Speeches
Fiona O'Malley calls for creation of a Department of Environment and Energy
Fiona O'Malley Proposes New Department to Tackle Environmental Sustainability and Energy Security
Five years ago at the beginning of this Government the world was a different place. Priorities were different. None but a very few could have foretold how energy and climate change would move centre stage and become the most important political challenge not just of the present term but of our generation.
I'm attracted to politics and we are in politics because of the ability to get things done, to make a difference. Anything is possible in politics if it is fuelled by a political will, a drive and an ambition, but most importantly, a vision. You need to know were you want to go.
Undoubtedly, the complex challenge of energy security, climate change and the overwhelming responsibility of government to create and sustain a vibrant economy are testing demands for any administration. But the solution will only be found when these oft times conflicting demands are addressed together.
Energy in the 21st century poses at least as great a challenge to the country as the economy was in the 1980s. Rising fuel costs and our over dependence on imports have the potential to do huge damage to the economy.
About forty years ago, barren Gulf states were transformed by oil. They discovered a massive natural resource underground. What we have is a massive natural resource all around our coast: not oil, not gas, not gold, but wind.
It might sound strange, but Irelandliterally has the best wind in Europe .
If we harness this resource, we can establish ourselves as the 'wind arabs' of the world.
To achieve this will require investment by Government and the private sector; research and development; and above all the wisdom to understand the scale of the climate challenge, and vision to see the size of the opportunity and the courage to commit the resources to grasp that opportunity.
To equip ourselves for our energy future will require that the State gears up for change. We need a government department which is fit for purpose: able to tackle the intertwined issues of energy security and environmental sustainability.
The issues of environmental sustainability and energy security deserve the dedicated attention of a full Cabinet Minister.
We are proposing a new Department of Environment and Energy, where responsibility for these twin interests will reside. Dedicated. With strong Agencies. And strong control of regulators.
To make real progress on the challenge of climate change and ourKyotoand post Kyoto responsibilities a department which is singularly focused on this challenge is necessary.
The Department of the Environment as currently constituted spreads its functions too widely. The new department would assume responsibility for environmental protection issues, building standards and regulations and all matters related to energy. But the minister should be divested of responsibility for Local Government matters. We will make this a manifesto commitment.
Irelandpossesses limited hydrocarbon resources. Thus it is essential that we develop the Corrib gas field as expeditiously as possible and take all possible steps to promote further exploration and development.
We also have to make maximum use of our renewable energy resources. Our wind and ocean energy potential is internationally recognised and our climate is perfect for the development of bioenergy resources.
From a predominantly agricultural society we have developed into a more diverse cosmopolitan and enterprising society. Traditional farming is in decline, but farmers with an entrepreneurial spirit and an appreciation for the capacity of agriculture to help reduce our CO2 emissions can contribute to the development of an indigenous Biofuels industry.
The announcements made this week by the Minister for Communications Marine and Natural Resources and the Minister for Agriculture in relation to targets and investment schemes provide the necessary framework in which progress can be made. Developing the industry is not with out its negative impacts however.
The increase in grain prices across the world is a direct consequence of the development of the biofuels industry in theUS . For energy security reasons, rather than any altruistic concern for the global environment, 20% of America 's corn yield is currently going into biofuel production rather than the food chain. This is set to grow to 40% before long. For us this means the discomfort of higher prices. For others particularly, in the developing world, it results in starvation.
The lesson from this is that the development of a biofuel industry must be done on a sustainable basis. In Ireland , we need to recognise the limits of tillage based biofuel production. The sustainable source for biofuels inIrelandis grassland. The targets and initiatives announced this week by government permit an indigenous industry to develop. Given the statistics released in a report by the EPA yesterday on CO2 emissions and the huge increase accounted for by the transport sector, we have a mountain to climb.
Energy efficiency and conservation are the hallmarks of any responsible energy policy. It is infinitely cheaper to save a kilowatt of energy rather than to generate one. This fact should inform all decisions in relation to energy policy. As Gerry has pointed out the waste of energy associated with the built environment is staggering and the savings immense. Delays in introducing more stringent building regulations are highly irresponsible: burdening new home owners with inefficient homes, the delay condemns buyers to a lifetime of high energy bills.
I was delighted this week that my own local authority Dun Laoghaire Rathdown has adopted a policy which will require new buildings to be build to a higher standard. This is good for the home owner and good for the country and I hope other local authorities will follow suit. I compliment Dun Laoghaire Rathdown on their vision.
The fact that over 40% of new housing constructions last year were once off housing in rural areas is a challenge to sustainability. On the other hand, we cannot impose urban settlement patterns on rural environments. The planning system must be adapted to require the use of sustainable methods of construction and the installation of renewable energy heating technology for once-off housing projects to compensate for the transport-related energy cost associated with such development.
Our rising CO2 emissions figures are a worrying trend. The ambition for 30% of electricity produced from renewable sources by 2020 as set out in the Government Green paper is only one of the ways we can reverse this trend.
This figure is only surpassed by our own party target date of 30% by 2015. Yes this is an ambitious target but if you don't set high standards for yourself you will only perform moderately well. With the will comes the way. Given our optimum location inIreland , wind will inevitably generate a large proportion of this energy.
But we also need shorter term solutions to our rapidly rising energy costs and our declining competitiveness, which is now manifesting itself in job losses. Energy prices are still rising in Ireland at a time when European wholesale gas prices are a quarter of what they were this time last year.
The ESB was the flagship public service utility which served the country's energy requirements exclusively for many decades. In this liberalised market its role and operation have changed very dramatically and not at always in the interest of the shareholder; you and me the people of Ireland .
You and I should be enjoying cheaper electricity. We don't need to be paying the prices we currently are. We are being ripped off by ESB dominance and work practices and what is galling is we own the company!
Nowadays the ESB is far more interested in the welfare of its workers and its own balance sheet rather than the country's balance sheet. Liberalisation has failed to produce the promised competition in generation. It has however allowed huge profits to be made: In the period 2003-2005 ESB's pre-tax profits from its 'regulated business' were almost €300m p.a.
These profits were earned in areas where ESB has either a total monopoly, such as Transmission & Distribution or where it has a virtual monopoly, such as price setting generation plant.
As it is widely accepted that there is no question of the vital assets of transmission and distribution ever being privatised, and given that it is a monopoly asset, why has the regulator permitted the ESB to generate enormous profits? Commercial rates of profit make no sense in a monopoly scenario and are an abuse of position. Before liberalisation, this area operated on a break even basis. This is when the ESB operated in the national interest. Now the bottom line is changed.
But in addition to high profits ESB's costs are correspondingly high. It's average payroll costs are twice the industrial average and the Deloitte Report, published last year drew attention to the ESB's exceptionally high generation costs (€122,000 average wage cost in one power station) and poor power station performance (generation availability 67%). These combined factors underpin the escalating energy costs in the country which threaten our competitiveness.
In a nut shell: we are paying too much for electricity because of ESB's dominance, particularly where they own the power lines which brings the electricity into our homes; and all other operators have to use these wires. This allows the ESB to charge what they like; Other factors contributing to excessive prices include; old clapped out power stations which operate less than half the time, and very, very expensive work practices.
Irish electricity prices- currently 40% higher that the EU average for commercial customers are higher than they should be.
The Progressive Democrats say that a 10% reduction in electricity prices is achievable.
How?
The Minister must instruct the regulator that the ESB revert to the break-even position in monopoly areas of energy supply- ie. bringing it down the wires to our homes.
When you own the wires and are never going to sell them, it is unethical to be charging unwarranted high prices just to swell your coffers essentially in expectation of a privatisation which will never come. It is an abuse of position. Providing reasonably priced electricity is no longer the purpose of the ESB. It should be the focus of the Minister.
In a market like ours effective regulation is of critical importance. Yet the regulator intervention time after time has resulted in consolidation of ESB dominance and the perpetuation of inefficient and costly work practices. This will have to change.
The expected government White Paper on energy provides the opportunity to remedy this inefficient management and ineffective regulation of this monopoly area and to deliver cheaper electricity to customers in our homes and factories. This will be Progressive Democrat policy in any future administration.
The continued prosperity of this country is a priority for the Progressive Democrats.
The environment health of this country is priority for the PD's.
Keeping the lights on is a priority for the PD's.
What we are proposing are intelligent green responses to the challenges we face, not theological ones.
Thank you.