Select Committee on Transport and Communications debate -
Wednesday, 16 Oct 2024

The purpose of this meeting is to consider the Supplementary Estimates for Public Services 2024 in respect of Vote 29 - Programme D - Environment, Climate and Communications. I remind members that the committee has no role in approving the Estimates. What we are doing constitutes an ongoing opportunity for the committee to examine departmental expenditure in order to make the process more transparent and to engage in a meaningful way on relevant performance issues.

I thank the Department for the briefing notes circulated to us yesterday. I welcome the Minister of State, Deputy Ossian Smyth, and his officials.

Before we start, all witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if witnesses' statements are potentially defamatory with regard to an identifiable person or entity, they will be directed to discontinue their remarks, and it is imperative that they comply with any such direction.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. For anyone watching this meeting, Oireachtas Members and witnesses now have the option of being physically present in the committee room or to join the meeting remotely via Microsoft Teams. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts will be asked to cease. In this regard, I ask any member partaking via Microsoft Teams that prior to making a contribution to the meeting, they confirm they are on the grounds of the Leinster House complex.

I invite the Minister of State to make his opening statement.

I thank the Chair and the committee for this opportunity to present details of this Supplementary Estimate for my Department. This Supplementary Estimate is required to provide additional funding of €30 million for the national broadband plan because it will exceed its planned delivery for this year. Other elements of the Supplementary Estimate include: funding of €520 million required for the fourth electricity costs emergency benefit scheme; €3.32 million which is part of an approved allocation from the EU's REPowerEU for the deep retrofit of a number of HSE sites; and €440,000 to facilitate the recoupment of an overpayment of prefinancing made by the EU Commission from the EU's just transition fund to Ireland. The Select Committee on Environment and Climate Action will consider these elements at its session tomorrow.

The Government is committed to ensuring that high-speed broadband is delivered to every home, farm, business and school in Ireland. The national broadband plan contract provides for a future-proofed high-speed broadband network to be deployed by National Broadband Ireland to people living and working in the intervention area. Over the life of the programme, it is expected that over 600,000 premises, including new builds, will benefit from connection to the high-speed network. When complete, the national broadband plan, which is the largest infrastructural project in rural Ireland since rural electrification, will provide for a future-proofed broadband network spanning 96% of Ireland’s landmass and will bring high-speed broadband to 23% of Ireland’s population.

Notwithstanding the challenges in the implementation of the national broadband plan, mainly due to the impacts of Covid-19 pandemic restrictions, the roll-out of the new high-speed fibre broadband network has ramped up significantly. Significant additional progress has been made to date, with National Broadband Ireland reporting design completed on over 538,000 premises. Over 300,000 premises are now passed by the network and are available for connection. More than 99,000 premises have now been connected. This equates to approximately 4,200 homes now being connected every month. In addition, high-speed broadband has been provided to all primary schools in the intervention area.

Connecting the islands around Ireland is also an important aspect of the national broadband plan, ensuring that those living on offshore islands have the same access to high-speed broadband as those living on the mainland. So far, National Broadband Ireland has completed fibre deployment on ten islands. In 2024, we saw the delivery of fibre broadband to the Black Valley, which was the last place in Ireland to connect to the electricity grid. Works to connect the Black Valley are nearing completion. Most homes and farms in the area are now able to connect to high-speed fibre broadband. The remaining build works for a small number of premises in the most remote parts of the valley are set to be completed in the coming months.

The delivery of fibre broadband to the Black Valley is a significant milestone for the national broadband plan. Residents who have already connected are enjoying the benefits of reliable, high-speed broadband. This was one of the most challenging parts of the national broadband plan roll-out - delivery with minimum impact to the natural beauty of the region and without disruption to tourism during the vibrant season within the valley. The delivery of high-speed broadband for the citizens of Ireland is necessary for the continued economic and social development of this country, and the additional funding of €30 million furthers this delivery.

I am happy to take questions from the committee on any aspect of this additional capital funding requirement as it relates to the national broadband plan.

They are people who have subscribed to the service. About 10,000 homes are passed with fibre, so the fibre is going pass the kerbs outside those homes. The 4,200 homes are actually subscribing. The numbers will keep increasing. We expect that eventually 80% of people in rural Ireland will subscribe to the service.

I thank the Minister of State for his opening statement and I thank the Department for the briefing note.

I welcome the progress that has been made. The Minister of State has been before the committee previously. For a time, Deputy Ó Murchú covered this end of things for Sinn Féin. We have gone through the granular details of this project. It is most welcome to see many of the barriers starting to unravel and the scale, for which we hoped, coming on stream.

Initially, there was talk about trimming some time off the end of this project in terms of the overall timeframe for the roll-out. This issue has cropped up from time to time. In fairness, Covid did interrupt things. Given the scale and capacity of the system, however, is there a prospect of reducing the time involved? I presume that this is an issue that is kept under review.

I wish to mention a current problem. It is one that will increase in the future when the national broadband plan is fully rolled out. I refer to the situation, which has already arisen, of urban areas where there is poor-quality broadband. The commercial viability of going back into those areas for the providers is pretty low. There are a number of examples of this right across the State, including in my constituency. I know from some of the providers, the likes of SIRO and others, that they have talked about a mini-national broadband plan and a Dutch auction for bundling together these hard-to-reach areas. Is that matter on the radar of the Minister of State? Has he given consideration to it?

Deputy O'Rourke and I and Deputy Ó Murchú have worked together through ups and downs on this project over the past number of years. Deputy O'Rourke will remember that during the pandemic there were delays to the project. It eventually looked as though it would be eight months delayed compared with its original schedule. The project was signed in December 2019 and the contract activation date was the end of January 2020. It is a seven-year project. As we know, seven years from the end of January 2020 is the end of January 2027. That was the original schedule for the project but it was eight months late because of Covid. It looked like it was heading towards September 2027 but, since then, the project has begun to accelerate and get back on track and the time has been made up. At this stage, NBI expects to complete the project by the end of 2026. In other words, it will be completed earlier than the original schedule and will have made up the time that was lost during Covid. That is a positive. More than half of the homes in the country were passed earlier this year. We have passed more homes than we were on schedule for in the original contract and connected more homes then we were on schedule for in the contract, which is the reason we are here today. We are ahead of where we expected to be on our schedule and, therefore, need to draw down some of the money this year rather than next. We need an additional sum of money. We are looking for an extra €30 million to connect those additional people. It is good news.

The Deputy’s second question relates to a non-intervention area, in this case an urban area where the commercial providers have found it is not worth their while to connect. It is not profitable for them to connect a particular home, street or estate. This often relates to estates where it was decided not to put in lamp posts or overhead wires and where cables, typically installed in the 1980s, were buried in the soil directly. Those estates will need to be dug up and ducting put in to connect to each of the individual homes. From the point of view of the three fibre commercial providers that are operating in the market, namely, SIRO, Eir and Virgin, it is not profitable to connect these people. From the Government's point of view, however we have to connect everybody in the country and provide them with gigabit Internet. In the rural area we have a contract to make sure there is 100% coverage but in the urban area we need to find a solution for blackspots. I have worked on that with ComReg, which is producing mapping data that I hope to show to the public shortly, showing which areas do not have any particular fibre provider. We have worked on a number of possible solutions for how to make sure that everybody gets connected. We have looked at how this has been approached in other European countries and considered various solutions, having to take into account whether we could do it in a way that is compatible with state aid rules and make sure it is not discriminating against one or other of the providers and that it is done in a fair way. We have the experience; we have been through this with the national broadband plan when we made sure it was state aid compatible. In the urban areas, the problem is much smaller than it is in rural areas. We are probably talking about approximately 150,000 homes, whereas the national broadband plan is currently 564,000 homes, so it is only a quarter of the number of homes, approximately. The amount of money needed to get those homes connected is much less per premises. I am working with my Department, which will work on various pilot projects. I am also working with the communications regulator to find a solution to that. I will keep the Deputy updated.

I thank the Minister of State. I acknowledge the work he has done in this area, in which he has a particular expertise, to keep this project on the go. My party had criticisms regarding the contract and some elements thereof, particularly the fact that we will not own the infrastructure at the end of it, but ultimately we all share the objective of seeing high-speed broadband across all of Ireland. It is very welcome to see this project at full tilt and long may it continue. Hopefully, it will continue to hit those targets. I am sure there will be anomalies and knots that have to be addressed, including those I mentioned. I hope we will be able to overcome them. I commend all those involved, including the Minister of State and his officials in the Department.

I thank Deputy O’Rourke. For my part, before I call in Deputy Feighan, I wish to say that it is fantastic to see this project working so quickly and efficiently. The additional information the Minister of State provided with regard to the number of homes that are being connected, at 10,000 per week-----

Per month excuse me. It is a pretty astonishing number. It is fantastic to see. Arising from Deputy O'Rourke's contribution in respect of areas in urban environments where there are gaps, I am aware of a further gap. It might be a matter for ComReg but the Minister of State might have a view on it or it might have arisen before. There are a number of estates built in the noughties with contracts between the developer and a broadband provider. In a lot of cases it is a telephone and Internet service provider. In the particular estate I am thinking of - I know this applies to other estates in my constituency and south Dublin - there is a particular provider contracted to the builder and the builder is no longer on the scene. There is now a management company with directors and all the rest of it, owned by the residents. This is a taken-over estate which will never be in public control but one Internet provider and the service is often very poor. The standard offering is 50 Mbps to 100 Mbps, along with telephone services and whatever else. I cannot help but feel that was not what we, as a State, wanted to happen. I wonder whether NBI or ComReg have a role to play in this. Ultimately, it is about the trunking or cable ducting being in the ownership of one part, although that is not really the case as it was a contract with a developer that is no longer on the scene. I wonder whether there is a solution to that.

This is a fantastic success and it is really good to see. It is great to acknowledge it and to see it working sufficiently well that the Department is having to come back and ask for more money as it is ahead of schedule. There is a little bit of cold comfort to the families and individuals at the end of a lane a few hundred metres away from the end of the existing roll-out. There is a bit of that in my constituency and may well be a bit of it in the Minister of State's constituency. As to the end point that Deputy O'Rourke referred to, is that an absolute complete delivery of all 97%? I am wondering whether it is going to capture all locations across the State or whether there are still going to be a few areas where there will have to further evaluation done as to whether NBI can provide a service to that location. I am thinking about the individuals who are on a waiting list and there is ambiguity as to when the service will actually be hooked up. During Covid a university lecturer whom I happen to know very well who lives in rural Swords did not have a reliable broadband connection through which she could deliver her lectures. I volunteered my office in Malahide. I work from home. It worked out in the end, which was great. There are other scenarios, however, where that would not arise or be suitable. Does the Minister of State wish to comment on that?

The country has been divided up into two areas: the intervention area where NBI operates and the non-intervention area, which is the urban areas which are commercially viable. We got approval from the European Commission to have NBI operate and be subsidised within the intervention area. If a person is not in that area, the NBI is not going to reach them. The NBI has to provide 100%; it has to provide a service to every person. It does not get its bonus or its payments until it completes an area. The reason this project is on track for expenditure and has not gone over budget is that the contractor gets paid for every piece that is delivered.

The Cathaoirleach referred to a particular housing estate.

The builder may have done a deal with one supplier where one supplier owns the ducting and no one else can get in. Clearly that creates a barrier to competition and means that somebody could potentially be paying more than they should because there is no competition.

For an inferior service. This is not just a problem in Ireland. Builders involved in residential developments around Europe have figured out that they can do a deal with somebody to supply the service. The Gigabit Infrastructure Act is European legislation that I have worked on in recent years. It has been passed and comes into effect in November of next year. It deals with precisely that problem. It requires competition in those areas.

It is an Act, not a regulation. It is to be transposed. The deadline for transposition is November 2025. It should provide for that.

About 81% of the country now has access to either fibre broadband or high-speed cable Internet. Only about 19% of people do not have that. That covers everybody in Ireland, both urban and rural. As that number reduces, the 10,000 a month, the political pressure for the people left at the end will increase. So, if only 5% in Ireland cannot get fibre broadband or high-speed cable Internet, they will feel disadvantaged compared with their neighbours. They will find they cannot do their video calls, work from home or whatever. That will create additional pressure for this problem to be solved. As stated earlier, the problem is far smaller than that with the national broadband plan - it is a much smaller number of homes. It is up about a quarter of the number of homes, and it will take a fraction of the cost to resolve. It is something that we can do and that I would like to see happen. At the same time as the rural areas are completed, I would like to see the urban areas completed.

That is very welcome information. I thank the Minister of State. What does the European Act envisage in the scenario where there is a notionally privately owned duct in a private estate? We need to bear in mind that these are not public estates. These are invariably apartment complexes where an arrangement was made and the builder has gone off the scene. It is a private management company owned by the owners of the apartments or mixed-use development in certain cases, and there is one provider.

The Minister of State is very welcome. I congratulate him and his officials on all their great work in the past four and a half years. The national broadband plan has been a major success, certainly where I live in Sligo, Leitrim, south Donegal and north Roscommon. The plan has certainly accommodated many talented people moving to rural areas certainly since the arrival of Covid and since Brexit. These talented people are in every town and village and they want to get involved things like the Tidy Towns. They are working from home and could be dealing with people in New York, London or Dublin. I do not think people fully realise the value of it. The Minister of State should take a bow. It is good news. That is where we are at.

Regarding the Supplementary Estimate, I very much welcome the funding of €520 million for the fourth electricity costs emergency benefit scheme. Tomorrow - I try to keep an eye out for it - my electricity bill is due to arrive. I am often excited because I have contacted my provider for the past two months to ask when I can leave. I go to bonkers.ie and can see that tomorrow I can save €1,500 or €1,700 on domestic electricity costs, which represents a 40% saving. I just do not think we do enough. I remind people to look at their utility provider every year. As the Minister of State is aware, if people do not change providers, their bills automatically go up. We have come from about 80 cent two and a half years ago to 24 cent. It is an awful lot of money, but we need to do more to inform the general public of the huge savings to be made by just looking at the contract every year. I do not think we are doing enough. I strongly recommend people to go on to bonkers.ie and see how much they can save. While this may not be the responsibility of the Minister of State and his Department, what are they doing to publicly inform people? There are huge savings to be made.

I am not sure if this is the Minister of State's area but I think we need to do much more about solar energy. I know there are incentives and many more houses are changing. We are in a much better place, and I congratulate the Minister of State.

I must travel down to the Black Valley to have a look. The national broadband plan has made an enormous difference in my constituency and in every rural constituency throughout the country. We need to acknowledge the great work that has been done there. I thank the Minister of State and his officials.

The first electricity credit will be paid between November and December. It is worth €125. The next one will be in the January-February period. The Deputy is right in saying that most people will be able to save more money by switching provider than they will get from the electricity credits. There has been a great deal of interest in that, but switching provider is worth doing. A number of websites are doing it. The Deputy mentioned bonkers.ie, but there are also others. I would definitely recommend doing it. The Deputy is suggesting that we promote that more. I will mention that to the retail electricity division in my Department. He is right that people should take that opportunity.

The electricity credits exclude homes with very low usage on the basis that they are likely to be vacant. A home with very low electricity usage for a year is excluded from getting an electricity credit. However, that does not apply to people who have solar panels because people with solar panels sometimes have very low usage because they have been selling so much power back to the grid. Everybody with solar panels will get it. The reason people are taking up solar so much is partly because the requirement for planning permission has been removed for those installing solar panels, meaning that people can skip the bureaucracy. There is 0% VAT not just on the panels but also on the batteries and installation. That saves people a lot of money. There is still a grant and everybody can sell their power back to the grid which was not the case four years ago when it was difficult to get providers to buy electricity back when people were not at home.

About 100 families are installing solar panels every day, which is more than ever. Those of us who have been knocking on doors will have noticed how many homes have solar panels on their roofs. Approximately €17 million has been allocated for solar grants for next year. We are promoting solar heavily. The Deputy is right that switching electricity provider is something that everybody should do and something we should promote more.

Returning to the issue of solar, I am a TD. TDs are well paid. We get the same pay as principal officers in the public service. People, particularly if they have a young family will always be trying to find out where they can get that €9,000 or €10,000 for solar panels. It would be great if there was some zero-interest loan that people could get. Many people would like to put in solar panels, but an outlay of €10,000 is a problem. With a zero-interest loan, if they were struggling with repayments, the money might come from whatever they are selling back to the grid. The €10,000 or €12,000 is off-putting for many people. I know most people have it, but many others would love to put in solar. The local credit union might charge 9%, and in most cases people will not get loans from their banks.

It may be something with which we could assist so there would be zero interest. The Minister of State can tell me whether there are any views on that.

There is a low interest grant scheme for retrofit. I understand the rate is about 3%. The idea is that people receive half the money as a grant from the State and the borrow the other portion at a low interest rate. I do not think it applies to solar alone. People have to be doing a comprehensive retrofit, which is more expensive. I take the Deputy's point on that.

We are putting solar panels on every school in the country. There are 4,000 schools and we have completed work on about 1,000. That project came in about 20% less expensive than we expected, which is an example of how the State is succeeding in rolling out a project which did not get much coverage. We started with 11 counties. People will see solar panels on the roofs of those schools, saving them money and generating income for them during the summer when the kids are off school. The pilot phase comprised 1,000 schools; the next 3,000 schools are due to start next month.

That is a good suggestion. I will go back to the Department and see what we can do. We have very high demand for solar. The only constraining factor is the number of people available to do the work. The number of registered installers for solar doubled over the past year. A lot of people are moving into that business. To anybody who is looking for a job in the future, I would say that installing solar panels, in particular being an electrician, is a great job that will always provide an income, no matter where one is in the world.

Before we conclude, while we are on the subject of State support for general retrofits, the Minister of State mentioned VAT. It is not uniform across retrofitting products. We as a State need to revisit that decision. There are currently two different rates for construction-related products, such as heat pumps, for retrofitting. People are not sure what rate they should pay, in particular individuals who are working through a one-stop shop. For instance, I believe heat pumps attract a different VAT rate, that is, 23%, versus other solar products which have a zero rate. We want to add an extra little layer of incentive for people.

I am probably about to engage in a deep retrofit. Such a change is something that might persuade people to make that leap when they might not necessarily have installed a heat pump and instead decided to stick with a gas boiler. The Minister knows as well as I do that it has ten or 15 years of life before someone is told to replace it because it is coming to the end of its life, and then they decide to get a heat pump. Why not front-load that and try to get people to install them at the start? As I said, that is not part of this Estimate, but it is an important conversation. I put my climate action hat on because, as the Minister of State knows, I am on both committees.

The VAT on heat pumps dropped in the budget. One reason for that is that we were allowed, under the VAT directive, to cut VAT. We are always constrained in terms of what we can do on VAT in Ireland. It is one area that is decided at a European level. We have a certain flexibility. The committee will know from getting a car serviced that there are different rates of VAT on the bill and labour is charged at a different rate from parts and so on. That is common. For my part, I would like the taxes on retrofitting reduced as much as possible. I would like to make sure that it is feasible for people who do not have large amounts of capital to have this work done. It is often those who need retrofitting or solar panels the most who are struggling to pay their bills and do not have a reserve of money available. If there is some way for them to make paying out of the savings made by reducing their energy bills, that makes sense.

The Minister of State is absolutely right. It is often the people who need the support the most who are the ones in need of getting the job done. That is why a rate of 10% or 13% is important. Doing a retrofit does not involve a small amount of money. I thank the Minister of State and his officials for engaging with the committee. As we have now completed our consideration of Supplementary Estimate - Vote 29, programme D, the clerk will send a message to that effect to the Clerk of the Dáil.