Bríd Smith calls €50m purchase of 'fantasy' energy credits a failure

Thanks Minister for the presentation and I just want to make a few comments on what we are actually doing here today because most people will look at it and say what are we buying for 50 million euro and I think it has to be said and I think you at least in the past would agree with me that these accountancy tricks is basically what they are completely fail the attempt to deal with our climate challenge and our climate crisis and this is a failure and I think we should acknowledge that it is a failure and what we are actually doing here because we have failed to reach our legally binding targets we are buying fantasy energy credits, absolute fantasy from Denmark and Estonia this energy is not going to heat homes or help produce power that will run factories or anything else the energy is fantasy but the money, the 50 million euro is absolutely real and that real 50 million euro could for example pay the student nurses could be involved in all sorts of community projects and as was mentioned be used to help retrofit homes and solar power schools but I think we should spend a bit of time thinking about why we failed and I want to argue that I don't think it is just an oversight or a technical matter you know government ministers may pat each other on the back about what they have done to reach renewable energy targets but the case remains that we are still overwhelmingly reliant on fossil fuels in every category in electricity, heating, transport and it is worth noting that our targets are percentages of the overall electricity and energy demand so when you talk about the drive to industrialize the ports and develop the ports and create all this new economic energy our demand for electricity will go up and therefore the overall percentage will go up that is allocated to the percentage of fossil fuels so it could actually mean a larger volume of CO2 and greenhouse gas emissions but my main point really is to say this that the failure of the failure of the last government Fianna Gael with Labour and the previous government Fianna Fáil and Labour and all the combinations of the government's the government's is something that I think we need to be a bit cautious about when we are being given commitments that these new targets will be set and that they won't fail because what you hear here is that the reason they failed is planning difficulties upsets in the market and maybe even although it is not being said explicitly but maybe even community opposition to some of the renewable projects but I actually fear that the root cause is not any of those that the reason for future failures and past failures is the reliance on private enterprise to deliver the targets that we need in renewables and Deputy Bruton mentioned the climate action plan I think you did yourself and we worked and looked at this and one of the recommendations we made although I've no doubt I'm absolutely certain hasn't been acted on that we would look at the possibility of a state run lead invested in renewable energy company that could deliver the sort of targets that we need to reach instead of always relying on the investment decisions of private corporations private actors sometimes nudged and guided by state incentives but the failure rest ultimately I think on the policy which says we have to rely on the private sector and here raises an interesting current question for us that if we continue to do that and we continue to rely on a sector that may or may not invest or may or may not expand in this area depending on how profitable is and how are we going to handle that sector in a situation where we didn't do it today but I know note the government's intend to do it in the next month or so to sign off on the CETA agreement and that would really copper fasten the idea that the state cannot and will not see a prospect of taking ownership of the kind of decisions that might guarantee that we could reach our energy targets in the future it would really make it impossible for the state to set up publicly owned renewable energy companies if the private sector are already in there because the legal challenges would be so great and I would appreciate minister if you would comment on that and also my overall contention that unless we have a sort of an ESB style and determined state company like we did in the past when we had little or no resources in this country that could really drive forward the switch to renewables just like the ESB turned on the lights in every corner of the country in the decades gone by I have reassurances from the Danish ambassador and the Estonian ambassador and I have no reason to doubt them this money will be going into specific projects renewable electricity generation projects which will contribute to the decarbonisation we need to do as a matter of emergency and I have faith I suppose in that because I also have faith in the European system that this is something we committed to in the renewables directive back in 2007 I think it was originally framed and there it was designed to provide not a get out or an accounting trick but to provide a mechanism or a stick in a way on states that if you are not meeting your targets you are going to have to meet them another way and you will pay So this is a stick and at the same time I think it is an appropriate stick where it does promote or encourage those who have met targets in a sense it does reward them they get that cash for but it can only be invested in renewable projects So I agree with that European directive that was involved in framing it so I thought maybe I would but I think it was an appropriate mechanism Second question you are absolutely right about electricity and energy demand being the key first priority and it is always the focus on generation and that is why in some ways I think this heat target is particularly important because I think One of the key projects we are going to do is to electrify the generation of heat through the use of heat pumps but we all know that heat pumps don't work if they aren't deployed in a building that is also efficient and it is that jouled tack where we both insulate and therefore promote energy efficiency and then use heat pumps using electricity which again is a highly efficient use of electricity. Is where this where we are going to go and that is ending the use of fossil fuels as you say in oil and gas burners if I had power heating systems ending the burning of coal or other smoky fuels and radically investing in energy efficiency first and heat pumps to warm those much more efficient buildings to give a sense that that is possible and there are loads of examples where I could give examples where I could give examples where we are not delivering it I would just say that one of the issues around electricity demand in the last 10 years there were people who know that there was we recently reached a new peak in electricity consumption I think it was two weeks ago where electricity production consumption peaked I think it was 5,000 or 200 megawatts on a Thursday evening but in truth that is the same level effectively that had been in place over 10-12 years ago. And our economy has grown significantly in the intervening period. It is possible for us to create employment, run our economy without necessarily having a massive expansion in electricity use. Our economy in that intervening 10 year period must have grown 50, 60, 70, 80 per cent. If you do the maths around the 5, 6 per cent on average growth each year. It is possible for us to promote energy efficiency and promote energy efficiency in everything we do. Can I say just in terms of looking at aspects of why is it that we didn't meet targets? Why is it that compared to Denmark or other countries who have clearly as demonstrable the fact that we are paying them or Estonia for their projects? I think they have a tradition at it. They have been going at it for about 40 or 50 years. The Danes and the Estonians and others, but the Danes particularly responded to the first oil crisis in the late 70s by investing in not just wind generation, which they developed a competitive advantage, but also particularly in district heating and they developed real efficiency around district heating. I think that is an area which is underestimated as the significance of the fact that we are going to be able to meet the next targets. But it was that 40 year advantage they had in terms of an advantage in the sense of understanding that this is going to be good for us as an economy. Out of that strategic decision they made 40 years ago, they didn't just get companies like Vestas, which were making wind turbines, they were companies like Velux or what is the company that makes the radiators? They developed a whole range of companies around energy efficiency and heat management and district heat management. We need to develop the same and the same understanding, public understanding, widespread public understanding, that this is the better solution, this is where we are going to go. I think the Irish people are there. I absolutely agree with you. Blaming communities is not where I would go here. I actually think Irish people are waiting for the correct signals, the correct supports, the correct regulatory systems, the correct regulatory systems that will deliver this new heating and energy efficient heating system. I believe the Climate Action Plan can and will deliver that. It is that systemic approach that we need to use. Lastly, if I can, just in regard to private versus public enterprise, I think it will be both. I very much believe the state has a role and community energy and large scale interventions, by the state of the state. The likes of the ESB or Board Namona have real skill in energy efficiency and in energy systems and logistics. I am absolutely committed to supporting Board Namona, as they move from being a brown company to a green company, to define themselves as a climate solutions company, to use their resources and expertise, which they have in abundance in engineering, towards this energy efficient renewable energy future. The same with the ESB, and the same with any other public body that is moving into this space. That does not preclude private companies being in it. Those 50,000 homes will be retrofitted by a whole host of Irish building businesses of all different sizes and scale. I think that is appropriate. I think many Irish companies that have real expertise in this area. We want to encourage that and allow them to flourish so that they can, like those Danish companies in the 70s, grow to become big exporting companies for us. In that the European Union policy and in regard to CETA or any other public policy, my understanding is clear is that public policy aims around the environment are protected, that DG competition do take a very close eye on if there is inappropriate market manipulation or state aids, which does undermine the competitive market. But it is not in my mind whether they rule private enterprise or public enterprise differently in that regard. I think even within that, it was interesting, I mentioned earlier on our discussion at the Energy Council meeting yesterday, a lot of the discussion was around the need for DG competition to be aware, aware that we are aware that we do need flexibility in how we apply competition rules so we get innovation, so we get development happening. That is a level playing field across Europe. That is the key issue in the trade discussions with the UK at the moment, is how do you maintain that level playing field, but at the same time protect our environmental standards and our social standards. And that is where we need to do. This is the future economy and we need to make sure it is not a race to the bottom. That it does allow community, allow state companies, allow private enterprise work in a fair way. Thank you, Minister Deputy O'Rourke. Go ahead, Deputy Smith. Minister again, if you would comment on how CETA might impact on our ability to run state renewable energy companies, if we first tenders out to the private market. I do not see that the State will have any restrictions from CETA, which will restrict us in the policy decisions we need to make. The possibility of litigation? I do not see where that would come from and how it would be successful. I suppose it has been in operations for three years, I do not know if Minister Bruton is left now, but he might have been able to answer whether it impinged or came across his desk as a restriction in terms of any investment decisions or any policy decisions. I have not seen it mentioned once in any consideration of any energy policy decisions so far. If I do, I would happily share that with the Deputy and raise similar concerns that she would have. We do need to evolve our international trade rules. We do need to make sure that they are in step with environmental objectives and social objectives. That is an evolving process. No one is saying that it is a perfect system we have at the present time. We do seek to change it as we do. I think we have 40 trade deals now in place with other countries. There is another 10 I can see coming or are in the horizon. I think the critical thing is to make sure that we continue to evolve the rules so that it is in step with our climate ambition. Thank you. Thank you.