Vol. 568 No. 2
64 Ms Burton asked the Minister for Communications, Marine and Natural Resources if he will report on the current and future structure of fuel sources for Ireland's electricity production, in the context of proposals to change the fuel inputs at Moneypoint power station; and if he will make a statement on the matter. [15906/03]
Provisional figures for 2002 show the shares of fuel used for electricity generation were as follows: coal, 28%; peat, 14%; oil, 18%; natural gas, 37%; and renewables, 3%. The question of changing the role of coal in our fuel mix for electricity generation stems primarily from concerns about its environmental impact. The national climate change strategy, NCCS, points out that the closure of Moneypoint and its replacement with combined cycle gas-fired power generation would contribute to 60% of the energy sector's indicative reductions total and 37% of the total NCCS target. Moneypoint, therefore, has the potential to make a large contribution to Ireland's Kyoto commitments.
However, the NCCS also recognises that losing coal from our electricity generation fuel mix would have serious implications for fuel diversity. Replacement with gas would see the electricity sector reliant on gas for 80% of its production capacity by 2010. This level of reliance on a single fuel would contrast unfavourably with the rest of Europe, which, on average, would be 30% reliant on gas in the same timeframe.
Taking account of our peripherality to future gas supplies, it will be necessary for the Government to consider carefully whether the move from a reasonably diverse fuel mix for electricity generation to one of such a high dependence on gas would be prudent. If it is decided to retain coal in the energy mix, this will require major investment to upgrade Moneypoint. These important decisions must be taken within the next six to nine months. In so far as Ireland's commitments under the Kyoto Protocol are concerned, the introduction of emissions trading under the EU scheme from 2005 is recognised as one of the flexibility mechanisms which will enable countries to attain compliance with Kyoto obligations at the least cost.
The Minister seems to be saying that it would be undesirable for Ireland to become totally reliant on gas. That being the case, the future of Moneypoint will have to be carefully studied before a decision is made. However, is it not the case that, despite the announcement this morning in a hostelry near this House of Eirtricity's major development in regard to the Arklow Bank, the effort being made by this country in regard to renewables is still pretty appalling at close to 3% of total energy supplies? There was a committee discussion yesterday on the issue of getting the cost structure of renewable energy sources, especially wind, down from its current levels by 2016, and that is the approach I favour. Is not critical, therefore, that under the AER IV or future programmes, the Minister has a responsibility to advance the renewables sector, including wood, in order to urgently diversify our energy mix?
When will we see the post-AER IV forum on the promotion of renewable energy as promised by the Minister, Deputy Dermot Ahern, in a speech some months ago? When will we see the contracts, which are being considered at present, granted under the current AER IV programme? Does the Government have plans to invest in an interconnector between Ireland and Britain to connect capacity in regard to power and energy generation?
The Minister is saying that emissions trading under the European system in place until 2005 is a flexible option which would provide a solution at least cost. However, while it will provide a solution at least cost for manufacturing industry and for power generation companies in this country, it will be at a most expensive cost to the people. The Minister speaks as if the emissions trading system is an easy way out with no cost involved to anyone. Under the EU system, while quotas will be given to the companies so they will not have to pay the cost, the Irish people will have to pay a massive cost.
We need to reduce emissions by about 10 million tonnes per year. Moneypoint could have reduced it by 2.5 million to 3 million tonnes but that will not now happen as is clear from the Minister's reply. Does the Minister think that the emissions trading system will be enough or is it the right way for us to deal with the problems regarding the Kyoto Protocol and our own emissions, which have increased more than any other European country?
To reply to Deputy Broughan, I accept that renewable energy is an area which needs to be driven. While I will answer later on the AER IV programme, we would hope to make speedy decisions in that area. I am pointing out some of the difficulties involved if Ireland was to convert totally to gas. There are three possible options for Moneypoint: a coal-burning facility, refitted to comply with EPA licensing; the conversion of the existing facility to gas burning, though it is unlikely that this would be economical; or to replace the facility with combined cycle gas turbine generating capacity, probably on the same site for grid reasons. The ESB is at present considering all aspects of the future of Moneypoint with a view to making a firm proposal to Government in the coming months. A large investment – close to €200 million – would be required to upgrade the station to meet with EPA licensing requirements and to keep the plant in operation in the long-term.
No decision has been made but recommendations will, I hope, shortly be put to the Minister. While there are supply difficulties in regard to converting totally to gas, Members can rest assured that all areas are being considered. The Minister and his Department will make a final decision on the matter.
The Minister said yesterday that he would produce a Green Paper or White Paper on energy. Given our discussion today, is it not urgent that this is done or that the Minister issues a directive to the Commission for Energy Regulation?
I will answer on that later. However, the Minister spoke of a consultation paper not a Green Paper.
