F I A N N A F I L P O L I C Y P A P E R : E N E R G Y I N I R E L A N D

FIANNA FIL POLICY PAPER

A P R I L 2 0 1 5

MICHAEL MOYNIHAN TDSPOKESPERSON FOR COMMUNICATIONS,

ENERGY AND NATURAL RESOURCES

F I A N N A F I L P O L I C Y P A P E R : E N E R G Y I N I R E L A N D

Executive SummaryFianna Fil believes Irelands current energy policy is driving up consumer prices, making our economy uncompetitive and failing to tap into the opportunities presented by community energy projects. It is time for policy makers to develop a national energy policy which is low in cost, is respectful of local communities and their ability to contribute to our renewable energy future and which secures our energy supply from external energy shocks.

Moving towards a carbon neutral environment is a long term goal that must be targeted so that future generations will be in a position to be energy self-sufficient. We are still excessively dependent on energy importation to power homes and businesses nationally. With Ireland obligated to meet the EU target of 16% for all energy generated from renewable sources by 2020, concrete steps have to be taken. It is also important that Ireland does not become over reliant on any one particular energy source and diversify where possible.

In this energy policy paper, Fianna Fils proposals are outlined in the following 5 key areas:

1: Ensuring a Balanced and Secure Energy MixStrive towards carbon neutral self-sufficiency away

from heavy energy importationExplore the feasibility of offshore wind and tidal

energy

2: Investment in Retrofitting Homes and BusinessesEstablish a cross departmental Green Deal agency to

finance a new simplified, easy access scheme across all tenure types for home energy usageAwareness campaigns to increase citizen energy

efficiency education

3: Reforming and Empowering the Commission for Energy RegulationEmpower the Commission to significantly lower

energy prices to reflect the needs of Irelands consumers and competitiveness Investigate competitive practices in the energy

sector and allow for sanctions

4: Planning Infrastructure with Community ConsensusDetailed actions for community acceptance of wind

energy projectsOppose the use of fracking

5: Examine Expansion of Biomass Investigate utilising biomass as a central energy

resource supplying the national gridExplore all funding mechanisms to support biomass

projects

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Introduction Fianna Fil believes Irelands current energy policy is driving up consumer prices, making our economy uncompetitive and failing to tap into the opportunities presented by community energy projects. It is time for policy makers to develop a national energy policy which is low in cost, is respectful of local communities and their ability to contribute to our renewable energy future and which secures our energy supply from external energy shocks. The pursuit of renewable energy in Ireland offers the potential to shield Ireland from ever rising oil and gas prices and help reduce our CO2 emissions. However, it is vital that renewable energy projects are developed in a sensitive manner to the environment around them and that they will benefit the local community. It is also important that Ireland does not become over reliant on any one particular energy source.

This paper is based on 5 core policy areas:

1. Ensuring a Balanced and Secure Energy Mix2. Investment in Retrofitting Homes

and Businesses3. Reforming and Empowering the

Commission for Energy Regulation4. Planning Infrastructure with Community Con-

sensus5. Examine Expansion of Biomass

Ireland imports over 88% of its energy resources, largely consisting of gas and oil. This makes our energy market vulnerable to external energy shocks caused by both political and economic change in in Eastern Europe, including the Ukraine and Russia, the Middle East, and the wider world. Our reliance on imports means Irelands energy market is like a bottle cork floating in a very large and turbulent sea. This must change.

This policy paper seeks to outline the actions necessary to put Irelands energy supply on a more balanced and cost effective footing while also ensuring that community concerns are address with regard to strategic infrastructure projects. Now is the time for our country and our communities to take action together to secure our future prosperity and progress for decades to come by tackling the challenge of our generation.

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1: Ensuring a Balanced and Secure Energy Mix

With world population projected to be over 9 billion by 2050, the demand for remaining fossil fuels will only intensify; driving oil and gas prices skywards. This married to growing geopolitical instability is threatening existing energy security. Ireland is not fully self-sufficient and we are excessively depen-dent on energy importation to power homes and businesses nationally. It is imperative that we plot a course towards carbon neutral self-sufficiency to meet these emerging energy supply challenges.

Ireland must ensure that our energy supply is secure and balanced. Wind energy already provides Ireland with over 19% of its electricity needs. This is a significant percentage in energy terms on our grid for any resources which fluctuates dramatically. Until Irelands grid is fully integrated into the European energy market further increases in our wind energy capacity are misguided especially in light of the EUs adjustment in climate change targets and energy focus. EU aims for 2020 set renewable energy targets for each Member State. Ireland is obligated to meet the target of 16% for all energy generated from renewable sources by 2020. This renewables target is to be met by 40% from electricity, 12% from heat and 10% from transport.

The new 2030 proposals governing the EUs climate and energy policy post-2020 envisages a 40 per cent decrease in carbon emissions from 1999 levels by 2030, and an EU-wide target of 27 per cent for renewable energy. National guidelines in this area have been removed in the 2030 targets for renewable energy. The renewable energy target is now an EU level target which is binding on the Union as a whole but gives Member States greater flexibility to adapt to their national preferences and circumstances. This has resulted in the UK rolling back from its plan to import wind energy from Ireland in order to reach its EU targets. Ireland should therefore focus more on reducing energy consumption and our carbon emission rather than seeking to dramatically increase our reliance on wind energy at a very high cost. Other alternative renewable energy resources must also be pursued such as biomass energy.

Biomass energy may offer Ireland an opportunity to dramatically reduce our carbon emissions and reduce the necessity to spend large sums of public money on upgrading the national grid as outlined in Grid25. The pursuit of biomass as a renewable energy in Ireland may also lesson the necessity to construct more wind farms within the state.

The future proofing of legislation should be examined for any new fossil fuel discoveries on Irish territory so that revenue and taxes accruing from these finds automatically go into a national sovereign wealth fund. Norways national sovereign wealth fund is a model to investigate further and see if elements could be used in an Irish setting.

Fianna Fil questions the need for plans to build industrial sized wind farms due to the negative impact on the local communities and the lack of demand from the UK for Irish wind energy. The shelving of plans to export power to the UK from wind turbines in the Ireland now means that our national grid will have an oversupply of wind energy if the projects originally proposed go ahead. Given

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wind energys unstable and unpredictable nature of production, further reliance on wind energy may undermine the stability of our national grid. To illustrate this, only 43 MWs of wind energy were produced during the week beginning on 30th September 2013 according to the Commission for Energy Regulation. Yet wind generation produced 1,769 MWs on 17 December 2013. That is a variation of 1726 MWs on our Grid, which represents more than half our energy needs in the summer.

Furthermore, it is very peculiar that three semi state companies are competing in the wind market. Bord na Mona, Coillte and ESB have all invested hundreds of millions in constructing numerous wind turbines nationally. They will be in direct competition with one another, while still owned by the state. We should be diversifying our renewable portfolio where possible because wind does not guarantee security of supply.

Offshore wind and tidal energy are other renewables that have the potential to contribute to future renewable targets beyond 2020. Nevertheless, Government most invest in greater research and development (R&D) in examining the abundant Irish offshore renewable energy resources. Ireland has a landmass of around 90,000 square kilometres, with a

sea area approximately 10 times that size, at 900,000 square kilometres, located on the Atlantic edge of the EU. This gives us an immense opportunity to maximise the potential emanating from offshore wind energy via sea based turbines that generate electricity. While the main disadvantage of offshore wind is high construction costs, the major advantage relates to the more powerful winds that blow offshore, away from population centres.

Tidal energy is another offshore renewable that could tap the enormous potential of our geographical position. Tidal power is a type of hydropower that generates electricity by the slow movement of large volumes of water according to the sea tides that flow in and out twice daily. In Strangford Lough in county Down, a company have installed a 1.2MW tidal- energy unit - the worlds first full-scale commercial prototype tidal turbine that generates electricity while connected to the grid. While challenges remain for more widespread use, this technology needs further R&D to make it more economical for greater commercial roll out, thereby enhancing security of supply. Overall, a broader mix of renewable energy is required and further reductions in energy consumption should be pursued in order to ensure a balanced and secure energy mix.

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2: Investment in Retrofitting Homes and BusinessesMoving towards a carbon neutral environment is a long term goal that must be targeted so that future generations will be in a position to be energy self-sufficient. The dependency burden of importing energy to power the national grid is not sustainable and should not be passed over to the next generation. Concrete measures such as government run awareness campaigns to increase consumer education must be rolled out so that energy efficiency is a constant everyday automation for energy users. Citizens must become more aware of their energy usage and the levels required to keep Irish communities and businesses connected to the national grid from imported sources, purchased in volatile international markets.

The National Smart Metering Programme initiated under a FF led government is one such measure to improve energy awareness and usage. The provision of smart metres in all homes and SMEs will give an instant real time usage reading, thereby giving consumers a mechanism to reduce their electricity and gas bill. This will enable users to change their electricity usage away from more expensive consumption at peak times. It will also have the added benefit of encouraging citizens to become more energy efficient by the direct correlation between decreased consumption and accompanying cost reduction overtime.

There is significant potential in Ireland for energy and carbon saving in Irish homes and businesses. Through the retrofitting of homes and offices with proper insulation and cleaner heating production, carbon emissions in Ireland could be reduced dramatically and energy consumption could fall. It would also provide a necessary boost for Irelands construction industry as a national rollout programme would have

the potential to create thousands of new jobs.

The current schemes run by Sustainable Energy Authority of Ireland (SEAI) including the Better Energy Homes and Better Energy Communities schemes should be expanded further. The capital needed to allocate significantly more funding to these projects could be found through the reduced capital needed to upgrade the national grid as outlined in EirGrids Grid 25 Project due to the reduction in energy consumption. This project is currently estimated to cost between 3.2 billion and 4 billion. Retrofitting along with the national rollout of smart metering will result in lower energy bills for energy consumers and a significant reduction in carbon emissions in Ireland. It will also improve the housing stock across the country and increase employment levels in the construction sector.

Fianna Fil proposes the establishment of a Green Deal agency, a new multi-fund cross departmental agency tasked with accessing European Regional Development Fund, EU Cohesion and European Investment Banking funds as well as private finance. The agency will be tasked with financing a new simplified, easy access scheme across all tenure types will revolutionise home energy usage in Ireland. It is also vital that the Department of Communications, Energy and Natural Resources (DCENR) apply better regulation guidelines to simplify existing energy efficiency funded incentive schemes (Better Energy Financing project) to increase take up. Reducing the administrative burden and red tape associated with such schemes to streamline bureaucracy and to make it seamless for citizens to avail of energy efficient incentives is a must.

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3: Reforming and Empowering the Commission for Energy RegulationElectricity and gas prices in general in Ireland rise at a much faster rate here than average energy costs across the EU according to Eurostat. Ireland is often cited as being in the top five highest household electricity prices among the 28 European Union Member States. When prices rise in Europe, our prices are often seen to rise at a faster rate. One example of this phenomenon occurred in 2013, when energy costs for consumers and gas prices in the Republic soared at a rate seven times the EU average. Gas charges in Ireland went up by 7.4% in 2013 compared to an average increase of just 1% across the European Union. While prices have recently eased as a result of the drop in oil prices and the expansion of shale gas, Ireland still remains vulnerable to rapidly rising prices when the market turns.

In June 2014, the UK Energy Regulator wrote to the largest power suppliers in Britain seeking an explanation to consumers as to why a decline in wholesale gas and electricity prices has not led to lower fuel bills. No such approach has been taken by the Irish Commission for Energy Regulation (CER). Fianna Fil has questioned why this is not happening in Ireland. The Commission must take a different approach to the incessant requests for energy price increases being put forward by energy companies.

The energy regulators failure to pursue policies which result in significantly lower energy prices at a time of record profits for Irish energy firms and lowering wholesale energy prices has led Fianna Fil to believe that the Commission for Energy Regulation must be reformed and empowered. The CER must take account of the impact of granting price increases for energy providers on our competitiveness and consumers. At a time of massive profits for energy companies in Ireland and decreasing energy costs, it appears that the legislation needs to be amended to balance the priorities of the Commission for Energy Regulation between the needs of the energy suppliers and the needs of Irelands competitiveness and consumers.

Key reforms must include the ability of CER to investigate competitive practices in the energy sector and allow for sanctions against energy companies where they are shown to be engaged in anti-competitive practices. In addition, the feasibility of empowering the CER should be investigated to ensure that Ireland reaches its 2020 target of increasing energy efficiency by 20%. Currently, this is the responsibility of the Sustainable Energy Authority of Ireland, which has voluntary agreements with most energy suppliers involved in the Better Energy Programme. Nonetheless, these have not been sufficiently implemented or followed by suppliers. Therefore, the CER could be empowered to set stricter annual targets for each supplier in order that they adhere to these energy efficiency targets.

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The planned construction of wind turbines and pylons has created great concern and fear amongst local communities in Ireland. Fianna Fil have put forward a number of policy ideas in order to address community concerns while also ensuring that strategic infrastructure is constructed to the highest international standard.

In order to address the concerns of local communities surrounding the planning and construction of strategic infrastructure it is vital that outdated planning guidelines are replaced with updated guidelines on a national legislative footing. Current plans for significant wind energy expansion and grid development as contained in Grid 25 should be subject to a full economic review in light of our reduced energy needs. These projects should also be reviewed taking into account their impact on energy prices and their long term sustainability in supplying the Irish national grid.

The REFIT (renewable energy feed in tariff) scheme has largely benefited large scale development of renewable energy projects. However, small scale, community driven renewable energy projects will have a considerable impact on entire communities with revenue being retained locally in rural areas. Fianna Fil proposes a reform of the REFIT system to create an initiative for smaller scale projects. Notwithstanding the additional work and start-up costs, developing a sustainable business model will benefit communities, while enhancing energy supply in the long term. To encourage take up of small scale community energy projects energy suppliers should be mandated to give a price discount for a certain period.

Fianna Fil has also proposed the following actions in order to gain community acceptance of wind energy projects:

Ensure all county development plans have a wind energy strategy which has been submitted for public consultation in advance of any wind turbine construction in that county.

Introduce a minimum distance restriction on wind turbines from residential properties. Wind turbines will be kept a distance of six times the height of the wind turbine away from residential property.

Introduce a new community share options scheme on proposed wind farms where the local

community must be given the option of purchasing a minimum of 20% ownership of wind farms in their area, creating a sustainable wealth source for the local community.

Introduce a new compensation provision for properties with a decreased property value as a result of the construction of the wind turbines.

Introduce new noise and shadow flicker restrictions which reflect international best practice.

Examine the potential of increasing the number of off-shore wind farms in Ireland and map areas where this development could take place.

Fianna Fil also opposes the use of the fracking technique in Ireland. There are potentially significant risks to our natural environment due to the pumping technique and the fate of the fluids used in the drilling and fracturing processes. The possible risks to our drinking water from fracking are simply not acceptable. Nor is the possibility of serious damage to our reputation as a high quality food producing nation worth risking. The Government of France banned fracking in May 2011 in a response to these risks. We are not willing to subject our communities to any potential risk which could undermine the integrity of their water supply or the natural environment in which they live. As a result of these risks Fianna Fil are demanding a ban on any fracking activity in Ireland.

4: Planning Infrastructure with Community Consensus

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5: Examine Expansion of Biomass Biomass is described by SEAI as land and water-based vegetation, organic wastes and photosynthetic organisms. Such non-fossil, renewable carbon resources from which energy can be generated are used as fossil fuel replacements e.g. wood, grasses or crops. Biomass is also burned to produce heat that is used to create steam to turn turbines to produce electricity. Liquid biofuels can also be produced from biomass crops.

It is estimated that the full implementation of current Government policies could mean that up to 5% of electricity may be generated from biomass in 2020. It is Fianna Fils belief that biomass may be able to supply the Irish Grid with a significantly higher percentage of energy if the correct policies were pursued. We believe that the possibility of converting the coal fired power station at Moneypoint to biomass should be examined as a way of cutting carbon emissions and reducing the cost of producing renewable energy.

An examination of the feasibility of utilising biomass as a central energy resource supplying the national grid with electricity should be carried out. The successful conversion of the Drax coal fired power station in the United Kingdom would seem to present Ireland with a similar opportunity to broaden the renewable energy mix being sought here.

Long term, Ireland is predisposed to maximise biomass use due to advantageous climate and soil conditions conducive to its production. Increased afforestation targets will enlarge national forest cover, strengthening the indigenous supply of timber for biomass use. Irish cooperatives have already started to see the potential gain from biomass energy production. The Aurivo heat generating operation in Ballaghadereen, Co Roscommon consists of a 12MW biomass boiler. This facility will decrease oil imports by 5 million litres and cut the carbon output in half. It is an imperative that all funding mechanisms are explored to support biomass projects such as the EUs funding resource for environment and climate change projects (LIFE programme). Further, the DCENR must fast track the planned renewable heat incentive for commercial renewable heating installations. It is clear that biomass as a source of energy will have a significant role in the heat and transport sectors where fewer alternative technologies exist. The change of approach seen in the electricity sector to renewables has not been replicated in the transport sector which is now struggling to reach its renewable energy targets. Biofuels must be part of the solution to this challenge. The Government must be more proactive in promoting renewable solutions for the transport sector. It must also seek to encourage further the use of cycling and public transport as a way of reducing congestion in our cities and the emitting of carbon dioxide.

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MICHAEL MOYNIHAN TDSPOKESPERSON FOR COMMUNICATIONS, ENERGY AND NATURAL RESOURCES

Dil Eireann, Teach LaigheanSrid Chill Dara, Baile tha Cliath 2 .Email michael@michaelmoynihantd.ie

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