merrion street

Introduction

Ladies and Gentlemen,

I am delighted to be here in Drumshanbo to speak at the closing of the inaugural Robert John Kane Energy Symposium. I would like to thank the Drumshanbo Forum for their invitation to be with you here this afternoon to speak with you about the critical energy policy choices facing the Government and our plans to get this country energised again.

I understand that the discussions over the past few days have been very engaging and insightful. There are huge decisions to make in the coming years on energy policy that will have a lasting impact on our country, its people and the wider economy. We need to get it right.

It is appropriate today to remember Robert John Kane for whom this symposium is named. Kane had an incredible career as a chemist and is today perhaps not as well known as his work deserves. He is best known for his book “The Industrial Resources of Ireland”, which made a scientific and economic case for the utilisation of Ireland’s natural resources and has been characterised as the world’s first energy cost benefit analysis.

170 years later we are still grappling with how best to use Ireland’s natural resources for energy at a competitive cost. This is a real challenge facing the Government and for people in this room. The rapid contraction in the economy in recent years has caused significant hardship for the people of Ireland. This is why the top priority of the new Government has been jobs and economic growth by engaging in a dedicated campaign to improve the general competitiveness of the Irish economy. The challenge is to balance this goal with that of improving Irish energy security and increasing renewable energy supply.

I’m sure the ESRI review of energy policy prompted a lot of discussion here at the symposium. Whether you agree or disagree with its conclusions it does raise a number of important questions on energy policy for the State that the new Government will examine closely. I did note one conclusion in that the current economic crisis has had a negative impact on the capital costs for energy investment. Unless we can rebuild the economy, private sector funding for energy projects will remain difficult to access.

The new Programme for Government has already made some initial decisions on the future of Irish energy policy. We are eager not to see the mistakes of the property boom repeated within the renewable energy sector and the new Government is determined that future wind farms are encouraged to build in locations where the wind regime is best and built in sufficiently large numbers or clusters to reduce the cost of connections to the grid.

We have also acknowledged that the fiscal crisis and the need to keep Irish energy prices as competitive as possible means that subsides will be increasingly limited. In addition, the ReFIT for micro generation can’t be significantly higher than the single energy market price for electricity.

The Government will be addressing other weaknesses within the system to try and improve the investment environment for the energy industry. Planning process, licensing and legislative reforms should make it easier in the future for energy projects to proceed.

Renewable energy will continue to play a key role in shaping Ireland’s energy future and will contribute, in turn, to each of our policy goals of secure, clean and affordable energy supplies. The overall energy policy objective of the Government is to ensure a secure, clean and affordable energy supply for Ireland

There are a few immediate energy priorities that we think will make a big difference. First of all, we need to drive down energy demand by increasing our energy efficiency measures. This is a policy promoted in the Programme for Government and one that Minister Rabbitte is keen to progress on quickly.

The Government also recognises there is a long term economic advantage from developing our indigenous energy sources to switch away from imported fuel sources. The €6 billion spent each year on imported fossil fuels could sustain a huge amount of jobs and industry within our country if cost effective ways of exploiting our own energy resources can be achieved.

With some of the best wind and wave resources in Europe, the natural resources are clearly available, but we need to work to ensure that they can be harvested and deployed in such a way that will bring national benefits, most importantly by benefiting Irish homes and businesses. We have to ensure that we continue to improve our national competitive position and that means we need to ensure our overall energy costs remain as low as possible.

Energy innovators might soon discover that inventing the technology to harvest energy from the sea might be the easy part. Developing that technology in such a way to get that same energy into the national grid and into homes and businesses at a competitive price will be the challenge.

The new Government won’t be a passive bystander when it comes developing the energy sector. For our own part we need to examine our own public structures to ensure that they are operating efficiently within the market. The recent McCarthy Report into State Assets and Liabilities raised a number of issues that the Government will have to look at. We have to decide whether is it best public policy that four separate public semi state companies are operating wind farms when the private sector are seeking to compete. Or whether the semi state energy companies are operating in the most efficient manner possible that offers the best prices and services to consumers? Consideration of these issues will not be long fingered by the Government.

We have long acknowledged that semi state energy companies will play a key role in rebuilding the economy. Our NewERA policy remains a central policy feature of this Government and will be progressed. The overall aim will be to see additional investment in key areas of the economy designed to improve our overall competitiveness. Initially, it will involve a new governance approach and structure for the semi states designed to:

Squeeze cash rich state companies to finance extra investment in priority sectors;

Reinvest on a commercial basis proceeds from future sales of non-strategic State assets, as approved by Government;

Drive efficiencies and a restructuring programme in the Semi State sector for the benefit of taxpayers and consumers;

Re-structure state assets to take advantage of economies of scale;

And, to explore and exploit potential synergies in future investment plans in the Semi States

I thank the Minister for Communications, Energy and Natural Resources, Pat Rabbitte, and the Minister of State for NewERA, Fergus O’Dowd, for their ongoing work in this area.

In addition, as a signal of the intent of the new Government to drive change in this area the Cabinet has decided to establish a Cabinet Sub-Committee on Economic Infrastructure to consider many of these issues.

For environmental and energy security reasons the global economy is moving towards a low-carbon, green economy model. This new beginning coincides with the need to re-build and re-invent our country in the context of a low carbon, sustainable economy.

Ireland, more than most countries, has an opportunity to emerge as a world leader to the fore of this new economic reality. Across all areas of the green economy value chain from research and development, manufacturing, enterprise commercialisation, financing and technology innovation we have the skills to add considerable value to this transition.

Ireland has an important role to play in servicing and managing these new capital flows and investments. We already have the template, through the IFSC, in how to position ourselves as world leaders in this new and dynamic area of finance. If we marry the skills we already have, and support them with appropriate enabling policies, we can position ourselves as a country of choice for such green financial services. To this end, the Government is advancing the development of a green financial and administrative services Centre – the Green IFSC initiative.

Closer to here and more relevant to the local economy are a number of ongoing developments that have the potential to play a major role in the energy industry.

I understand two companies are currently exploring for viable natural gas reserves in the Lough Allen area which could have a significant boost for the local economy if successful. On a national level they could prove invaluable to improving Ireland’s energy security situation.

There is also the initiative of the Lough Allen Basin Smart Energy Hub which is a clear example of how this new potential can be exploited in a local context. The Energy Hub has the potential to become a centre of excellence exemplifying energy economies of scale.

I know that links have been developed with Sligo IT with a view to developing partnerships with incubation companies who may base themselves in the Energy Hub.

Furthermore, I understand that a renewable energy FETAC Level 5 course will begin in the local VEC School as a post-leaving cert offering in September 2011.

Together these elements will ensure that the area will become a hub for the development of energy sources and the creation of new jobs.

However, local economies such as this and the wider energy sector won’t meet their full potential unless the national economy is rebuilt. I have made it a mission of this Government to make Ireland the best small country in the world in which to do business in by 2016.

This is not empty rhetoric but a guide for my Cabinet to implement the types of changes in the Irish economy to make us competitive again. We are actively working towards the aim of undoing much of the damage caused by years of economic mismanagement and Governmental drift.

No-one in this room needs to be reminded that the last few years saw business costs rise, skills lost, market share drop and most seriously, our collective international reputation muddied.

No more. I want to assure everyone in this audience that this new Government will be doing things very differently.

In the few short weeks since this Government was formed we have already made an impact. We are making decisions. We are moving forward.

Following on from the toughest internationally backed stress tests on our banks, we have launched on a radical restructuring plan for our entire banking sector.

And I’m happy to say that the response internationally has been very positive. Confidence is starting to return now that we have dealt swiftly with the banks.

With early banking decisions made the Government’s attention has turned to our top priorities, jobs and reform.

We committed ourselves in the Programme for Government to delivering a Jobs Initiative within the first 100 days of taking office. I am happy to report that I and my Ministers have been working flat out on ensuring that we will deliver on these job creation policies within the next few weeks.

However, the Ireland brand has been damaged over the past few years.

My Government is determined to undo this damage. We intend to remind the world of these strengths through a concerted campaign to rebuild and strengthen our international reputation. This is what I had the privilege of doing in speaking to 2000 Irish American business interests in Washington recently.

The forthcoming visits by President Obama and Queen Elizabeth II will put Ireland at the centre global media coverage next month – an unprecedented opportunity to portray a more positive image of the country.

We also want to work with people like yourselves – to get this message out to the world that Ireland is open to business. Many of you here operate internationally. Your voices and your role as ambassadors can show the positive and fighting face of Ireland.

Yes, the country is in a tough place. There are a great many challenges ahead of us yet. We are on a long road to recovery.

But we will get there.

Step by step. Decision by decision.

We will build a dynamic energy industry. We will rebuild this country. We will restore the good name of Ireland among the nations of the world.

Go raibh maith agaibh go léir.