Michael McCarthy (Cork South West, Labour)
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Question 125: To ask the Minister for Communications, Energy and Natural Resources his policy in relation to micro-generation; and if he will make a statement on the matter. [33927/11]

Pat Rabbitte (Dublin South West, Labour)
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The Programme for Government commits to the provision of a feed in tariff for micro-generators producing electricity for their own homes, farms and businesses and selling surplus electricity to the grid. The programme also states that the tariff will not be significantly above the single energy market price for electricity.

A number of activities in recent years have supported microgeneration. These have been the Sustainable Energy Authority of Ireland (SEAI) pilot microgeneration programme instigated in 2009 and comprising 42 installations and the microgeneration feed-in-tariff programme introduced by ESB in 2009.

The SEAI pilot microgeneration programme has now been operational for a number of years and I expect to shortly receive a report from SEAI on its findings.

The ESB scheme has been operational for almost 3 years – it is a limited feed-in-tariff available under certain conditions to the domestic sector. Under 400 microgenerators have set up under this scheme to date. The scheme offers 10c Kwh from ESB networks and an additional 9c Kwh from ESB Electric Ireland (formerly ESB Customer Supply.)

At the time ESB introduced the microgeneration scheme, the Commission for Energy Regulation (CER) wrote to all suppliers in the market inviting them to introduce microgeneration support schemes, however no other suppliers chose to enter the market. The tariff offered by ESB, comprising a total of 19c Kwh, has had limited success with under 400 availing of it to date.

The lack of interest of all suppliers in voluntarily introducing microgeneration schemes is indicative of market failure and the need to offer price supports in this area, should we wish to see it develop. The experience with the ESB tariff would seem to indicate that a tariff not significantly above the market price for microgeneration, as stated in the Programme for Government would be unlikely to have much success. This is backed up by research that SEAI has carried out in the area, which points to significant costs for relatively modest output, when compared with large scale generation.

Should a scheme be introduced, if this is to be funded from the PSO levy, increased electricity costs would have to be borne by all consumers to fund it. It is my intention to consider the options available on microgeneration with a view to a submission to Government in the matter.