is an important provision which is to be welcomed.
I am also glad that the Bill restates, in primary legislation, the pension entitlements of employees from Bord Gáis and the ESB who have transferred to other companies like Gaslink, ESB Networks and EirGrid. It is vital for worker confidence when there are such transitions, reforms and restructuring is in the semi State sector. The Minister and Department will be involved in other such reforms and consolidations as they affect strategically important companies such as the ESB, Coillte and Bord na Móna.
It is vital that there is no apprehension or doubt in workers' minds about their superannuation and pension entitlements. Their pensions must be secure as they transfer or are diverted to other companies or new bodies that have been set up. Apprehension could serve to put in place an impediment or a reluctance to comply with such important changes as we strategically develop these companies. It is important that there is a smooth transition.
I know from first-hand experience that workers in the private and public sectors are anxious that, having paid into pension funds for over 30 years, when they seek to avail of their pension entitlements they are told they are now underfunded. I commend the Minister for addressing that issue for workers in semi-State companies. They can rest assured about the security of their pensions.
It is very important that the Bill addresses installation and safety around LPG and electrical contractors in the sector. The last thing we need are cowboys chancing their arms fitting out homes and other installations. We have seen far too much of that from some sectors of the construction industry over the past decade.
The paths of the Minister and I crossed slightly on the last occasion he was before the House. I will take a slight liberty in bringing up another issue we discussed when the Minister of State, Deputy O'Dowd, was substituting for the Minister.
As I have stated, strategically the Minister's Department is perhaps the most important of Government because he has executive control over a branch of policy which, at the risk of being over dramatic, has existential indications for our species. There is a tendency on the part of contemporary commentators to sometimes ignore the fact we are facing profound energy problems in the absence of new technologies being developed.
They may be developed but those of us involved in technology understand they may not be within a meaningful timeframe for us, our children and our grandchildren. If we are depending on the kind of energy resources we are now we will be in very serious trouble, even allowing for the normal increase in consumption which is occurring, as bigger parts of the world become developed, coupled with the fact that two or three of the most critical nonrenewable energy sources upon which we rely, will run out.
The most spectacular will be oil, which we know is probably at or near peak already. It is at a past peak of the kind of financially extractable oil that we have had on land over the past 60 to 70 years. We will find that even if there are more discoveries they will be much more difficult to exploit. It is against this backdrop that there is a need for a real strategic vision. All of the proposals outlined today are important and are steps in the right direction.
I take this opportunity to say and ask something. When we are looking at energy policy in the future our choice will not be between having a currently available safe supply of energy and something else. We must understand that what we have now, if it is not replaced, will run out. We will not have a socially neutral phenomenon, rather there will be deaths from freezing, cities will be paralysed and transport, food production and all areas of human activity necessary for the sustenance of our species and for us individuals will grind to a halt. This is not make-believe, it is something that will happen. As a famous economist once said, the thing about things that cannot go on forever is that they stop. That is what will happen. There is no doubt that at some stage in the future there will come a moment when there is no oil, no extractable gas and no coal. We must look at alternative energy sources and in this vacuum there are other sources that must be looked at. We hope technological advances will increase the efficiency of renewables but there is a substantial body of serious sceptical scientific opinion as to whether our current energy requirements can be met by the sorts of renewable energy sources in their entirety that will become available, even if we make more of an effort to harness them. I am not saying we should not, of course we should.
The other issue that raises its head is nuclear energy. I have asked many people how many extra cases of malformed children there were as a result of Chernobyl. The answer is zero. This is a well known fact, it is not something put out there by crazy, right wing, pro-nuclear energy activists, these are figures from the United Nations. When the serious epidemiologists carried out the study, the answer was zero. There is no evidence that any child was born with a malformation anywhere in the world as a result of Chernobyl. There is a background level of 2% foetal malformation, which occurs in pregnancies in America, Tallaght, Ballincollig and Leitrim. Everywhere children are born, this is sadly what nature does. There is no evidence this increased at all.
I am throwing this into the mix because if we are to have a coherent, long-term energy policy, we must look at all sources of energy and must do so in a scientifically informed and emotionally dispassionate way. The debate surrounding nuclear energy has not been characterised by those features. I am not today advocating nuclear energy but it would be remiss of us to exclude a consideration of an energy source that has been extraordinarily safe, when remembering that every day in every part of the world, people are killed in horrible ways as a result of accidents involving petroleum products, the atmosphere is polluted by petroleum and other carbon products and there is loss of life on an extraordinary scale in wars over carbon products. All of these things are real, even for those who do not believe in global warming. Those who do believe in global warming must know the environmental consequences of not looking at alternative energy sources will be much more frightening.
For these reasons, I am asking for a serious strategic look at national and international level at the scenarios that might exist. The first scenario is for no new technology, where we have what we have and what we will do when there is no carbon left. We have so much flexibility in the ways we generate electricity that we cannot have a wind turbine on every car or wave machine on every boat but we could look at alternative strategies for electricity generation and then mandate that at some time in the future, making it aphoristic, where maybe by 2025 or 2030, the goal of Europe would be to have no private cars using the internal combustion engine driven by carbon. If we did that, at a stroke we would have a policy in place for reducing our reliance on carbon while increasing incentives to look at alternative, renewable and nuclear energy sources if they are found to be acceptable.
I thank the Minister for attending the House and I apologise for slightly hijacking the debate on important issues pertaining to the conditions of employment of energy sector workers to make these points but I did not get the chance to make them when the Minister had to leave the Chamber last week.
I welcome the opportunity to speak on this Bill. The most important feature of it is that it focuses on reducing our energy demand by introducing energy efficiency. I agree with Senator Crown that the Minister has one of the most challenging Departments as we attempt to meet the needs of business customers as well as domestic customers. The cost of energy for businesses has continually been cited as onerous and excessive and has affected our competitiveness, particularly when looking at export countries that are most important for the future economic well-being of the country.
The focus on energy demand reduction targets is positive if we are to meet our EU goals by 2020 and the 20% energy reduction is part of that. Looking at energy efficiency means retrofitting buildings and this Bill seeks to address that. The energy demand reduction targets for electricity companies, gas suppliers and distributors will now be put in legislation and that is to be welcomed. The Institute of Economic Affairs did a report on the value of introducing a retrofit programme, looking at the almost 1.2 million buildings in the country that could benefit from such a programme. It is always cheaper to save energy than to buy it. Insulating and upgrading energy efficiency of buildings can save the average household €1,100 per annum and will bring housing stock up to building regulation standard. One of the most successful programmes we were obliged to introduce was the BER programme. It resonates with people and they understand what it means, that it is important that any dwelling would reach a certain standard and cannot be sold unless it has certification. It is important all these changes will be done with minimum cost to the Exchequer and that is where the fund mentioned by the Minister will support the delivery of efficiency improvement programmes and it will be operated on a pay as you save framework.
I welcome the proposals on energy security. This is pushing at an open door, this is appreciated across the board. Last week I referred to a report produced by the Irish Academy of Engineering on energy. It contained interesting insights, particularly that our level of energy consumption has fallen since 2007. We hope it will increase but we must consider if we need to invest in developing more energy production schemes when we should be trying to maximise the efficiency of existing structures. We must also look at supports for renewable energy sources. Will they cost us? The subsidy for renewables must be considered in a practical manner. The OECD has recommended we move away from wave energy, with subsidies to it being phased out as it is seen as not cost effective.
We are in a different era now and that is the challenge to the Minister as we move forward to work within our commitments under Kyoto and the EU umbrella. Those targets must be met but we must balance the cost to business and domestic users in this country. It is a real challenge for us all as the economic climate changes.
I welcome the Minister to the House. The Minister stayed for most of the debate on Private Members' business last week so I will not go over the ground covered then. We are looking at energy efficiency into the future, however, so I ask the Minister to consider the request for more joined up thinking by local authorities when dealing with major energy projects under the Planning and Development (Strategic Infrastructure) Act.
I know the Minister is well aware of the case that has been made with regard to the east-west interconnector. Citizens expect local authorities to work on behalf of the people of each local authority area. In the case of the North-South interconnector, the local authorities in the region did not work together on the question of whether the cables should be laid underground or overground. The local authority in Rush, which is in my own area of north County Dublin, did not request the rerouting of the interconnector on the basis of the precautionary principle. Meath County Council, by contrast, requested that it be rerouted around the town of Ratoath. That request was granted.
We have to learn lessons so things can be done better in the future. The Minister and his Department are ideally placed to ensure Oireachtas Members from the Government and Opposition sides and members of local authorities are honest with people when large energy infrastructure is being developed. During every discussion I have heard on renewable energy and nuclear energy, people have started their remarks by saying "wind energy is great, but", "we need energy security, but" or "the east-west interconnector is great, but". Local considerations always come into play. We need leadership in the areas of energy and energy supply. I believe the Minister can provide that leadership while he holds this portfolio. It is badly needed. I refer, for example, to the discussion about the decision to grant permission for exploratory drilling 6 km off Dalkey Island. Public meetings are already taking place.
I am not suggesting that local residents do not have genuine concerns. Where are our public representatives leading us on these matters, however? Although many concerns are valid, some of them are being driven by people on the ground in a way that is dangerous and dishonest. I use the word "dishonest" in its more benign meaning. I do not think we should be approaching these matters in this way. Many people are objecting to wind energy projects. The Minister recently visited the Arklow wind farm, which is offshore. People objected to that wind energy project when it was being developed. I cannot understand that for the life of me. Perhaps people will understand when we do not have these objections. Rossport is another example. Regardless of the views on the matter, I do not see why any energy company in the oil or gas exploration area would want to do business in Ireland if it takes 15 years to bring gas into Ireland. All Governments and all Ministers will have to determine how this issue can be dealt with better at the planning stage.
I would like to raise a couple of issues with the Minister. I welcomed the announcement he made before Christmas that the energy suppliers would not engage in any disconnections over the winter months. It was a clear statement and it was the correct thing to do. I would like an update on disconnections. Last week, representatives of the ESB and Airtricity who were interviewed on a drive time show referred to ongoing disconnections. I do not think anyone who is trying to pay should have his or her energy supply cut off. I would like to know how we will deal with this issue into the future.
Energy efficiency is the issue I really want to raise in the context of this Bill. The target that has to be met involves a reduction of 20% in consumption. I have a serious issue with the warmer homes and better energy initiatives. I appreciate that these are more straitened times. Regardless of how one looks at it, there has been a substantial decrease in the 2012 budget for these schemes. I have done some independent research with contractors in this area. Most people will agree that the external insulation and home insulation grants are very important. Not only do they create new jobs, but they also reduce energy consumption and allow people to make better use of this country's energy resources. The Minister said in his speech that the Sustainable Energy Authority of Ireland has advised that over 5,800 full-time jobs in this area were being supported in 2011, but this figure has been reduced to 4,500 jobs in 2012. I would like him to clarify that.
I have been told by a number of companies that between 1,600 and 1,800 people have been made redundant in this sector since the most recent budget. That has happened as a result of the substantial decrease in the amount of money made available for external wall insulation, in particular. The relevant sum for mid-terrace houses has dropped from €4,000 to €1,800. In the case of semi-detached and end of terrace houses, there has been a reduction from €4,000 to €2,700. This is a major issue. I have met representatives of companies in my area of Dublin. I can inform the Minister that a couple of companies which carried out almost 400 jobs between them last year are now working only on jobs that relate to grants that were issued last year. No new jobs are coming on stream. As I said to the Minister of State, Deputy O'Dowd, last week, there is a genuine risk that much of this work will be done in the black market and that substandard materials will arrive from mainland Europe.
I appreciate that the Minister has a difficult job. We do not have as much money as we would like. I will finish on this point. I do not think the debate will continue until 5 p.m. As the Minister said, these schemes used to support more than 5,800 full-time jobs. He has recognised that 1,300 jobs have been lost in this area. Major investment in major infrastructure is required. No matter what way one looks at it, the Minister lost €35 million in this year's budget. I ask him to outline what can be done to ensure the warmer homes and energy efficiency schemes are restored to the standard of previous years. I put it to him that more jobs are about to be lost in this sector. It is important that we achieve the targets that are set out in this Bill. I would like to hear the Minister's views on these matters.
I welcome the Minister to the House again. The cost of doing business in this country, from an energy perspective, has been mentioned. I support the Western Development Commission's report, of which the Minister is aware. The report suggests that savings of €32 million could be achieved by businesses in the west and north west if natural gas were made more widely available in that region. I am aware that interested parties are trying to arrange a meeting with the Minister. I understand they were unable to attend on the two dates suggested by the Minister. I hope the meeting in question will happen soon so that progress can be made. When the debate on the roll-out of natural gas throughout the west of Ireland started a couple of years ago, a group was established in my home town of Ballaghaderreen. We did some research when we learned that Bord Gáis was thinking of delivering natural gas along a route through the bigger towns in the west. We found that even though Ballaghaderreen is not the biggest town in the western region, a co-operative in the town, Shannonside Milk Products, uses more electricity than the entire town of Castlebar. Bord Gáis has chosen to overlook this flabbergasting statistic. I look forward to the Minister's meeting with the group I have mentioned.
I would like to speak about the better energy and warmer homes schemes. I am a great supporter of the warmer homes scheme, which is fantastic. Those who avail of the scheme, including elderly people and those who receive the free fuel allowance, are absolutely delighted with it. They can see the difference it makes. Although I understand why cutbacks are needed, it is unfortunate that cutbacks in this area mean that from this year on, those who have had their attics insulated in the past will not get their walls insulated now. New applicants will get a full energy efficiency package, including attic insulation and wall insulation. I have suggested to officials from the Sustainable Energy Authority of Ireland that 10% of those who had their attics insulated in 2009 could have their walls insulated this year. Perhaps we could catch up on the list by degrees. It is unfair that those whose attics were insulated in 2009 and 2010, in particular, might not get their walls insulated even though that might need to be done.
Senator Crown spoke about long-term energy policies and the ill effects of nuclear energy. I have campaigned for a long time on behalf of people who are in favour of wind energy but have a problem with the location of wind turbines near private residences. The Minister and I have discussed this previously. It has been proven that health risks are associated with turbines being located too close to people's residences. I am aware that the Wind Turbines (Minimum Distances from Residential Premises) Bill has reached Committee Stage in the House of Lords in the UK. When I mentioned the UK legislation to the Minister previously, I said I would propose a similar Bill in this House. I hope to forward the legislation in question to the Minister in the next few days. This issue must be addressed. It is unfair to impose wind turbines on people who do not want to have them erected close to their homes, even on land that does not belong to them. The only protection such people have is that the companies involved are supposed to communicate with local people. Unfortunately, rather than doing so, the first thing they do is earmark the land they need and do sweet deals with its owners. Once the owners have been sucked into the process, contracts are drawn up and everyone in the locality is told a wind farm will be constructed on the land in question. Only then will the company be willing to engage with local people. It may offer €25,000 per annum to build a fountain that will look good on the side of the road but that will not solve the problem. I look forward to the Minister's support on this matter.
I welcome the Minister. Having noted that the Bill was not controversial in the other House, he stated its purpose is to support energy efficiency programmes and the overriding objectives of energy policy remain security of supply, competitiveness and sustainability. These are important issues when one considers recent developments and potential future developments.
It was reported recently that eight European Union countries have joined Italy in noting a sharp drop in Russian gas supplies. This development recalls the massive supply crunch in 2009 caused by the Russian gas provider, Gazprom. Deliveries to Austria and Slovakia reportedly fell by 30%, shipments to Poland fell 7% and the Czech supplier, RWE Transgas, indicated that deliveries were 7% lower than normal. On Friday, the European Union added that Bulgaria, Greece, Hungary and Romania have also been affected. Given the volatility in the market, is it possible to reduce our dependence on gas which is delivered via a pipeline?
It was interesting to note Senator Crown's reference to nuclear power, an issue I raised previously, including in a Private Members' motion I tabled two years ago which called on the Government not to exclude nuclear power from the energy debate. I understand legislation implemented some years ago provides that the ESB may not use nuclear power. We should at least debate this issue as there is a danger that concerns and beliefs will develop in the absence of a full debate.
The Minister is much too young to remember the 1950s. I recall the response to the introduction of fluorescent lighting at that time, when people claimed this type of lighting caused baldness. I was challenged on this observation last week when I made it. Somehow we managed to overcome such concerns and while I am not sure what has been the effect of fluorescent lights on baldness, the discussion shows that concerns occasionally crop up.
Given our strong reliance on gas, I hope the House will have a debate on hydraulic fracturing or "fracking". It is interesting that "The Frontline" programme debated the practice this week, while politicians have still not held a debate. It is extraordinary that a country that imports 90% of its energy does not want to debate hydraulic fracturing because it is considered taboo. I do not know much about the issue but I want to ensure the House at least debates it.
Last week, Paul Drury wrote the following about hydraulic fracturing: "You would have thought that, in a country on its economic knees, a discovery that could supply Ireland's entire natural gas needs for 12 years, create 3,000 jobs and generate €4.9 billion in tax revenue for the State would be cause for unbridled celebration." Fracking has transformed the United States energy market. It is opening up a 100-year supply of natural gas and massively reducing the country's dependence on imported oil. Natural gas prices have halved in the United States in the past four years. In North Dakota, one of the fracking hotbeds of the United States and a former economic basket case, unemployment has declined to only 3.5% and the state has even managed to return a budget surplus in recent years. According to President Obama, the full exploitation of these resources will supply more than 600,000 jobs by the end of the decade. We cannot ignore hydraulic fracturing or nuclear power, about which I am not enthusiastic. It must be debated.
Visiting Brazil a few years ago I was surprised to note the widespread use of biomass. Every petrol station offered drivers a choice of petrol or a biomass based product. It is clear that despite the enthusiasm of the green movement, it does not make sense to grow plants and damage the environment to produce fuel for vehicles. We must consider alternatives. I do not believe people have opened their minds sufficiently on this issue. I welcome this debate and last week's debate on renewable energy and hope it will be an opportunity to open our minds and consider various alternatives.
I welcome the Bill, which makes a number of amendments to legislation relating to the appointment of electrical investigation officers and the provision of safety information. I welcome sections 6 and 7, in particular, which provide for the appointment of these officers.
I attended a presentation earlier by LowC, a renewable energy company which claims it will solve our energy problems forever and a day. The meeting was chaired by Deputy Michelle Mulherin who also provided a report. I ask the Minister to investigate the company's proposal.
Following last week's debate on renewable energy, the House should hold a wider debate on energy policy which encompasses all options. As Senator Quinn noted, calling for a debate does not mean we support any specific energy type. Many of the experts who oppose fracking may not know the first thing about the practice. A full debate is needed.
I welcome the establishment of an energy efficiency fund, to which energy suppliers will make contributions.
On section 20, will the Minister clarify the new disclosures provisions for board members of energy companies, who will be covered by the Ethics in Public Office Act? While I welcome this change, there is nothing as effective as hitting a person in his or her pocket. Under the old regulations, board members had to dispose of any shares they held in their company within three months of taking office. This ensured conflicts of interest did not arise. If board members are only required to declare a conflict of interest, it could result in all board members being required to leave a meeting under the Ethics in Public Office Act. While I do not know if this is a good change, the system will be open and transparent.
The proposal in the Bill is to change the position in the Act under which board members were required to divest themselves of shares in the company within three months of taking office. This was a good rule and it is being superseded by a requirement to report such matters to the Standards in Public Office Commission. I do not believe it is okay for directors to hold shares in their company.
I welcome the proposal to enable the Minister to set targets for energy efficiency. As time is limited, I will not discuss this issue in detail other than to note that the legislation places the onus on energy companies to inform consumers of what options are available to them.
I welcome the increase of €30 million in the allocation for the better energy scheme which targets fuel poverty. I compliment the Minister on accepting an amendment in the Dáil on fuel poverty, which will require that some of the money from the energy efficiency fund be allocated towards addressing fuel poverty. The Minister has proposed to phase out direct State supports for energy efficiency as part of a shift towards a pay-as-you-save model. I welcome this move. We must reduce up-front costs to households. We should make a start by promoting energy efficiency.
The Minister alluded to energy theft, which I understand costs €32 million per annum. In the United Kingdom energy theft costs every household £10 per annum. I welcome the proposal in the Bill to deal with the theft issue.
The Government's new energy policy framework is due to be published next year. I hope it is ambitious enough, although I am sure that under the Minister's stewardship, it will be. Having listened to him during the debate in the House on energy, I have great confidence in that regard.
I would like to see definitions of energy terminology in the Bill and definitions for words such as "bio-fuel". It is easy to call something "bio" but when it comes to it, it is not bio. The bio-diesel on sale in Tesco cannot really be termed "bio-diesel". It is fossil based and does not comply with what we would regard as B100. Renewable fuel is less than 3% fossil based. We should base our terminology on what is really renewable and not on what people like to think is and sell as renewable. There should be energy labelling like with food labelling. What is in fuel should be stated at the pumps and if it is not less than 3% fossil based, it should not be called bio anything. It should be totally renewable. I propose that some definitions of terminology be included in the legislation.
Tá fáilte roimh an Aire don Teach. Tá an Bille seo teicniúil go leor agus cuirimid fáilte roimhe agus roimh na leasuithe a ghlac an tAire ar bord. Pointe beag a thógfaidh mé maidir leis na comhlachtaí leath-Stáit atá againn faoi láthair, áfach, ná go raibh ainmneacha Gaelacha againn ach feicim go bhfuilimid ag dul i dtreo ainmneacha atá níos Gallda ar nós Electric Ireland agus mar sin de. D'iarrfainn ar an Aire sin a thabhairt ar ais dá chomhghleacaithe mar tá baint aige sin ag an bhrandáil atá againn mar thír bhreá Ghaelach nuair atá ainm bhreá Ghaelach ar na comhlachtaí leath-Stáit. Ba mhaith liom go dtógfadh an Rialtas sin ar bord seachas Electric Ireland, Gaslink agus a leithéid.
I do not want to go over points made previously but wish to take the opportunity to focus on some particular parts of the Bill and on general energy policy. In particular, I note the sections which deal with the energy demand reduction target programme. This is one of the key parts of the State's commitment to reduce energy consumption by 20% by 2020. Clearly, any savings for the consumer must be welcomed, in particular in the context of rising energy costs and the huge pressures our citizens are under, in particular the elderly and vulnerable for whom fuel costs account for a large part of their income.
We must, in addition, find other means of reducing energy costs and examine other means of producing energy. We are still hugely dependent on importing fossil fuels to a level of almost 90% of current requirements. There have been a number of calls for a debate on this issue but I would welcome a debate on the licensing regime for the oil and gas industry off our coast. A number of licences were granted recently and there was a review of the licensing regime, so I would welcome a debate on that because we are talking about security of supply. I understand that under the present regime, there are no clauses in those licences to guarantee the State security of supply even if a pipeline comes in land in this State. It is important to look at that licensing regime.
Coming from the west, I am aware of the huge potential which exists in regard to renewable energy all along the western seaboard. It has been stated many times over but the potential is enormous. We could become an energy exporter and could become giants in terms of renewable energy due to the advantages we have as an island nation on the Atlantic and by generating wind, wave and tidal power. There is an estimated €100 billion in potential energy to be generated from wave power around our coastline.
There are some anomalies in the system and it might be useful to engage with the Minister for the Environment, Community and Local Government, Deputy Hogan. For example, in the county development plan for County Galway, when the zoning proposals were put in place, they excluded all the special protection areas in County Galway, which is 90% of Connemara where most of the wind power is available. I understand wind farms are exempt under the EU SPA regulations and that one can have a wind farm in a special protection area. That has been done in places such as County Donegal. A discussion with the Minister, Deputy Hogan, and the local authorities to harmonise the regimes throughout the country might useful.
The ESB is eventually putting a 110 kV line into west Connemara, for which we have been waiting for quite a long time. I have been told by some people developing wind energy projects that the issue there is that those wind energy projects will not be able to connect into that 110 kV line. That is another anomaly in that we will have the potential to generate the electricity but potentially we will not be able to connect into the network.
In these difficult times, the primary focus of the Government should be on creating employment and investing in measures that would create jobs. I urge the Government to consider a programme of investment in capital programmes to improve our renewable energy infrastructure thus creating countless jobs directly and indirectly as well as benefiting our economy in the long run in terms of the return on investment and the export of substantial amounts of energy.
I refer to a point made by Senator Darragh O'Brien. Citizens' rights must be upheld in all these scenarios. The Senator referred to Rossport and the 15 years it took to bring gas ashore. It took 15 years because people exercised their constitutional right to challenge the progress there. That was right and the only reason a company like Shell would stay for 15 years is that it realises it will make billions in profits from those gas fields. History will probably say that the local citizens were treated very badly in the whole process and that the State and big business colluded to railroad that project through. We also saw a smaller version of this in the Teresa Treacy case in which I understand the Minister intervened to try to have a bit of fair play brought into that situation.
I note the enormous issue of fuel poverty and I commend the Government on accepting our amendment in the Dáil in regard to the alleviation of fuel poverty. I support the calls in regard to the warmer homes scheme. Many people in Galway greatly benefited from the scheme by having their attics done. They were told an inspector would call to check the cavity walls in order that they could be done but they have now been told that will not happen. If resources could be found, it would be very important to try to revisit the decision on the warmer homes scheme in order that attics and cavity walls could be done.
In a reply to a question on fuel poverty recently, the Minister referred to the energy efficiency of homes as being a key factor, along with what I would regard as the even more important factors of energy prices and actual household income. A report based on statistics gathered over the winter of 2006-07 showed that there were 1,300 excess deaths which in large measure can be attributed to illness caused by persons being unable to properly heat their homes. The vast majority of those deaths were of those aged 65 and over. In his reply, the Minister stated that enhancing the energy efficiency of low income homes through permanent structural improvements is the most effective means of addressing energy affordability. This could make a significant contribution to alleviating fuel poverty and I commend what work has been done under the better energy warmer homes scheme and encourage further progress in this regard but note that without investment, this work is likely to be further slowed down.
We need a full debate on fracking. The former Minister, Deputy Ó Cuív, introduced the initial licences to allow the companies to go ahead with the exploratory work. We must ensure that process is environmentally sustainable and that the rights of local people are taken into consideration if we are to consider the potential of developing the fracking industry here.
I welcome the Minister and this Bill. Sections 3 and 4, which were mentioned by previous speakers, provide that employees of the ESB, whose employment was transferred to Eirgrid, will have their previous superannuation contributions transferred to Eirgrid. The same applies in the case of Bord Gáis Éireann and Gaslink. These decisions are right.
Our future energy needs are of grave concern to me. Alternative energy is paramount for the future of this country, to maintain sustainable jobs and to keep our energy costs at a competitive level in a European context. Is the future wind, wave or bio-mass? It will require much more debate between all parties.
We should have a policy on the placing main transmission lines underground, or on underground versus overhead. I was an employee of the ESB so I am familiar with the difference in cost between underground and overhead lines, and the question of interconnection and transmission lines. It is interesting to look at wealthy industrial countries like Germany. Last week, I was watching a television programme on the Middle East where the only obstacle to underground lines is sand, but the costs are astronomical for overhead 220 kV and 440 kV lines. We should have a policy because otherwise it all adds up to delays. Whether it concerns sea, mountains or scenic areas we must have a concrete policy. We must listen to objectors but the delays caused are unbelievable.
In 1927, the pioneers and visionaries of Ardnacrusha achieved the greatest engineering feat of the last century in Ireland. Would it happen today or would there be vociferous objections? In the late 1960s and early 1970s it was my job to get people to sign the application forms to take electricity, which was an achievement. One's success was measured on a Friday evening by the number of people one had convinced to take the electric power supply. I recall one specific instance when I went to a house in County Monaghan to try to convince the owners to connect to the electricity supply. He looked at her and she looked at him, and he said, "My father and grandfather and all before them did without it, and it is a thatched cottage." The bullet point was that she decided they would sign up for one light in the kitchen, and he said, "Won't it be very handy to switch it on to find the Tilly lamp?" We have surely come a long way since then when we are now talking about alternative energy supplies.
There should be a consultation process with all parties concerned, including communications between ourselves, as elected representatives, and the relevant Departments. I am not convinced there are health issues, as some people claim. I hold no brief for anyone at this stage, but I am not convinced in that regard. We are obligated to adhere to the World Health Organisation's guidelines, and we are way below the WHO's required limits.
I cannot overemphasise the dangers of trying to by-pass electricity meters because people are unaware of the significant dangers to life and limb. I have seen it happen. The Minister referred to meter measuring, but the secret is to measure from the beginning. If it is left for 12 months the consumption figures can go down and we may not know why that has happened.
The importance of the interconnector was mentioned last week, although the Minister was not present. It is of paramount importance that we are part of the European grid. There must be in-depth discussions and further meetings so that all sides are heard. In addition, we need assurances that we can proceed.
Earlier, I mentioned the case of signing up for one light in the kitchen 40 years ago. I have since gone back to that farm and one would not believe how modern it is now, although the two elderly people are no longer there. We must provide for the future, although we do not know what the situation will be in 40 years' time.
I will not delay the House unduly because most of what I wanted to say has been said already. Nonetheless, I welcome the Minister to the House and support what he is trying to achieve with this Bill. The legislation is both logical and sensible, as everyone here would agree. I wish to raise one or two points, however.
Senator Quinn spoke of opening up a debate on nuclear power and that such a debate would be timely. It is a good few years since the then Minister, Dessie O'Malley, proposed a nuclear power plant at Carnsore Point. It was a big issue at the time and is now part of folk legend with a song by Christy Moore. As a young student at the time, I was probably on that side of the fence. More than likely the Minister was too, as he was a student leader in my time. I first encountered the current Minister when he was head of the student union and I was only a soldier.
Senator Quinn is quite right to say it is time to have the courage to re-examine this matter. People have serious concerns about nuclear power on a number of fronts, but when one considers that the whole west coast of Great Britain is nuclear, and is a lot closer to Dublin than the west coast of Ireland, that does not hold water. Like Senator Quinn, I am not on either side of the fence, but I am certainly in favour of opening up such a debate. The Minister should take the initiative and bring a report before both Houses of the Oireachtas which we can peruse properly.
As a businessman, I know that one of the biggest costs facing business people is energy. We have seen competition between various energy providers, which is almost the same as the telecom sector. Every month, one finds a special savings offer asking the public to sign on with this or that crowd. People are switching but 18 months or two years' later they find their bills are higher than ever. It is time for some form of regulation in this respect. We should have a level playing pitch so that people can see the wood for the trees. The Minister might consider such regulation in due course.
As this is a Second Stage debate, I hope the Minister will not mind me raising an issue of both local and national interest. I know the Minister has been appraised of it by my Kerry colleague, the Minister for Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan. It is the question of providing a gas terminal in the Shannon estuary on the north Kerry coast. This project was mooted seven years ago. As a county councillor at the time, I moved a planning procedure to enable a company called Shannon LNG to make plans for an imported liquid natural gas project, which was exciting for us at the time. Some 500 jobs would be involved at the construction stage in an area of high unemployment with a new wave of emigration. As the Minister knows, this project has the full support of the community in north Kerry. An individual succeeded in holding it up single-handedly for 18 months but apart from that, it has the full support of all sections of the community, including business people. For one reason or another, however it has fallen foul of every kind of hiccup one could possibly imagine. We had the much-heralded fast-forwarding of planning but there is canned laughter about that where I live because this project has been hampered every step of the way, not by objections but by internal problems. Many of those problems seem to have emanated from the last government, and the current one. This is a major project and several speakers have already referred to our dependence on gas from the Russian pipeline. That exposes us and leaves us very vulnerable. This is a proven, clean project. We have the deepest natural water outside of Rotterdam at the mouth of the Shannon Estuary, so it is ideal. The Minister will be in favour of taking a more hands-on approach to this project. Someone needs to drive it. I have no doubt of the bona fides of the principals in this scheme. It is not a money problem and cheques will be written if everything else is cleared. I appeal to the Minister to examine it.
I heard the Minister's speech and the contributions of one or two colleagues. It is an interesting debate and, as with most Seanad debates, we do not stick rigidly to the legislation before us but I hope the Minister is taking on board some of the extraneous suggestions. I listened with interest to Senator Brennan, who could become the seanchaí of the current Seanad. His discussions with possible ESB clients 30 and 40 years ago gives us a picture of what Ireland was like then. Where we will go in the next 30 or 40 years is an interesting question.
Senators Quinn and O'Sullivan made the uncomfortable but necessary suggestion that we should have a genuine debate on the desirability or otherwise of nuclear power, which we cannot ignore. The previous Minister had a personal philosophical difficulty with the concept of nuclear power but thought it was a subject worthy of serious debate. Over the course of the next few years, we must be mature enough to have the debate. As we speak, there are proposals for enhanced nuclear facilities in Britain. Those facilities are probably closer to the city of Dublin than the Carnsore Point would have been. In the context of the advance of nuclear power technology in Britain, France and elsewhere, we need to have a debate on whether it will play a role in future energy needs of the country.
The Minister referred to sections 10 to 16 of the Bill, relating to energy efficiency. This is very important and we have not made sufficient progress on energy efficiency. As well as nuclear, we are also looking at solar and geothermal energy but we must focus more attention on energy efficiency and savings. The number of new houses being built has fallen dramatically and hopefully it will rise again. At the planning stage, all sorts of advice is available to people building a house and different agencies are peddling technology but my suggestion is that the applicant receives a certificate or document demonstrating the heating costs of the house and the various options when submitting a planning application. At that stage of the construction of the house, we should focus on heating costs and energy efficiency. Once the house is built, we are playing catch up. In many of Ireland's modern housing estates, energy efficiency is limited and low. Maybe it is coming through in rules and regulations but much more progress must be made. If we were forced to quantify the heating and energy cost of the house at the building stage, it would cause people to look closely at energy provision, efficiency and insulation.
The legislation refers to LPG and the previous speaker referred to natural gas and the desirability of making more progress. Although it is unrelated to the Bill, perhaps the Minister can ask his officials to provide statistics and details on LPG provision in cars. For two or three years in the mid to late 1970s, although it was not the majority choice, 5% to 10% of cars were powered by LPG. Some car companies, particularly Volvo, worked on conversion units. Perhaps the Minister can talk to his Cabinet colleague with responsibility for transport to consider the possibility of having more cars in this country running on LPG. It is environmentally friendly and will hopefully be a national, natural source of energy. It requires adjustments to car engines but in northern Europe and Scandinavia a significant number of cars have engines built specifically for LPG. I welcome the Bill, which is technical but important and allows us to do some contemplation and reflection on energy supply and conservation in this country. It is a movable feast and policies keep changing but we need to pay greater attention to energy conservation, installation and that aspect of reduction.
I thank the Members who have contributed. Senator Keane said it was time we had a full debate on energy and it seems to me that she did not make a bad stab at it on this occasion. As Senator Bradford said, the debate ranged far and wide and some important issues have been raised.
If there is an issue that causes me to wake up in the middle of the night, it is the issue raised by Senator Crown and taken up by other Senators, namely, energy security. We live in a society where it is taken for granted that there is light when we turn on the switch and heating when we turn on another switch. As Senator Quinn said, we live in a volatile global environment where geopolitical events determine whether we have a reliable and secure energy supply in a country that is an importer of fossil fuels. Apart from Senator Crown's interesting question about peak oil, there is also a question about energy security.
I do not have difficulty with Senator Bradford's framing of the answer and I would not be averse to a discussion on nuclear energy. I have no difficulty with that formation but the first thing we can do about energy supply is to reduce consumption, consistent with good health considerations and an improvement in the balance of payments. We are wasteful of energy and the thrust of the contributions of several Senators and of the Bill has been to the effect that there is not enough emphasis on energy efficiency and what can be done. I suspect that, if like Mr. de Valera, I was to look into my heart and see what the Irish people are thinking on the nuclear question, I would draw the conclusion that with that little lubrication of hypocrisy for which we are pretty good, now that we have an interconnector with Britain we do not really mind if the energy is generated by nuclear power on the other side of the Irish Sea. As long as we can import it, it is all right.
As Senator Keane said, I intend to produce a new White Paper on energy policy during the course of this year. The International Energy Agency has examined the efficiency, competitiveness and so on of our energy provision here, and its report will be available soon. There is a necessity for us to review the situation. Many Senators have touched on the real reasons we would do that.
Senator Clune referred to a report from the Academy of Engineers. I have read it and met the authors. They would admit they are writing as engineers rather than public policymakers. There has been a steep step down in economic activity but whether that is an argument for slowing up on investment in improving the grid and so on is doubtful. It takes so long, as Senator Brennan said, to roll out new grid and so on in this country that it can take up to a decade. We are in an economic hole at the moment but in ten years' time we will be very glad that we maintained the investment.
Senator Ó Clochartaigh referred to the provision of 110 kV in Connemara and quite properly referred to the fact that our capacity to take up renewables and exploit the area along the west coast is greatly constrained by the weakness of the grid. A number of colleagues, including Senators Darragh O'Brien, Brennan and others, referred to community resistance which is a growing phenomenon. It is not unique to Ireland but we have a fair measure of it.
For example, we need the North-South interconnector for a number of reasons. There has been very considerable community resistance. We have gone out of our way to bring in three Scandinavian experts to produce a report on the question of underground versus overground and so on. The report has gone down well and people have accepted that it is a genuinely independent, accessible, authoritative and quality report. The process is taking place in the Oireachtas. The chairman of the relevant committee will take hearings and submissions to deal with the issue.
I am not in favour of taking a foot off the pedal in terms of investment in energy infrastructure. It has to continue. Senator Clune is right to introduce the report and it is something that will have to be taken into account in the debate. The question of energy security, as Senator Crown said, is very much the big issue.
We are doing well on renewables. My advice is that we can meet our renewable target from onshore capacity. Three weeks ago I got state aid approval in Brussels for REFIT 2, the feed-in tariff or subsidy for onshore wind development. Some six weeks previously, I got approval for biomass, to which Senator Quinn referred. I am aware of a number of interesting combined heat and power projects that were dependent on REFIT coming through.
I brought a memorandum to Cabinet recommending against seeking state aid clearance for offshore REFIT. I did that for a couple of reasons. We can meet our targets from onshore. Offshore is immensely expensive and is putting a huge additional cost on consumers and large energy users on the PSO. In the current climate it cannot be justified.
In terms of Senator Crown's wider thesis, we are making progress. Senator Quinn is right. I have no idea where this is going because we do not know enough about it yet. There is no doubt that shale gas has dramatically changed the picture in the United States. It has not been a uniformly happy picture for which there are reasons. A number of Senators asked me to respond specifically to that issue in the context of the EPA report on hydraulic fracturing. I asked the EPA to do that report last November. So far I have heard it will have completed the report very soon but it is by no means the answer. The question is far more complex and it will be looking for more money. In fairness, the US EPA report, which is due this December, has taken four years to put together. This is a very complex issue.
Meanwhile, the protests abound to the effect that I am responsible for dreadful crimes against humanity on fracking. The fact that we cannot find any fracking on the island does not seem to have any impact on the protesters. I accept they are, in many cases, genuinely concerned about what they have read and what has been presented in, what seems to me, a fairly partial way. We need more scientific evidence before we can draw a conclusion on that. I have no idea why people want to railroad me into a decision before the scientific evidence is available.
It is odd that everybody in this House knows that when Senator Crown raises a question of how we will ensure energy security in the future and the domestic contributions we can make all cause the most extraordinary protests. We may or may not strike oil off the coast. We have not had a very good record over the past 40 years. We have only had three strikes and one field in development. Compared with Norway that is chicken feed. However, the debate goes on about the daft comparison with Norway.
Norway has a strike rate of one in four and if one drills an empty well 78% of the cost is refunded. The unique geology of Norway confers on it the extraordinary wealth that we know about. I can bring in a tax regime of 90% on offshore prospecting with no difficulty but there will not be any prospecting. There is little point in believing that the country is surrounded by oil rather than water if we do not find it. There is great difficulty in persuading people of the merit of that.
Senator Mooney told us about the little old lady who is burning CDs in order to stay warm. He is sceptical about whether the story is true.
It is true there is a problem of energy poverty and according to the CSO figures I have seen, it has increased since the height of the boom, which is scarcely surprising either. Senator Mooney is right, however, to be sceptical of some of the stories one reads about. Yesterday's edition of The Irish Times recorded a doctor, speaking on behalf of what is called the health intelligence unit of the HSE, as saying at a conference in Dublin that people will die as a result of the reduction in the fuel allowance. Perhaps the doctor did not quite say that but that is what she was reported as saying in every headline in the news on RTE and in The Irish Times. I opened that conference yesterday morning and I did not hear what she actually said but it is highly irresponsible of a member of the medical profession to make such a statement. It is an easy "to go" statement that people may die. People could possibly die as a result of rising energy costs. I cannot stand here and say it would never happen with a combination of that, a very bad winter and substandard accommodation. I can stand here and say, however, that no one is going to die as a result of the fuel allowance being paid for six months instead of 32 weeks. It is that kind of shroud waving that-----
There are many other interesting issues raised by Senators that I would like to have responded to. I assure Senator Ned O'Sullivan that I concur entirely with him about the importance of the LNG plant in terms of diversity of supply and offering us another string to our bow. To partially answer Senator Crown's question, I met with the promoters again two weeks ago. Unfortunately this process is heavily regulated. It is not a ministerial decision, it is a matter ultimately for the Energy Regulator and a process has now been put in place that will commence within ten days. It is believed it will go on for two weeks and there will be an outcome in a further two weeks. I hope this goes well because it will be an important string to our bow if it happens.