Joe Higgins (Dublin West, Socialist Party)
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To ask the Minister for Communications, Energy and Natural Resources noting Irelands potential deliverable renewable energy resource identified by Sustainable Energy Ireland and referred to again by the private sector Irish Wind Energy Association in the context of the potential for the creation of 30,000 jobs in this sector, his views on whether this resource did not require prospecting or drilling costs with associated tax concessions and other surrender of publicly owned resources to attract private sector companies; and his plans to enable the State sector including the ESB to develop the offshore wind industry using European Investment Bank funding. [43801/12]

Pat Rabbitte (Dublin South West, Labour)
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The number of long-term sustainable jobs that new renewable energy projects can deliver depends on a variety of factors. The figures quoted are estimates based on a variety of assumptions. A 2009 report by the Irish Wind Energy Association (IWEA) entitled “Jobs and Investment in Irish wind energy” estimated that the wind energy sector in Ireland can support 1.5 jobs per MW installed. At the end of 2011, 17.6% of Ireland’s electricity was from renewable sources, with approximately 1900MW installed.

At an EU level, the European Wind Energy Association (EWEA) analysis found that there are 15 jobs created per MW - wind turbine and component manufacturing provide the majority of employment opportunities at circa 59% of direct employment. These elements represent 12.5 of the 15.1 jobs created in the EU for every MW installed. Ireland’s ability to harness a high level of employment from renewable energy projects would depend, to a large extent, on related industry such as turbine and cable manufacturing industry relocating to Ireland.

The development of renewable energy in Ireland is being pursued in line with our obligations under the Renewable Energy Directive, that 16% of all energy consumed in the State must be from renewable sources by 2020.

This is a legally binding obligation introduced by the EU to ensure that our climate and energy goals of reducing CO2 emissions and increasing security of energy supply can be achieved by 2020. In the event that Member States fall short of their national renewable targets, the Directive provides that they will be obliged to purchase renewable energy credits from other Member States that have exceeded their targets, at a price that is not yet known.

In the electricity sector, 17.6% of electricity consumed was from renewables in 2011, in the transport sector 3.6% of energy consumed was biofuels and in the heating sector 5% of energy consumed was from renewable sources (mainly biomass and shallow geothermal.) The total of the renewable energy consumed in 2011 across the three sectors amounted to 6.5% of all energy. The objective, in order to meet our 2020 binding targets are to increase renewable energy consumption in those sectors to 40% in the electricity sector, 10% in the transport sector and 12% in the heating sector, which together will mean the 16% overall target can be reached.

Onshore wind rather than offshore wind will be the major mechanism towards the meeting of our 2020 target. This is because the cost per MW for offshore wind is significantly higher than onshore wind and a higher feed in tariff (REFIT) for offshore wind would have had to be provided, funded through the PSO levy.

The potential for export of renewable electricity was outlined in the Strategy for Renewable Energy 2012-2020 which I published earlier in the year. The mechanisms by which renewable energy can be exported or traded with another country are provided for under the Renewable Energy Directive in Articles 6-12 on co-operation mechanisms. Countries can agree statistical transfer, which involves the purchase of renewable credits by the importing country in order to meet their target or they can agree joint projects which involves identifying specific projects for the purpose of renewable trading and agreeing how the projects will be financed and how the renewable value will be counted towards each country’s renewable target under the Directive.

The use of these co-operation mechanisms under the Directive requires formal agreement between two or more Governments. I have had a number of bilateral discussions with my UK counterpart in this regard as well as some discussion under the auspices of the British Irish Council. We are actively exploring the possibility of trade in renewable energy between the two jurisdictions, with a view to reaching an agreement that would provide for that.

It will be necessary to ensure that Irish consumers do not have to foot the bill for renewable electricity that is exported to the UK and that there are real benefits from renewable trade accruing to the Irish State and Irish consumers. Renewable developers will only pursue an investment if they can finance the investment and usually this involves a guaranteed minimum price for 15 or 20 years over which time they can repay the loan for the capital outlay.

In the event that renewable power was being exported to the UK, for example, it would be necessary to ensure that the costs associated with new transmission infrastructure to export the power and the cost of a support scheme for renewable developers is paid for by UK consumers, rather than Irish consumers who would not be benefitting from either the power or the renewable value of the electricity.

The current market price for electricity in the SEM is approximately €65MWh. The capital costs of offshore wind are high. Offshore wind developers would need a significantly higher guaranteed price more than the current market price for electricity in order to finance an offshore wind project and to finance new transmission infrastructure to transport the electricity generated by such a project to the marketplace.

A loan to finance a project is only helpful insofar as the project has a reasonable prospect of earning sufficient revenue from the project to pay off the loan over time. The current market prices in Ireland and the UK would be insufficient in the case of an offshore wind project. If the UK or another market wanted to import power from an offshore wind project under the cooperation mechanisms in the Directive, so that they could count some or all of the output towards their target, they would need to be willing to offer a sufficient support price to the project developer over a defined period to make the investment viable. This is an area that the UK Government is currently examining as part of their market reform.

If the Irish Government decides to enter an Inter-Governmental agreement under the Directive with the UK or another Government, it will have to ensure sufficient return to the State from such projects. This might include a share of the renewable value or the imposition of a royalty of some type.

The Irish State Companies, notably ESB and BGE already have a significant presence in the onshore wind energy sector. Further investment in wind energy would be a matter for the companies themselves, taking full account of their commercial remit.

Joe Higgins (Dublin West, Socialist Party)
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To ask the Minister for Communications, Energy and Natural Resources his views on whether the basis for the development of our renewable energy resource has been funded by the Irish State through the Sustainable Energy Ireland, the Department of the Marine, the Marine Institute, the HMRC in UCC and the ESB; his views on whether his Departments present plans for the development of the resources will enable multinational energy corporations including those based in Ireland to extract large profits from the development of this resource with no payback to the Irish taxpayer for their investment in this resource over decades. [43802/12]

Pat Rabbitte (Dublin South West, Labour)
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Energy use comprises electricity, heating and transport. In 2011, 6.5% of all energy we consumed in the State was from renewable sources. The development of renewable energy in Ireland is being pursued in line with our obligations under the Renewable Energy Directive, to have 16% of all energy consumed in the State to be from renewable sources by 2020. This is a legally binding obligation introduced by the EU to ensure that our climate and energy goals of reducing CO2 emissions and increasing security of energy supply can be achieved by 2020. In the event that Member States fall short of their national renewable targets, the Directive provides that they will be obliged to purchase renewable energy credits from other Member States that have exceeded their targets, at a price that is not yet known.

In the electricity sector, 17.6% of electricity consumed was from renewables in 2011, in the transport sector 3.6% of energy consumed was biofuels and in the heating sector 5% of energy consumed was from renewable sources (mainly biomass and shallow geothermal.) The total of the renewable energy consumed in 2011 across the three sectors amounted to 6.5% of all energy. Our intention, in order to meet our 2020 binding targets are to increase renewable energy consumption in those sectors to 40% in the electricity sector, 10% in the transport sector and 12% in the heating sector, which together will mean our 16% overall target can be reached.

In the electricity sector, which makes the greatest contribution to our renewable energy consumption, Ireland has approximately 1900MW of renewable generation connected to the electricity grid. This consists of existing large hydro plants such as Ardnacrusha, as well as wind and biomass sourced generation. Six tender competitions were run from the mid 1990s to the mid 2000s through a scheme known as AER (Alternative Energy Requirement) to incentivise renewable generation across different technologies. This guaranteed the winning tenders 10 or 15 years of support at the winning price. Under the AER schemes, 532MW of renewable generation was built out.

In 2006 a new scheme known as REFIT was introduced. REFIT operates by guaranteeing a minimum floor price for renewable energy generation over a 15 year period. The original REFIT scheme was to cater for 1450MW of wind sourced generation, small hydro, landfill gas and biomass generated electricity. Two new REFIT schemes were introduced in 2012 – one to encourage biomass sourced generation including anaerobic digestion and combined heat and power and one to encourage wind sourced generation, small hydro and landfill gas. The REFIT and AER schemes are funded through the PSO levy that is funded by all electricity consumers.

The above is the basis for our renewable energy development to date. Separate to the above, there has been a certain level of public funding allocated to the wave and tidal energy sector in recent years. Ocean Energy was recently identified as a priority area in the research prioritisation exercised undertaken by the Department of Jobs, Enterprise and Innovation, given its potential for the development of a future industrial sector here. The development of ocean energy has been pursued in line with the 2006 Ocean Energy Strategy published by my Department.

This wave and tidal sector is still at the research and development phase and is not yet commercially viable. The Hydraulics and Maritime Research Centre (HMRC) in Cork has a wave test tank where early stage devices can be tested and has developed a systematic protocol for the scaling up and testing of wave technology. Certain third level institutions are engaged in ocean energy research across the Irish university system.

SEAI’s ocean energy development unit has been engaged in a series of tasks to encourage the ocean energy sector, including through the administration of a prototype development fund of grants whereby up to 50% co-funding for scale testing and other research in the ocean area has been provided to industry. ESB has been involved in the Westwave project, which has had as a goal to install and operate wave energy converters capable of generating 5MW of clean electricity by 2015. SEAI together with the Marine Institute has been involved in the development of a wave test site in Galway Bay, where quarter scale prototypes can be tested and the Marine Institute, together with IBM has been involved in the SmartBay project, creating ICT links with the development of ocean energy.

The public funding for ocean energy to date has been focussed on research, development and demonstration as technologies in this area are not commercially viable. The public funding in this area is in anticipation of potential for a future ocean energy industrial sector and the maximisation of benefits to the Irish State and citizens in that regard in the event that the sector becomes commercially viable.