Paudge Connolly (Cavan-Monaghan, Independent)
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Question 210: To ask the Minister for Communications, Marine and Natural Resources his views on the place of wind energy in future energy production; and if he will make a statement on the matter. [16986/05]

Noel Dempsey (Meath, Fianna Fail)
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The promotion of renewable energy technologies in electricity production is a key priority of this Government. This priority is shared by European Community institutions that have addressed Directive 2001/77/EC — the renewables directive — to all member states to increase the consumption of green electricity by 2010. The obligation addressed to Ireland is to deliver a programme capable of increasing the amount of electricity from renewable energy sources to 13.2% of total consumption by 2010.

Existing hydro facilities, together with the current AER support programme operated by my Department and activity in the liberalised green market, are capable of delivering significantly on the target in the directive. Additional capacity will be supported under a new support mechanism that I announced recently. I will return to this point later in my reply. In 2003, the latest year for which figures are available, 1.7% of the total electricity consumed came from wind-powered electricity generating plant. At that time there were 189 MW of wind power connected to the electricity network. This figure is growing and, of the 624 MW of renewable energy sourced electricity-generating plant currently installed, 362 MW is wind-powered This is an increase of 173 MW, or over 91%, since the latest statistics were calculated.

The target of 13.2% approximates to 1400 MW to be connected to the electricity network by 2010. It is acknowledged at EU level as a challenging target. It will require us to more than double existing capacity within five years. This is the minimum target I am demanding. My overall target is to optimise the amount of renewable energy technologies, which can be connected to the network while maintaining safe and reliable supply and reasonable retail charges for consumers.

The amount of wind-powered stations, which can be usefully connected to the network in the future, is dependent on future technological developments within the technology, future electricity demand, the size and future mix of technologies on the electricity network and the development of interconnectors. It is only by monitoring these variables over time that realistic further targets can be set. In addition to the environmental benefits, it is important that the State reduces its dependency on fossil fuels, whose prices are subject to the vagaries of the global markets and geopolitical developments that can adversely affect both the price and availability of supplies. From a national economic perspective and not just an energy policy perspective, increasing the amount of renewable energy in the system will be helpful in substituting costly fuel imports and in dealing with levels of uncertainty in the future evolution of energy prices.

Wind-powered plant is the most competitively priced of all renewable energy technologies. It is therefore the dominant renewable technology at this time. However, because wind is an intermittent fuel source, it presents particular challenges for the networks' operators as penetration levels grow. Future challenging targets to increase wind-powered stations will require the co-operation and co-ordination of my Department, Sustainable Energy Ireland, SEI, the market regulator, CER, the electricity networks' operators and developers.

All these key players, and more, have participated in a consultation process launched in December 2003 and in the work of the subsequently established renewable energy development group. The group's report 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.

Although the report of the renewable energy development group is not yet completed, I have received updates on the work in progress. On 7 April 2005, I was able to announce the outline of a future support mechanism, AER VII. 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 available for supply contracts with any licensed supplier. I also indicated, in my announcement, that wind-powered technology will remain the dominant technology in delivering this target.

AER VII will contain a quantitative limit and a competitive element therefore remains. The actual capacity limit in AER VII will be a specific term of major interest to all potential applicants. It is appropriate that it is made accessible to all potential applicants simultaneously. I am not in a position, therefore, to announce a specific quantitative target until AER VII is formally launched. My Department is in consultation with suppliers about the practical implementation of the new arrangements announced on 7 April. I expect these consultations to conclude shortly. Publication of the detailed terms and conditions of the future support mechanism, AER VII, will be published shortly after those contacts with suppliers finish.