Fur Farming (Prohibition) Bill: First Stage
Limited Liability Partnerships Bill: First Stage
Committee Business: Change of Membership
Establishment of Ad Hoc Committee on the Updating of Schedule 1 of the Northern Ireland Assembly Disqualification Act 1975
Social Security (Disability Living Allowance) (Amendment) Regulations (Northern Ireland) 2002: Prayer of Annulment
Northern Ireland Energy Agency
Oral Answers to Questions
Office of the First Minister and Deputy First Minister
Department of Regional Development
Department of Environment
Lack of Investment in the A20 Newtownards to Portaferry Road
The Assembly met at noon (Mr Speaker in the Chair).
Members observed two minutes’ silence.
The Minister of Agriculture and Rural Development (Ms Rodgers):
I beg leave to lay before the Assembly a Bill [NIA 8/01] to prohibit the keeping of animals solely or primarily for slaughter for the value of their fur; to provide for the making of payments in respect of the related closure of certain businesses; and for connected purposes.
Bill passed First Stage and ordered to be printed.
The Bill will be put on the list of pending business until a date for its Second Stage is determined.
The Minister of Enterprise, Trade and Investment (Sir Reg Empey):
I beg leave to lay before the Assembly a Bill [NIA 9/01] to make provision for limited liability partnerships.
Bill passed First Stage and ordered to be printed.
The Bill will be put on the list of pending business until a date for its Second Stage is determined.
The following motions stood in the Order Paper:
That Mr Arthur Doherty replace Mr Joe Byrne as a member of the Committee for Employment and Learning. — [Mr Tierney.]
That Mr Alban Maginness replace Ms Patricia Lewsley as a member of the Committee for Education. — [Mr Tierney.]
Two motions concerning Committee membership stand in the Order Paper in the name of Mr Tierney. However, Mr Tierney has advised me that he is unable to attend this afternoon’s sitting due to untoward circumstances. The two motions will, therefore, not be moved.
That, pursuant to Standing Order 48(7), this Assembly appoints an Ad Hoc Committee to consider the updating of Schedule 1 of the Northern Ireland Assembly Disqualification Act 1975 referred by the Secretary of State and to submit a report to the Assembly by 24 June 2002.
Composition: UUP 2
Other Parties 3
Quorum: The quorum shall be five.
Procedure: The procedures of the Committee shall be such as the Committee shall determine. — [ Mr Davis.]
The following motion stood in the Order Paper:
That the Social Security (Disability Living Allowance) (Amendment) Regulations (NI) 2002 be annulled. — [Mr Ford.]
I do not see Mr Ford in the House. That being the case, I am afraid that the motion falls.
The following motion stood in the Order Paper:
That this Assembly calls for the urgent establishment of a Northern Ireland energy agency to assess, plan and actively manage all aspects of energy procurement, supply and conservation in Northern Ireland. — [Dr McDonnell.]
I do not see Dr McDonnell in the House. However, in all reasonableness and fairness to the House, the Member would not have expected the motion to come at this time. Therefore, I propose that the sitting be suspended for five minutes to enable the House to gather itself. The House will now, by leave, suspend. The House is suspended.
The sitting was suspended at 12.06 pm.
On resuming (Mr Speaker in the Chair) —
Northern Ireland Energy Agency
I beg to move
That this Assembly calls for the urgent establishment of a Northern Ireland energy agency to assess, plan and actively manage all aspects of energy procurement, supply and conservation in Northern Ireland.
I am perhaps a little unprepared, as I anticipated speaking in an hour and a half. Nevertheless, I welcome the opportunity to speak, premature though it is.
The supply and use of energy is one of the biggest issues that affects us all. It affects everything from the personal cost of living to the costs of major industrialists, whether in service or manufacturing industries. It adds a considerable amount to the bills and overhead costs of any establishment, and, indeed, it adds a considerable amount to the Executive’s expenditure because the Civil Service Departments probably consume large amounts of energy and, therefore, large amounts of money — that energy costs perhaps 25% or 30% more than it should.
The Committee for Enterprise, Trade and Investment, of which I am a member, spent months working hard on a range of energy issues and presented its report to the Assembly earlier this year. It was well received and, some weeks ago, Sir Reg Empey produced initial proposals for consultation.
During the preparation of the report, it became evident that there is very little stability, cohesion, certainty or security in the energy market. It is bitty, scattered and disorganised. I hope I am making my points in a non-contentious way. The island of Ireland is relatively small in energy terms. Indeed, we probably need a much more open energy market in these islands, including Scotland, Wales, England and the other regions involved. In the short term, I want the various aspects of energy to be opened up and joined up on an all-island basis.
I could go into the major debate about gas pipelines at length, but it is fairly obvious that gas connections are needed, both North/South and east-west with Scotland and England. Gas is opening up, and the electricity market needs to be opened up very quickly too.
I do not intend to go into the details of the generator contracts, which the House has debated at length before and which were also considered in the energy report. I know that the generators’ contracts — [Interruption].
I cannot hear myself, Mr Speaker.
Is Mr Weir finished?
We will debate at length whether we should buy out the generator contracts over the next eight years or leave them to fizzle out. Leaving them creates problems, because we must ask what will happen after 2010 or 2012. Will we end up with no locally generated electricity? Are our stations stable enough to produce electricity beyond 2012, or will their owners let them chug on inefficiently and switch them off in 2012?
A range of questions must be answered, and again I emphasise that they must be examined in an all-island perspective. Some people in Fermanagh have discovered that it is more efficient and effective to buy their electricity from the Electricity Supply Board (ESB) than from NIE. I suggest that the Southern Irish electricity market should be opened up and the ESB’s monopoly reviewed, but that is a matter for investigation by the North/South bodies.
It is not a question of our taking a daily or weekly look at the energy market or, as prices fluctuate, being chancers and buying cheap gas or a bit of cheap coal. If we are to produce stable energy for the twenty-first century, we must produce a 35- to 40-year plan for the direction in which the energy debate should go. Generators will not invest, because the life of a power station is 35 to 40 years, and no one will invest unless the outcome is known.
In a domestic situation, no one will invest in an oil-fired boiler if the price of oil is to go through the roof in two years’ time. Equally, if coal is to be out of date in three years’ time, no one will invest in a solid-fuel boiler. Gas is popular, but many people have no access to gas. The discussion and perspective must be balanced by what works in rural areas without gas and by what works in urban areas where gas is. I represent an urban constituency, and all too often matters are viewed from an urban perspective. The energy situation is just as important in Newtownstewart as it is on the Newtownards Road, and the needs of both must be addressed.
Although I welcome the efforts of the Minister of Enterprise, Trade and Investment and his Department over the last couple of years to work with the regulator to create some kind of stability, we must go further. To some extent, energy can be seen as being added on to, or piggy-backed by, a much bigger Enterprise, Trade and Investment job-creation agenda. Energy is like a motorbike sidecar — it is there when it is needed, but most of the time no one pays much attention to it. Primary concentration and a stronger group of people who are organised are needed to make a real difference in the energy market by finding supplies of energy — gas or whatever — and ensuring that those supplies are delivered at an affordable price.
I am concerned at the scatter of interests beyond those vested in the Department of Enterprise, Trade and Investment. The Department of Agriculture and Rural Development has a major responsibility for renewables. That includes the energy potential of biomass from willow and other rapidly grown softwoods. It also includes the potential for biogas production, whereby pig slurry can be used to produce copious methane gas that can then be used efficiently and effectively.
That was an outline of the agricultural issues. I could go on at length, but I do not want to delay the House unduly.
The issue should interest the Department of the Environment because of the potential to create considerable amounts of energy from much of the waste that is dumped in landfill sites, where it causes other problems. However, from the perspective of the man or woman on the street, most of the responsibility for energy conservation and fuel poverty, which results from houses being badly designed and built, lies with the Department for Social Development. The Department of the Environment is also responsible to some extent through its building control measures.
A plethora of energy issues permeates every Department. There are major contentions. The energy inquiry failed to resolve the debate on the burning of Orimulsion at Kilroot power station. Orimulsion is a tarry substance that can be burnt efficiently and effectively and, with the proper controls and chimney-washing measures, it is cleaner than either coal or oil. That issue must be resolved.
Unless energy prices come down by 25% to 30%, the local economy will be affected. Our economy is not as efficient, effective or welcoming as others are, and in a few years’ time, when grants and other incentives are tighter, investors will consider criteria such as energy prices. Although our well-trained, work-friendly workforce can be promoted in Europe and North America, the fact that our energy prices are excessive will rapidly counter our efforts.
Would it be worthwhile to buy out the contracts now, or would it be worthwhile to take the pain now in order to avail of the gain later? We must ensure that in the future we do not fall into the trap that the contracts created. Nevertheless, the contracts and the regulator must be considered. When the contracts expire in 2010, we must ensure that we have not created a free-for-all market, because we could be subject to either the fluctuations of the market or the power station being switched off by the operator if it did not like the price that it was receiving.
There is a long-term need, which must be thought out carefully, for the regulation and control of energy. Therefore, we must consider how best we can pull together all the components and interests that the Assembly has in energy issues. Those issues mainly involve the Department of Enterprise, Trade and Investment, but the Department of Agriculture and Rural Development, the Department of the Environment and the Department for Social Development are also involved.
I have no great sympathy for quangos, and I am not proposing that another quango be created simply for the sake of it. However, in this case, it is prudent to consider the formation of a twenty-first-century quango with the remit to either produce the goods or to be wound up after a set period.
I do not want to go on too long; I have probably talked for long enough. However, I would like to mention fuel poverty. I remind Colleagues that the last statistics showed that approximately 170,000 of our households — 28% — are in fuel poverty. I hope that the number has been reduced a little since then.
Fuel poverty is when people cannot afford enough energy or fuel to keep themselves and their homes warm. It is a scandal that, in this day and age, 28% of our population are in fuel poverty. Although I have not dwelt on energy conservation at length, it is a big part of the equation. We must tackle fuel poverty, and, in order to have the teeth necessary to do so, we need an energy agency. The agency must cover all aspects of energy, from the beginning of the energy production process to its ultimate consumption, with the customer switching on an electric kettle or other appliance.
There is great excitement about gas at the moment, and for people in the Belfast region and some other towns who can access it, gas seems to be clean, efficient and cheaper than oil and other fuel sources. We have been promised large supplies of gas from the Corrib gas field off the west of Ireland, and that may last for 10 or 15 years. In 20 or 25 years’ time we, or those who succeed us in the Chamber, might return to the debate, because it may be necessary to procure gas supplies from places such as Siberia and pipe it across Europe. That would be a major task, and it is why this issue is too big for the present structure to handle.
We need a dedicated team under the structure of a special agency, which would report regularly to the Assembly or to the appropriate Ministers, to pull the fragmented energy framework together. Such an agency would co-ordinate the existing structure and set us up strongly for the future. I urge Members to support the motion.
Mr C Murphy:
Go raibh maith agat, a Cheann Comhairle. Sinn Féin broadly welcomes the objectives of the motion, but with some reservations. This debate, and the establishment of an agency, might bring about a much-needed examination of our energy situation. Major long-term structural problems with energy arrangements must be addressed.
The proposed energy agency has merits, since it could bring much-needed co-ordination and planning to the generation and supply of energy. The motion further proposes that conservation — energy efficiency — be included in the agency’s remit, and that suggestion is welcome. There are stringent targets for the control of energy consumption in the North of Ireland, and electricity generation from renewable or sustainable methods has been proposed. Such an agency could provide the necessary clout and co-ordination to meet our needs. Too often we hear about the barriers that people generating electricity from renewable or sustainable methods encounter when they attempt to spill their extra capacity onto the grid. The proposed agency could streamline that process and support electricity production from those means.
It has been suggested that the agency’s remit would include assessing the energy needs of the Six Counties in the medium and longer term, and it could build on the British Cabinet Office’s recent energy review. The agency would need to examine the expansion of the gas network and the impact that lack of access to natural gas might have on the competitiveness and economic development of our rural community. It should be further tasked with proposing plans to overcome that disadvantage.
Any such agency must also have a pivotal role in the development of the all-Ireland energy infrastructure, and its remit would need to be expanded to encompass the whole of Ireland or any other reciprocal arrangement when the all-Ireland infrastructure is established.
However, I am concerned because the Administration does not need another quango. Given that we wish to curb public administration, we must think long and hard about the financial liability and the implications of such a body. Will the public bear the burden of such an agency, and will its effectiveness and efficiency make the expenditure worthwhile?
My final reservation is the most significant. There are long-term problems with the energy infrastructure in the North of Ireland, as evidenced by high electricity prices and the lack of access to natural gas. The proposed role and remit of the energy agency may help by tinkering at the edges but will not begin to address the fundamental problems of fuel poverty and commercial competitiveness, which must be dealt with.
Sinn Féin believes that it is time to explore fully all possibilities for solving the problems created by the expensive and archaic energy infrastructure that we inherited. Westminster has retired from the picture, happy in the knowledge that it has reaped millions of pounds from the sale of the North’s generation and supply industry. This has resulted in high prices for consumers and high profits and dividends for shareholders. It is time for a full and open debate on all potential solutions. Consumers will pay through their electricity bills for the Moyle interconnector with Scotland. However, only the shareholders will benefit from the profits of electricity trading on the interconnector, which is socially and economically unjust.
An energy agency might help to deal with the immediate issues of co-ordinating generation, supply and energy efficiency. However, for Sinn Féin to support such an initiative, the agency would have to be more than a quango: it would require a radical agenda for mapping and planning energy issues throughout Ireland for the next 50 years. The proposed agency does not go far enough to address the real energy issues in the North of Ireland, and Sinn Féin believes that it is time to open the debate fully. Go raibh maith agat.
I thank Dr McDonnell for bringing this matter to the attention of the House. Energy is of great interest to me and to the Enterprise, Trade and Investment Committee, which presented its report to the Assembly on 13 March 2002. The inquiry was expected to last a matter of weeks but took almost a year. The subject is of great interest to me because 20 years ago one of my predecessors appointed me as the Alliance Party spokesperson on energy, and I have had the remit ever since.
I agree in principle with the motion, but we must give further consideration to what Dr McDonnell is trying to achieve. There is an overlap in the work of the Department of Enterprise, Trade and Investment and that of the General Consumer Council for Northern Ireland. It is important to clarify what the proposed agency’s role would be.
Once again, I must express my disgust at the Oil Distributors’ Association’s interference. It is trying to create obstacles to the extension of the natural gas pipeline to the north-west. It is disgraceful that an unregulated sector should do that. The price differential across Northern Ireland is outrageous, particularly for domestic consumers. If an agency were established, it would be important that it examine all aspects of energy consumption in Northern Ireland, including petrol. One need only look around Northern Ireland to see the major price differentials and the unacceptable levels of the importation of illegal petrol and diesel. Therefore the remit of the agency should be shown in greater detail.
We all want to see a level playing field for all consumers in Northern Ireland, and that is why the Committee and I have been so keen for as many areas of Northern Ireland as possible to benefit from natural gas. The Department will introduce its energy Bill soon, and I look forward to that. Although I am not speaking as the Deputy Chairperson of the Committee, it also looks forward to the publication of the Bill. One of the issues to be addressed is the strengthening of the role of those with responsibility for consumer affairs. In the Committee’s report, which was presented to the Minister and the Department, we outlined the need to ensure that there are adequate resources to deal with consumer affairs.
Finally, such an agency would have to take the European dimension into consideration. When the Committee visited Denmark and Brussels last September we became aware of the impact of European Directives on the energy market throughout an expanding European Union. I agree with Dr McDonnell when he talked about the possibility of using natural gas from as far away as Siberia. We can look forward to some exciting opportunities in the future, and I look forward to the enlargement of the European Union, which will provide other major opportunities. In principle, I accept the spirit of the motion, and I look forward to the Minister’s response.
I declare an interest, as my sister is involved in the gas business in the Fermanagh/Sligo area. I have a great interest in energy issues, particularly the renewable sector, from my work with the Enterprise, Trade and Investment Committee.
I will begin by thanking Dr McDonnell for bringing the matter to the Floor of the House. The Enterprise, Trade and Investment Committee certainly had lengthy debate on the issue when compiling its report on energy, but it is valuable to keep the issue alive in our minds and in the minds of the public and the press. Having said that, I agree with Sean Neeson when he said that he agrees with the spirit of the motion. I am slightly concerned — and this also applied to a previous motion proposed by Dr McDonnell — about any suggestion to set up agencies, given the possibility of duplicating work. However, the value of this motion is to concentrate minds on the need to do something better. I totally agree that there needs to be a streamlining of the joined-up government approach to energy issues.
That is vitally important, because energy, as we have discovered, takes in many different departmental responsibilities. These include social, economic and health issues ranging from fuel poverty to energy conservation and energy efficiency. We desperately need some form of streamlining. I wonder whether there is justification for an agency, but some sort of team, task force or joined-up government approach would certainly be valuable.
We must consider the importance of the all-Ireland approach — the North/South approach — to energy programming. Although the North/South dimension is important, I agree with Members that we cannot deal with the issue by having an island mentality. There must be an east-west approach, involving the British-Irish isles, and a European dimension. That would cover not only the examples of best practice we saw during our trip to Denmark, when we learnt about the energy market there, but also tapping into energy in Europe and countries beyond the former Iron Curtain. The global aspect must be included, but it will be difficult to achieve that if we have a single unit in Northern Ireland. The onus is on the British-Irish Council and the North/South Ministerial Council to see this as a priority for work in infrastructure.
Last, but by no means least, is my bandwagon — the renewable energy sector. We are lagging too far behind in that area. Nevertheless, good, healthy momentum has been achieved. There has been great progress on wind farming. I welcome the plans for the wind farm off the north coast, but I wonder about them. I would appreciate a progress report outlining what the potential delays might be.
This is definitely the energy source of the future. We must move away from fossil fuels. We do not even have to keep up with the demands of European Directives; we can go further. Why can we not develop the technology for the new energy markets using wind, wave, tides, and biomass? Why can we not use our agriculture industry to provide us with renewable energy? This is the way forward for our economy. It would allow us to use our university research to develop new technologies, and it would be good for consumers. We are talking about healthy social and economic development — renewable energy is about that.
Mr A Doherty:
This is the twenty-first century — however, we are inclined to forget it, as many people are still deeply rooted in the late seventeenth century. Some people are trying to solve our political problems using seventeenth century methods marked by appalling bigotry, superstition and violence. Despite the greatest efforts of our best people — our active visionaries — the Enlightenment has passed by too many of our leaders. The vision enshrined in the Good Friday Agreement is beyond their understanding: so much for Dark Ages politics.
Things become a little better when we look at social, economic and technological thought and achievement. As an SDLP Back-Bencher, I blush prettily, but modestly, at the knowledge that the SDLP is at the forefront of progressive political thought and because it has so much to offer in the social, cultural and economic fields.
I welcome Dr McDonnell’s initiative. The provision of economical, reliable, safe energy is essential for economic prosperity and the health and well-being of the entire community. It is scandalous that the neediest and the most vulnerable have the greatest dependence on the most expensive and least healthy fuels. For their sake and that of the economy and environment, the generation and supply of energy must be brought out of the early twentieth century and into the twenty-first. We have the power sources and the technology; all we need is the will and a great deal of co-operation from many people and organisations. That would include involving those who are concerned about protecting and improving the environment. It would involve the quickest possible move away from fossil fuels.
We all know about the "polluter pays" principle, and most would agree with it. The harsh reality is that we pay the polluters to heat and to light our homes and to power our factories and vehicles. The cost is not only monetary; we pay with our bad health, the desperate pressure on our social services and the poorer quality of our lives.
We need a body with substantial independence from the power producers and providers. That would be the only way to emphasise energy production from our plentiful renewable resources, which Jane Morrice highlighted. We have endless supplies of wind, water, and, unfortunately, waste. I thoroughly approve of wind farms. Concerns about their visual impact on the environment could be eased through sensitive management.
I will devote the rest of my precious time to Sandy Bain, whose letter to the ‘Sunday Herald’ in Scotland was published on 17 March 2002. Like a good Irish politician, I was in Scotland on that day.
The letter reads:
"It is disappointing that so much of the debate about Scotland’s energy needs 10 or more years in the future is being conducted with reference to 20th century technology. The coming pollution-free fuel is hydrogen. . More importantly, however, using electricity from renewable sources to produce hydrogen will give a much greater degree of flexibility.
Electricity derived from wind, wave and tidal power at locations along the northwest coast and in the Western Isles should be used to produce hydrogen from sea water. This hydrogen would then be transported by sea in gas tankers to the existing coastal thermal power stations at Peterhead, Inverkip, Cockenzie and Longannet, adapted to use hydrogen as fuel. The electricity produced would be distributed to consumers through the existing national grid, removing the need to lay an expensive subsea cable or despoil our scenic areas with overhead lines. The unreliability of renewable sources of electricity will be overcome too. Ideally Clyde shipyards would build the gas tankers required and Scottish engineering companies would become market leaders in building the hydrogen production plants and doing power station conversions. Any surplus hydrogen could, of course, be exported worldwide."
Sandy, quite naturally, speaks for Scotland. However, our scenario is so similar that what would be good for Scotland could be equally good for us, by which I mean everyone on this island. That is why I wanted Sandy’s words to be recorded in Hansard and to be food for thought when Dr McDonnell’s agency is set up, as I hope it will be soon.
I support the concept of a greater co-ordination of energy supply and conservation in Northern Ireland to protect our environment and to reduce electricity prices for residential and industrial consumers. Northern Ireland suffers from some of the highest prices in Europe, and those key issues must be addressed so that we can remain competitive, continue to protect our environment and respect it more.
Is the proposed agency needed or will it simply duplicate other projects? Would it try to draw strands together and form another layer of bureaucracy in this small part of the United Kingdom? That must be considered carefully. Should we examine how we could restructure our present system? The Department of Agriculture and Rural Development has an interest in willow biomass and electricity production through the farming industry. Should responsibility for those matters be transferred? In addition, the Department for Social Development is interested in energy conservation. Should that role be transferred so that one area deals with the supply and conservation of electricity?
Perhaps the Department for Social Development’s role in identifying those suffering from fuel poverty should become a key aspect of its work. There may also be scope for the issue to be included in the review of public administration. The restructuring of Departments is not the issue; subject to agreement, some sections of Departments might logically sit somewhere else.
I have not heard much about how OFREG will fit into this plan. Will it become defunct? I value OFREG’s independence and believe that its powers should be increased. It is disappointing that OFREG has not been as successful as we would have liked in driving down electricity prices in Northern Ireland.
Improvements are necessary. The electricity contracts that were handed out during direct rule were a licence to print money, and that was of no benefit to the people of Northern Ireland. NIE is moving towards electricity generation through the Huntstown power station in the Republic of Ireland. The grey area is becoming larger. Is NIE an independent distributor or a generator? Does it give greater priority to the profits of its shareholders than it does to the interests of the people of Northern Ireland? That question must be answered.
OFREG’s powers should be increased to favour the consumer. Considering the initial investment in their shares, the private companies have made healthy profits. Increased downward pressure on prices should now be applied. There have been benefits by way of improvements to the generating equipment, but that has been transmitted into their profits.
Nationalist Members have emphasised the all-island aspect. However, we must fit into the United Kingdom structures of electricity production and regulation. The Kyoto agreement provided for that, and we must abide by it. There are two sides to the coin. There is a United Kingdom and a European aspect as well as the all-Ireland aspect. We must ensure that any benefits are delivered to the consumer. A sizeable electricity interconnector is now on-stream, which is also applying downward pressure on electricity prices in Northern Ireland.
I consider Dr McDonnell’s proposals to be at the early stages. It would be premature to jump now. Further consideration is required, and I look forward to hearing what Dr McDonnell and the Minister of Enterprise, Trade and Investment have to say in reply.
I support the motion. However, other issues must be highlighted. The Committee for Enterprise, Trade and Investment’s energy inquiry concluded that if we were ever to get an efficient system, it should have as wide a remit as possible, possibly on an all-Ireland basis, and it should conform to EU Directives.
It has been obvious for some time that the energy industry needs an all-Ireland remit if it is to have a stable future. After the storms in the winter of 1998, when lines came down and many people suffered a miserable Christmas and new year, the industry invested in greater volume, modern installations and upgraded lines. However, the problem remains that NIE has a monopoly, with Belfast being the only area that has the alternative of British Gas.
(Mr Deputy Speaker [Mr McClelland] in the Chair)
This system has proved effective — it is more economical and it provides consumer choice. Renewable energy is becoming more effective, but it still falls far short of Government proposals. The recent decision to install a North/South, east-west gas pipeline throughout Ireland will be a real boost for the north-west of Northern Ireland and for Donegal. The Oil Promotion Federation has taken the matter to the EU to try to prevent that, and that says more about the federation than anyone else could. The Oil Promotion Federation is not controlled, and it is regulated by providers and consumers. The federation calling "foul" brings to mind the pot and the kettle. I support the call for a Northern Ireland energy agency to assess, plan and actively manage all aspects of energy procurement, supply and conservation in Northern Ireland.
Members supported the report produced by the Committee for Enterprise, Trade and Investment, and I agree that, in the short term, a Northern Ireland energy agency would ensure that our aims are achieved sooner rather than later, and it would provide consumer choice to more people.
The Minister of Enterprise, Trade and Investment (Sir Reg Empey):
Ms Morrice said that she welcomed the fact that the motion was keeping the issue alive in our minds and that it was allowing us to remain focused on a matter that was important to everyone. I entirely agree that the debate achieves that objective. I have listened carefully to Dr McDonnell calling for the establishment of a Northern Ireland energy agency. However, I point out that his proposal goes much further than the Committee for Enterprise, Trade and Investment’s recommendation in its report on the energy inquiry. It simply said that the agency idea should be considered. There is no suggestion in the Committee’s report that the wider proposition was seriously examined. However, I intend to respond fully to the Committee’s report in the near future and to deal with some of those issues.
I agree, to some extent, with Mr Neeson, Ms Morrice and Mr Beggs that the call for an agency is somewhat premature. We must remember that the energy sector in Northern Ireland is privatised. All the generation is in private hands, as is the distribution. However, in the Republic the generation is primarily in the control of the state. The Committee visited Denmark to look at its model. The Danish Energy Agency is responsible for climate change negotiations, oil and gas exploration, research programmes and bilateral programmes with Eastern European countries. In other words, it is a significant body that interfaces with powers far and beyond any that devolution would have. It is responsible for oil and gas exploration, for example, so it is a very different animal. Many Members have referred to the desirability of greater co-ordination, and I have no difficulty with that. It is entirely common sense that where several Departments have at least some degree of interest in a subject they should co-ordinate. However, it is impossible to get every subject matter that has a cross-departmental activity gathered together in one place.
Many issues and themes in Government are cross-cutting. I accept what Members have said about fuel poverty. However, I recently attended the opening of a scheme in my East Belfast constituency. A home had been fitted with gas central heating, insulation et cetera under a pilot scheme that the Department for Social Development was carrying out in Belfast. Insufficient applications had been made to use all the money available on the pilot scheme, although it was fantastic to see what had been achieved. For example, hundreds of home helps in Belfast spend hundreds of man-hours lighting fires for people, yet those facilities could be installed cheaply and efficiently, and would prove less hassle for someone who is unable to get around easily. It is a terrible shame that the scheme is not receiving the level of support that we would like. I sympathise with the objectives to which Dr McDonnell and other Members referred.
My Department recently published a consultation paper, ‘Towards a New Energy Market Strategy for Northern Ireland’, which recognised the interaction between energy and other priorities such as climate change, social inclusion, fuel poverty, health and equality. That echoes my previous point that many energy issues are cross-cutting. The paper posed the question of how an integrated approach to the issue might be secured, and we are currently analysing the responses that we received.
I cannot say with absolute conviction that all the energy concerns that have come before the Assembly would have been solved more easily if an organisation of that kind existed; we must remember that we deal with a privatised industry. The energy issue is in no way "bolted on" to the Department’s activities; I view it as a mainstream part of my work. I was surprised in that I underestimated the amount of time and effort that that would take, all because the energy sector is a privatised industry. I spend much of my time on the issue, as do my officials. A division of the Department is dedicated to energy.
Members will be aware that, in the current session, I intend to introduce a utilities Bill to deal with a range of issues, including the consumer arrangements and the situation with regard to the regulator, which Mr Beggs mentioned. I accept that a range of issues must be dealt with.
Mr Neeson referred to the European dimension. We hope to achieve more market opening, as that is the trend in the European Union, and we hope that that will bring down prices. It is frustrating that we have been unable to bring proposals to the House that will achieve reductions; however, I hope that those proposals will emerge in the coming weeks. I do not despair, because the situation has been changing for the better in the past couple of years. A new combined-cycle power station is under construction at Ballylumford. That will introduce state-of-the-art generating equipment, which will produce electricity more efficiently than the current station does. As the consumer will pay fuel costs directly, electricity will be produced more efficiently, which will have a downward impact on prices.
A project, which includes the extension of the gas pipeline, has been earmarked for Coolkeeragh. However, I share the anger of some Members at what has been happening there, and the attempts that have been made to frustrate a strategic decision. As Dr McDonnell said, Coolkeeragh has had a power station for 30 or 40 years and someone is making decisions on the basis of what may happen to the plant’s profits in the next six or 12 months. We must plan strategically for energy production for future generations, given that the infrastructure is so expensive.
If the Coolkeeragh power station developments take place, they will result in a state-of-the-art, highly efficient gas turbine. Mr Beggs referred to the Moyle interconnector, which has come on-stream and which will help to bring competition into the market in the long term.
The renewable energy sector has potential, but there are limitations to the use of renewables in Northern Ireland. For example, the geography here does not enable us to create meaningful amounts of hydroelectricity. My Department and the Department of Agriculture and Rural Development are interested in biomass, anaerobic digesters and other new technologies, and we will be pursuing those options. However, such technologies have a long way to go before they can deliver electricity at commercial prices.
Wind energy is one area in which we may have made more progress. However, Members must understand that there are lessons to be learnt from privatisation when dealing with renewables. Although we may be anxious to introduce renewables into the mainstream energy system, we must plan carefully and be cautious about the cost. There is no point in producing renewable energy that is so expensive that no one can buy it.
Apart from wind energy, the renewable energy technologies have a long way to go. My Department will wish to discuss those matters further with the Committee for Enterprise, Trade and Investment as we move towards introducing policies concerning renewables.
Jane Morrice and Arthur Doherty mentioned offshore wind farms. That method of energy production has potential and, as Members may know, my Department, in conjunction with the Department of Public Enterprise in the Republic, prepared a report on the options for wind energy production, particularly offshore production, around the island. The Tunes Plateau site, situated off the north coast of Northern Ireland, emerged as a strong possibility. Discussions between the Crown Estate and a possible applicant are at a delicate stage, and I cannot predict the outcome. If the project were to proceed, a substantial period of public consultation on the environmental impact would be required. I am not in a position to say whether it will proceed.
I welcome the fact that energy management is being kept on the agenda, because it is an area of activity that has been neglected. Reference was made to the unfortunate contracts that were entered into several years ago. Those contracts have now run for over half of their allotted time, and we have spent much time examining the matter.
I accept the spirit of the motion, but I am not convinced that setting up another quango would add to the sum of knowledge on the issue. I am not trying to pour cold water on the motion, because I fully understand the Member’s concerns. The spirit of the motion is going in the right direction, and I accept that there needs to be a joined-up approach. However, bearing in mind that we are dealing with the private sector, I am concerned that another body might not achieve better results than those that can be achieved by adapting existing systems and ensuring that there is the sort of cross-departmental activity that already exists in other areas. I want to discuss the matter further with the Committee for Enterprise, Trade and Investment, and I hope to be able to say something on this when making a formal response to the Committee’s valuable report.
Action has already been taken on the matter that Mr Beggs raised about different Departments having bits and pieces of interest across the subject. For example, the Department for Social Development deals with fuel poverty, the Department of Enterprise, Trade and Investment has interests in wider energy issues and the Department of Agriculture and Rural Development also has energy-related interests. Following devolution, the Department for Regional Development was considered to have a strategic energy role. In fact, that Department did not have the statutory basis or the staff for such. It was a kind of anomaly. The proposal is to draft an Order to incorporate responsibility for energy again in my Department. Functions have already been moved around, and that may happen again. From time to time it may be that functions will not be in the right place and will have to be moved around.
With regard to linkages, while energy is being considered in an all-Ireland context, my Department is considering it in a European context. The island of Ireland is a tiny energy market in international terms. Over the years, Northern Ireland’s problem has been isolation from major sources of supply. The Department’s objective is to ensure that we do not remain isolated. That is why I am pleased that we now have gas and electricity interconnection with Great Britain, which will progress to a European connection. That will ensure that we have supply reinforcement and do not depend on one source. That was the rock on which we perished in the 1970s when we were entirely dependent on oil. That was ruinous, and I warmly welcome the opening-up of sources of supply. That is the best way to bring prices down in the long term, once contracts are dealt with.
I welcome the debate and appreciate the interest and concern of Members, which I share. I assure them, and particularly Dr McDonnell, that I do not regard the Department’s responsibility for energy as a sidecar on a bike. I regard it to be mainstream, and officials will confirm that because they put much time and effort into energy. It is important. I also hope that if the Assembly brings the Bill forward during this session, it will address the range of significant matters that concern Members, particularly on the consumer side, about who operates the system — the transmissions operator — and buying and selling. All of those matters must be considered.
I will respond in detail to the Committee for Enterprise, Trade and Investment. However, I cannot yet support the Member’s proposal for another body. The Assembly must wait and see and discuss further with the Committee for Enterprise, Trade and Investment to decide whether the draft legislation will achieve its objectives. We should not yet proceed to create another agency.
I understand the merits of what the Member has said and the need for a co-ordinated, strategic long-term view. However, I am not convinced that another non-departmental public body attached to the Department of Enterprise, Trade and Investment would achieve our shared objectives. I ask the Member to address that point in his summing-up.
When the Assembly votes on the motion it should consider the Cabinet Office’s major energy review, which was published in February 2002 and which was mentioned by Mr Conor Murphy. The review considered new institutional arrangements for energy policy-making and delivery. A cross-departmental unit is being created in the Department of Trade and Industry in London with its future position subject to review depending on the roles of climate change, energy policy and transport policy within the Government. That document did not consider removing those critical issues from direct departmental and ministerial responsibility and putting them into an agency. However, we will watch that development closely because there may be lessons to be learned.