Catherine Murphy (Kildare North, Independent)
Link to this: Individually | In context

Question 113: To ask the Minister for Communications, Energy and Natural Resources if, in seeking to achieve the objectives laid out in Strategic Goals 1 and 3 of the Strategy for Renewable Energy 2012-2020, he will be sending an application to the European Union for State aid approval in respect of a REFIT support mechanism for offshore wind, wave or tidal power; if not, his views on whether the absence of such a scheme significantly undermines Ireland's ability to reach the 2020 target of 40% for domestic renewable energy generation; his views on whether the absence of such a scheme places Ireland at a competitive disadvantage compared to other jurisdictions which are seeking investment in their domestic renewable sectors; and if he will make a statement on the matter. [30740/12]

Pat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context

Keeping the cost of energy in Ireland as low as possible is important for domestic consumers and plays a critical role in maintaining our overall economic competiveness. Late last year the Government agreed with my decision on cost grounds not to proceed with an application to the European Commission for State Aid clearance for a higher priced feed in tariff to support Offshore Wind development in the Irish electricity market.

While offshore wind is already being deployed in several Member States as part of delivering on their national renewable energy targets, it is still a very expensive technology to deploy, typically costing double the price of deploying onshore wind. Offshore wind currently costs in the region of €3 million per megawatt to deploy compared to the cost of onshore wind which is around €1.5 million per megawatt.

Given the higher costs which would be incurred by business and domestic electricity consumers to support such a tariff, I believe that we could better focus instead on the opportunity to develop a renewable electricity export market for the offshore wind sector. The economic case for developing Ireland's offshore wind resources lies in gaining access to bigger electricity markets and in developing inter Member State renewable electricity trading.

Ireland's deployment of renewable energy sources in electricity has been increasing steadily in recent years as we work North and South, to deliver a 40% level of renewable electricity consumption by 2020. There has been good progress from 5% renewable electricity in 2005 to around 17% renewable electricity at present. The challenge is to steadily increase renewable electricity generation in the all island market from onshore wind and biomass year on year towards 2020.

I am confident that Ireland has the capability to achieve its targets for domestic renewable electricity from the onshore wind projects already in the existing Gate processes despite some of the planning and financing challenges being encountered by some projects.

Wave and tidal energy is still very much at the research and development stage and the commercial and technical feasibility is not yet proven and while there are very promising wave technology devices in development they are very much at pre-commercial stages.

Ireland has a relatively small electricity market, with around 2 million electricity consumers. The Public Service Obligation levy which is paid by all electricity customers in this small market currently encompasses support for peat, some conventional generation as well as renewable generation. It makes economic sense that we focus on developing our lower cost renewable resources to deliver Ireland's binding EU targets for renewable electricity. In parallel we will actively pursue the potential opportunities for renewable energy export, which offshore wind represents.

I met UK energy Minister Hendry in London last week and we have set in place a formal process to work towards finalising by the end of the year a Memorandum of Understanding that will facilitate renewable electricity trading. My Department will also continue to work with the UK energy Department through the ongoing work of the British-Irish Council and in the EU through the North Seas Offshore Grid Initiative to deal with the market, regulatory and technical issues that need to be addressed to enable us to deliver on the high renewable energy resources we have.