Peadar Tóibín (Meath West, Sinn Fein)
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Question 32: To ask the Minister for Communications, Energy and Natural Resources the steps he is taking to reduce energy costs and support renewable energy. [11330/12]

Pat Rabbitte (Dublin South West, Labour)
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I have no statutory function in the setting of energy prices, whether in the regulated or non-regulated sector. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. The electricity retail market is fully deregulated as of April 2011. As a result, business and domestic customers can avail of the competitive offerings from a number of electricity supply companies.

The CER is engaged in progressive deregulation of the gas retail market. The only remaining regulated segment of the gas market is that of residential customers supplied by Bord Gáis Energy. Gas customers can avail of competitive offerings from other suppliers. Competition helps to put downward pressure on energy prices. The Government remains concerned to ensure that additional actions are taken, where feasible, to mitigate energy costs for business and domestic customers in the interests of competitiveness, employment and for the economy as a whole.

Ireland's energy prices are currently in line with, or below, European averages. This is confirmed by Eurostat figures for the first half of 2011 which shows electricity prices moving towards convergence with the EU average. Electricity prices in Ireland were below the EU average for all medium to large business customers for the first half of 2011, ranging from 10% to 17% below. During the same period, prices for business gas consumers remained below the EU average for most consumption levels ranging from 4% to 25% below. I am committed to continuing to work with the enterprise community, the energy sector, and the energy regulator to ensure that the costs of energy for business are as competitive as possible through all measures at our disposal.

In terms of supporting renewable energy, Ireland is legally obliged under Directive 2009/28/EC to increase consumption of renewables to 16% by 2020. The National Renewable Energy Action Plan sets out the planned trajectory for achieving the target across the electricity, heat and transport sectors with 40% needed in electricity, 10% in transport and 12% in heat to meet Ireland's overall 16% commitment.

Renewable energy is being supported by a variety of policy initiatives. Renewable electricity is now the largest contributor to renewable energy consumption and is expected to contribute most to our 2020 target. The largest contribution in the electricity sector is expected to be made through generation from wind technologies, followed by biomass technologies.

For the support of commercial renewable generation, my Department administers a renewable energy support mechanism known as the Renewable Energy Feed In Tariff (REFIT). The terms and conditions of REFIT are available on the Department of Communications, Energy and Natural Resources website. A new REFIT scheme for biomass technologies (REFIT 3) was opened in February by my Department and a further new REFIT scheme for onshore wind, small hydro and landfill gas (REFIT 2) is due to be opened later this month.

Wind generation will provide the bulk of Ireland's renewable energy in 2020. To meet the RES-E target, the Sustainable Energy Authority of Ireland has estimated that 4000MW of renewable generation needs to be connected to the electricity grid. At end 2011, EirGrid data shows that there was 1900MW of installed renewable generation, including 1630MW of wind. The Government is proactively engaged in discussions with the UK, under the British Irish Council, on developing the cooperation mechanisms under Directive 2009/28/EC for renewable trading purposes. Ireland's significant offshore renewable energy potential offers undoubted opportunities for renewable export. The prospect also of realising onshore wind projects of scale for export markets is also being actively explained.

In the transport sector, the biofuels obligation introduced in 2010 under the Energy (Biofuel Obligation and Miscellaneous Provisions) Act 2010 requires transport fuel suppliers to provide a specified amount of their sales in the form of biofuels. The obligation currently stands at 4% by volume which is equivalent to 3% in energy terms. The biofuel obligation will incrementally increase on a sustainable basis to 2020, to meet the RES-T target of 10% in 2020.

Due to the cost of transporting heat, heat is generally consumed at the point of generation to maximise efficiency. The new biomass REFIT for electricity exported to the grid provides for up to 310MW of new biomass generation to be constructed. This will stimulate the production of renewable heat by improving the financial viability of many more potential sites.