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Minister Naughten's address to IBEC Energy and Climate Policy Committee

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24 May 2018 


Check against delivery 

Introduction

 

I very much welcome the opportunity to meet with the Energy and Climate policy committee this morning. While the State can set out long term policies and facilitate market developments, the private sector also has a crucial role in making timely investment decisions, in playing its role in the long term decarbonisation of  society and by being a vocal supporter for necessary infrastructure development to underpin our future economic development.

 

National Planning Framework 2040

 

The recently published National Planning Framework shows that by 2040 we expect that;

  • an additional one million people will live in Ireland
  • an additional two-thirds of a million people will be in employment in our economy and
  • there will be a need for 550,000 more homes.

     

    These are huge increases: more people will be travelling to work, school and universities, more buildings will be needed to accommodate them, clean water will be needed for homes, farms and industry, more and better care facilities will be required for the elderly. Without proper planning, growth will be haphazard and uneven. Without the required infrastructure, our potential for economic growth will stall. If cities, towns, villages and regions are to grow, they need the necessary infrastructure to support that growth. It is important that local people and businesses see the linkages between infrastructure availability and opportunities for growth. As part of a better communications approach, business stakeholders need to come out in support of local infrastructure developments and show how growth will be curtailed in its absence

     

    The National Planning Framework is published together with a 10-year national investment plan as one vision – Project Ireland 2040, meaning that implementation of the Framework will be fully supported by the Government's investment strategy for public capital investment.

     

    National Development Plan 2018-2027

     

    Publishing both plans together shows how the Government is determined to deliver on Ireland's infrastructure and investment needs over the next ten years, through a total investment estimated at €116 billion over the period. This represents a very substantial commitment of resources and is expected to move Ireland close to the top of the international league table for levels of public investment.

     

    The National Development Plan sets out clear measures towards decarbonisation, identifying almost €22 billion in funding for climate and energy projects over the period of the plan, including the deeper retrofit of 45,000 homes every year from 2021 to make them more energy efficient, up to 4,500MW of renewable electricity generation, development of a renewable gas programme, roll-out of the support scheme for renewable heat, and commitments on electric vehicles and low-emission public transport.

     

    In addition to this the planned closure of Moneypoint by 2025 and the ending of peat for electricity generation in advance of 2030 will have a significant, positive impact on our level of emissions.

     
     

    European policy drivers


    The next wave of energy and climate policy drivers will derive from the EU's Clean Energy Package. In this package, the European Commission have highlighted the importance of ensuring that the transition to a clean energy system will benefit all Europeans, including all consumers who should feel involved and reap the tangible benefits of access to more secure, clean and competitive energy. At the December 2017 Energy Council, the General Agreement reached by the Member States set out an EU level target of at least 27% for Renewable Energy and 30% for Energy Efficiency. 

     

    New Renewable Support Schemes

     

    Increasing renewable technology diversity is one of several policy objectives of my Department. To date, onshore wind has been the largest driver of growth in renewable energy electricity, primarily down to its cost effectiveness when compared to other renewable technologies.  My Department is currently developing a proposed new Renewable Electricity Support Scheme (RESS) which will be designed to assist Ireland in meeting its renewable energy contributions out to 2030.

     

    The design of the new scheme included an extensive independent economic appraisal which compared the cost of supporting a range of commercial renewable technologies, at various scales to ensure that the new scheme delivers value for money for energy users by minimising any PSO related costs, whilst also delivering on the energy pillars of sustainability and security of supply. The new scheme is expected to open in 2019.

     
     

    Support Scheme for Renewable Heat

     

    The Scheme supports the replacement of fossil fuel heating systems with renewable energy for large heat demand non-domestic users.  This covers commercial, industrial, agricultural, district heating, public sector and other non-domestic businesses and sectors (in the non-emissions trading sector). 

     

     Under the 2009 Renewable Energy Directive, Ireland has a target of 12% of energy consumed in the heat sector to come from renewable energy sources by 2020.  Currently 6.8% of energy consumed in the heat sector in renewable.

     

    Budget 2018 allocated €7 million to fund the initial phase of the Support Scheme for Renewable Heat next year. The Scheme is designed to ensure that air quality impacts will be addressed to support sustainable biomass use in installations, using best available technology and emission abatement.

     

    ISEM project

     

    On 12 April, 2018, a decision was made by the SEM Committee, the cross-border Regulatory authority leading the I-SEM implementation, to de-risk delivery of the Energy Market component of the Integrated Single Electricity Market (I-SEM) by rescheduling the Go-Live date to 1 October, 2018 from the previous May deadline.

     

    This decision by the SEM Committee reflects testing issues surrounding new software required for the I-SEM balancing market and the need to ensure market certainty. This relates to a comparatively small, but nevertheless integral, component of new wholesale market trading.



    EU-UK


    Brexit is potentially one of the biggest economic and social challenges our country has ever faced. We have closer ties now with the UK than at any time since the independence of the State and our trade and economic ties are deep both with Northern Ireland and on an East/West basis. This has been shaped and underpinned very heavily through our common membership of the EU, including the Single Market and the Customs Union.

     

    The energy sector in particular has very many linkages on a North/South and East/West basis.

    While Brexit poses a risk to the SEM and Irish/Northern Irish cooperation more generally, it is reassuring that the EU Taskforce and the UK Government have consistently and explicitly supported the Irish and Northern view that SEM should endure post-Brexit. The special circumstances of SEM are provided for in the overall treatment of Ireland and Northern Ireland​ in the Protocol to the draft Withdrawal Agreement. While negotiations are ongoing I am confident there will be a successful resolution to this issue.

     

    The intensive round of EU-UK negotiations on the Irish specific issues during the past few months has not so far produced any significant results, with agreement on most of the key elements of the Protocol on Ireland and Northern Ireland still outstanding.  The EU's Chief Negotiator, Michel Barnier, during his recent visit to Ireland and  Northern Ireland, was clear that substantive progress on the Protocol is needed by the June European Council and that there can be no Withdrawal Agreement without a backstop to avoid a hard border.

     

    Conclusion


    The energy markets are changing and greater accessibility to renewable and lower carbon energy sources are required. There is no magic bullet solution and no one policy or single scheme is a panacea or a ready-made answer to the challenges we face. It will take concerted action across all the energy sectors to meet the decarbonisation challenge we all face.

     



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