Cork East Fine Gael TD, David Stanton last week urged the Minister for Communications, Energy and Natural Resources, Pat Rabbitte TD to further promote micro-generation supports to electricity consumers. Deputy Stanton comments were made during a Dail debate.
“Two years ago the ESB launched a micro-generation scheme to encourage domestic and other customers to generate their own electricity. This scheme provides for customers who use micro-generators to generate their own electricity to receive a payment for the electricity they feed back to the grid.
“Although it seems there is a large level of interest in the scheme, take-up has not been as high as had been hoped. Provision was made by the ESB to provide metering free of charge to the first 4,000 domestic customers. Unfortunately, just 364 customers have signed up to the scheme to date. The majority of these are using wind turbines to generate electricity with smaller amounts opting for photo-voltaic (solar) and hydro-turbine installations.
“The Sustainable Energy Authority of Ireland (SEAI) are currently nearing completion of a 18 month pilot scheme monitoring the performance of 42 different installations. SEAI and the Department are also carrying out a cost-benefit analysis of a feed-in tariff programme for micro-generation. The results of these will inform future micro-generation schemes.
“Given the great potential of micro-generation schemes, I have asked the Minister to examine the possibility of improved marketing of the current scheme and of involving other electricity suppliers into the scheme. I have also asked that he look at any possible barriers to the scheme such as the cost of supports under the scheme and the extension of VAT refunds to farmers using wind instead of diesel generators.
“I hope that improved supports will be made available to encourage more people to begin producing their own electricity through micro-generation. I am convinced that micro-generation through renewable energy is both environmentally friendly and an effective way to expand our power generation.
Contact: David Stanton TD, tel: 021 4632867 www.stanton.ie
Note to Editors, transcript of Dail debate below
Oral PQ – Microgeneration, Tuesday, 5th April 2011
29. Deputy David Stanton asked the Minister for Communications; Energy and Natural Resources, further to Parliamentary Question Nos. 53 and 61 of 30 November 2010, the number of customers currently on the ESB micro-generation tariff; and if he will make a statement on the matter. [6636/11]
34. Deputy David Stanton asked the Minister for Communications; Energy and Natural Resources the initiatives in place or due to be put in place by him to encourage micro-generation; and if he will make a statement on the matter. [6367/11]
Deputy Pat Rabbitte: I propose to take Questions Nos. 29 and 34 together. I am informed there are 364 customers on the ESB microgeneration tariff to date, representing a total connected generation capacity of just in excess of 2 MW. The technologies being deployed are wind turbines, solar installations and small-scale hydro turbines. ESB Networks is currently processing 18 customer applications and these are at different stages of completion. ESB Networks agreed in 2009 to provide the necessary import and export metering free of charge to the first 4,000 domestic microgeneration customers. ESB Networks also provides a support payment of ten cent per kilowatt hour for those eligible customers for the first 3,000 kW hours exported back to the grid annually for a period of five years.
The take-up has been disappointingly low despite an overall tariff rate of 19 cent per kilowatt hour being available. This compares to the wholesale electricity price, which is currently averaging approximately seven cent per kilowatt hour. Currently, ESB Customer Supply, now rebranded ESB Electric Ireland, is the only electricity supplier in the market offering microgeneration tariffs to domestic customers who generate up to 11 kW.
The Sustainable Energy Authority of Ireland, SEAI, is currently completing an 18 month microgeneration pilot scheme and is monitoring the performance of the 42 installations involved. Those participating in the pilot have been able to avail of the tariffs offered. The findings from the pilot will provide valuable data with regard to microgeneration and which will inform policy decisions on how best to stimulate the sector. In line with the programme for Government commitment, I have asked my Department and the SEAI to finalise their cost-benefit analysis work on a feed in tariff programme for microgeneration. Any such programme must be fully cost effective and take into consideration the overall cost implications for all electricity consumers.
Deputy David Stanton: I thank the Minister for his response. When does the Minister expect the SEAI study to be completed? Is the ESB carrying out a review of this as well? Has the Department identified any barriers or why, as the Minister stated, there is such a low uptake in a scheme which could have great potential? For example, has anyone considered the fact that VAT can be reclaimed on diesel generators but not on wind generators? Would this assist if it were put into practice? Is there any reason it should not be allowed? Is it not an anomaly that someone can reclaim VAT if he or she generates electricity on a farm using a diesel generator but not if he or she uses a wind generator?
Deputy Pat Rabbitte: I suspect Deputy Stanton knows more about the detail of this than I do and I am struggling to understand the barriers and obstacles to which he refers. For example, I am aware that the single electricity market price paid for electricity is approximately €60 per megawatt hour. The ESB pays microgenerators approximately three times this amount, that is, €190. Obviously, this is a barrier from the point of view of the State in the sense that if a subsidy is required – this signals that it is required – it is a significant matter. I hope that I will have the conclusions of the SEAI report before the autumn. It is analysing various scenarios related to levels of feed in tariffs which would be required.
As the Deputy is aware, the REFIT, renewable energy feed in tariff, system operates for large-scale projects. It is funded by public service obligation on all consumers. We have made a commitment in the programme for Government to provide a REFIT system for microgenerators for the reasons Deputy Stanton has hinted. However, as the programme for Government states, “The tariff will not be significantly above single energy market price for electricity”. We must wait and see what the conclusions will be. Since the scheme announced has the capacity to accommodate 4,000 participants, the level of uptake is disappointing. Is it the case that the level of subsidy is inadequate? How much further can one go? The contribution of renewables is critical. If one were obliged to increase the subsidy, would it be the most economic way of feeding back into the grid? We must wait and see. I was surprised to learn that there have been only 364 applicants of the scheme as it stands.
Deputy David Stanton: What way is the scheme being marketed, sold or put out to people who might be customers? I have seen no marketing for it anywhere. Would the Minister examine this and consider a public awareness campaign such that people could know a little more about the scheme?
The Minister may not have this information but he might get it to me. Is it true there was a problem with generating at the 11kW level? I understand the SEAI was examining this earlier in the year. Perhaps the Minister will come back to me and inform me whether this issue has been resolved or whether there has been any further information issued from the SEAI.
Deputy Pat Rabbitte: The Deputy may well have a point about the effectiveness of the marketing of the initiative but one should be struck by the number of correspondents who communicate with the Department about it. It would appear that there is a wider level of interest than there is of uptake and I am unsure why this is the case. There is regular e-mail traffic to the Department from individuals seeking information on it. The ESB is the only supplier and no other supplier has chosen to enter the market. I suppose this is because of the cost of the supports involved. Nevertheless, only the ESB is in place and I suppose to some degree this constrains it. I will certainly examine the point raised by the Deputy and come back to him on it.