Department of Communications, Energy and Natural Resources Statement by Ken Spratt, Assistant Secretary.

20 June 2013

Introduction Thank you Chairman. Perhaps I could begin by introducing my colleagues from the department. Brian Carroll is responsible for Renewable and Sustainable Energy, Stjohn OConnor, is responsible for Energy Efficiency. I am also joined by Mairad McCabe, who is responsible for Energy Planning. Chairman, thank you for the invitation to address the Committee this afternoon on the Climate Action and Low Carbon Development Bill. As Members will be aware, the Department of Communications, Energy and Natural Resources (DCENR) leads on the development of energy policy options, including energy policys interaction with environmental policy and climate action goals.

DCENR and DECLG Collaborating to Implement Government Policy on Low Carbon Roadmaps. Chairman, I should first mention that our Department is fully committed to working closely with our Environment colleagues on implementing Government policy on energy and climate, including the development of a sectoral Roadmap for energy. In adopting a crossDepartmental approach and aligning our respective roadmaps, the determination shared across the board is for a robust framework which allows us to adopt appropriate measures within realistic but ambitious timeframes. We note that the explanatory note to Head 4 states that the national and sectoral lowcarbon roadmaps are aimed at achieving transition to a low-carbon, climate resilient and environmentally sustainable economy in a cost-effective way and as soon as possible (and not later than 2050). From an energy policy perspective, our Department is mindful that sustainability and cost effectiveness must be accompanied by paying due attention to energy security. Adopting a rational and integrated approach in close discussion with other Departments will, of course, facilitate the development of workable policy that is effective in terms of sustainability and energy security.

20/20/20 Chairman, its important to recall the other 20s from the 20/20/20 EU plan. While we are focussing today on the commitment to reduce greenhouse gas emissions by 20%, the European Council also committed to increase by 20% the energy efficiency in the EU and to reach 20% of renewables in total energy consumption in the EU. We in DCENR are leading Irelands delivery of these other two 20s. While we are facing many difficult challenges we are making very steady progress and are on track to reach those goals. It is also important to note that reaching the energy efficiency goal, and the renewable energy goal, will make a significant contribution to the greenhouse gas emissions goal. Complexity of Energy Policy and its Foundation on Three Pillars (security of supply, sustainability and competitiveness) Energy policy in Ireland, and indeed in most developed countries, is founded on the three pillars of security of supply, competiveness and sustainability. More recently, as we consider updating our Energy policy paper, we have been mindful of the opportunity that energy policy presents in terms of growth and jobs. After the Presidency, we will turn our attention to the policy paper and you will notice the significant focus on the jobs and growth agenda which has been uppermost in Minister Rabbittes mind and indeed a major focus for the Government. Irelands Energy Mix Chairman, it is important to understand the unique characteristics of our energy mix. We are heavily dependent on imports of oil and gas from neighbouring markets. Against that backdrop, our renewable energy capacity has continued to expand, with increasing use of wind power feeding into the grid. Despite the difficult economic situation, reform and modernisation of the energy market has been steady, with implementation of an all-island electricity market, entry of new players into the competitive retail electricity and gas markets, and substantial investment in infrastructure. Progressive liberalisation of the gas and electricity markets has been a positive move. I have already mentioned our proactive energy efficiency policy. We also wish to embrace the benefits of new energy technologies, particularly demand side management tools on a smart grid, tailored to suit our local circumstances. Our efforts are aimed at making progress towards our 2020 goals and anticipate even greater ambition after 2020. Meeting ambitious objectives and balancing competing values will require considerable analysis and sound modelling at both national and European levels.

The Need for Development of Accurate and Reliable Target Modelling As we face the end of one era based on fossil fuel and transition towards another based on establishing new energy systems based on renewable energy and incorporating new technologies, we must employ sound data and evidence to develop accurate modelling scenarios which would enable us to make sound predictions on a more scientific basis, across the range of sustainability, security and competitiveness. I note that Head 5 of the Bill emphasises the need for due consideration to be given to the economic impacts of the national and sectoral roadmaps. Thankfully, good work has been done on developing sustainability focussed models, but much more needs to be done to develop good quality predictors and models based on energy security and on competitiveness. We anticipate working closely with colleagues in the other relevant departments to ensure the full impacts of all options for the sectoral roadmaps are clear. Chairman, if I may, I would like to touch briefly on a number of recent developments in order to give the members some important background context in terms of the Irish energy scene. IEA Country Review of Ireland Report 2012 Firstly, the in-depth country review of Ireland which was conducted by the International Energy Agency (IEA) in 2011 and reported upon in July 2012 contained many positive comments on the direction being taken in the Irish energy market. In its key recommendations, the IEA urged actions to support the drive towards a low-carbon economy, including the development and deployment of new low-carbon technologies in which Ireland has an advantage; ensuring that participation in regional energy markets brings benefits to our consumers; and emphasising the balancing of local community concerns with the benefits of critical energy infrastructure. It also recommended in its report that we outline a plan for emissions reduction targets, update our position in relation to developing low-carbon strategies and plans, clarify the position in relation to carbon tax, and explore synergies between the energy and agricultural sectors so as to contribute to GHG emissions. In addition, it identified a number of actions on continuing to strengthen our energy efficiency strategies and plans. Clearly, there is good alignment between the Bill and the IEAs recommendations. IEA World Energy Outlook for 2013 and IEA Energy Efficiency Report Secondly, central to any future de-carbonisation strategy will be the maximisation of energy efficiency opportunities, a point highlighted by the IEA in its report entitled Annual World Energy Outlook Report 2013. Unlocking the energy efficiency potential on an economically viable basis will remain a key focus of Irish energy policy. Indeed, yesterday, Minister Rabbitte launched the Energy Efficiency Framework exemplar projects. Those projects will

test new processes for procuring, contracting and financing energy and carbon saving projects. DCENR Renewable Energy Strategy Thirdly, the National Renewable Energy Action Plan (NREAP) sets out the Governments strategic approach to deliver on Irelands target to achieve 16% of energy from renewable sources by 2020. We aim to achieve 40% electricity consumption from renewable sources by 2020. On the transport front, we are seeking to transform our oil dependency. A two pronged strategy has been put in place which combines significant increases in the use of biofuels with facilitating greater use of electric vehicles in Ireland. The Government has also set a target of 12% renewable heat by 2020. A series of related and complementary support programmes have been put in place to address the delivery of this target already, aimed at supporting both demand and supply sides. European Commission: Energy Roadmap 2050 and the 2030 Green Paper. I should also mention the European Commissions Energy Roadmap 2050 and their Green Paper on a 2030 Framework for Climate and Energy Policies. These important documents refer to the close linkages between climate and energy policy development and acknowledge the benefits of retaining a European approach to that policy post 2020. Needless to say, the Department will ensure Irish interests are well represented in the development of a combined approach on target identification and delivery. Indeed, the work that we undertake on our sectoral roadmap will feed into our work on the 2030 Framework. Recent Discussions on Energy Policy (Two Irish Presidency Energy Councils, Informal meeting of EU Energy Ministers, SETPlan Conference and the May European Council) Finally, I should briefly mention some of the work that we undertook during our Presidency of the Council of the European Union. Minister Rabbitte chaired three Councils of Energy Ministers, one an Informal meeting held at Dublin Castle. Good progress was made on various legislative and other files including excellent discussions on the 2030 Framework and on the need for renewed focus on facilitating energy efficiency.

Summary and Conclusion To sum up Chairman, I wish to emphasise that our Department is acutely aware of its responsibility as Ireland, Europe and the world transitions to a low carbon economy and society. We are seized of the challenges that such a transition presents across a number of fronts. We must play our part in minimising the rise in global temperatures as much as

possible. We must achieve our long term carbon ambitions without damaging our national competitiveness or undermining our energy security. We are setting about our interrelated goals, within the legislative framework set by the Oireachtas, in collaboration with colleagues in other Irish government departments and agencies. Our international colleagues, in Europe and beyond, are also focussed on similar challenges and eager to engage, cooperate and succeed. We look forward to addressing and overcoming the obstacles to a low carbon future.

We are happy to answer any questions you may have concerning the Bill and the surrounding policy approach. Where we are not in a position to make an immediate response, we would be happy to provide follow up information to the Members over the coming days. Thank you Chairman.