Written answers

Wednesday, 12 October 2005

Department of Communications, Energy and Natural Resources

Alternative Energy Projects

9:00 pm

Photo of Joe CostelloJoe Costello (Dublin Central, Labour)
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Question 145: To ask the Minister for Communications, Marine and Natural Resources the details of the recent biofuels initiative; his views on the replacement support pricing mechanism for the AER scheme; and if he will make a statement on the matter. [27867/05]

Photo of Noel DempseyNoel Dempsey (Meath, Fianna Fail)
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In 2004, the Department of Communications, Marine and Natural Resources secured an amendment to the Finance Act 1999, which provides for the introduction of a pilot scheme for mineral oil tax relief for biofuels which is designed either to produce biofuel or test the technical viability of biofuel for use as motor fuel.

A scheme under the Act was subsequently agreed between the Department of Communications, Marine and Natural Resources and the Department of Finance and received state aid clearance from the EU Commission in March 2005. Under the scheme, mineral oil tax relief may be granted for pilot projects producing up to 6 million litres per annum of pure plant oil, 1 million litres per annum of biodiesel and 1 million litres per annum of bioethanol.

A total of 34 applications were received under the call for proposals by the closing date. Applications were received under all three categories of biofuel. A total of eight successful projects were selected, comprising four pure plant oil projects, three biodiesel projects and one bioethanol project and excise relief of €6 million has been granted to the successful applicants over two years commencing in August 2005.

Ireland has a renewable electricity target of 13.2% of electricity consumption to be sourced from renewable technologies by 2010. To meet this target Ireland needs in the region of 1,450 MW of renewable capacity connected. Ireland has 675 MW of renewable capacity connected with a further 175 MW under active construction. This consists of 400 MW of wind, 240 MW of hydro with the balance made up of different biomass technologies. Further development will take place from the last two rounds of competitive tendering, the AER V and AER VI competitions. To achieve our target, a minimum of 400 MW of new renewable capacity will be supported and will be increased to accommodate any slippage rates from previous competitions.

Earlier this year I announced, in outline form, the next support programme to further increase the contribution to electricity production from renewable energy sources. This new programme will move away from the competitive tendering model to a fixed price scheme. This means that any applicant, whether an individual or company, may submit an application at a fixed price based on technology and, in the case of wind, the capacity of the project.

The detailed draft terms and conditions of the proposed feed-in support programme were posted on the website Department of Communications, Marine and Natural Resources, www.dcmnr.gov.ie, in draft form, on 29 September last and interested parties have until today to raise any queries or to furnish any observations on the proposals, as published. Following a detailed analysis of the matters raised the new programme, to be known as the renewable energy feed in tariff, will be put in place.

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