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Northern Ireland Assembly

Monday 23 September 2002 (continued)

Northern Ireland depends on traditional energy sources. Much more needs to be done to promote the use of renewable energy. Some 60% of our electricity is produced from gas, as opposed to 38% in the UK as a whole. With volatile worldwide markets for oil and, perhaps soon, gas, we must act immediately to redress our energy deficit. We are aware of the huge potential to generate electricity through harnessing wind power. However, that must be sensibly managed to preserve the natural beauty of our landscape.

Especially in the face of international obligations, the Northern Ireland energy sector must undergo significant changes in the next few years in order to comply with obligations on renewable energy. In the Republic of Ireland, one company supplies green electricity generated by wind at a lower price than electricity generated by fossil fuels. I support an eco-energy tariff that does not impose additional charges on customers who opt for green energy.

It is vital that all parties concerned are encouraged to adopt environmentally friendly measures to generate energy. I hope that the Minister will further consider funding biomass schemes, such as the one at Brook Hall Estate in Londonderry. Willow coppice is a feedstock for producing electricity from biomass. The benefits of introducing such a scheme on a more widespread basis include an aid to rural development in addition to further diversifying the energy mix. There is also the further side benefit of reducing waste because biomass acts as a bio-filter.

I hope that the Minister of Enterprise, Trade and Investment will seriously consider the importance of increasing the range of energy sources used to generate power. The report recommends that planning and building control bodies should also show greater awareness by encouraging low-energy buildings to reduce energy consumption.

In planning for the future fuel-energy market, we must give particular consideration to fuel poverty in rural areas. There are no plans at present for the alternative energy source of gas to be extended outside Belfast and the north-west and south-east of the Province, so I hope that the Minister will consider the importance of promoting and funding alternative energy sources, such as anaerobic digesters, in rural areas. The Minister should also endorse postalisation so that more dispersed rural communities can also benefit from renewable energy sources.

Dr McDonnell:

Discussions on energy are always timely - we could probably discuss energy once a month. As I said in a debate a few months ago, the future of energy is one of the most important issues that we face. It is a lifeblood of our society not only socially, but economically. We shall have to keep returning to the matter.

Although I disagree with one or two points, I broadly welcome the Minister's response. It is only appropriate that I should pay tribute to the sterling work of the Committee for Enterprise, Trade and Investment. The Chairperson, Pat Doherty, the Deputy Chairperson, Sean Neeson, and my Colleagues on that Committee should be thanked for the massive amount of work that was put into the original inquiry.

Several issues must be addressed, including financing debt at a lower cost. We must buy out the stranded costs and do what we can to reduce the excessive charges that were tied up in the original scandalous contracts. The legislation must contain, or new legislation must be enacted to provide for, low-cost borrowing mechanisms in the energy industry that will allow for the servicing of debt and for the burden of debt to be reduced. That in itself would create small but significant savings for customers.

I am told that if lending institutions were allowed to use customers' credit ratings, they might rate customers as more creditworthy than do NIE and would charge lower rates of interest, which would benefit the customers. There seems to be no great desire to include a low-cost financing option in the forthcoming energy Bill, but one must be included. If that option is not included in the original Bill, it must be included at Consideration Stage.

My Committee Colleagues have already touched on the scandal of fuel poverty. The Committee Chairman, Pat Doherty, cited the 170,000 homes - 28% of our people - that experience fuel poverty. I welcome the Minister's support for the increase in the energy levy to an average of £5 per customer. The extra money that that will generate will be of great value to the homes affected by that scourge and will go some way towards eradicating it.

However, I also agree with recommendation 10. The Department of Enterprise, Trade and Investment and the Department for Social Development must together develop an aggressive and effective task force on fuel poverty. It is not enough to take action such as raising levies in a passive or semi-active way; this problem must be dealt with aggressively and forcibly. The task force and the Executive must make the rapid eradication of fuel poverty a priority underpinned by legislation.

Like Mr Doherty, I believe that if the Exchequer cannot provide the necessary resources to eliminate fuel poverty, it behoves the Executive to find them as quickly as possible. The longer that that scandal pertains, the longer the Assembly will be ridiculed for not effectively getting to grips with government and the issues that affect people's lives.

Recommendation 38 proposes the consideration of the establishment of a renewable energy agency. If such an agency is established, it will help us to focus on and adopt a much more serious approach to renewables, especially in the light of the Executive's commitment to ensuring that 10% of energy will come from renewable sources. Like other Members, I am not satisfied with 10% - it should be 15%. A much greater commitment to developing renewable energy is needed. In many respects, we pay little more than lip service to it. It sounds nice, and it seems green, reasonable and user-friendly. However, as I told the House before the summer recess, an all-embracing energy agency is needed. I have let the matter rest until other issues have been debated, but if we do not return to it, we will never be in control of our energy resources. We can talk all we like, but there is no evidence that the Department of Agriculture and Rural Development is offering farmers effective incentives to produce renewable energy products. Until we have joined-up government that involves the Department of Enterprise, Trade and Investment and the Department for Social Development, and which pulls in all aspects of energy production, consumption and usage, we will not have the necessary grip on energy issues. The renewable energy debate must be renewed and engaged in with much more vigour than has been the case.

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The Department of Agriculture should be involved. There are problems in the agriculture industry and, if a few people knew that they could diversify into energy products if the market were stable, it would perhaps be a welcome respite. However, I see no great incentive to do that.

I welcome the question of creating an all-island energy market, which was raised in recommendation 42 and in other recommendations in the report. North and South, we are an island community of only five million to six million people. That is not a large number in relation to a stable energy supply from multiple sources, and it is not enough in respect of an all-island energy economy. Greater co-operation with the UK must be obtained, particularly with Scotland. The Moyle interconnector is an excellent example of that. It has been fully loaded and used, and has gone some way towards creating an opening in the market. An open energy market is not possible without the supply. Douglas McIldoon said:

"The Moyle Interconnector, with a capacity of 500MW, has been developed as a strategic infrastructure project to link the previously isolated NI electricity system to the systems of Great Britain (GB) and the European mainland. The benefits of access to these larger systems for the NI electricity consumer include downward pressure on electricity prices from increased competition in generation along with enhanced security and diversity of supply."

Without adequate interconnecting capacity there can be no market. Our current problem, however, is that because the interconnector is fully used and fully loaded, there is no spare capacity. Expensive as it may be, we may very well need a second interconnector to double the capacity between Northern Ireland and Scotland. We must have a freer, more competitive and relatively open market as quickly as possible. If that is not done, if there are closed shops and restricted supplies, opportunities and choice, we can talk all we like, but that will not bring about change.

I could make other points, but I shall not. Other Members referred to the scandalously high price of the privatisation of the power stations. One primary focus should be to concentrate on the liberalisation of the market to promote as much competition as possible, so that the price of electricity comes down and the economics begin to make sense. They do not make sense now.

Mr Wells:

Once again, sadly, the debate on energy has not proved to be the hottest ticket in town. I am delighted that Mr Davis has appeared. At one stage, it looked as if Dr Birnie would be the only non-member of the Committee to take part in the debate, with the exception of the Minister. It is either a tremendous vote of confidence or a sign of apathy with regard to the work of the Committee. Members perhaps feel that the Committee has done such a good job and that the report is so watertight that it is not necessary to scrutinise its work, that it is a five-star Committee and there is nothing to worry about. Either that, or the level of interest in the crucial subject of energy is not what it should be. I am not sure of the reason, but on the three occasions on which this topic has arisen it has attracted very few Members. That said, however, it reveals a slight deficiency in the Standing Orders of the Assembly. There is no provision for a statement to be made by a Committee Chairperson. That provision existed in previous Assemblies and is a neat way of dealing with responses from Government Departments to Committee reports.

Of course, we are required to use the more unwieldy mechanism of a motion, which is often heard late in the afternoon, rather than during the morning's business. Having said that, the Minister has made a steady but positive response to the Committee's report.

If I were asked to describe the Minister in cricketing terms, I would say that he is more of a Geoffrey Boycott than an Ian Botham. Geoffrey Boycott tended to bat steadily and solidly, deflecting the bouncers and chalking up quite a few maiden overs, as opposed to Ian Botham, who nailed his colours to the mast and struck out with the bat. In reading the Minister's report, I realised that he has a deft way of saying no. He reminds me of a young lady whom I asked out many times. Rather than say "No, I think that you are the ugliest person in the school", she offered good excuses that did not upset me, such as "I am doing my hair", "I have to look after my maiden aunt", or "I have to go shopping". The Minister does the same thing. Nowhere does he say that the Committee's report is a load of nonsense or that it is extreme. He always has a "no, but" reply to the recommendations, which, I suppose, is how Ministers attain the tacit support of Committees on many issues.

The Minister could have been bold and responded to the recommendation on nuclear power as follows: "It is not a transferred matter. It is for officials at Westminster, but my view is: nuclear power in Northern Ireland - over my dead body". He could have nailed his colours to the mast, made a name for himself, and gained much support from the people of Northern Ireland, who are extremely worried about the health implications of Sellafield and nuclear power production. But, no, the Minister batted steady, sidestepping the issue by saying that it was not a matter for his Department - a neat answer but not, perhaps, the bravest.

The report recommends a radical rethink of the proportion of energy that will be produced by renewable fuel. Again, the Minister played with a straight bat, stuck to previous policy and stated that the proportion should be 10% - no more, no less. He could have said that although he would welcome an increase to 20% or 25% he must comply with the constraints, but, again, he did not comment.

I do not want to be negative, because the Department responded positively to several issues raised by the Committee. The Committee, the Assembly and the Minister are agreed on fuel poverty, an issue that unites the community. It is one of the few situations in which everybody would gain. If there were an adequate programme to tackle fuel poverty, we would lower carbon dioxide emissions, because less heat would be lost up the chimney and less fossil fuel would be used. We would also improve the health of the community, because fewer old people would contract serious diseases and die from cold-related illness. Those measures would result in a saving for the Exchequer, because less money would be spent on treating the ill and less would be wasted on social security payments to provide fuel.

The Committee supports strongly the recommendation to increase the levy to £5, especially as it learnt that the average levy would be £5 a household. The home occupied by Dr McDonnell, the hon Member for South Belfast, a man of numerous incomes, would therefore sustain a much higher levy than the home of a working-class person in east Belfast. The richer members of society will pay a much higher proportion of the levy than poorer people. The Committee also discovered that, as the levy is also taken from industrial and commercial users, it is not spread over 600,000 domestic consumers; it is spread over the entire community. In some instances, therefore, the levy could be as little as 75p a year for households that use little energy. If that is the case, it is a small price to pay to alleviate the scourge of fuel poverty in the Province, especially among the elderly. One of the main obstacles to the increase of the levy was that many people felt that £5 a household was too much. That is not the case, and the fuel poor are not paying the lion's share. Therefore, the Minister's response was positive.

I am also glad that he left the door open on Orimulsion. There is no getting away from it: Orimulsion has been a controversial fuel in some parts of the world. Work on the energy inquiry led to one of the most beneficial and productive visits that any Assembly Committee has ever made; it was to the Orimulsion-fired power stations in Denmark. I was not part of the delegation because I had been there previously, but I can verify the Committee's findings on the efficiency and the high environmental standards of that plant in Zealand.

Indeed, on my visit, we quizzed the representatives of green organisations. I do not mean the SDLP but groups such as Friends of the Earth, the World Wildlife Fund, and so on and their equivalents in Denmark. Having investigated emissions from that plant and having examined the programme that was established to deal with spillage, those groups were extremely happy with the work going on at the plant, and they gave it their seal of approval. If Kilroot were converted to dual-fired Orimulsion and oil burning, it could go a long way to bridging the gap between generation costs in this part of the UK and in England, Scotland and Wales.

I am glad that the Minister kept the door open to the Committee's recommendation, and indeed, this is perhaps the one issue over which the Committee almost came to blows. From memory, the only two issues on which it disagreed were the name of Londonderry and whether the use of Orimulsion should go ahead at Kilroot. Both engendered a great deal of heat and required much energy, but they were both resolved.

The triple lock offered by the Committee gives the Minister a way forward to deal with this difficult issue - and there is no getting away from it, it is a complex matter - but it also ensures that the highest possible environmental standards will apply.

First, the Committee said that the use of Orimulsion should be subject to a planning application, which is, of course, only right. That planning application would be the subject of an inquiry or a similar mechanism that would allow the public to air their views. Secondly, the strictest of environmental impact assessments should be carried out in public, which will enable the public to see exactly what measurements are taken, what statistics are used and how the consultants arrive at their conclusions on the environmental issues.

Particulates and spillage are the two remaining unresolved, yet crucial, issues. There is no doubt that the conversion to Orimulsion burning will lead to a major reduction in greenhouse gas emissions from Kilroot. Sulphur emissions, when combined with flue-gas desulphurisation plant, will fall appreciably. Therefore, we have a win-win situation as far as oxides of nitrogen (NOx) and oxides of sulphur (SOx), as they are called, and emission gases are concerned. However, questions remain about the fine particulate matter, cadmium and vanadium, as well as about the other particulates that can cause some respiratory problems. With flue-gas desulphurisation and electrostatic precipitation it is possible to eliminate the majority of those particulates from the atmosphere. However, there are remaining concerns about that, and the environmental impact assessment must examine it in detail.

More crucially perhaps, although only 11 or 12 tankers a year are likely to come to Kilroot from Venezuela, we must ask what would happen if any of those were to sink in Belfast harbour or along the coast of Northern Ireland. The environmental impact assessment must examine in detail any contingency plans to deal with that should it ever occur. Therefore, the second lock is the environmental impact analysis.

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Thirdly, the Assembly should make any decision on the production of power, because this is an important regional issue that, given those three provisos, should be taken seriously. In the response to the report, the door has been left open for that proposal. I came to the proposed use of Orimulsion with a cynical and jaundiced viewpoint. My impression was that Orimulsion was the last thing we needed in Northern Ireland. However, when I considered the facts, the use of Orimulsion elsewhere and read the literature, I concluded that there was merit in considering the proposal.

Dr McDonnell raised the issue of the lack of legislation to provide a low-cost borrowing mechanism to reduce the real cost to the consumer of the capital tied up in the power industry. A simple piece of primary legislation is needed, which some believe could be included in the energy Bill. It could be used to buy out the Ballylumford long-term generator contract.

The Committee is examining the energy Bill, and some members are minded to suggest an amendment to allow that provision to be included, not as a mandatory provision but as enabling legislation that would allow a proposal to be considered. The Minister would not be compelled to do anything. It would be a question of "may" rather than "shall". At least the provision would be there if a realistic proposal were put forward.

As Dr McDonnell stated, in pure numerical terms the savings are small, one suggestion being that the figure would be between £1 million and £1·2 million. However, that saving, combined with tackling the long-term generator contracts, and perhaps moving to the use of Orimulsion, would go a long way to reducing the gap between Northern Ireland and the rest of the UK. If nothing else is achieved during the Minister's short term of office, a series of steps would have been set in motion to bridge that gap and the Minister would have made a significant achievement for Northern Ireland. If the Assembly is to mean anything to the people of Northern Ireland, something has to be done on this crucial issue.

The Committee for Enterprise, Trade and Investment is considering industrial derating, and some difficult decisions will have to be taken. Industrial derating was introduced because of the significant difference in electricity prices for industry in Northern Ireland. Many witnesses appearing before the Committee said that the abolition of industrial derating could not be justified until the problem of high electricity costs was addressed. There is much merit in that argument. That does not presuppose one or other decision on the matter, but the two elements are linked.

The energy issue is extraordinarily complex, and no one will pretend otherwise. However, the Committee's report and the Minister's response were a step in the right direction and, if we go forward together, many positive changes will be put in place for the people of Northern Ireland.

I welcome most of the response and understand the reasons for saying "no" and "perhaps". No matter how tactful those responses are, I understand that those decisions have to be made.

We will get a second bite at the cherry when we debate the energy Bill, and these issues will reappear many times. As far as the Assembly is concerned, the book on energy is far from closed.

Dr O'Hagan:

Go raibh maith agat, a LeasCheann Comhairle. Before I make my contribution to the debate, I send my congratulations to the Armagh team and the Derry minor team. I am being very parochial in relation to Armagh. It is disappointing that the erroneous -

Madam Deputy Speaker:

Thank you; that issue has been covered.

Dr O'Hagan:

I will not discuss all of the recommendations, as the report was substantial, and the response was very detailed. This is part of the continuing debate on energy, and I look forward to further discussion on the matter.

Recommendation 2 deals with the consumer bond. In addition to Orimulsion, this issue exercised the members of the Committee a great deal. There is growing recognition that bonds could be an effective way of reducing prices. The matter certainly requires full public debate and consultation. It appears that people are increasingly coming around to the idea that bonds are a low-cost borrowing mechanism for energy. However, the proposal needs detailed examination, debate and consultation.

Recommendation 9 deals with eradicating fuel poverty. The revised framework for the energy efficiency levy must ensure openness and transparency with regard to how money is spent and the extent to which people are lifted out of fuel poverty. The eradication of fuel poverty must be considered from the inception of any scheme or project funded by the energy efficiency levy. The evaluation of the warm homes scheme will provide some valuable information on the levy contribution. We need a comprehensive, resource-based evaluation of the energy efficiency levy, and this should be formalised and implemented as quickly as possible.

Recommendation 10 concerns the establishment of a task force on fuel poverty. Although a fuel poverty strategy is very welcome, the Committee for Enterprise, Trade and Investment called for the task force in order to inject some political momentum into the situation. I would like to see that established as quickly as possible. The Assembly has demonstrated that there is cross-party support for tackling fuel poverty, but that needs to be harnessed and driven forward. The eradication of fuel poverty in the North of Ireland within 10 years would be a testament to the Assembly's work.

Recommendation 11 seeks greater transparency with regard to the use of the energy efficiency levy. For example, how does Northern Ireland Electricity (NIE) select projects to fund? What criteria are used? Are some organisations refused funding, and, if so, what happens to them? I would welcome clarity and openness on these matters. A panel of independent assessors could help NIE to assess projects.

Recommendation 24, which deals with a renewable energy target, has already been mentioned. I would like to see a more vigorous response from the Department on the promotion of renewable energy. The Committee set a target of 15% of all electricity to come from renewable sources by 2010. That is not impossible, and it would help to drive a more vigorous project forward. I look forward to the implementation of the strategy and to the Department of Enterprise, Trade and Investment's plans to promote renewable energy.

Recommendation 38 deals with the establishment of a renewable energy agency. I would like to see that done as soon as possible, in line with the Committee's recommendation.

With regard to recommendation 45, the consultation on the abolition of the Government royalty tax is to be welcomed. However, all parties recognise the need for an all-Ireland energy market. One of the key issues -

Mr Wells:

On a point of order, Madam Deputy Speaker. Is it in order for the hon Member to mislead the Assembly? The recommendation refers to an all-island energy market, not an all-Ireland one. That is an important distinction, so what is being said is slightly misleading.

Madam Deputy Speaker:

Thank you for guiding the Assembly in that way.

Dr O'Hagan:

Go raibh maith agat, a LeasCheann Comhairle. Words are certainly important, but my preference is to use the term "all-Ireland energy market".

The promotion of an all-Ireland energy market should benefit consumers as well as businesses, so consumer issues should be a key consideration. I broadly welcome the Department's response. The ongoing debate is healthy and frank, and I welcome that. Go raibh maith agat, a LeasCheann Comhairle.

Madam Deputy Speaker:

Given the limited time remaining, I must ask Members who still wish to speak in the debate to restrict their contributions to five minutes.

Dr Birnie:

I am not a member of the Committee for Enterprise, Trade and Investment, but energy issues are so important that we should all take an interest in them.

A key issue in the report and the Minister's response is that of relative energy charges, particularly in Great Britain and the rest of the European Union. Along with Dr McDonnell and Mr Wells, I argue that consideration should be given to permissive legislation for so-called low-cost borrowing mechanisms. Several billion pounds worth of capital is tied up in the energy industry, so a relatively small reduction in interest charges on loans - even by 0·1% - could lead to tens of millions of pounds worth of savings for customers.

Primary legislation - for example, the forthcoming energy Bill - is needed to achieve that laudable objective. The Department of Enterprise, Trade and Investment, through the regulator, could commit consumers to repay on loans. Given that there are approximately 600,000 electricity users in the Province, the lending institutions such as the banks would view that as better security, given the current risk, albeit unlikely, of Northern Ireland Electricity's bankruptcy. Consequently, consumers could make savings, as the loan repayment would be at a lower interest rate. I understand that, in principle, the Confederation of British Industry and the Federation of Small Businesses support such permissive legislation.

It might be argued that the systems operator could levy charges on customers within the framework of existing legislation. However, that would not be enough to satisfy the lending institutions. They need assurance, in the form of primary legislation, that consumers would ultimately repay loans. I commend the report and the ministerial response. However, we need to act now to lower electricity prices through, for example, permissive legislation to provide for a low-cost borrowing mechanism.

Mrs Courtney:

I welcome the Minister's response, which, for the large part, was positive. Most of the 45 recommendations fall within his remit.

Recommendation 14 relates to the Coolkeeragh development. As regards its support and implementation, all the necessary statutory consent for the construction of a combined cycle gas turbine station has been granted. The projected commissioning date for the project is autumn 2004.

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On 12 February 2002, the regulator granted a gas conveyance licence to Bord Gáis Éireann for the construction of a gas pipeline to supply the new generation station and downstream markets along the route of the pipeline.

The new power station will act as an anchor customer for the new natural gas pipeline to the North and northwest. Over 80,000 new domestic gas connections, including the city of Derry, Limavady, Ballymena, Antrim and Letterkenny, could be made possible in the years after the construction of the gas pipeline, facilitated by the power station.

Developing the power plant at Coolkeeragh will enhance economic activity in the north-west. The development of the new power station represents an inward investment of £150 million in the region, bringing jobs and other benefits. It will provide 600 jobs at the peak of the construction phase, and there will be 40 secure jobs in running the station when it has been built. The local economy is set to benefit significantly from the power plant development at Coolkeeragh. To facilitate local companies being given the opportunity to supply products and service to the main contractor, a unique supplier model initiative supported by Invest Northern Ireland and delivered by North West Marketing has been developed.

I support the report but, as I have a little time left, I would also like to commend recommendation 9 on eradicating fuel poverty. The energy efficiency levy is to be increased to £5 per customer. I also commend recommendation 10 on the setting up of the task force on fuel poverty. The Department for Social Development is already advancing the fuel poverty strategy. Recommendation 15 relates to the climate change levy, which is a reserved matter. We already have a derogation for five years, and I appreciate the Minister's assurance that he will seek a 10-year derogation.

I welcome very much recommendation 22 on waste minimalisation and the Minister's positive response to it. Recommendations 39 and 40 deal with gas to the north-west and the postalisation of costs. The fact that costs will be evenly distributed to all gas consumers must be welcomed. I agree with Dr Birnie, Mr Wells, Dr O'Hagan and my Colleague, Dr McDonnell, who spoke in favour of recommendation 45 - its implementation would undoubtedly benefit all in the electricity market.

The Minister of Enterprise, Trade and Investment (Sir Reg Empey):

I am grateful to the Committee for the motion, which will help to keep the extremely important question of energy high on the Assembly's agenda. I have listened carefully to a very positive debate on energy, although I share Mr Wells's disappointment that we did not attract more Members. This issue affects every household and business in the Province, so it should be high on the agenda. I will attempt to cover as many of the issues that were raised as possible.

The Committee Chairperson and many other Members spoke about renewable energy. I want to make it clear that the target has not yet been set. However, it will be set in the energy strategy, which will be published later in the year. I understand why the Committee feels strongly that we should have set a higher target, but Members are omitting one issue - most potential renewables will come from wind power. Mr Armstrong and others raised questions about biomass, anaerobic digesters and other forms of renewable energy. All have their place. However, if we are to reach a significant target of 10% or 15%, 95% of it will come from wind. That is the reality. We must also remember the huge cost involved.

A figure of 15% would cost the consumer a further £40 million. That excludes the cost of upgrading the network to distribute that energy, and that could be as much again. Wind energy generators are usually located in isolated areas, and the existing network for wind energy is not equipped to deal with intermittent sources of energy supply and would have to be radically upgraded and changed at a huge cost to the consumer. Members must understand that there is a double cost involved: it may be more expensive to produce, and the high distribution costs must also be taken into account.

My Department is committed to renewable energy. Mr Armstrong and other Members raised issues such as anaerobic digesters, and I am working closely with my Colleague in the Department of Agriculture and Rural Development to encourage such matters. However, it is not easy to set such a target. In any event, there is no point in setting a target that is not achievable, and I hope that can be avoided. Nevertheless, I take Members' points very seriously, and I know how sincerely held their views are on the subject.

Virtually every Member referred to fuel poverty. The figure of 170,000 people below the fuel poverty line is, in this day and age, a disgrace. However, that is primarily a matter for my Colleague, the Minister for Social Development, and I will draw his attention to the points raised. I have had experience of fuel poverty in my constituency. The staggering fact is that even though we were offering, through the fuel poverty pilot scheme, to convert and insulate properties, to provide modern, efficient gas boilers and to give other advice, an enormous number of people did not apply for it. I found that disturbing. Home helps have to light fires for people who cannot manage solid fuel, and, even though the scheme was available in certain areas and people could get new equipment, homes insulated and free advice, there was still an insufficient number of applicants. That is shocking.

Mr Wells:

There were two schemes, one in the Beechmount area of west Belfast and one in Willowfield in the Minister's constituency. The Beechmount scheme was incredibly successful with a very high take-up, but the Willowfield scheme was much less successful. However, that had more to do with the level of community organisation in the two areas rather than the attractiveness of the scheme.

(Mr Speaker in the Chair)

Sir Reg Empey:

I accept that to a point. Nevertheless, even though significant efforts were made to draw the scheme to the attention of people in the area, I was disappointed with the take-up. I accept that we must all do more at community level. However, almost every Member has made the point about fuel poverty, and I will draw it to the attention of my Colleague.

Significant bids are being made in the Budget. The Minister for Social Development is bidding for substantial resources from the Northern Ireland block grant to back the increase in the OFREG levy. There is a real chance of making a significant difference on that.

The Chairperson referred to recommendation 27 on local renewable energy plans and recommendation 28 on planning and building control bodies. Again, some of those matters are the concern of the Department of the Environment, and I will draw Mr Nesbitt's attention to them as many Members found them significant.

Mr Neeson, Dr Birnie, Dr McDonnell and other Members raised the issue of the bonds. I am aware of the problem, and I am looking at it closely. A range of issues must be considered, including tax and state aid issues. However, Members have made it clear that they intend to raise the matter during the passage of the Bill. As the Executive approved the Bill at their meeting last week, we hope, with your permission, Mr Speaker, to introduce it this month. It will then move to Committee Stage, when Members will be able to discuss its provisions at some length - we shall see where that leads us.

Mr Neeson and other Members also referred to the high cost of electricity. I have now had two meetings with Sir George Quigley, one the week before last and one some months ago. I am acutely aware of all the major issues, and I assure the Member that not a week goes by without our trying to address them in the Department. They are very difficult and complex, and we shall continue to work at them, for each half point that we can shave off the cost is of advantage to the people of Northern Ireland.

Mr Neeson also referred to diversification; I am aware of the percentage of our electricity that we shall eventually produce with gas when Coolkeeragh comes on-stream and when the new combined cycle gas turbine starts to work. Of course, that will be a much more efficient form of generation; we shall use less gas at Ballylumford when the new power station opens than we use with the present facilities because of increased efficiency. Coolkeeragh, as Mrs Courtney is well aware, is a state-of-the-art, highly efficient combined cycle gas turbine. I am aware of Mr Neeson's point, but at least now we have the interconnector. There is also interconnection with the Republic, so we are not as isolated as we used to be, and that is of significant satisfaction to us.

Dr McDonnell spoke about the all-island market. Of course, a population of five million is a small market for energy, and we all know that. That is why interconnection, both North/South and east-west, gives us a platform upon which we can play more effectively. We are working very closely with the regulators both North and South, who meet monthly. The two Departments have a high-level working group, and we had a report in 2001. These reports are accessible on our Department's web site, and one can see there what we are doing. The market is opening up because of the interconnection with Great Britain.

That brings us neatly to the nuclear option to which Mr Wells referred. He used some cricketing analogies, and at one stage he was in danger of putting us in some doubt about how he ever got married; but someone must have said "Yes" to him at some stage. We have an interconnection with Great Britain, and the electricity that flows through that interconnector can come from various sources, including the south of Scotland, which has access to nuclear plants.

I do not favour any such plants being built here, but Sellafield is of environmental importance to all of us, quite apart from the generation of electricity. There can be no guarantee of the source from which electricity comes when it passes through the interconnector; it is not possible to identify that.

Mr Wells also raised the question of Orimulsion. As he says, we are keeping an open mind, but the Member should not forget the significant environmental issues with that fuel. It sinks when it enters water, and I am satisfied that he has no desire to tarmac the bottom of Belfast Lough. We should bear in mind that there is only one source of supply in a very unstable part of the world - there was an attempted coup d'état there some months ago, and we must all take account of that.

5.45pm

However, I know that he and other Committee members were impressed by their visit to Denmark. We shall examine any proposal that comes to us. Apart from the environmental issues, the change in the generating regime will require the consent of the Department. There are other options, such as coal, and a range of issues has been designed to reduce costs. We must take a view based on our regulatory position.

The debate has shown that the Committee has taken a consistent interest; it has done more work on energy than on any other heading in the portfolio. That is important, because the issue affects what is in people's pockets and has an impact on our industrial competitiveness, which is a key area in which the Committee and the Department are engaged.

Together we are involved in evolving policy. I have been able to take on board several recommendations, and when the energy Bill goes to the Committee for consideration we shall examine the consumer issues, which Dr O'Hagan mentioned, and postalisation, which is a huge matter for all of us.

I know that Mr Neeson has been angered by the reactions that we received from some quarters. However, we can post a letter anywhere in the Province for the same price. Every unit of electricity is sold to consumers at the same price, wherever they are. The principle of postalisation is already established. Would it be fair to charge a consumer in south Fermanagh the real cost of electricity that is produced in Larne and transmitted from there? It would clearly cost more than it would for a consumer in Carrickfergus. It would be insane to go down that road. No part of the Province, especially the rural areas, could hope to survive under that sort of regime.

I earnestly hope that the Committee and the House will support the Bill's postalisation element, because that is the only way to deliver what is, in cross-border terms, the largest single project that we have undertaken together since partition. I would like to think that that project could be delivered to benefit thousands of people in Northern Ireland who were denied access to fuel. We used to be the only region in western Europe with no gas supply to its main towns. I hope that we shall have support. I look forward to working with the Committee as the Bill proceeds, and I shall be keenly interested in the Committee's responses and suggestions.

The Chairperson of the Committee for Enterprise, Trade and Investment (Mr P Doherty):

I wish to thank, a Cheann Comhairle, all my Colleagues on the Committee for Enterprise, Trade and Investment for making a thoughtful contribution to the debate. Those contributions represented our consensus on three different levels: a general consensus on the original 45 recommendations; a general consensus that we would broadly welcome the Minister's initial response; and a consensus that the more innovative recommendations that have been refuted should be pursued. I would also like to thank Esmond Birnie, who was the only non-member of the Committee to speak, for his usual thought-provoking words.

I shall deal with the Minister's points in some detail later on, but his general contribution was very solid and recognised the work in which the Committee has been involved. The Deputy Chairperson of the Committee mentioned bonds, which is an issue with which we are still struggling at times, because a huge amount of money is involved.

The Committee has yet to conclude its views on bonds, but it was right that Mr Neeson should highlight that. Mr Neeson welcomed the work being done on the natural gas pipeline from South to North and the north-west, and he made some historical references to various all-party delegations that tried to bring it all about. He also made a clear reference to the need for postalisation and the work done by the Committee in dealing with the energy Bill.

Mr Armstrong mentioned the benefits of turning waste into energy, which the Committee saw on its visit to Denmark. He also stressed the need for cheaper electricity and energy, and that was what helped the Committee initially to focus on energy.

Every Member who spoke mentioned fuel poverty. Biogas is another notable source of renewables, and the energy savings that can be made by properly implementing building regulations were also mentioned.

Dr McDonnell spoke of the need for Members to debate energy constantly, such is its importance - particularly the cost of electricity and how to tackle it. He also referred to the ongoing discussions on bonds and their implications, and he had clear views on fuel poverty. There are 170,000 households in Northern Ireland living in fuel poverty. Members spoke of the levy paid by each customer, and Mr Wells made detailed reference to how well spread the levy could be if Dr McDonnell paid a bit more than the rest of us. Given the number of people and the enormity of the suffering involved, a £5 levy per customer per annum is very little to ask, and it would eradicate fuel poverty in five years.

The Assembly, the Committees and the Executive have been involved in many enormous projects that take a lot of strategic planning, time and money. However, the report states that another £1 million would wipe out fuel poverty in five years. That can be achieved; the money can be found. If the Exchequer will not give it, the Executive can surely find it.

Dr McDonnell also mentioned renewable energy, the all-island market and the Moyle interconnector which links us up not only with Britain but with the wider EU, bringing about security of supply and the potential for reducing costs. He also referred to the privatisation of power stations; that subject spills over into the issue of bonds.

Mr Wells was concerned about the small turnout for the debate, but I think he answered his own question when he said that the energy issue is so complex that very few understand it. It has taken the Committee over a year to cover all the associated issues. The Committee jokes about Mr Neeson promising an easy inquiry that would last six weeks after completion of the economic inquiry. However, we are still at it. We may not be experts, but we are much more knowledgeable now than when we started.

Mr Wells "praised" the steady and positive response from the Minister and the Department, and referred to the Minister's straight bat response. He also said that the Minister should have said that nuclear power would be used in Northern Ireland over his dead body.

Mr Wells elaborated on fuel poverty. He dealt in huge detail with Orimulsion and said that the debate on the matter was ongoing. He also talked about the triple-lock mechanism, and the Minister dealt with those concerns in his response. The Committee had a huge debate on that, but the door has been left open, as we have not yet made a decision on it. Mr Wells also discussed the buying out of electricity contracts, which is tied to the issue of bonds. He talked about industrial derating, which will come before the House soon, and the fact that the Committee was considering how it would deal with the matter.

Dr O'Hagan, after praising the Armagh team for its fine victory, talked about the Minister's detailed response to the Committee's report. She dwelt on the issue of consumer bonds and the need for a full debate. She elaborated on fuel poverty, the energy efficiency levy and the Committee's target of generating 15% of electricity from renewable sources by 2010. Dr O'Hagan also mentioned recommendation 38 on the establishment of a renewable energy agency and recommendation 45, which would enable companies to trade in a fair and equitable all-island energy market. She also welcomed the Department's response to the Committee's proposals.

Dr Birnie talked about the low-cost borrowing mechanisms that are available and the need to conclude the debate on that issue.

Mrs Courtney expressed support for the Coolkeeragh project, about which the Committee has felt strongly since the beginning. She also spoke about the need for a fuel poverty task force.

I have lost my notes on the Minister's detailed response. He explained why it was difficult to push the target from 10% to 15%, outlining the cost factors, on which the Committee will reflect. The Committee was trying to put Northern Ireland at the cutting edge with renewable resources rather than leave it behind in the game with regard to European Directives and the activities of other countries.

I understand that aspects of fuel poverty related to other Ministries, but the issue could be resolved by means of a collective, all-embracing, cross-cutting response. Bonds and the cost-saving aspects of diversification were discussed. That reminded us that even an all-island market would be small and that energy could flow in more than one direction, for example, from an electricity interconnector linking us to Britain and the EU.

Mr Wells may have been told that nuclear plants were an option, but the Minister rejected that possibility. However, he highlighted the fact that he could not determine from which source energy would be manufactured. The Minister responded to the question of Orimulsion, and it will feed into the Committee's thorough deliberations. We have had a lively debate on energy, and no doubt we shall return to the issue.

Mr Speaker:

Order. Just in case the Member finds his notes, I draw his attention to the fact that only three minutes remain.

Mr P Doherty:

Two minutes will suffice.

The Minister recognised the Committee's work, for which I thank him, and also how the Committee worked with the Department. It was an example of the right way for a Committee and Department to work together. The Committee did its best in that regard, because the issue is so serious. I was glad that the Minister said that the principle of postalisation has long been established.

The debate has been useful, although, as Jim Wells said, it was a pity that more Members were not present. However, as we continue to debate and promote the issues, and especially as the Committee scrutinises the draft Bill, everything will be dealt with.

6.00pm

I thank the Members and you, a Cheann Comhairle, for allowing me a little extra time.

Question put and agreed to.

Resolved:

That this Assembly takes note of the response of the Minister of Enterprise, Trade and Investment to the Committee's Report on Energy (03/01R).

Adjourned at 6.01 pm.

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