Bernard Durkan (Kildare North, Fine Gael)
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Question 50: To ask the Minister for Communications, Marine and Natural Resources if, in view of rapidly escalating energy costs and uncertainty in regard to supply, he proposes to take special initiatives to encourage the production of wind generated electricity, biodiesel or other alternative energy sources; if he has issued policy directives in regard to the optimum role for such producers in the future; and if he will make a statement on the matter. [14483/05]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 100: To ask the Minister for Communications, Marine and Natural Resources the role he plans for alternative energy in the context of overall energy requirements in the future; and if he will make a statement on the matter. [14489/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 137: To ask the Minister for Communications, Marine and Natural Resources if, in view of rapidly escalating energy costs and uncertainty in regard to supply, he proposes to take special initiatives to encourage the production of wind generated electricity, biodiesel or other alternative energy sources; if he has issued policy directives in regard to the optimum role for such producers in the future; and if he will make a statement on the matter. [14714/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 142: To ask the Minister for Communications, Marine and Natural Resources the role he plans for alternative energy in the context of overall energy requirements in the future; and if he will make a statement on the matter. [14720/05]

Noel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 50, 100, 137 and 142 together.

My policy on electricity generated from renewable sources, of which wind is the dominant technology, in the first instance is to increase consumption from these sources to 13.2% of total consumption by 2010 as required by Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market. To ensure that this target is met, a renewable energy development group was established in May last. I have received updates on the work of the group and, on 7 April last, I was able to announce the outline of a future support mechanism.

This revised system will move away from competitive tendering to a fixed price proposal. In addition, the support which was previously tied to contracts with the ESB will now be accepted from any licensed supplier. I also indicated that wind powered technology will remain the dominant technology in delivering this target. The final report of the group, which will be published after the new support mechanism is finalised, will form the basis of my future policy decisions on the increased penetration of renewable energy technologies in the electricity market and will seek to ensure that developers can make a reasonable rate of return on renewable energy projects while ensuring that the interests of national competitiveness and the ultimate burden of cost to the final consumer are all fully taken into consideration.

In March 2004, my Department secured an amendment to the Finance Act 1999, which provides for the introduction of a pilot scheme for excise tax relief for biofuels. The European Commission has now given state aid clearance for the scheme, which was publicised on 20 April. Interested parties have been invited to apply for excise relief through a competitive call for proposals process. Under the scheme, excise relief may be granted for pilot projects producing up to 6 million litres of pure plant oil, 1 million litres of biodiesel and 1 million litres of bioethanol.

An interdepartmental group has been set up, chaired by my Department, to consider policy options for the development of a biofuels sector. As part of the group's work, a liquid biofuels strategy study was published by Sustainable Energy Ireland, SEI, in December 2004. This report provides comprehensive details on the potential for the development of a biofuels market in Ireland and options to stimulate the market.

SEI is also funding a number of biomass projects and studies through its renewable energy research development and demonstration programme. Under the programme, capital grant aid is offered for biofuels market demonstration projects in the pure plant oil, biodiesel and bioethanol categories. Funding of €250,000 has already been awarded to one company which is demonstrating the feasibility of producing and selling vegetable oil locally as a transport fuel. It is intended that further grant aid will be available under the programme for biofuel demonstration projects. It is anticipated that these initial measures will lead to market penetration of biofuels of 0.13% within two years. Further measures to increase market penetration over a longer timeframe are currently being considered.