Good morning ladies and gentlemen. I would like to thank Energy Ireland for inviting me to open the Irish Renewable Energy Summit. The theme of the conference, focused on progress to 2030 and beyond, illustrates the horizons against which energy policy must be measured. Events such as this support the discussions and deliberations that inform that policy and I would like to commend the organisers for putting together what looks like a very interesting and stimulating agenda with many distinguished speakers.
Ireland is still far too reliant on imported fossil fuels for our energy needs. The Sustainable Energy Authority has reported that, in 2013, imports accounted for around 89% of our energy use. This cost us approximately €6.7 billion.
The recent fall in oil prices has given some short-term respite from the cost of imports. But there is no certainty that prices will remain low or stable and it remains imperative, from both an economic and an environmental perspective, that we reduce our reliance on these imports.
The 800 scientists who produced the last year’s UN Intergovernmental Panel on Climate Change (IPCC) report made it absolutely clear that the world must replace gas and coal with renewable electricity generation within 35 years. Ireland and every other country – large and small – must play its part in achieving that.
Renewable energy is playing a key role in shaping Ireland’s long term energy future and our progression towards a decarbonised economy. It is critical to delivering secure, environmentally clean and affordable energy supplies sourced indigenously. Allied to delivering improvements in national energy efficiency, renewable energy will help wean us off our dependency on carbon intensive fossil fuels, while maintaining and supporting competitiveness and enterprise development opportunities.
Against this backdrop I want to talk today about four key aspects concerning the energy industry, namely our 2020 ambitions; the development of the 2030 Framework for Climate and Energy Policy; the process through which I intend to publish the Energy Policy paper later this year and finally, I will highlight some relevant initiatives being brought forward by my Department.
The 2009 EU Renewable Energy Directive set Ireland a legally binding target to meet 16% of our energy requirements from renewable sources by 2020. Ireland is committed to meeting 40% of electricity demand from renewable sources, with 10% for transport and 12% for heat.
At the end of 2013, renewable heat and transport stood at 5.7% and 4.9% respectively, renewable electricity at 20.9%, with progress towards the overall 16% target standing at 7.8%. While we have made good progress to date, particular challenges are apparent in the achievement of our renewable heat and transport targets in particular.
2030 Framework for Climate and Energy Policy
In addition to our endeavours in advance of 2020, negotiations are underway on the EU 2030 Climate and Energy Framework. At the European Council meeting in October last year, political agreement was reached on headline targets for the Climate and Energy Framework, namely a reduction in greenhouse gas emissions of 40%; an increase in EU energy from renewable sources to 27%; and an indicative target of 27% for energy efficiency. This translates into emissions reductions of 43% and 30% respectively for the Emissions Trading Scheme (ETS) and non-ETS sectors on 2005 levels.
These conclusions recognise the very significant contribution that renewables will make in the period to 2030, which is the next critical milestone on the EU’s transition to a low-carbon European economy by 2050.
A central feature of Ireland’s position thus far has been the critical importance of translating high level EU ambition into cost efficient, fair and achievable Member State contributions that take full account of the particular circumstance of each Member State.
Energy Policy Paper
A central objective of the Government's energy policy is to ensure secure and sustainable supplies of competitively priced energy to all consumers. Energy systems are integral to all parts of modern life, as they help us live our lives and drive our economy forward. It is therefore necessary to consider what we will need as a society in the future and what a sustainable energy system will look like. International commitments, especially but not only in the EU, around climate change, renewable energy targets and energy markets, to name a few, will naturally be important in shaping this vision and plan we need to put in place.
In this context, the upcoming Energy Policy Paper is all about providing a vision for sustainable energy regime in Ireland into the future and a pathway to get us there.
The Green Paper, which was published by my predecessor Pat Rabbitte last year, identified six priority policy areas that flow from the three energy policy pillars of sustainability, security and competitiveness. A fourth aspect was added given the increasing recognition that the energy sector is an important contributor to the economy both financially and in terms of the numbers employed in the sector.
An extensive consultation process has been undertaken on the paper offering the opportunity to contribute by written submission or through attendance during the stakeholder engagement phase which we launched in September last year involving a number of seminars across the country on the key priority areas.
I know that many of you in this room made submissions, or participated in the seminars, and I want to acknowledge and thank you for your important contributions to the process.
Having listened carefully to all views, we are working in the Department to refine an approach to the separate – but very much related – components of an energy policy that will serve Ireland for a generation or more.
I intend to present the core principles of a definitive energy policy document at a public event in June this year. The final Energy Policy Paper should then be ready for publication in Q3 this year.
Initiatives underway in DCENR
We should take a moment to recognise some of the achievements to date and the economic spin-off of these endeavours. There is already over 2,500MW of renewable electricity connected to the grid and renewable capacity has delivered tangible benefits in terms of decarbonising the power system. For instance, based on analysis of 2012, the SEAI has found that the fossil fuel saving resulting from renewable electricity amounted to almost 800 kilo tonnes of oil equivalent, valued at €245 million with a consequent carbon dioxide saving of almost 2 million tonnes valued at €15 million.
It is estimated that a total of between 3,500 and 4,000 MW of onshore renewable generation capacity will be required to allow Ireland to meet its 40% renewable electricity target.
Although wind energy has to date been by far the most significant source of renewable electricity and, indeed is expected to continue to be, the Government recognises that this must be complemented by other policies to meet our renewable energy ambitions.
For example, Ireland has a landmass of almost 90,000 km and a sea area almost 10 times that size. With one of the best offshore renewable energy resources in the world, there is very significant potential in utilising these resources. The development of this vast resource can enhance security of supply, provide a potential future export market, reduce harmful emissions and contribute to economic growth. The Offshore Renewable Energy Development Plan (OREDP) provides a framework for the sustainable development of offshore renewable energy in Ireland.
In terms of the policy actions contained in the OREDP I intend, subject to further Government approval and European State Aid approval, to introduce an initial market support scheme, limited to 30 MW, of €260 per megawatt hour for wave and tidal generation from 2016. This is in addition to the €26.3 million in funding my Department has allocated to ocean energy for the period 2013 to 2016.
Draft Bioenergy Plan
In addition to our wind and marine resources, bioenergy will play a critical role in diversifying our renewable generation portfolio. A successful bioenergy sector presents enterprise development opportunities, supports jobs and contributes to rural development.
Recognising the potential to significantly develop the sector, and to address the challenges involved in doing this, I published a Draft Bioenergy Plan last October.
That Plan sets out the broad context for the development of the sector, and outlines the current status with regard to the range of policy areas that must be coordinated to create the conditions to support its development.
The draft Plan also proposes a number of policy initiatives and enabling actions, which fall into five broad categories:
o demand-side measures that contribute directly to delivering renewable energy;
o enabling policies that address the supply-chain challenge faced by domestic producers of biomass;
o measures to support research, demonstration and development;
o further market support and sustainability measures; and finally
o the issue of governance of the Plan.
Continued support for the significant bioenergy policies already in place – which include REFIT and the Biofuels Obligation Scheme in the electricity and transport sectors respectively – is central to the draft Plan.
Analysis underpinning the Plan demonstrates that an additional bioenergy-focussed measure in the heat sector would represent the most cost effective means of meeting a number of our policy goals. You will all know, I think,that it is my intention to introduce a Renewable Heat Incentive for larger heat users to change to heating solutions that produce heat from renewable sources.
The design of the renewable heat incentive scheme will be completed during 2015. Once designed, it will require state aid approval from the European Commission and, indeed it will require Government approval. My Department will be issuing the initial public consultation document in relation to the RHI in the coming weeks.
Bioenergy Steering Group
The draft Bioenergy Plan was developed with significant stakeholder contribution and its completion will require further detailed engagement with stakeholders.
A high-level Bioenergy Steering Group comprising representatives from a number of Government departments and agencies has now been established to oversee the finalisation and implementation of the Plan.
Four working groups focussing on the key aspects of the plan, namely demand, supply, transport and R&D have been established and will report to the Steering group.
Further details and the contact details for each of the groups are available on my Department’s website and I would encourage anyone who’s interested in participating to make contact.
The draft plan will also undergo strategic environmental and appropriate assessments, that will inform the content of the final Plan. These assessment processes and there are many which are required, which will be overseen by the Steering Group, will also be subject to public consultation.
New Renewable Electricity Support Scheme
The REFIT schemes have been the primary means through which electricity from renewable sources are supported in Ireland. These schemes support electricity generated from a range of renewable sources including hydro, biomass combustion, biomass combined heat and power, landfill gas and onshore wind and are paid for by electricity customers through the Public Service Obligation.
A recent publication by the Council of European Regulators has found the average support cost per megawatt hour of supported electricity in Ireland is low compared to other Member States.
However, the policy context and requirements of the target market continue to emerge. I am conscious of the fact that as early as possible in that process, regulatory certainty is needed to provide the platform for promoters to continue to access funding and progress their projects.
In parallel with the market developments, my Department has begun work on a new support scheme for renewable electricity to be available in 2016. This will incorporate the support scheme for renewable electricity from marine technologies that I referenced earlier. A key component in the development of the scheme will be stakeholder engagement. The scheme will be subject to the new rules on public support for projects in the field of energy, adopted by the Commission in April last year.. The initial phase of public consultation on the project will be published by my Department in the next few weeks.
Renewable Electricity Policy and Development Framework
Meeting our objectives under the three pillars of energy policy will require further significant development of our indigenous, renewable energy resources.
To assist in the sustainable development of these energy resources, I will shortly be producing a Renewable Electricity Policy and Development Framework. The goal of the framework is to optimise the opportunities in Ireland for renewable electricity generation development on land at significant scale.
The development of the framework will be informed by carrying out a Strategic Environmental Assessment, in connection with producing an Environmental Report; an Appropriate Assessment under the Habitats Directive, in connection with producing a Natura Impact Statement; and widespread consultations with the public, stakeholders and statutorily designated organisations.
The draft Renewable Electricity Policy and Development Framework, the Environmental Report and the Natura Impact Statement will be drawn up in 2015.
The NESC report on Building Community Engagement and Social Support calls for an energy transition process that is intentional, participative and problem-solving. The Green Paper on Energy Policy in Ireland recognised the importance of building societal acceptance in deploying renewable energy – empowering energy citizens and I have stated on a number of occasions that communities must be at the heart of the transition to a sustainable energy system.
It is therefore intended that the Renewable Electricity Policy and Development Framework will address community engagement.
In summary, while we have made good progress to date, our 2020 targets continue to be challenging. As we progress towards a decarbonised economy, further significant investment in renewable energy is required to 2020, 2030 and beyond.
I am mindful of the role that a stable and transparent policy framework plays in creating the platform for project promoters to access cost effective funding in order to develop their technologies and deliver their projects.
I will work with my officials to bring forward the Energy Policy Paper later this year as I mentioned, to provide direction for the future of Irish energy policy. In addition to that a number of key policy initiatives are underway in my Department to support the sector for both established and emerging technologies. I look forward to your engagement in the development of these policies and wish you well with the remainder of the summit.