Darragh O'Brien: Why the Government says the Bill is premature

I call on Minister Darragh O'Brien Thanks Ciann Comhairle, I speak on behalf of the Government on the proposed Bill. Thank you Deputy Daly for tabling the Bill. I'm going to speak to the piece of legislation itself and explain the rationale as to why we're opposing it, which we are on the basis that the crew already holds significant existing powers to monitor, report and regulate gas and electricity suppliers. Additionally, and the Deputies will know this, a review of the comprehensive suite of legislation underpinning the work of the crew has already been commenced by Government. This is in line with our Programme for Government commitment to prioritise review and reform of the legislation underpinning the Commission for Regulation of Utilities and to emphasise that low costs for households and businesses are a central tenant in the updated mandate of the crew. A review of the legislation underpinning it has been completed. The next phase of the work involves an assessment of what is the adequate or in need of change, including whether a stronger mandate is required for the crew, and I believe it is. I believe that will come out of this process. In light of this, any changes to crew's mandate right now would be premature, but I do acknowledge the manner in which this is put forward and we're also, as a Government, undertaking additional measures to ensure a well-functioning energy market and to support energy affordability. Additional staffing resources have also been allocated to crew and they've been sanctioned and that is to ensure that they can fully and effectively fulfil their remit. The forthcoming transposition of the Electricity Market Design Directive by my Department will also provide further consumer protection measures and monitoring of energy supplier hedging practices. Intensive work is underway in the preparation of the Energy Affordability Action Plan, which we discussed last week, which will examine cost drivers in the energy sector and identify measures to enhance affordability of energy for households and for businesses. Deputies will be aware that we brought in very targeted measures in what is an international crisis to support households £470,000 to the fuel allowance payment and extending that to the Working Family Payment Scheme as well, direct payments to households and I'll deal as well with the grants as well that we've brought in, insofar as retrofitting, 250,000 homes have been retrofitted, bringing about permanent changes and permanent savings indeed for families and we're targeting a further 73,000 this year with the grant offerings that we've changed and there is a major role to be played by solar, by battery storage within that as well, but we do need to expand our grid, we do need to improve the resilience of our grid to enable us to take more renewables onto our system and that's the whole purpose of the Capital Investment Plan 26-2030, which includes critical pieces of infrastructure, as I'm sure the deputies opposite will know, like the Northside Interconnector, which is a critical piece of infrastructure for the island of Ireland that operates under a single electricity market. That needs to commence construction, both sides of the border and that in itself, one project, will again drive down electricity prices for us. We are unquestionably, like the rest of Europe, also at the vagaries of international markets. We are an islanded nation that imports a substantial amount of fossil, but thankfully now we're seeing well over 40% of our electricity being generated through renewables in the month of March just gone, 49% of electricity generated through renewables, 8 gigawatts of capacity of renewables within our system, actually the number one country in Europe for the integration of renewables into our energy system. But absolutely, the pass-on price reductions that take time to pass on, that there are families out there who are struggling to meet energy bills and that's why any supports we bring forward and have brought forward absolutely need to be targeted. That's why I've also amended the grants to bring forward a retrofitting passport that you can break down the grants and make them more accessible, particularly to middle income families. And we've seen a 29,000 applications in quarter one of this year, 189% increase on the same quarter last year and that in itself is very significant. The warmer home scheme, which is 100% grant-aided for low-income families and those at risk of energy poverty. We've managed to retrofit about 34,000 homes and are targeting 12,000 this year alone. They're very targeted measures, most of which is actually paid through the carbon tax, which the proposing party actually oppose and that's your right to oppose it. You've never said how that gap would be filled. They are real measures that will protect against further price shocks and against further crises. But the real thing within our grasp is that acceleration and delivery of additional renewables into our system. That is onshore wind, more onshore wind, more onshore solar. And we've seen solar in just 11 years go from two megawatts, literally two megawatts in 2015, of solar integrated into our grid to 2,553 megawatts as of last month in our grid. So that acceleration of delivery is actually happening. But there is still the issue of a reliance on gas, particularly gas importation. About 20% of the gas that we use is generated through CARB, the remainder of which is imported. And there are costs associated with that unquestionably. And we do have to, the thing that drives me absolutely is to ensure that we get energy prices down for households and prices down for businesses. That's why business supports grants are particularly important, particularly to enable businesses to retrofit their own businesses, but also to enable them to switch to renewable forms of energy. So on offshore renewables, deputies opposite will know also that the five East Coast schemes that are there still remain in planning. I can tell you from my engagement with the O-Res 1 developers that we expect at least two of those to come through planning the middle of this year, toward the end of this year, where we can commence construction by 2030. The original plan was that they would be electrified and five gigawatts of offshore renewables would be integrated into our system by 2030. And that will not happen. I'm very honest with people. What we need to see is construction of that offshore wind resource and to scale that up. So whilst our target is 80% renewables by 2030, our projections are between 68% and 72% by the end of the decade. But I think we can bridge that gap. Battery storage is also critical, too, and long-duration battery storage in particular. And another Eurostat report that was reported on Euronews there just yesterday is Ireland's actually in the top four countries within the European Union of long-duration battery storage within our system. And that's expanded greatly. Now, why is that important? Because deputies rightly, both in government and across the House, look at curtailment and curtailment of renewable energy resources, sometimes up to 16%. The more battery storage we actually have within our system, that we can deploy that energy at the appropriate time. And we're seeing now about 1.2 gigawatts of battery storage actually connected within our grid. Another thing we are seeing is a rooftop revolution on solar. With households themselves, through accessing solar grants that Deputy Kenny mentioned as well, at an accelerated rate now. Where you're looking at savings of approximately €1,500 per year to energy costs for households with the installation of solar PV on rooftops. And we'd like to see more of that indeed being done for businesses. To get back to your bill here at the moment, I do appreciate that the bill has been tabled. And that Deputy Daly and colleagues have gone to some effort to produce the bill and to table it. The measures within it are measures that are being looked at right now. And I just think that the bill itself at this moment in time would be premature. And the next phase now is to actually look to looking at the actions within that. And making the relevant changes should they be needed to crew. Who already have a substantial mandate overseeing energy, retail energy costs within our system. Furthermore, as you know that the CCPC have also monitored this. And they have a very important role within that. And recently they carried out a report with input, sorry the crew did, with input from the CCPC. And found that competition in the Irish electricity and gas markets is functioning effectively. And is generating meaningful rivalry. And that point I make is that we have to make it easier as well for people to switch providers. And not enough people switch. And there are major savings to be made for households and indeed for businesses by switching electricity providers. And there is an issue particularly with those, not exclusively, but those particularly in the senior cohort of our population. With enabling them to access switching of energy providers as appropriately as they can. So our focus is absolutely in delivering affordability. And there is much more work needed to be done on that. The last budget we reduced VAT on electricity and gas to 9% permanently to 2030. We will also be coming forward in July with a final report on the Energy Affordability Task Force. Which looks at things like network charges. And what we can do in the round on that to drive permanent savings to household and business bills. But fundamentally within all of this it is reducing our dependence on fossil. It is creating more domestic energy generation through renewable sources. And actually the projections for that are very positive. For more information visit www.fema.gov