Dáil Éireann debate -
Thursday, 25 Jan 2024

The energy security package grounds Ireland's energy policy on three policy objectives: sustainability, affordability, and security. Action 2 of the package commits to standardising the approach used to evaluate the affordability of new and existing policy initiatives for consumers. My Department is committed to ensuring policies that have an impact on consumers are evidence-based, with costs minimised as far as possible, and assessed according to these policy objectives.

The core driver of higher energy bills for Irish households and businesses is high wholesale energy prices. Ireland is a price taker on international fossil fuel energy markets and the rise in wholesale gas prices since the Russian invasion of Ukraine, and the connection between gas and electricity prices, has had a serious impact on household energy costs. Due to consistently high gas storage levels and the efforts to reduce demand across Europe, wholesale gas prices fell substantially throughout last year and are currently well below the peak values of August 2022. While energy prices remain above their pre-pandemic levels, consumers are starting to experience reductions in gas and electricity prices. This is a welcome development and I expect all suppliers to continue to pass through savings to consumers as quickly as possible.

In June 2023, I wrote to the Commission for Regulation of Utilities to investigate pricing strategies within retail energy markets, and to report on whether market failure has occurred. Its report found no evidence of market failures, and it will continue to monitor this into the future. Throughout the period of high energy prices, the Government has continued to support energy consumers to stay warm and well. Most recently, budget 2024 introduced a total €2.2 billion suite of once-off cost-of-living measures to assist families, pensioners, carers and people with disabilities. This included a new electricity cost emergency benefit scheme through which €412.83, exclusive of VAT, is being credited to each domestic electricity account in three payments of €137.61, again exclusive of VAT, between December 2023 and April this year.

There is no doubt that workers and families are really struggling with their energy costs. We can see that as presented in the numbers in arrears, those contacting St. Vincent de Paul, for example, and others struggling with energy bills. Almost one in four domestic gas customers are in arrears at this stage. Therefore, there are real challenges there. However, my question specifically asks about the underlying factors driving the high cost of energy in this country. The Minister stated that the CRU said there was no market failure. Is it the case that customers in Ireland are expected to live with energy bills double the European average into the future or will the Government act to tackle the underlying causes of those huge bills?

There are two key reasons for those high bills, the first of which is the very distributed nature of our population, which makes it very expensive to provide the grid and other infrastructure to service every house. The other key fundamental is that we are still generating some half of our electricity from the use of gas. Those countries which have a high gas component in their electricity mix are seeing the highest prices. That will change. We are absolutely committed to deliver on the switch to renewables, rather than relying on fossil fuels, to meet 80% of our energy needs by the end of this decade. I am absolutely convinced we can do that. We have been restricted in the last three years by the effect of problems bottlenecking our planning system. This is partly due to the nature of our planning laws not being fit for purpose, which is why it is important we pass the new planning reform legislation we have before the Oireachtas committee in the next two weeks. For various other reasons, An Bord Pleanála was not able to able to make decisions on some key projects. Those decisions are starting to come through now. We are seeing onshore wind farms starting to be delivered. Last year, we delivered 1 GW of solar energy in one year, which is phenomenal. If anybody had said three years ago that we would be rolling out 1 GW of solar a year, they would have been laughed at but it is now happening. That mechanism of switching to renewables is the best way for us to reduce the exposure of the Irish consumer to high fossil fuel prices.

We are getting into some of the key issues there. The Minister mentioned the distributed nature of the population, and we hear that regularly, but there are many distributed populations across the European Union and far geographically bigger countries than Ireland that pay half the price we do for electricity and energy. Therefore, where is the evidence base to that point? On planning and the grid, the sector itself says we are further away from our renewables targets than we were this time last year because of delays in planning and in the grid. There is a massive urgency but we do not see it. We all know the approach to planning reform. It will be difficult and there is lots of concern in this regard. How can we have confidence that this dependence on gas will be addressed any time soon under this Government?

We have one of the most distributed housing settlement patterns in Europe. There is no other country that has a similar pattern of one-off housing. It is expensive. The wires have to be brought to every house and that is by definition expensive. This is not going to change, but it is a reality. It is one of the reasons for high costs not just in electricity but also in water supply and other areas. It makes the infrastructure we have to provide for houses more expensive. That is to a certain extent something that will not change quickly because it is a pattern that has been set over several decades. On the other hand, we are changing quickly now. We will deliver the 80%. The big development will be the offshore floating project. It has to get through planning and construction, which is still complicated, but I am confident it will happen. In the interim, we need onshore wind and solar and as I said, that is changing. I met the head of the Irish Wind Energy Association recently and he said there has been a real turnaround even in the last few months. We are starting to see projects get approval. They will be built and will switch us from dependence on gas. That is the best way for us to give greater security, reduce emissions and lower prices.

The national air quality monitoring stations are operated, maintained and monitored by the Environmental Protection Agency under the ambient air quality monitoring programme. My Department has provided funding for a significant upgrade to the network in recent years and the number of monitoring stations has increased from 29 in 2017 to 116 today.

All stations collect air quality data for a range of pollutants to provide information to the public, and for assessment against European legal limit values and World Health Organization guideline values. The EPA produces an annual report on air quality in Ireland that provides an overview of our air quality and key issues that impact on it. Details of the locations of all monitoring stations currently in operation, along with real-time and historic data from each station, can be found at www.airquality.ie.

Dublin Airport undertakes a voluntary ambient air quality monitoring programme. This includes the operation of an on-site air quality monitoring station, which measures a range of parameters on a continuous basis, complemented by monthly monitoring undertaken at 11 locations in communities surrounding the airport. Dublin Airport air quality monitoring station data is provided to the EPA on a continuous basis and can be viewed on the EPA website at www.epa.ie/air/quality. Dublin Airport also publishes quarterly reports on air quality monitoring that help to keep local communities informed. These reports are available at www.dublinairport.com/corporate/corporate-social-responsibility/air. Monitoring results indicate good air quality with concentrations of the main transport-related parameters below the national ambient air quality standards.

I thank the Minister. I am familiar with all of those websites. The problem is that for residents, particularly in south Swords and in estates like Ridgewood, Boroimhe and River Valley - huge estates with large populations - there has been a huge increase in both the smell of aviation fuel and particulate matter being visible on sills, curtains and walls in these estates. The monitoring stations are all over the north of the county. They are not in the areas we are asking them to be. We are getting poor responses as to why they cannot put the monitoring in these estates where we are actually seeing and smelling the pollution. I ask the Minister to bear in mind that we are an airport community and airport people. We live next to an airport so we understand what to expect but this is over and above that. The confused nature of Fingal County Council and the EPA and the voluntary nature of the DAA's obligations in this regard means we are not getting enough regulation in this area. I think the Minister would want such regulation.

It is important that we continue to review, revise and amend, particularly with the airport changing and the new runway. We both know the series of issues that have arisen around different flight paths and so on. I would argue that the concerns of local residents in south Swords or other areas need to be listened to. I would be happy to assist the Deputy in engaging with Dublin Airport to make sure that whatever monitoring stations we have continue to assess those communities that might have a concern or a question, maybe about a flight path they might not have been on previously. We should continue to review and monitor that.

My understanding from the data that is available is that all existing stations are below the levels. The one that is probably closest or most difficult is in the bus depot or station that is effectively outside the airport, which is understandable because there are bus emissions and it is the busiest bus station in the city. However, I would be quite happy to support the Deputy in engaging with Dublin Airport to make sure we continue to review the locations of the air monitoring stations to ensure they are capturing communities that might have a concern.

I appreciate that. All of this is taking place in a couple of contexts. The DAA has changed its complaints mechanism, which has actually made it more difficult for residents and local communities to make any number of complaints, not just in this area. Also, we know the air quality in our city and all over the county is struggling. We have a huge problem and we have articulated that. The Minister of State, Deputy Ossian Smyth, has also articulated it really well, and has stated that as many as one in five deaths can be attributed to or impacted as a result of air quality in our city. It is a huge issue, and not just an airport issue.

We need to do everything we can with regard to active travel and reducing emissions. However, empowering the EPA in this regard is needed, either through implementation of statutory instruments or a change of legislation. That is something we should work on across the House in the coming months and beyond.

I agree with the Deputy. We have to treat air quality absolutely seriously. There are 1,600 premature deaths each year due to air quality issues. We have taken significant action in this Government - actions that were put off by previous governments for decades - with regard to introducing standards around solid fuels, which is the key issue around impact, as science tells us. That is making a significant difference, as is the promotion of active travel, as the Deputy said, and other clean technologies. In fact, the renewables issue we were talking about earlier would also help. Solar and wind power will all help in terms of air quality. The key issue now is doubling down on enforcement and getting local authorities to enforce the legislation we have. I will continue to work with the CCMA and others to make sure that if any merchant or other operator is selling fuels outside the standards, they will be prosecuted. They will be shut down, in effect, or certainly stopped in that activity. At the moment, I am focusing my efforts on making sure we have proper enforcement.

I ask the Minister to set out what solutions are available for homes that are not suitable for heat pumps or for householders who cannot afford heat pump installation, whether biofuel boilers in the residential sector are being considered as part of the solution, and if he will make a statement on the matter.

As part of an enhanced package of SEAI retrofit supports, the heat pump grant has increased significantly, with grant support for an air-to-water heat pump of up to €6,500. For homeowners undertaking a deep retrofit under the national home energy upgrade scheme or the community energy grant scheme, additional grant support is available towards required heating system upgrades, as well as a bonus payment of €2,000 to eligible homeowners. This equates to a significant total potential grant of up to €10,500.

The SEAI is also working on a residential heat pump and heat loss indicator research study with a scope involving up to 1,000 homes to test the performance of heat pumps across homes with a higher level of heat loss than is currently permitted by the SEAI in order to qualify for grant support. The pilot is open to homeowners wishing to participate and the SEAI has indicated that results from participating homes are expected next year. Pending the findings of the study, this could allow heat pumps to be installed in many more homes that currently are not deemed eligible for grant support.

The national heat study undertaken by the SEAI at the request of my Department contains the detailed analysis that is informing the development of options, policies and measures to decarbonise the heating and cooling sectors by 2050. The study considered a number of potential decarbonisation options for a wide range of dwelling and business types. This included the use of liquid biofuels, solid biomass, biogases and other technologies such as heat pumps and district heating networks.

The recommendation of the heat study is that heat pumps are the optimal decarbonisation path for domestic heating systems, with district heating also being a competitive option that can be widely deployed. Up to 0.7 TWh of heating will also be provided by biomethane. It should be noted that there is a limited supply of bio-based liquid fuels, which would account for only a small fraction of our current fossil fuel use. Any incentive to encourage the use of these scarce heating resources is likely to displace the carbon savings in other sectors. Therefore, no steps are being taken at this time to promote the use of biofuel boilers in the heat sector.

The Minister's response reflects the current position. With regard to the targets for heat pump installations - 45,000 existing and 170,000 new dwellings by 2025, and up to 400,000 existing and 280,000 new dwellings by 2030 - it has to be said that the Government is missing a lot of targets. It is missing this target by an absolute mile. Just 9,469 heat pumps have been installed since 2020. This is nowhere near what is needed. The difficulty is with the cost but also with regard to whether houses are appropriate for it. What solution does the Minister have for those people who have been burdened with carbon tax, who are maybe burning solid fuels or oil, and who want to move to a more sustainable, climate-friendly solution? The only show in town according to this Government is the heat pump, and it is simply not an option for very many people. Even with the heat loss indicator study, it still will not be an option for many of them. It is a real problem.

Heat pumps have been fitted in more than 3,700 homes, which was a 66% increase on the previous year. Yes, we need to go further and faster, and we will do that. In particular, we need to improve a lot of the online and other bureaucratic systems around heat pump supports, which are not as flexible and as fast as I would like to see, in order to deliver the scale and number of heat pump installations we need. We will accelerate that.

The implication of the Deputy's question is that in hard-to-reach houses, the solution should be liquid biofuel boilers. I do not agree with that because I do not believe it would be sustainable. It would deliver households down into a cul-de-sac where those fuels would not be seen as the correct solution. Given the limited quantity of the fuels, they are best targeted at the transport rather than the heat sector. We will have to look at a whole range of other solutions, including heat pumps, district heating and, in some instances, wood-fired heating in isolated houses in the countryside. However, the solution will not be biofuel boilers because we have to consider biodiversity as well as climate in our sustainability criteria. The sustainability issue arising from everyone turning to biofuel is a severely critical issue that we cannot ignore.

I am not for a second suggesting we should ignore it but we need to provide a pathway for those hard-to-reach households. We cannot ignore them. I would look at the number of heat pumps that have been installed and consider how many are in the poorest, coldest homes. How many are in homes where people are burning turf and sticks? I would say it is a tiny fraction because those houses are not suitable or the homeowners cannot afford the installation. We need to provide a solution for them. I know there are questions in terms of sustainability. Let us look at all of that but we need to provide a solution for those households. Otherwise, we are at real risk of leaving them behind and driving a wedge between people. When the Minister comes in here and talks about the success of retrofitting and heat pump installation, those families see that it is being done in other people's homes. There are, of course, questions about land use, sustainability and the supply chain. However, others have raised the weaknesses in the design of the schemes and the fact people are being left behind. It behoves the Government to find solutions. If the Minister is saying hydrotreated vegetable oil, HVO, is not the solution, he needs to show us the evidence for that and provide an alternative.

There is mounting international evidence and concern about the limited availability of sustainable HVO. I will happily share that with the Deputy. It is an international issue of real concern and we cannot ignore it. There is a whole variety of solutions. The first has to be, as we are doing now, improving the insulation capabilities of something like 50,000 houses a year, which will make them available and accessible for heat pump installation. We need to change the standards to allow for a wider deployment subject to the study I instanced in my first response. We need to look at a whole range of other solutions, including district heating. Going back to the original district heating study, we think we could cover something like half the homes in the country if we really went for district heating at scale. Other options including biomethane can be developed as a heat energy source that is sustainable. We can manage the land use implications of it.

There is a variety of solutions, as I have outlined. We absolutely must target the houses that are the least efficient and have the highest smoky fuel content. That is why we put half the carbon tax money we give to heating into the warmer homes scheme, social housing and other targeted solutions. The households involved often tend to be the poorer homes and that is why we particularly use the carbon tax to address that sector.

In order to assist with the achievement of our retrofitting targets, the programme for Government, the climate action plan and the national retrofit plan committed to the introduction of a new residential retrofit low-cost loan scheme. The home energy upgrade loan scheme was developed by my Department in conjunction with the Department of Finance, the Strategic Banking Corporation of Ireland, the SEAI, the European Investment Bank, EIB, and the European Investment Fund.

An agreement with the EIB Group underpinning the new home energy upgrade loan scheme was announced in October last year. An open call inviting lenders to participate in the scheme was launched on 31 October. The €500 million scheme is the first of its kind for both Ireland and the EIB. Homeowners will be able to borrow between €5,000 and €75,000 on an unsecured basis for a term of up to ten years. The interest rates will be significantly lower than those currently available on the market as a result of the combination of the EIB Group loan guarantee and a Government-funded interest rate subsidy. The home energy upgrade loans will help to reduce the financial challenges for many homeowners and will play a crucial role in helping them to invest in energy efficiency, thereby making their homes warmer and cheaper to run and helping to lower emissions. The scheme will also signal to the banking sector the availability of new, sustainable business opportunities associated with retrofit and the transition to a low-carbon economy.

It is anticipated that the loans will be available in this quarter through participating retail lenders. Each will have a slightly different rate but all the proposed rates I have seen from prospective lenders, which they will have to publish in the coming two months, are very significantly below market rates. Householders who might not have the upfront cash will be able to avail of the loans to improve their homes. I expect there to be significant demand for the loans when they are launched, such are the lower interest rates that will apply.

I am really disappointed that we do not seem to have the details of the loan scheme. The Minister launched the scheme two or three years ago. Every time I put in a question on it through the parliamentary system, I am told that information should be available in the following quarter. It seems the same response is being given again today. I acknowledge that progress has been made and there is agreement at EIB level. However, people need to know exactly when the loans will be available and what kinds of interest rates will apply. Is there a base interest rate the Minister can indicate? People need to plan. Retrofits are hugely expensive and the majority of householders cannot afford to do them unaided. Unfortunately, the grants that have been provided by the Government do not really help people who are outside the social welfare system. A homeowner who does not qualify for any of the social welfare schemes cannot get any supports or only very limited supports. It is really unfortunate that the Minister has not provided any further detail today. My understanding was that the loan scheme was meant to start in February. Is he now saying it will not start next month?

It is frustrating that it is taking longer than I would have liked. The main reason is that this is a first for the European Investment Bank and the European institutions. They have never before engaged in direct lending support to consumers. They have to get it right and make sure all their qualifying criteria and all the processing adheres to European law and so on. That is the reason it is happening later than I would have liked.

The scheme will begin this quarter. It is coming in the coming weeks. I cannot announce the rates in advance of the decisions in that regard by the banks. They have to put together their loan packages and arrangements. They will be doing that within a number of weeks and publishing and publicising them. People will see it is a very attractive proposition. There is significant help for householders through both the EIB support and direct Government support to keep interest rates down, which will make the economics of transitioning people's homes far more effective.

Yes, people need to know what the interest rate will be. As I said, that information is coming very shortly. The key detail they need to know is that they can get an unsecured loan of up to €75,000 for up to ten years. The savings they will make on the energy reductions will start to make real economic sense. That will be achieved by way of the low interest rate the Government has managed to create through this intervention we have made. The loans are coming. They will be announced this quarter, not in the next one. The banks have to lead the process out and put out their loan offers. I cannot pre-empt that but it is coming very shortly.

The Minister said this has not been done before. In fact, other countries have given zero-interest loans. Brussels, for example, gives zero-interest loans for retrofitting.

That would have actually been a much better solution because it means that retrofitting is going to be something that every household could look at - that there is not that upfront cost to them. That is just a different argument.

I have a quick question in relation to the loan scheme. Is the Minister looking to extend it beyond residential, to community electricity generation projects? My understanding is that with these projects, a 5 MW solar farm could cost between €5 million and €6 million, which is a considerable outlay for community groups to run. It would appear that financial barriers are one of the main reasons why these community solar farms are not up and running. Would the Minister consider expanding this scheme so that they could also avail of these low-interest loans?

We are significantly ahead of B2 targets. It is not just about retrofitting; the Deputy is right to focus on microgeneration where there has also been a phenomenal increase, both domestic and non-domestic, in the uptake of the grants. We are providing very significant grants to encourage people to avail of solar PV. Yes, we will go further on that and a range of different measures because the scale change we need to make is huge.

Another recent development, which I am sure the Deputy has been selling to her own constituency, is the new community supports we are providing for climate action at the community level. We accept that we have 600 to 700 sustainable energy communities but there has not been the follow-through into projects like solar and aggregated retrofitting solar and other renewable and low-carbon projects. "Yes" is the answer to the question. We will be looking continuously to upgrade and improve, particularly in the area of community energy, to support turning those sustainable energy communities into delivery agencies for sustainable transport, sustainable energy, sustainable food and local environment improvements. The recent community grant applications provided through the climate action fund are somewhere in the region of €30 million and are intended to help communities make that leap.

What plans does the Department have to support ComReg in its responsibility in the communications sector as this continues to grow? We know that regulation of the digital economy is very important and this sector is continuing to grow at pace. The responsibility around the telecoms sector with broadband roll-out and ensuring that there is no monopoly present - all of these issues need to be dealt with. The issue of cyber security is also an aspect of the work that ComReg continues to take a larger role in, as that sector continues to be under more and more threat. What kind of investment are we going to see there? Will we see more employment for more people because clearly it needs more staff?

Given the importance of the electronic communications sector to both the economy and society, robust regulation of networks and services in a manner that enables investment, ensures operational resilience and trust and appropriate consumer protection requires a fit-for-purpose communications regulator.

Both my officials and I meet regularly with ComReg to discuss a range of policy and regulatory issues, including the timely and adequate resourcing, and indeed funding, of the regulator to enable it to deliver on its current and evolving statutory remit.

This remit includes legislating to ensure clarity around existing and additional functions and that relevant enforcement powers and consumer protections are in place. Transposition of the European Electronic Communications Code last year saw ComReg designated as the competent authority for the purpose of enforcing the code. It provided new powers and measures for ComReg including a new civil enforcement regime and an updated criminal enforcement procedure and the power to set minimum quality of service standards for consumers. It allows ComReg to take interim measures where necessary and sets a higher penalty for the commission of indictable offences.

It also includes engaging with colleagues across Government to ensure a strategic approach to designating relevant competent authorities for a range of new functions emerging under numerous horizontal EU files. Many of these files and associated functions are often not directly electronic communications related, but include data, cyber security and network resilience in the context of critical infrastructure.

Finally, it involves ongoing engagement with my colleague, the Minister for Public Expenditure, National Development Plan Delivery and Reform, on the timely sanctioning of the recruitment of additional staff and appropriate funding models for same.

I will continue to work with ComReg to ensure that it can deliver on its statutory remit which has a key role to play in shaping and enabling Ireland’s digital connectivity. More broadly, I will continue to engage with colleagues to ensure a strong, stable and coherent regulatory framework for digital, with highly capable and well-resourced regulators, which is recognised in Harnessing Digital, our national digital strategy, as an essential part of Ireland’s strategic offering.

We all recognise the vital role that ComReg plays in this. As the digital world continues to grow and expand, we need to recognise that its capability also needs to be expanded to match what needs to happen. Many of the general public are quite fearful and under the impression that our regulatory authorities are not up to matching the level of criminal activity that we see going on - people being hacked, Internet scams and all the types of things which come into play to some extent in regard to this. I was looking at the growth in data storage both on fixed and mobile use. It has grown exponentially and is at almost 2 billion GB at the moment. We must recognise that we need to have an organisation that is fit for purpose to be able to deliver on all of this. As the Minister of State mentioned, the continued advancement of legislation, particularly from the European Union as part of all of that, puts our communications regulator under considerable pressure and I am glad to hear the Minister of State say that he is having constant communications with ComReg and is seeking additional resources for it. When I met the regulator recently, it was very clear to me that additional resources will certainly be required.

I am glad to hear that the Deputy has taken the time to meet ComReg. It has 156 employees at the moment and has sanction for 177. ComReg came to my Department looking for an additional 55 employees. It was looking for specific increases in grades and salaries and so on, and that is under consideration at the moment. However, it does have sanction to move to 177.

The Deputy mentioned some of the important functions ComReg has. One of them is stopping the public from receiving scam texts and calls. I worked with the organisation and the network operators to introduce a number of changes to prevent this from happening. We have brought in six different measures. I will not outline them because they would be of use to the scammers themselves.

In addition, we have a new commissioner coming in. This is Helen Dixon, who was the Data Protection Commissioner. She will take up the position of commissioner. She will join Garett Blaney and Robert Mourik, with whom, as I said, I work closely. ComReg will have a new function under the Network and Information Security Directive for cyber security. It will be the competent authority for cyber security in a number of sectors and it needs to have staff to carry out that function.

The cyber security aspect of it is something we need to really focus on. As with the HSE in Ireland, when we look at other jurisdictions we see some of these hackers and criminal organisations target water distribution systems and electricity systems. We have had blackouts recently; my own electricity only came back yesterday so we understand what it is like when we have vital services like this under attack. Most of the systems are computerised and based on data. We need to have an efficient and effective force in place to ensure that we can protect the organisations and that there is oversight to ensure those protection mechanisms are in place. It has a hugely detrimental effect on the general public if we have these types of attacks because they involve huge disruptions not just to the economy but to people's lives in some cases. We only have to think of the effects on health systems where they have been attacked before in this regard. It is vital that ComReg gets the staff it requires to do this and as the Minister of State said, it is under consideration. I welcome that but I hope that the considerations do not take very long.

Communications networks are part of our critical infrastructure, of course. We can see that they are a target. The biggest target is the energy system, with communications probably second after that. We see the example of Vodafone Portugal being taken down for a number of days. This is the kind of thing we need to protect against. The function of ComReg will be to ensure that communications companies are carrying out all the tasks they need to protect themselves. The National Cyber Security Centre will continue to offer the kind of technical support and incident response that is required. Additionally, ComReg will also be involved in something much more directly with the public, which is making sure that telecoms companies are providing a customer charter. When a company does not live up to the charter, there will be an easy adjudication method to ensure that they do not have to go to court. People have suffered a lot with communications companies. I am not going to name any one large communications company, but people have had a lot of difficulty with communications companies offering an appalling level of customer service.

Under new European law, ComReg will be the authority that is on the customer's side. It is going to provide an easy mechanism for people to get restitution and, in some cases, automatic refunds where, for example, customers book broadband installations and the installer does not turn up or where customers are not getting the services for which they have paid.