Speech by Pat Rabbitte TD
Minister for Communications, Energy and Natural Resources
“Renewable Energy – Revitalising Ireland’s Regions”
Border, Midland & Western Regional Assembly
Annual Conference, TF Royal Hotel, Castlebar
Monday 30th April 2012
I congratulate the Border, Midland and Western Regional Assembly on the choice of theme for this Conference. The potential that renewable energy offers to revitalise Ireland’s regions is clear. Indeed the imperative need to ensure competitive, sustainable and secure energy is fundamental to our collective task of delivering regional development, growth and jobs across the economy.
The first priority of this Government is to secure Ireland’s economic recovery and to ensure employment for our people. Job-creating growth must be at the top of the agenda, both here at home and in Europe too, if we are to create lasting confidence for citizens, enterprise and investors.
And the Government, in its work to deliver that growth agenda, is committed to creating the conditions and exploiting all the opportunities that will revitalise and secure the development of our regions.
Energy policy has a pivotal role to play in creating the conditions for a return to economic growth and job creation right across the regions of Ireland.
It is striking that the work of this Regional Assembly over many years has led the way in so many respects in supporting and nurturing sustainable energy opportunities at regional level. As the Managing Authority for the BMW Regional Operational Programme 2000-2006, you were leading the way in ensuring that Structural Funds were deployed to best effect in support of the sustainable development agenda and harvesting the economic benefits of our natural resources.
And, under the current Operational Programme 2007-2013, critical supports are on-going in the priority areas of Innovation: ICT and the Knowledge Economy; Environment and Renewable Energy; and Urban Development and Transport Networks.
So much of the work you do resonates with my own portfolio of responsibility. And your partnership with the Sustainable Energy Authority of Ireland in particular has been delivering to excellent effect across the range of innovative programme areas, including the Energy in Business Programme and the Sustainable Energy Zones.
The achievements to date under the Energy for Business Scheme underline the economic and competitiveness opportunities. The Scheme is delivering energy cost-reduction and carbon-reduction services to over 3000 SMEs and 160 large companies through networks, training and advisory services. The work of the SEAI at regional and national level is critical to the Government’s ambitions in this area and I look forward to many more years of successful partnership between the Authority and the BMW assembly.
All of this is of course made possible by the support from the European Regional Development Fund and the EU INTERREG programmes. One of the hallmarks of our EU membership has been the extent to which, over many decades, Ireland’s regions have benefited from Europe’s own commitment to regional development. This has mainly been achieved through the Regional Development Fund but also under programmes such as STRIDE and Valoren in the 1980s and 1990s, which were focussed on natural resources.
The EU Commission’s draft proposals for the 2014-2020 Structural Funds Programmes include a welcome emphasis on energy efficiency and renewable energy deployment as key priorities for all regions. And this is not just about meeting the headline targets – it’s about creating a low carbon economy which will deliver benefits in terms of growth, innovation, competitiveness, job creation, energy security, and environmental quality.
These are objectives which we all share. And I firmly believe that achieving these objectives will provide us with the opportunity to transform our economy and to transform the regions through the creation of a low carbon economy.
The European Commission has clearly identified a pivotal role for renewable energy in decarbonising the European economy. In December last, the Commission published an Energy 2050 roadmap which sets out a number of different scenarios for developing a decarbonised energy sector over the coming decades. It is clear, under all of these scenarios, that there will be a significant increase required in renewable energy deployment in Europe, well over and above the 2020 target levels.
The roadmap shows the importance of a fundamental shift away from fossil fuels. This means not just meeting small percentages of our energy from renewable sources but moving to a situation where renewable technologies become the norm, particularly for electricity generation, and where fossil fuels are seen as the exception.
Alongside the Energy 2050 roadmap, the Commission also published a public consultation on renewable energy policy post-2020, with specific focus on the potential scale of development between now and 2030, including any infrastructure and support requirements. The scenarios outline how electricity will be a growing sector in energy usage, as it is used more and more in the heating/cooling and transport sectors over time, and how renewable electricity must increase its contribution to overall electricity usage.
The security of supply challenge is growing in Europe, with oil and conventional gas reserves in the EU area declining, with member states becoming more dependent on imports from increasingly unstable parts of the world, and with high and volatile fossil fuel prices threatening economic growth right across the Union.
As I’ve said, the cost, reliability and sustainability of energy are all key to our economy and to our economic recovery. It is therefore critical that we identify and deliver the right energy solutions for this country – solutions which will enhance our collective security of supply, reduce our dependence on imported fossil fuels, reduce our levels of emissions and, crucially, minimise costs for all consumers.
This is where renewable energy will play a key role in shaping not only Ireland’s but Europe’s energy future, by decarbonising our electricity generation over the coming years, using natural resources located primarily within the European Union’s borders, and reducing our dependence on an increasingly expensive and volatile fossil fuel supply.
As you know, the overall obligation is to ensure that, by 2020, at least 16% of all energy consumed in the State is from renewable sources, with a sub-target of 10% in the transport sector. So we must ensure that, between now and 2020, there is a steady, progressive and measurable increase in the amount of renewable energy consumed in the electricity, heat and transport sectors, commensurate with achieving the national target. And we have made good progress in this regard, going from around 5% renewable electricity in 2005 to around 18% renewable electricity today.
To date, our focus has been on developing renewable electricity to meet our own national requirements. Our National Renewable Energy Action Plan to 2020 sets out the detailed schemes, policies and measures, both underway and planned, to deliver a trajectory of growth from renewable sources. Together with all other Member States, we are obliged to report to the Commission on progress in delivering on our action plan, as well as on the obstacles to progress. Our first such report was delivered last January and it outlines progress to date, including updates on policy and regulatory changes, and it sets out the challenges still to be addressed.
Among the significant challenges inherent in successfully going beyond the current deployment levels of renewable energy in electricity, heat and transport, so as to ensure delivery of our targets, I would list:-
· the need for predictable and transparent support frameworks, to attract commercial investment at a cost which is competitive;
· the need for regulatory certainty, which supports renewable energy development in the long term interest of consumers;
· the need for cost effective and timely investment in our electricity transmission and distribution systems;
· ensuring ‘best practice’ planning and permitting procedures and coherence between our environmental and renewable energy objectives;
· the impact of large scale penetration of renewable technologies on the overall energy system, with particular regard to overall efficiency and system reliability; and
· winning public acceptance around environmental and other impacts and securing benefits for local communities.
That is quite an agenda. But now is the time to think even bigger. We have long known that Ireland has a relatively small national electricity market and that we have renewable energy resources that are considerably greater than our own needs.
As we move from today’s island-based, stand-alone energy system to a more interconnected and integrated single European energy market, we now have a real opportunity to go beyond providing for our own needs and to develop our abundant natural resources to become a renewable electricity exporter of scale, to Britain in the first instance and to North West Europe over time.
The potential of our abundant renewable energy resources is nowhere more vividly evident than in the BMW Region. Your wind and ocean resources are rich and abundant and represent a real economic opportunity. And your bioenergy potential is only beginning to be tapped.
Because of your location, on Europe’s Western border and facing the Atlantic, you have one of the best wind and wave resources in Europe, if not in the world. This means potential renewable energy resources that are significantly higher than those in many other countries. To illustrate the point, a wind turbine on a good site in the West of Ireland can generate on a yearly basis almost twice the amount of electricity the same turbine would yield if it were built in Northern Germany.
Increased interconnection to the UK offers us the opportunity to access a much larger market in future. The counties in the BMW region are well placed to benefit from this opportunity. In the short term there are opportunities for onshore wind and biomass development but, as technologies develop and become more commercially deployable, in time we will also see offshore wind, wave and tidal developments.
The EU Renewable Energy Directive is the framework under which Ireland can develop cross border trade in renewables. I am committed to delivering on that opportunity for Ireland, though our engagement with the European Commission and other Member States in the context of the North Seas Offshore Grid Initiative and through our on-going work with the United Kingdom under the auspices of the British Irish Council, to create the framework and conditions for a bilateral and eventually multilateral trade in renewable energy.
That work is set to intensify over the coming months, with the objective of achieving an inter-Governmental agreement with the British to underpin the export of renewable energy. And this is very much in line with overall electricity market developments at EU level, which are putting Europe on track for a single, EU-wide, electricity market.
As part of the export potential, we have a real opportunity to develop a few large-scale, onshore, renewable projects, some of which have the potential to be combined with large scale electricity pumped hydro storage.
The possibility of developing large scale commercial electricity storage, in order to deliver on our export opportunities, merits clear attention at a time when electricity storage is gaining a higher profile at the European Union and at the International Energy Association. Electricity storage on the scale envisaged will require significant technological, logistical and environmental challenges to be met. If these challenges are met, the potential opportunities, over time, could be very considerable for renewable energy export and could provide real benefits and economic opportunities to the localities and counties where they are located.
I know there are proposals in train for this county, put forward by participants at this conference, and I look forward to an update on the current state of play.
When these large scale renewable energy projects are built, there will be the obvious construction jobs. But people often forget that renewable generators are commercial businesses and, as such, they form part of the rate-paying base locally. At a time when local government finances are under pressure, renewable developments are a long term and stable source of income for local authorities. Windfarms typically pay commercial rates of between seven and eight thousand euro per megawatt per annum.
A growing majority of windfarm developers also operate some form of local community fund, where payments are made available to deliver local amenities.
And, if we can develop projects at sufficient scale, there is also the opportunity to see increased job potential not just during the construction phases but in component manufacturing on this island and in the operations and maintenance area.
While we work to open up the new export market, we need to ensure that new projects can actually develop into the future. We need to ensure that we plan these new projects appropriately, that we fully respect the local environment and that we site these developments in suitable areas.
We also need to ensure that we get critical infrastructure built out as the key regional electricity upgrades identified in EirGrid’s GRID25 strategy proceed through the planning process. The focus now must be firmly on delivery – in particular, the delivery of the vital energy infrastructure projects that underpin our collective security of supply. This is in the long term best interests of every citizen of this country and this is one of the key messages that I want to highlight here today.
Development of the high voltage electricity grid as planned in the GRID25 strategy is critical to our long term economic recovery. Some have argued that the severe step down in economic activity ought to result in pulling back investment in this area. It is true that the contraction of the economy has been dramatic but it is also true that infrastructure investments are long term investments by nature. They are projects that can take years to deliver but they deliver benefits to us for decades thereafter.
I hope very shortly to publish high level Strategy for Renewable Energy. This strategy will be underpinned by our detailed National Renewable Energy Action Plan and will set out both our strategic goals for renewable energy and the key actions underway and planned in the short and medium term for each of the renewable energy sectors. The key actions will be designed to address current challenges and to support progressive delivery on our national ambitions for renewable electricity, heat and transport.
Of course, achieving our strategic goals, and delivering the key actions on renewable energy, must be a collective endeavour. It requires a fully integrated and cohesive approach across many Departments, State agencies, the Commission for Energy Regulation, EirGrid, ESB Networks, the renewable energy sector and its representative organisations, the enterprise community, the research community, regional and local authorities, consumers and local communities. Renewable energy policy is very closely interrelated with other policy areas including Agriculture, Transport, Environment and Climate Change, Local Government and Enterprise.
The Renewable Energy Development Group has been an important forum for bringing together all stakeholders. It comprises all relevant Departments and Agencies, the Sustainable Energy Authority of Ireland, the wind, ocean and bioenergy sectors and their representative organisations, the Regulator, the utilities and EirGrid, as well as the financial community. The Group played a key consultative and advisory role in the drawing up of the National Renewable Energy Action Plan in 2010. I intend to re-launch the Group in the coming months as a key advisory forum on renewable energy development.
I want before closing to mention briefly two related topics: energy efficiency and the green economy. First, I need to stress that underpinning our ability to deliver on our ambitious strategies for renewable energy in a cost effective way is our continued need to deliver on energy demand reduction. Our National Energy Efficiency Action Plan sets out our ambitions to deliver further energy savings over the period to 2020. We are committed to achieving, by that year, a 20% reduction in energy demand across the whole of the economy through energy efficiency measures. And, recognising that Government must lead by example, we are committed to achieving a 33% reduction in public sector energy use.
These energy efficiency measures will directly assist and complement the continued development of renewable energy. The reality is that, if we fall short on energy efficiency, we will have a legal obligation to do more to achieve our renewables targets.
In relation to the green economy, you will know that, earlier this year, the Government published the ‘Action Plan for Jobs’ strategy which includes an outline of the employment growth potential in the renewable energy sector. The report acknowledges that renewable energy, smart grid development and energy efficiency products and services are key sub-sectors of the green economy. It identifies that the global market has been estimated at €3.5 trillion, with the potential to grow by more than 4% per annum to 2015.
The Expert Group on Future Skills Needs indicated that there were 19,000 people employed directly in Ireland in 2010 in key sub-sectors of the green economy, excluding agri-food production. It suggested that up to an additional 10,000 jobs could be created across the variety of sub-sectors by 2015 through the adoption of appropriate policies. The longer term job creation potential is even more significant, particularly in the area of renewable energy.
So, in conclusion, climate change, energy security and competitiveness are inter-related challenges that need to be addressed by transforming Ireland's economy from one of predominantly import-based, fossil fuel dependence to a more indigenous, low carbon economy based around energy efficiency, renewable energy, the green economy and smart networks.
The Government’s renewable energy strategy is set firmly in the global and European context. I am convinced that the development and deployment of Ireland’s abundant indigenous renewable energy resources, both onshore and offshore, clearly stands on its own merits in terms of the contribution to the economy, to environmental sustainability and to diversity of energy supply. In addition, and in support of our own energy policy objectives, we remain committed to delivering on our obligations under European Union Energy Policy, which include the binding national targets for renewable energy by 2020.
Our objectives accord with the policy ambitions for renewable energy set by the European Union and the International Energy Agency. They are grounded in the economic, environmental and supply security imperatives to decarbonise energy systems and to diversify energy sources by fundamentally de-coupling energy from reliance on fossil fuels. They also recognise the economic opportunity which the development of an electricity market of scale in renewable energy represents.
Finally, the scale of the renewable energy resources in your region is significant by European standards. Providing we can develop a sensitive and appropriate planning system and get the necessary infrastructure built, then there is an enormous regional development potential here.
I would like to close by assuring you that the Government, and my Department in particular, will work closely with you to ensure that we can deliver on this potential.