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Speech by Minister Naughten T.D., at the Energy Ireland Conference Croke Park

I am delighted to be here today at this, I think is the third time to speak at the Energy Ireland Conference. I was very green probably the first time I stood here just two years ago. I think things have changed and changed dramatically over that period of time, none more so than within the Department itself. I suppose we seen the way that has transitioned from not just energy but broadening it out to the climate area. I think as a Department what we are really focused on is the issue of efficiency and we see ourselves as the Department of efficiency. Using the natural resources that we have here in Ireland in a sustainable manner to drive change, to transform rural Ireland to support employment and to protect our people and our planet for future generations.

We see at the moment changing economic circumstances within the euro zone now beginning to slow down and that's as a direct result of rising oil prices and what we must do in an Irish context and in a European context is decouple economic growth from oil availability and oil price.

Yesterday week I was at the European Council of Energy Ministers and I urged my Ministerial colleagues to become as self-sufficient as possible in terms of energy within the European Union, focusing both on renewable energy and driving energy efficiency. This renewed focus is not just necessary to meet our climate targets or our Paris goals but from an economic perspective to ensure that EU economies will grow in a long term sustainable manner. Ireland and Europe has to break away from the constraining impact of fossil fuel that it is at present. I also emphasized the need for the EU to become more self-sufficient in the production of biofuels. We cannot replace imported oil with unsustainable imported palm oil. This undermines our long term economic sustainability as well as transferring emissions just to another part of the globe rather than dealing with them in a comprehensive manner.

We must bring a renewed focus to the development of second generation bio fuels which are based on waste streams and this is something that I as Natural Resources Minister with responsibility for waste am very conscious of because we have a double impact in terms of our environment by using these particular waste streams. Two days after that meeting last week in Luxembourg the Trilogue discussions progressed, the Renewable Energy Directive has been agreed. Now we have set and ambitious and very challenging 32% renewable energy target for the European Union as a whole by 2030. The Energy Efficiency Directive hasn't yet been agreed but it will be agreed I believe very shortly and I think that sets the bench mark for us now in a European context and they are challenging targets that we are going to have to meet and there is going to be a significant that's going to have to be made by each member state in reaching those targets.

Across three energy sectors that are key to us and our economy, heating, transport and electricity. The electricity sector has made the most progress in terms of renewable energy to date. Preliminary estimates from the Sustainable Energy Authority of Ireland have shown that we have achieved over 30% of our electricity consumption from renewable sources in 2017. That's a doubling of the equivalent figure from 2010 and that no mean achievement for an isolated electricity grid like we have here in Ireland. I think it's something that we should be very proud of; I think that will progress significantly on foot of the investment that we are putting into the DS3 Programme, something that is globally significant in terms of what we are doing here in Ireland. I think Eirgrid need to be congratulated on the effort that they have been putting into this and the fact that in April of this year, they went live in relation to a 65% loading of variable renewable energy on our grid something that has not been achieved anywhere else on this planet to date. That is the bench mark now right across the globe in relation to putting variable renewables onto the grid. The objective is by 2020 to go up to 75% and that is a significant commitment, a significant engineering challenge that we are dealing with head on and being the global leaders in that area here in Ireland.

Onshore wind of course has been the single biggest driver of renewable energy to date; the Government however is focused on diversifying the energy mix out to 2030.

Technologies such as solar and offshore wind are becoming far more cost effective and cost competitive that they have been today and there is significant interest now from developers in relation to developing offshore wind energy projects in Irish waters. It is worth noting also that the new Wind Energy Guidelines will be published soon will effectively place a cap on the volume of renewable electricity that can be delivered with onshore wind projects due to the spatial restrictions  and the other factors that are included in it. So while there will be growth in the onshore sector there is huge opportunities in the offshore sector and I believe that offshore renewables are critical if we are going to achieve our 2030 objectives. By then we expect to have 55% renewable electricity on the grid and if you look at the technical challenges we have between now and 2020 to have 40% renewables on our electricity grid you can see the challenge we are going have to increase that to 55%  by 2030 but we are determined to do that. We see the development progressively taken place, initially in the Irish Sea where there is already planning authorisations in place, the Celtic Sea and the Atlantic Ocean but it's not just wind it is also wave as well and we in Ireland have been very much to the fore in relation to offshore renewable research but we need to move from the learning by research to the learning by doing. We have potentially 50 gigawatts of energy and electricity in the offshore and we are now determined as a government to focus on that in terms of legislation and progressing the Maritime Area and Foreshore Amendment Bill and I am actively engaged with the Attorney General on that at the moment and also about how we actually plan and progress the development in the offshore area and of course dealing with the issue of grid. But it is not just about landing that electricity on to this island but it is about the export of that electricity as well.

As you know EirGrid are currently proposing a Electricity Interconnector between Ireland and France and will submit and investment request for the Celtic Interconnector Project to the Energy Regulator later this year. This would be a direct link from Ireland to the European Union internal electricity market. It will improve energy security; it will allow for the incorporation of our renewables on to the EU grid and allow us to actively participate in the EU single electricity market.

But with the huge potential that we have in the offshore of 50 gigawatts – that's not going to be enough and we are now exploring the opportunities of going much further than that; of actually by passing the island of Ireland and connecting from the Atlantic sea board right directly into the European Grid. I was speaking last week in Cherbourg where we opened the first ever purpose build offshore renewable tidal manufacturing facility in Cherbourg. Based on research that was initiated here in Ireland and supported by the Irish Government, supported by Irish researchers and I made the point there that with the potential that we have there that we can and it is our intention to connect directly into the European grid to supply renewable electricity not just to Ireland but to Europe as a whole.

In the international context in relation to that we cannot forget about the issue of SEM the Single Electricity Market here is going to be key to our development plans in the short term. I'm looking forward to later this year that becoming fully EU compliant with market structures here and helping to improve the cost effectiveness of our electricity supply, the security of electricity supply and the competitive objectives that have been set in relation to EU rules. But all of that cannot be unlocked unless we have a funding stream to support that. The Renewable Electricity Support Scheme is key to driving that forward. I expect to get a Government decision in the next couple of weeks that will allow me to seek state aid approval for a new Renewable Electricity Support Scheme and we hope to get that approval in the second half of this year.  I want to see the first auction take place as part of the Renewable Electricity Support Scheme as early as possible in 2019 to have a direct impact on our 2020 targets.

And combined with that is going to be issue of community ownership and community benefit and they will be key design principles of the design scheme. If a renewable energy project wants to get supported under the new scheme, paid for by all consumers, it will have to meet certain community based criteria such as greater and more transparent community engagement and collaboration. And I am not just talking about solar panels for community centres or football jerseys for the local GAA teams, I am talking about citizens having the opportunity to invest in and own and financially benefit from renewable energy projects within their own community and bringing that down to community level and individual level. As you know from the European context now and the EU Renewable Energy Directive, we are looking at supporting self-consumers and renewable energy communities and smaller scale projects are going to be supported. That is going to be facilitated by the roll out of the smart metering programme, the smart grid programme, projects like the pilot that is being run by the ESB in Dingle and many other similar pilot programmes across the country are going to be key to look at the needs and how we manage the grid both locally, regionally and nationally to deal with that.

The Sustainable Energy Authority of Ireland are currently developing a pilot scheme for Micro-Generation, which will target Solar PV and self-consumption among domestic consumers. The pilot scheme will commence later this year and further details will be available shortly. I had hoped that I would be in a position to announce it here today – that wasn't possible because what we are trying to do is design a scheme that can be expanded and grow as we expand out from just domestic consumers to other sectors within the whole micro generation sphere and we are hoping to have a scheme in place as quickly as possible for that, that can be developed and grow as the needs of the economy develop and grow and not just purely looking at the domestic sector.

It's not just about local communities; it's not just about domestic self-consumption it's also about the large big corporate users of electricity. Corporate power purchase agreements provide a potential route for large energy users to reduce the cost burden on ordinary consumers of funding renewable energy projects. Globally companies in 75 actively source renewable energy through corporate PPAs and that was in 2017. My Department is currently working with industry to organise a workshop on corporate PPAs in the coming weeks in order to examine the potential for corporate solutions here in Ireland and I think that could help to support the renewable energy sector as well.

As you know we have huge challenges in terms of heating, because of our dispersed rural population and the lack of district heating network and that makes it particularly difficult for us to decarbonise both our heating and cooling sectors, which accounts for about 40% of our energy consumption. Under the National Development Plan for 2018-2027 we are going to replace 170,000 oil fired boilers with electric heat pumps and the provision of roof top solar. We have also secured funding for the Renewable Heat Support Scheme for the non-residential sector and the SEAI are currently developing the terms and conditions for that scheme. My Department is currently engaged with the European Commission to secure the required EU State Aid approvals for that. That process typically takes nine months but we are looking to see how we can move this scheme on as early as possible, even in the interim pending that particular approval and we hope to be in a position to make an announcement on that during the summer.

The renewable energy sector is one aspect of the targets that we have to meet in relation to our 2030 European Targets but the other side of it is energy efficiency and energy efficiency is economic investment, its social action and it is climate action. Using less energy, use it more efficiently is the most cost effective and accessible way for us all to address climate change.

If the money that Ireland spends on energy imports can be redirected to energy efficiency and smarter energy services it will displace imported fossil fuels with local jobs and opportunities for Irish companies. In 2016 Ireland spend €3.4bn  on imported energy that's €715 for every man woman and child in this country and I think that it's not just the private sector but the public sector has to take a leadership role in relation to this. Not just to meet our overall climate action objectives, not just because we need to do it for public sector reform, but because we need to set an example; set an example for the economy as a whole, support businesses that are within this sector at the moment so that they can scale up and provide the type of solutions that are needed in the private sector. And also redeploy those savings that are being made within the public sector into other priorities for Government.

Since 2009, the State as whole has saved €737 million in energy efficiency and that's money that can be reinvested in other government services, in services to the public right across the country and that opportunity is there for business as well. The SEAI through its EXCEED Programme is driving energy efficiency with the private sector. Last year we tripled the funding support which exceeded over €10million in investment. Just to give you practical examples of how the EXCEED programme is working in real terms on the ground: Dublin Airport reduced their energy consumption in their car parks through the EXEED programme by 78% through this scheme. There are huge opportunities there for many, many businesses, not just the big ones but the smaller ones as well to untap that opportunity, to improve their cash flow and benefit our energy efficiency targets and our overall climate challenges.

As you know as a country we are playing catch up in terms of our obligations in relation to climate change but I see this as much as an opportunity as an obligation and in any event it's a moral necessity and a vital national interest and that is why earlier this year through the National Development Plan, Project Ireland 2040 we have secured a significant investment in the whole area of climate. In fact 1 in 5 euro that the Government and the Semi State companies spend over the next decade is going to be in climate and sustainable energy related projects. That puts Ireland to the fore not just in EU terms but in global terms in actual cash and investment in capital terms that is being put in to deliver on the climate agenda and to deliver on the sustainable energy solutions.

But this is only one leg of a three legged stool. The other one is in relation to regulatory change and we are exploring opportunities in relation to that and hope to have announcements later in the year regarding that. The third aspect to that is taxation and carbon related taxes are going to be on the agenda and they two critical strands to support the investment in the National Development Plan. Because Government alone through its capital investment cannot in isolation reach the very ambitious targets that have been set for 2030, it can only happen through the support of communities and individuals right across this country and we are going to use all of the tools, the full suite of tools that are available to us to do that.

One of the most innovative measures that we announced as part of Project Ireland 2040 is the Climate Action Fund, where we have ring fenced half a billion euro and that will open up for applications in the coming weeks. This is a very innovative fund in that is a blank canvas; we are not setting rules and regulations in relation to it. People don't have to come forward with projects that meet certain criteria; the sole objective here is to improve energy efficiency and to reduce our overall emissions as an economy. It allows people in this room that have good ideas to come forward with those projects, it allows people internationally that want to try out an initiative to come to Ireland and use Ireland as the test bed for that. It will support projects ranging from wave energy off our West Coast, to electrifying our bus fleet, to heating our homes and businesses using farm and food waste. The opportunities are endless there and I would encourage people to put their thinking cap on, to think about innovative solutions that may be up to now there hasn't been the opportunity, there hasn't been the public funds to unlock that. I believe that this fund will stimulate ideas and deliver concrete projects that will contribute to achieving our 2030 climate goals.

This time last year I spoke of a number of international developments that were going to have a long term impact on Ireland and our energy system. Most notable was the publication of the Clean Energy Package and I have updated you on that and of course the other was the vote by the citizens of the UK to leave the European Union. As I said we have outlined the progress that we have made in relation to the EU Energy Policy but sadly I can't report that we have had the same level of progress on Brexit. But that hasn't been for the lack of effort by my team in the Energy Division or by my work as Minister. In dealing with the UKs planned exit from the EU, I have met with my UK counterparts and raised Brexit issues at every suitable opportunity, at the International Energy Agency meetings and EU Energy Council and Environment meetings. I have taken every opportunity to speak with other European Energy Ministers about the implications of Brexit on these islands off the coast of Europe. I will continue to do that to ensure that the critically important aspect of trading between the UK and EU in terms of energy is kept to the fore to protect security in terms of Ireland, the UK and the European Union.

I very much welcome the support that I have received from the European Union as has the Irish Government to date in recognising Ireland's unique position on energy trade with the UK. The strong and cooperative energy relationship that exists between Ireland and the UK on security of supply issues is one which we together with our EU partners are continuing to work hard on to maintain.

We must connect the essential requirements of energy infrastructure the development for the benefit of the country as whole and the concerns of communities where this infrastructure is built.

Community led electricity and energy projects offer a real opportunity for local economic growth. Our role is to put the levers for change into people's hands. This is our work at home, while abroad we stand firm with our commitment to the Paris Agreement.

Acting in solidarity means redefining our self-interest and our national interest as an essential interest for the survival of the world that we all live in. Government initiatives such as Project Ireland 2040, including the Climate Action Fund will play a crucial role in driving change that is needed to enable Ireland to achieve it energy and climate objectives over the next decade.


Go raibh míle maith agat.


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