David Stanton (Cork East, Fine Gael)
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Question 56: To ask the Minister for Communications, Energy and Natural Resources, further to Parliamentary Question No. 9 of 19 October 2011, the further progress that has been made with the ESB microgeneration programme and the Sustainable Energy Authority of Ireland 18-month pilot programme; and if he will make a statement on the matter. [37389/11]

Catherine Murphy (Kildare North, Independent)
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Question 69: To ask the Minister for Communications, Energy and Natural Resources if, in view of the recent agreement between the ESB and the European Investment Bank on partial funding towards a large-scale smart-metering project in Ireland, he proposes to quickly advance plans for a widespread subsidised microgeneration scheme here; if so, the details and expected timeline of such a scheme; the projected investment cost; and if he will make a statement on the matter. [37351/11]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions Nos. 56 and 69 together.

ESB has been operating a micro-generation feed-in-tariff scheme for the domestic sector for the past number of years, which has 387 customers signed up to date. The available tariff is 19c kWh, made up of a 10 cent kWh, tariff offered by ESB Networks and a 9 cent kWh, tariff offered by ESB Electric Ireland (formerly Customer Supply). Despite being invited to do so by the Commission for Energy Regulation (CER), no other supply companies have chosen to introduce a tariff to date, although in the fully liberalised market that now exists, it is open to them to do so.

When the scheme was initially announced, ESB Networks announced that an import/export meter would also be provided to the first 4000 micro-generation installations countrywide over 3 years.

The Programme for Government commits to the introduction of a microgeneration feed-in-tariff at a tariff rate that will not be significantly above single energy market (SEM) price for electricity. The experience from the ESB tariff (at a combined tariff of 19c per Kilowatt hour) as well as from studies undertaken by the Sustainable Energy Authority of Ireland (SEAI) are that a combined tariff not significantly above the SEM price (currently around 7.2 cent per Kilowatt hour) would be unlikely to stimulate take-up of microgeneration.

I will shortly be considering advice from SEAI and my Department on fully costed options for encouraging microgeneration with a view to determining appropriate directions not least in the present budgetary circumstances. I am acutely aware of the cost of electricity to both domestic and commercial customers and as any extension of the feed-in tariff support scheme would have a knock on effect on the retail price of electricity; this needs very careful consideration before it could take place.

SEAI has been running a microgeneration awareness programme since 2009. Ongoing monitored field trials are a significant component of the programme and provide robust data on the performance of installations and the actual levels of output the various technologies achieve in actual conditions, which will allow for better evidence based policy and regulation relating to small- and micro-scale generation.

The traditional electricity meter is not capable of operating in reverse and as a result is incapable of giving credit for electricity exported to the grid. A smart meter can measure the consumption of energy, and can transmit data using a form of electronic communication. A key feature of a smart meter is the ability to provide bidirectional communication between the consumer and the supplier/operator. Smart meters also facilitate greater energy efficiency by providing consumers with more detailed, accurate and timely information regarding their energy consumption and costs, thus helping consumers reduce any unnecessary energy usage and shift any discretionary electricity usage away from peak consumption times.

The CER, is overseeing the national programme to develop smart meters working with my Department, ESB Networks and Bord Gáis Éireann. Pilot trials are under way and a comprehensive cost benefit analysis has been completed, which quantifies the benefits for consumers and the energy system.

Micro-scale electricity generators seeking to export excess generation to the grid would require smart meters. In the meantime, with regard to smart meters, I understand that the CER is shortly due to issue a public consultation seeking views on smart metering and a potential full national rollout. There will be an opportunity for all those interested, including microgenerators, to make the case as part of that consultation as to their views on any future rollout programme.

Clare Daly (Dublin North, Socialist Party)
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Question 57: To ask the Minister for Communications, Energy and Natural Resources if he will abandon dependence on the private sector and instruct the ESB to prepare plans to develop offshore wind energy generation, including the necessary grid from the offshore west coast, graving dock in Irish ports and other basic necessities to enable development of this significant national resource and create thousands of sustainable jobs (details supplied). [37360/11]

Clare Daly (Dublin North, Socialist Party)
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Question 62: To ask the Minister for Communications, Energy and Natural Resources if he will approach the Norwegian Government to participate in a public-public partnership to develop Ireland's offshore wind energy generation and create thousands of sustainable jobs (details supplied). [37361/11]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions Nos. 57 and 62 together.

Offshore wind is a rapidly maturing technology worldwide however it is still not commercially viable at the open wholesale market price of electricity and is dependant on high public subsidies to underpin a developers financial business case.

The electricity sector, including the renewable energy sector, operates in an open liberalised market. European policy is to move towards a wider single electricity market by mid decade. I have no intention to instruct ESB or any other State company operating in the electricity sector here to get involved in any particular technology.

While the Hywind floating turbine technology referred to is very promising it is still not commercially operational and is only one of many promising developments in turbine technology for deeper water deployment.

Recent years have seen a growing number of offshore wind turbines installed, particularly in European waters. Every Member State of the European Union has a specific renewable energy target and these developments are being supported by Governments in order to achieve their own domestic targets.

Countries that have seen installation of offshore wind in recent years have incentive schemes in place, which essentially subsidise offshore wind through a variety of support mechanisms such as tradeable renewable energy certificates or feed-in-tariff mechanisms. These subsidise offshore wind for a fixed period of between 15 and 20 years in order to provide sufficient certainty to private developers to obtain the necessary finance for their projects. Offshore wind has a capital cost in the region of €3 million per megawatt to install. By comparison, onshore wind would typically cost less than half of that.

Ireland operates a feed-in-tariff support scheme for onshore wind generation, which is funded through the PSO levy on all electricity consumers, domestic and commercial. Currently, the onshore wind feed-in-tariff is fairly close to the market price, so any subsidy required is relatively modest. International evidence, including from the UK, would suggest that offshore wind requires at least double the current market price (€72 MWh) for electricity, hence a feed-in tariff for offshore wind would require electricity consumers to fund a much larger subsidy. In this context, the Government, while recognising that there may be industrial opportunities available, will need to decide from a policy perspective whether to pursue offshore wind for the domestic market. I am acutely aware of the impact of electricity prices on homes and businesses and I need to balance the wish to develop expensive new technologies with the cost effect on electricity consumers.

There are however export market possibilities provided for in the Renewable Energy Directive whereby renewable generation produced on the territory of one country may be used (when a bilateral agreement is in place) to count towards the target of another country. This ability to trade the renewable value of electricity between countries is enormously beneficial, as essentially the additional premium that may be required for offshore wind or other renewable generators is a reward for the renewable nature of the electricity.

One of the key issues in this regard is whether electricity destined for export feeds into the national electricity grid or not. If it does grid reinforcements and interconnectors and additional grid management tools to cope with increased intermittency would be required, which adds to costs in Ireland. However, there are also possibilities particularly around offshore renewable developments for connecting directly from the offshore to another market without feeding into Ireland's grid.

In the context of the British Irish Council, I have been speaking with my UK counterpart on renewable trade and we issued a Joint Communiqué in June on the islands working together in this field to explore the possibilities around maximising trade in renewable energy. In such a scenario, any additional premium required by offshore wind would be paid for by British consumers, if it is their market which is gaining the renewable value.

At present, there is no renewable cross border trade anywhere in the EU and we are actively working with the UK Government to be one of the first regions in Europe to introduce such a market. The Irish market is a small electricity market by European standards and the key to being able to make use of the major renewable energy resource we have here is to be able to gain access to larger European renewable energy markets, starting with access to the UK market.

Together with the Sustainable Energy Authority of Ireland, the Commission for Energy Regulation and EirGrid, my Department is involved in a study that has been commissioned on this topic which is exploring the viability, costs and benefits to Ireland of using the cooperation mechanisms in the Renewable Energy Directive to export renewable electricity. My Department is also finalising an offshore renewable energy development plan, on which a strategic environmental assessment has been undertaken on low, medium and high development scenarios. This can help to inform coherent development of the sector going forward.