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Energy Bill 2016 [Seanad]: Second Stage (Resumed) (Continued)

Wednesday, 29 June 2016

Dáil Éireann Debate
Vol. 915 No. 3

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  7 o’clock

(Speaker Continuing)

[Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan]  The big investors know that there is a competitive ten to 20 year prospect in this country. That is the reason they are coming here and investing in those large data centres. They know they can get lower carbon and a relatively competitive supply because our wind power is cheap. It is probably the cheapest renewable energy in the world and we have a huge amount of wind resources. We must be careful how we manage it. We need to step back and try to win back the public on this and to get an understanding of that. We need to bring the power ownership back to the people. However, we should not turn our back on it because if we were to do that, what would we be doing to the secure supply and where would be the competitive advantage? Where would we get the digital jobs which would come in tandem with having this low cost electricity supply?

The European Union has been falling behind in this area. It was leading but because of a lack of confidence as a result of the financial crisis and because there were concerns about the competitive advantage of its shale gas resources, we lost our confidence in Europe with respect to climate change. We stepped back and said that we would not set such ambitious targets for 2030. The Commissioner may be getting it right in one way in the sense that Europe is saying let us piece the jigsaw together. That is what it is doing and it wants to apply the targets in 2017-18. Therefore, we must get our piece of the jigsaw right. We need to get the market mechanisms right more than anything else, which is what this Bill seeks to address.

I would make a broad point on the nature of the transition. We are going to make a 100% transition and most countries, including Ireland, have made a quarter of that. We are up there among the leaders. We are better than Denmark. We integrate renewables better than it does. We can be better than Denmark at this. We can sell our technology to the rest of the world. The first quarter of the transition was done by inserting renewables into the existing market system. The next quarter will be done by changing the entire system. Everyone know this. All the electricity markets in Europe are changing in recognition that this is the way we are going. Germany, in particular, is moving this way and that will drive the European approach. Therefore, we must make sure that we are in tandem with that. The system is not going to develop in the way that Germany did it for the first 25 years, which was the first quarter of the transition, with big subsidies for renewable power because already wind, solar or photovoltaic, pv, energy now generate lower costs than any of the other alternatives. However, we need to design the market system to make sure that providers can get access and that we use them in an efficient way. That is what we need our regulator to do.

The target market model system that the European Union has been relying on up to this point will not work because it still assumes that fossil fuels are the dominant fuel supply but everyone recognises that energy resource is gone and no one sees it as the future. We need to create a place in which investment can be made in the high capital renewable alternatives and we need to design our markets system around that. That requires us to do various things. It is a change from the old model, where we had big base-load plants such as Moneypoint chasing ever-increasing demand, towards a system where we have a variety of variable power supplies or a market based around an assumption of most power coming from variable supply sources. That will be matched with balancing that with variable demand and a range of payments to give investment certainty for the provision of power, the provision voltage frequency and stability on the system and flexibility with respect to energy services that come in this market system. That is how the market will have to be designed. It is complex. That is what our regulator has to do to make sure we are integrated with this new approach.

We have a difficulty because the UK was moving in a different way. It is not clear what is its energy policy. It has been led by the Treasury in recent years as much as by its energy department. They are backing nuclear and Drax coal-based power plants, which are incredibly expensive and, in the case of Drax, are not clean. We have a difficulty with the way that the UK is going and that is something we have to manage, particularly in terms of Brexit. There are a number of things that we know will work, whether it will be with the UK or whether we will integrate more with the rest of Europe at the same time.

The demand management component is the key critical element in this. Efficiency must come first in everything we do in the clean energy area. When we come to deal with Committee Stage, I hope the Minister will be able to give Ireland an economic advantage in incentivising demand management because it is the key. This is what everyone is seeking to be good at. No one has excelled in this yet. As a State, we have all the leading technology companies here, we have a single owner of our distributed grid, North and South, we are good already in terms of the balancing of this electricity system and we have a good regulatory system. I listened to colleagues who spoke earlier and they are always giving out about the Irish saying that we are the worst at this and at that. We are not bad at regulation. Our top regulators have moved on. Why is it that several of our regulators have been taken up by some of our European colleagues? The UK competition regulator is a former Irish communications regulator. The UK regulator of energy is a former Irish energy regulator. We are good at this. We have an independent system. We are good at implementing European regulations in the energy space. We have a good grid operator. EirGrid is a very talented company in this space. We have a good distribution company. We have all the conditions in place to be a world leader at the integration of energy demand management efficiency flexible systems. This is a prize we should grab. It guarantees our wealth and our jobs for the future in the west and in the midlands more than anywhere else. Let us grab it as the economic opportunity of our time, which it is.

President Obama does not spend all his time thinking about this. The US Energy Secretary, Steven Chu, came over here a few years ago. He spent four hours in EirGrid control centre because he knew what we were doing was ahead of the game. If we get very good at it, we can sell elsewhere.

The Minister needs to send a message to the regulator that in this process of dealing with this Bill we should look to be the best at demand management aggregations and should be pushing energy efficiency in everything we do. It is not easy to do that. No one has got it right. The European Commission is looking for countries to step up to the plate and provide this piece of the jigsaw, an example of demand manage aggregation using efficiency first in everything we do, and in the market signals that we create. Let us create 15-minute market opportunities where we put in scarcity pricing and integrate storage demand management heat integrated solutions. All this smart management on the demand side is what we need to be good at. The attractiveness of it is that it does not run into any of the obstacles about a big grid or big wind; it is managing that as we pause and work out what we will do next. As we push solar energy, let us work on the demand side and be world leaders at it and in doing that we will create security and competitive jobs by the tens of thousands for this country. That is the prize we should go for. We should use this Bill as a vehicle to send a signal to the regulator to go for that. Those concerned are well able to turn it into a reality.

We need to do this on an all-island basis. It makes no sense for us to have two electricity markets on this island. We made a great step forward when the single electricity market was set up nine years ago. It has worked and it was transparent and sophisticated. We need to evolve it and change it, which is what this Bill will do. We need to build interconnection between the North and South. As unpopular as that may be, I keep saying to my Sinn Féin colleagues seated on the lower benches and my Fine Gael colleagues on the opposite side that if we believe in an all-island approach, we have to build a grid. If we do not connect the North to the South, the North will separate from us. Forget about the politics, it will be the physics that will lead it.

Deputy Thomas Byrne: Information on Thomas Byrne Zoom on Thomas Byrne Underground.

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan We have a choice. We can say goodbye to Northern Ireland and the hope of a united Ireland, an all-island electricity market and all the benefits that would bring, savings to the South as well as the North, but it is that choice that we will have in the next year or two.

Deputy Shane Cassells: Information on Shane Cassells Zoom on Shane Cassells At what cost?

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan It will save us money-----

Deputy Shane Cassells: Information on Shane Cassells Zoom on Shane Cassells That is the answer the Deputy would give to the people.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Deputy Ryan, please do not engage in argument.

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan -----and it will create jobs and a united Ireland. This is not a cost, it is a gain.

Deputy Shane Cassells: Information on Shane Cassells Zoom on Shane Cassells My God.

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan It will not be easy as we go up through the various counties involved but from my perspective, if we do not do this, we will say goodbye to the North in terms of an integrated electricity market because the physics demand that we connect and we would be much better off. Does Deputy Cassells disagree, as he is shaking his head?

Deputy Shane Cassells: Information on Shane Cassells Zoom on Shane Cassells It is a scandal.

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan I beg your pardon.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl This is not a committee meeting. The Deputy is addressing the Chamber.

Deputy Shane Cassells: Information on Shane Cassells Zoom on Shane Cassells It is scandalous.

Deputy Eamon Ryan: Information on Eamon Ryan Zoom on Eamon Ryan Apologies, I will leave it to my colleague, Deputy Catherine Murphy, to continue the argument. I look forward to Committee Stage when we will get into the details. I hope the Minister is willing in this context. It is important that we send out a signal to the North that we are still in the business of having an all-island market, but it is important for us to get the economic opportunity right and give a signal to the regulator that efficiency and demand management is what we need to do. We can be good at this. We can create a great deal of employment with this and get cheaper power which would help all our people.

An Ceann Comhairle: Information on Seán Ó Fearghaíl Zoom on Seán Ó Fearghaíl Thank you, Deputy. It is great to have such a passionate debate.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy I do not know about continuing the debate where the Deputy left off but there was a proposal at one point for a ring main, which would have been offshore. I wonder why that was not taken up as it would have provided the prospect of a North-South arrangement. However, the onshore option was proceeded with.

The Bill sets out to provide enhanced enforcement powers to the Commission for Energy Regulation, including enhanced powers to carry out investigations in addition to the ultimate sanction, which is the revocation of the licence.

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