John Curran (Dublin Mid West, Fianna Fail)
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462. To ask the Minister for Communications, Climate Action and Environment the estimated annual fines that Ireland will incur due to missing renewable energy targets by 2020; the way in which he plans to fund these fines; and if he will make a statement on the matter. [48815/17]

Denis Naughten (Roscommon-Galway, Independent)
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The EU Renewable Energy Directive 2009/28/EC set Ireland a legally binding target of meeting 16% of our energy demand from renewable sources by 2020. Ireland is committed to achieving this target through meeting 40% of electricity demand, 12% of heat and 10% of transport from renewable sources of energy, with the latter transport target also being legally binding.

While good progress has been made to date, with the Sustainable Energy Authority of Ireland (SEAI) advising that 9.5% of Ireland's overall energy requirements in 2016 were met from renewable sources, meeting the 16% target remains challenging. The SEAI's most recent assessment is that Ireland will achieve between 13.2% and 15.4% of its 16% renewable energy target by 2020, indicating that Ireland should be between 82% to 96%  to its target. However, while the focus of my Department remains firmly on meeting our 2020 target and on implementation of renewable energy measures, including a new  Renewable Electricity Support Scheme (RESS) and Renewal Heat Incentive (RHI), contingency planning has commenced in the Department to explore  the potential  extent, mechanisms and cost of addressing  our target within the framework of the  Directive.

The Renewable Energy Directive provides a comprehensive framework for Member States to work towards achieving individual and EU renewable energy targets, including mechanisms for countries to work together such as statistical transfers, which allow Member States to meet their targets by purchasing credits from Member States that overachieve on their renewable targets.

In the absence of an established market  mechanism, estimates of the cost of using  instruments such as Statistical Transfers are necessarily  tentative. Work undertaken by the SEAI in 2016  indicated that the cost to Ireland of not meeting our overall renewable energy targets may be in the range of €65 million to €130 million for each percentage point Ireland falls short of the overall 16% renewable energy target.  However, the European Commission's EU Reference Scenario, Energy, transport and GHG Emissions Trends to 2050,  which is available at the following link, , states that modelling indicates that theoverall EU level target of 20% will be met, underlining the difficulty in any market estimate  process and the vulnerability to a range of cost assumptions and the level of transfers that might be required in a market where the overall target at EU level is met. Costs per percentage point for statistical transfers could be below the lower end of the range suggested by SEAI but this will depend on market conditions when and if purchases are made.

Any requirement for statistical transfers to meet compliance would be undertaken against a background of discussions by the Irish authorities with the EU Commission and relevant Member States. As any purchases arising would be made over a period, the costs to the Exchequer of acquiring statistical transfers to meet any potential shortfall would be spread over a period of more than one year and in any event the cumulative costs would not be known until 2021, the deadline for completion of all purchases.