Hildegarde Naughton (Galway West, Fine Gael)
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The Energy Bill 2016 was referred to the Select Committee on Communications, Climate Change and Natural Resources by order of the Dáil of 29 June. This meeting has been convened for the purpose of consideration of the Bill. I welcome the Minister for Communications, Energy and Natural Resources, Deputy Denis Naughten, and his officials. I thank them for their attendance and arranging briefings for members of the select committee. The meeting was arranged at the earliest available date, consistent with Standing Orders and the Minister's availability. I know that he attended the European Council meeting in Bratislava and I welcome him back. In advance of dealing with the Bill, he might outline its importance. There was a certain urgency in progressing it, for which he might outline the reasons.

Denis Naughten (Roscommon-Galway, Independent)
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I thank the Chairman and committee members for facilitating this meeting. We are anxious to get the legislation through. I gave a commitment at the North-South Ministerial Council last Monday week that we would try to facilitate its passage. The objective behind it relates to having an integrated single electricity market on the island of Ireland. The integrated market was established in 2007. With respect to changes in EU legislation and issues which have arisen with the market, we have brought forward this legalisation to deal with them. It is given far more significance on foot of the decision in the United Kingdom to exit the European Union.

There are issues regarding interconnectivity. When I addressed the 50 members of the Council of Ministers in Bratislava earlier this week, I pointed to the importance of interconnectivity for Ireland. Our electricity and gas networks are connected directly via the United Kingdom to European networks. I had an interesting meeting with my Norwegian counterpart. Norway is developing an interconnector with the United Kingdom. That brings into focus not only the need for interconnectivity across the island but also the broader challenges we face. The French President and the Taoiseach will next week sign an agreement on the Celtic electricity interconnector between France and Ireland. I also had very interesting discussions on liquefied natural gas, in which some members will be interested in terms of the opportunities along the Shannon Estuary. With reference to production in the United States, I understand that within the next five years Australia will be the biggest producer of liquefied natural gas.

While we had hoped the outcome of the Brexit referendum would have been different, we had been involved in contingency planning. We have engaged at European level to explain to our colleagues the importance of the United Kingdom not only in terms of the energy market but also in dealing with far broader trade issues and in the context of the need to make progress in having an integrated single electricity market, I-SEM, on the island of Ireland. This legislation will facilitate the development of the I-SEM in the context of EU directives. Whether they will still apply in two years time post the negotiations, I do not know, but the reality is that it will give greater stability to the electricity network, North and South. Because a substantial amount of electricity is generated from renewable resources, the additional stability will benefit everyone on the island.

Hildegarde Naughton (Galway West, Fine Gael)
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It is proposed to group the follow amendments for the purpose of debate, amendments Nos. 4 and 8 and Nos. 5 and 9. All other amendments which are not grouped will be discussed individually.

Denis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 1:

In page 5, line 27, after "Act" to insert ", other than section 7,".

This is a technical amendment that provides that section 7 in regard to the single electricity market will be commenced on the enactment of this Bill.

Brian Stanley (Laois, Sinn Fein)
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I move amendment No. 2:

In page 7, to delete lines 30 to 41 and substitute the following:" 'major sanction' means a direction to a specified body that the specified body pay a sum, as specified in the direction, but not exceeding 12 per cent of the turnover of the specified body, to the Commission by way of a financial penalty for improper conduct, by the specified body, specified in the direction;".

I will outline this as clearly as I can. The difficulty with the working of the Bill is that for smaller companies, namely, medium-sized companies, it may impose a disproportionate burden. The Bill proposes the imposition of a maximum of €50,000 and 10% pro rataon the turnover of a body, but we propose as more effective a figure of 12% to reflect the turnover, profit margin or scale of a company. To take the example of Britain, the Office of Gas and Electricity Markets, Ofgem, has the power to apply substantial fines on retail gas and electricity gas suppliers. To reflect more what is happening or is likely to happen, we propose this amendment as we believe it is fairer, a more proportionate way of doing things and that it will be more effective. It is in that spirit we offer this amendment for consideration in the round of matters.

Denis Naughten (Roscommon-Galway, Independent)
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I thank the Deputy for tabling this amendment. We have had quite a degree of discussion on this particular amendment. As the Deputy is aware, the primary focus in the legislation is to provide the commission with the power to impose financial sanctions for improper conduct. Improper conduct will be the failure of a licenceholder to comply with such standards of performance to be developed by the Commission for Energy Regulation, CER, and subsequently specified by the commission in its licences.

This administrative sanctions regime in the Bill is a start in providing the Commission for Energy Regulation with the effective enforcement process and it is not an end. The penalty provision of 10% specified in the Bill is in line with existing penalty provisions in other Irish statutes for regulatory breaches. It is also in line with penalty limits in EU directives. It would not be appropriate to exceed the penalty limits of EU directives. To do so may run the risk of a successful challenge on the grounds of disproportionality of penalties in excess of European norms and this could result, however unintentionally, in preventing the provisions being enforced in practice.

Our priority at this point is to enact the legislation and a more useful approach might be to assess the working of the penalty provisions after a suitable period of operation. At such point and as part of such a process of review, the Commission for Energy Regulation could come before the committee and provide an informed view on the overall effectiveness of the operation of the sanction regime.

As the Deputies are aware, the Commission for Energy Regulation is statutorily independent and is accountable to the committee of this House and not to the Government. On that basis, I cannot accept the amendment. However, I hear where the Deputy is coming from regarding the issue for smaller operators and that this would be disproportionate. The legislation is drafted the way it is in order that the penalties would have to be proportionate. A provision is in the legislation for a company, if it considers this is disproportionate, to go before the courts.

The concern we had with the way this amendment is drafted is that the Deputy is going the other way. He is creating the disproportionality by increasing the threshold. The fear was that it would move out of the civil sanctions regime into the criminal sanctions regime by going over the 10% threshold. I understand where the Deputy is coming from but the legislation as drafted allows for proportionate sanctions up to 10%, which would not disproportionately penalise small businesses over large ones. If the sanction was seen to be disproportionate, the courts could revise those penalties down. The important thing to remember is that this is for a breach of the licensing conditions set down by the Commission for Energy Regulation, CER. We do not yet have those conditions. There would be a very useful role for this committee in engaging with the Commission for Energy Regulation to ensure the conditions on those licences clearly reflect the concerns the public has about the operation of energy companies. Perhaps, with respect to the Chairman and members of the committee, they may wish to bring the commission in here to discuss that before it finalises the licensing conditions to ensure that they clearly and accurately reflect the issues that arise and come up in constituency offices, that the public complain about to CER. I think the concern the Deputy raises is accurately reflected in the legislation as it stands. There is always the safety net of the courts to review that if it is deemed to be disproportionate.

Brian Stanley (Laois, Sinn Fein)
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It is a pity that we are bound by what Big Brother in Brussels decrees. While I disagree with the decision the British took a couple of weeks ago to cut themselves off from Europe, I can see why millions of British citizens voted the way they did. That is the type of reply, with no disrespect to the Minister, that drives people crazy. It drives the public mad, if any member of the public is watching us this morning, to be told this, day in day out. Since the day I was elected to a county council I have been hearing this, that we have to put a stamp on eggs, to charge schools for water, to do this and do that because it is in line with European decrees.

In response to the proportionality argument, what the Minister has said and the officials have set out on paper for him does not stand up because 10% is 10%. A fixed charge of up to €50,000 is a fixed charge. We propose a maximum of 12% across the board. I will raise this with the CER before we break for the summer. It depends on who sits on the commission. Some of these bodies can be very far removed from us, never mind the public. The people appointed may be good but giving somebody that power without making it proportionate for small companies is very dangerous.

In regard to the appeal to the court the Minister and everybody in this House knows that the court is very difficult. We have all experienced, or seen our constituents experience, injustices and we do not have the wherewithal to go to the Four Courts. I do not and neither does somebody on the minimum wage or trying to run a small business.

The courts are already chock-a-block with work. They are flying through work every day. There is access to the court, and there is a financial burden, but there is also the question of the administration of the Courts Service. We should be keeping work away from the courts. I am pressing the amendment.

Denis Naughten (Roscommon-Galway, Independent)
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Keeping work away from the courts is the objective of this legislation. That is what we are trying to do. We are trying not to go down the criminal sanction route. This has nothing to do with the EU. In respect of legislation for civil sanctions, the threshold across the regulators has been up to a maximum of 10%. If we go over that threshold, we are very likely to find ourselves in a situation where the courts will interpret this in the criminal rather than the civil realm. Instead of these being dealt with as administrative sanctions, they will end up in the courts. The objective of this is to ensure we keep as much work out of the courts as possible.

The point I make about Europe with regard to this is that our thresholds across our regulators are 10%. At EU level, the thresholds are 10%. If it was the case that we were working at a higher threshold or if they were working at higher at European level, we could consider that in the context of the amendment but the Deputy’s amendment is trying to deal with proportionality. This legislation deals with that issue. We are talking about the difference between 10% and 12%. Going over 10%, whether to 10.1% , 10.5%, 11% or 12% is irrelevant, is likely to bring us down the criminal sanction route rather than administrative sanctions. We are trying to keep these out of the courts and reprimand companies that are not complying with the conditions of their licences. The €50,000 cap is separate. That applies where a decision is taken not to introduce a penalty but where there has been a cost involved in carrying out the investigation and the maximum that can be charged in that respect. To protect businesses, and particularly smaller operators, a cap is put on any administrative recovery cost that would be imposed by the CER. The way the legislation is drafted accurately reflects the Deputy’s concerns about it. The objective is the same as the Deputy’s, namely, to keep these issues out of the courts at an administrative level and to ensure that the companies involved in this business are operated in a manner that reflects the conditions laid down in their licences.

Brian Stanley (Laois, Sinn Fein)
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The Minister said that if it goes over 10%, it is likely to go into the criminal domain. He has got his legal advice. I did not draft that amendment on my own. I took legal advice from a barrister.

Denis Naughten (Roscommon-Galway, Independent)
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Would Deputy Stanley make that advice available to us on foot of what I have said today?

Brian Stanley (Laois, Sinn Fein)
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Yes.

Denis Naughten (Roscommon-Galway, Independent)
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If he could make it available to us, we will read it in the context of Report Stage next week.

That is the advice I have got via the Office of the Attorney General. It is the best legal advice available to me but if the Deputy has a contrary view, I am happy to read it. We have considered this amendment in detail.

Hildegarde Naughton (Galway West, Fine Gael)
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How stands the amendment?

Brian Stanley (Laois, Sinn Fein)
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I am pressing the amendment.

Denis Naughten (Roscommon-Galway, Independent)
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With all due respect to the Deputy I have said that on foot of his furnishing me with his advice we will consider it. I wonder why he is pressing the amendment if I am prepared to consider it.

Hildegarde Naughton (Galway West, Fine Gael)
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The Minister will examine the issue before Report Stage. Is that correct?

Denis Naughten (Roscommon-Galway, Independent)
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I will examine the advice provided to Deputy Stanley on foot of my comments today.

Hildegarde Naughton (Galway West, Fine Gael)
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Will Deputy Stanley withdraw the amendment for the time being?

Timmy Dooley (Clare, Fianna Fail)
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I move amendment No. 3:

In page 19, between lines 2 and 3, to insert the following:“(2) Within 18 months of the enactment of this Act, the Minister shall in consultation with the Commission establish if it is sufficiently resourced to enforce the new powers conferred upon the body.”.”.

As I must leave the meeting, I ask Deputy James Lawless to speak on the amendment.

James Lawless (Kildare North, Fianna Fail)
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The amendment addresses a resourcing issue. The Bill confers a number of new powers and responsibilities on the Commission for Energy Regulation in respect of the sanctions regime, etc. In other cases where the powers of regulators have been expanded or sanctions increased, for example, in the case of the Central Bank of Ireland, additional resources were provided. The amendment will not address the resources issue immediately but provides that the Commission for Energy Regulation will, 18 months after the enactment of the legislation, engage with the Minister to address any resource issues that may have arisen. The purpose of the amendment is to provide for checks and balances.

Denis Naughten (Roscommon-Galway, Independent)
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I thank Deputy Dooley for tabling the amendment and Deputy Lawless for speaking to it. Deputy Lawless is correct that the resourcing of the Commission for Energy Regulation, CER, is an important issue. While I welcome the opportunity to discuss the issue and fully agree with the intent of the proposed amendment, I must reject it for a number of reasons.

I am fully cognisant of the need to ensure the Commission for Energy Regulation is fully resourced to carry out its statutory functions. This important issue was raised in the Green Paper on Energy Policy published in May 2014. As a result of the Green Paper consultation process, the recent White Paper includes a Government commitment to review the legal and institutional framework for the electricity and natural gas markets. The White Paper commitment specifically states that the review includes the Commission for Energy Regulation's mandate and resources. The matter of how best to implement this commitment is a priority issue and part of my Department’s immediate work programme.

The European Union's 2009 third energy package obliges member states to ensure their energy regulators are fully independent and resourced. In line with this obligation, the Commission for Energy Regulation is legally independent in the performance of its functions under legislation and is only accountable to the Oireachtas. The CER must be sufficiently resourced to deliver on its existing and growing mandate and this matter will form part of the scope of the forthcoming review. I would greatly welcome the opportunity to discuss the review of the commission's mandate and resources with this committee at an early date.

Under the regulatory legislation, the Commission for Energy Regulation is accountable for the performance of its functions to this committee. In this light, I hope the review will be of interest to members and I have no doubt there is potential for Deputies and Senators to make a valuable contribution to the review. Any issues relating to resources in respect of new powers and functions will be fully reviewed in parallel with both the forthcoming review and the development of the new administrative sanctions regime.

It would not be appropriate or practical to consider the Commission for Energy Regulation's resources in respect of one particular statutory function and thereby exclude from examination the wide range of other regulatory functions the commission undertakes. It is vital that a holistic approach is taken in respect of any review of the CER's resources in light of all its energy regulation functions. In line with the principles of independence, the allocation of staff within the Commission for Energy Regulation is a matter for the commission. As the CER has assumed new functions in recent years, it has shown it can flexibly reallocate and adapt resources as its roles and objectives change.

It is therefore proposed to reject the Deputy’s amendment on the basis that the adequacy or otherwise of the Commission for Energy Regulation’s resources will be reviewed holistically as part of the forthcoming review to which the Government committed in the energy White Paper. As I stated, this review can be discussed with the committee.

I do not disagree with the amendment in principle but it is the wrong vehicle for achieving the objective the Deputy seeks. I will be pleased to engage with the committee as part of the overall review of the Commission for Energy Regulation and its functions. Such engagement would be appropriate given that the committee is the organ of the State to which the commission is accountable.

It would be useful to engage with the committee on the Commission for Energy Regulation's functions, as well as its resources. It is important that the commission has sufficient flexibility to reallocate resources in response to changes introduced under EU directives or additional responsibilities that may be conferred on it from time to time.

Hildegarde Naughton (Galway West, Fine Gael)
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How stands the amendment?

James Lawless (Kildare North, Fianna Fail)
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The Minister has provided a reasonable response. I welcome in particular the proposal that the committee review the operations of the Commission for Energy Regulation and I will withdraw the amendment on that basis.

Hildegarde Naughton (Galway West, Fine Gael)
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Amendments Nos. 4 and 8 are related and may be discussed together.

Eamon Ryan (Dublin Bay South, Green Party)
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I move amendment No. 4:

In page 24, between lines 16 and 17, to insert the following:

"Amendment of section 9 of Act of 199912. Section 9 of the Act of 1999 is amended in subsection (4) by the insertion of the following—

"(g) to promote the development of the demand-side of energy markets through energy efficiency, demand-side response, distributed generation, storage and the use of digital technologies;

(h) to provide consumers the ability to provide, consume and trade their own energy supply;

(i) to encourage transmission and system operators to make use of demand-side flexibility for cost effective system operation and infrastructure development;

(j) to allow distribution system operators be renumerated by measures other than assessment of the throughput of energy volumes;

(k) to advance the integration of the heat, power and transport sectors to increase the overall flexibility and efficiency of the energy system;

(l) to insure that market prices reflect the availability or scarcity of supply and the status of the electricity network and that consumers are made aware of the potential value of providing flexibility in their demand for the use of electricity;

(m) to provide for the ability of consumers to enter contract arrangements which allow them to procure a guaranteed percentage of renewable energy power from their electricity supply company; and

(n) to promote the use of storage technologies in the balancing of electricity demand and supply.".".

I will briefly explain the amendment. The Bill offers us an opportunity to update section 9 of the 1999 Act which sets out the issues to which the Commission for Energy Regulation must have regard. The Act is remarkably out of date as energy policy and the entire energy market have changed completely since its introduction. For this reason, section 9 needs to be updated to ensure it is in tune with the latest thinking on how electricity markets work. The Commission for Energy Regulation must be given a political direction that efficiency, demand management, self-generation and the balancing of a variable power supply with variable demand are the critical tasks on which it must deliver.

In the original legislation, the areas to which the Commission for Energy Regulation must have regard were primarily competition, meeting supply, financial prudence and so forth. While these requirements remain, the energy market and system have changed completely and we should use this opportunity to reflect this change in the legislation.

The amendment sets out in simple terms some of the broad elements of the new and evolving demand management market. These include self-generation and integrating heat and transport and not only electricity in the markets. This would completely flip the market model. Rather than simply measuring as much flow as one can get through the system, we must start to pay the utility, distribution and transmission operators not for the amount of power they distribute but on the basis of how little power they distribute. We should pay more for using less, as provided for in the amendment. This approach is very much in tune with what the European Commission has indicated will be part of its new governance and market arrangements, which we expect will be announced in the autumn. It is also in tune with what all progressive new utilities are doing.

The provisions inserted in the Bill under the amendment would provide the political guidance the regulator needs. Ireland is falling behind and is one of the few countries in western Europe that does not allow people to trade self-generated power. We are also falling behind in the roll-out of small meters and the integration of demand management and efficiency. We must make a political statement to the regulator in which we set out the areas on which we want progress to be made.

Amendment No. 8 is more specific and proposes to amend section 14 of the 1999 Act in respect of the issuing of licences. I am conscious that the Minister will argue that we must be careful in this regard because of the North and the need to enact the Bill quickly. The main purpose of the amendment is to signal the possibility that this jurisdiction will introduce a licence on a geographically limited area to allow a local community to generate power and manage energy efficiency such that it becomes a local energy community that is much more effective and active in how it uses and trades electricity.

It is important to signal that we can issue a geographic licence, rather than having to treat the entire market as a single market, while recognising that those local markets would also have to have the ability to synchronise or connect into the wider market and cannot be disruptive to the overall market.

Last but not least, there is a provision in the amendment to the effect that we should be able to allow consumers, third-party aggregators and energy service companies to provide demand-side resources in wholesale balancing and ancillary service electricity markets. That is the way the markets will go. We need to update our legislation to encourage it in this country and in our single electricity market.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Broadly speaking, I support Deputy Ryan's amendments but I want to flag a further amendment that I would like to make to this which specifically concerns allowing communities and local co-operatives access to the national grid. At the moment, they do not have access if they produce the energy by certain means. I flag the amendment now to be able to table it on Report Stage.

Denis Naughten (Roscommon-Galway, Independent)
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I will go through the note I have here but I agree with what Deputy Ryan talks about regarding his first amendment. There is huge merit in it. We are engaged at European level at the moment with the Commission on these very issues and I hope we will sign up by the end of this year to a new market design for the electricity market right across Europe. Many of the issues that Deputy Ryan has raised in his amendment are already included in the submission that we have made on this to the Commission regarding self-consumption of renewable energy, microgeneration onto the grid, storage, new customers, electricity networks, more flexibility, allowing customers to participate actively, facilitating flexible trading and so forth. We will include the aspects Deputy Ryan has proposed in his amendment in that overall discussion. We expect to have a decision on that by the end of the year. The concern is that if we accept this amendment at this stage, we will probably have to come back and revise and amend it again by the end of the year. It makes more sense to include it in the transposition of the directive that will come in at the end of this year.

I think there are a number of unintended consequences of what Deputy Ryan proposes in his second amendment and there are issues of cost. However, that does not take away from the principle or the point that he raises and it comes back to the proposed amendment to be tabled by Deputy Smith on Report Stage. I am very conscious of this but I do not think it requires provision in legislation. There is huge merit in what she talked about. I am actively considering it at the moment in the context of the replacement of REFIT. The big problem is getting access to the grid, the cost of getting access and the delay in getting access. Unless one has a lot of money to be able either to sit it out until one gets physical access to the grid or to buy quicker gate access to the grid, one is left high and dry. I do not believe that legislation is the way to do this. I think what Deputies Ryan and Smith are looking for can be addressed in other mechanisms. We are very actively engaged with this at the moment with the replacement of REFIT and we will come forward with draft proposals for public consultation towards the end of this year. I am quite happy for the committee to be involved in that public consultation or to have a separate discussion here at the committee, not just specifically on this, but also on the broader issue.

However, I see exactly where the Deputies are coming from and agree with the point they make. I am also very anxious to try to address the issue.

Turning to the formal note, I will speak to amendments Nos. 4 and 8 together. It is proposed to reject them. I commend Deputy Eamon Ryan for his desire to promote demand-side participation in the energy markets and provide a mechanism for consumers to participate actively in the market through the production, sale and possible storage of electricity to increase flexibility in energy markets and allow for the aggregation of services in the market. However, these services are already substantially provided for in legislation in the functions of the Commission for Energy Regulation, specifically in section 9(4)(b) of the Electricity Regulation Act 1999. The detailed rules for the operation of the wholesale electricity market are being fundamentally altered under the integrated single electricity market, ISEM, project. The project is being led by the regulators in the Republic of Ireland and Northern Ireland, overseen by the two Departments on the island and will deliver a flexible electricity market that will provide for the policies outlined by Deputy Eamon Ryan. They include the explicit facilitation of demand units in the high-level design and detailed decision papers. I can provide further information on this for Deputies if they wish.

Furthermore, the policies advocated by Deputy Eamon Ryan are supported by the White Paper on energy published in 2015. The White Paper acknowledges the crucial role of citizens in the transformation towards a decarbonised electricity sector. It acknowledges community-level energy efficiency and renewable energy projects such as the Aran Islands project and the Marino schools project and the role they will play in the transition. It also commits to supporting community participation in renewable energy and energy efficiency projects through the Sustainable Energy Authority of Ireland. It also commits the Government to facilitating access to the grid for renewable energy projects and ensuring grid connection policy will have due regard to current and future renewable energy policy.

As the Deputy is aware, the European Commission is drafting the winter package of legislative proposals, including proposed legislation on electricity market design. The Commission has consulted on this issue and my Department has responded to it. We expect the Commission to publish its impact assessment later this year, in advance of the proposals for market legislation which is due in December. The legislation will define how the new electricity market design should look in order to meet consumer expectations, deliver real benefits from technology and facilitate investment, especially in renewables and low carbon generation. The market design legislation will facilitate decentralised electricity generation, including for self-consumption, and support the emergence of innovative energy service companies.

Given these developments and the requirement for national compliance with EU legislation in the energy sphere, I suggest that if there are gaps in legislative and regulatory provision, they be addressed in transposing the imminent EU legislation. If we were to anticipate that legislation now in national primary legislation, it is quite possible that we would subsequently have to repeal the legislation if it conflicted with EU laws. We would then have to set about developing and drafting further and compatible legislation. It strikes me that it would be more efficient and prudent to await and influence the EU law as it is developed. Devoting time and scarce legal resources to legislating now and a second time in repealing or amending the legislation when transposing binding EU legislation would not seem to be an efficient way to proceed. Legislating prematurely could unintentionally generate infringements. We are quite happy to keep the Deputy up to speed on how the talks are progressing and the feedback received. I am also quite happy to receive his input on how we manage the process in the next few months.

On the matters pertaining to the regulation of the single electricity market for the Republic of Ireland and Northern Ireland, it has been the custom, since its inception in 2007, for legislation governing the operation of this cross-jurisdictional and all-island market to be amended in parallel in Northern Ireland and the Republic of Ireland in order that the substance of the legislation is mirrored. That has been the case in making the amendment in the Bill to facilitate the evolution of the single electricity market. The ministries in the Republic of Ireland and Northern Ireland have worked closely together to ensure the amendments to the definition of the market will have the same meaning in both jurisdictions.

Along with other Deputies, I wish as far as possible to adhere to the approach of parallel legislative development and enactment of largely similar content for the single electricity market.

On a technical drafting matter related to the proposed amendment No. 8, section 14(1) of the Electricity Regulation Act provides for the issuing of licences by the commission. Section 14(1)(e) and (f) of the Act enable the Commission for Energy Regulation, CER, to license a transmission system operator and a transmission system owner. Section 14(1) would not appear to be the appropriate location for the Deputy’s proposals. The proposal as worded by the Deputy would have the unintended effect of overwriting and removing the CER's function to license a transmission system operator or owner. The White Paper provides for a commitment for a review of the legal and institutional framework for the regulation of electricity and natural gas markets, including the CER's mandate. The review would be the more appropriate vehicle to develop proposals from the Deputy.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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What has been said harks back to what Deputy Stanley objected to, which is the idea we have to be guided all the time, in advance, by what Europe might say about what we want to do. I will press for a further amendment of this draft legislation. The Minister has missed the idea that within Ireland's energy market, specific communities, co-operatives and local individuals can produce, thanks be to God, sustainable energy for themselves and more and that we should allow them access to the grid and the market without having to compete on the same playing field with the big players. The Minister said that we cannot legislate for this aspect without considering what Europe will say to us, which to me is putting the cart before the horse. If I am wrong, please correct me, but we should legislate for our needs, desires and what we think is best for our market and people. If the commission in Europe that regulates utilities comes up with legislation that we are out of step with, let us deal with it then. The Minister said that it would be inefficient and imprudent for us to legislate in advance of what the Commission may have to say. We should pursue these amendments to assist our market.

Denis Naughten (Roscommon-Galway, Independent)
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I am talking about two separate things. In terms of Europe, we are developing a single European energy market and are driving forward with a European energy union. We need it more than anyone else in Europe. I was talking to my Portuguese and Spanish colleagues earlier this week, and they are also very anxious about interconnectivity. The reality is we import a substantial amount of energy. The vast majority of our energy comes from abroad. I would love to see us self-sufficient but we are not going to be for a long time to come, so we need this interconnectivity. We need co-operation across Europe while Britain is in the European Union and we will definitely need it when Britain leaves the European Union. We need to make sure that the system we have here in Ireland complies with what is happening elsewhere in Europe. Remember that we have a fully open competitive electricity and gas market here and I want to see more competition come in through interconnectivity. As I said at the outset, it is not just in terms of gas, and we are exploring the option of liquified natural gas in the Shannon Estuary which could provide competition to our gas interconnection with the UK.

Next week, President Hollande will come to Dublin to discuss the Celtic interconnector between Ireland and France so that we have electricity interconnection outside of these islands. Last month, at the Council of Ministers' meeting, I signed a political declaration with the other North Sea countries about developing offshore, wind, tidal and wave resources in order that we can work together on them.

That will require interconnectivity and having similar laws across Europe in order to manage and operate that. It will not work if we are at complete variance. We cannot go it alone. We are an island located off an island that will soon be outside of the European Union. There is an idea that Ireland can work on its own and do what it wants but where do we go for energy?

In terms of the specific question about communities, I agree with the Deputy that we should give communities access-----

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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But not in legislation.

Denis Naughten (Roscommon-Galway, Independent)
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Let me finish. We do not need legislation to do so. If it pointless to give communities access to the grid if they do not have the financial resources to connect to the grid or to build the renewable energy, whether it is biogas, wind, biomass or whatever the case may be. We need a comprehensive approach that will assist communities in getting a co-operative up and running, developing the renewable resource whatever it is and getting access to the grid. That is what I want to do. It is not just about grid access. We could provide grid access tomorrow morning but if we did so we will not see a rush of community groups developing renewable energy resources. They cannot do so because they do not have the capacity or financial resources to do so. What we are looking in the context of the review of the current supports is how can we actively support communities.

Last month, I spoke to my Scottish counterpart, Minister Cunningham, at a bilateral meeting of the Council of Ministers. She said that the mechanisms that Scotland used to support energy generation by communities have not been as successful as hoped for and, prior to the vote on Brexit, we had agreed to have further engagement to see how Ireland could learn from Scotland in this respect. For example, what have been the positive aspects of that? How can we better develop that? I am trying to do exactly what Deputy Smith wants me to do and that is to encourage communities to produce their own heat and electricity locally, not only to meet their own needs but to export it on to the grid as well. How best to do that is the issue.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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There are so many contradictions in what the Minister has said that I do not know where to start but I will start with where he finished. He will not encourage communities to produce their energy needs if he does not allow them access to the grid and remove the necessary burden of financial resources that they need in order to compete with the big players. It is just not fair. We are a small island with lots of wind, solar and wave potential and we need to urgently move away from our reliance on fossil fuels. The Minister contradicted himself by saying that we need connectivity with other countries through gas, etc. I believe that we need to move away from that model and into sustainability. The way we can do that is by encouraging local, community-based production of power and we can only do that through legislation. If the Government does not legislate for this, of course, communities will say, "Why bother? The Minister does not give a damn and he is waiting to see what Europe does." He must make decisions about this country not the entire European Union or the bit of it that has just "Brexited". That is the problem with his approach. He is saying leave the communities and leave the co-ops that exist on the Aran Islands out of the legislation and that he will think about them and talk to them separately. That is not good enough. They need legal access to the grid that does not force them to compete with the big players on the market. That is why I tabled my amendment.

Denis Naughten (Roscommon-Galway, Independent)
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I am focused on this country but I also know that we import, and will continue to import, a lot of electricity. I hope that in the near future, we will be a net exporter of electricity-----

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Let us start with the communities.

Denis Naughten (Roscommon-Galway, Independent)
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-----and community-generated electricity. We import a lot of gas and we will continue to do so. Presumably, Deputy Eamon and myself would disagree on whether we should be a net exporter of gas but that is not the case at the moment.

I must be conscious not only of the current situation but also the impending situation on foot of the UK's exit from the European Union and the fact that we cannot have jobs without energy. Ultimately, this is about supporting our economy with a reliable electricity supply. I am anxious to have far more community groups involved as Deputies Eamon Ryan and Bríd Smith are suggesting. As Minister with responsibility for energy, that is my intention. However, that does not have to be written into legislation relating to grid access. The latter is only one part of the issue. Providing grid access alone will not solve the problem. Providing financial resources alone will not solve the problem. Communities in Scotland have been given access to cheap money, yet they have not gone down this road.

What we must do is ensure that the system that is proposed will be in draft form by the end of the year and that it will be flexible enough to meet what we believe are the requirements for communities and that they will take it up. However, it must also be flexible enough to be adapted and changed, if that is required in the future, to ensure that there is the uptake we need and that we meet the objectives the Deputy is setting and with which I agree.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I will finish with this point or we will be here all day talking about this. I totally disagree with the Minister's approach. I am not saying this is an alternative to everything else in the Bill. I would not get away with saying that. However, we must insert a clause in the Bill that legally allows communities and co-operatives access to the national grid without having the financial burden of competing with the big players. If the Minister says that cannot be done he is looking after the interests of the big players, not the interests of local communities. The two aspects should not be put in opposition to each other, but the Minister appears to be doing that. I am not. I am saying they should be allowed legal access to the national grid. I will table the amendment next week and we can have the argument again.

Denis Naughten (Roscommon-Galway, Independent)
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We will examine it as well between now and next week.

Brian Stanley (Laois, Sinn Fein)
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The future will be thousands of micro-generators along with some of the bigger ones. That is the reality as we move away from the use of fossil fuels. At present, a queue of entities are waiting to get onto the national grid but they cannot get onto it. Methane gas is being flared, burnt off and going into the atmosphere from landfill sites because it cannot be used. I fail to see, and the Minister has not explained, how facilitating microgeneration of electricity will conflict with our EU masters' position. The Minister says he wishes to facilitate communities, co-operatives and small businesses in microgeneration. I realise it is important that we pass this Bill. I am aware of the reasons for doing so and Sinn Féin supports that. However, it is a missed opportunity if we do not facilitate the smaller generators to connect.

Denis Naughten (Roscommon-Galway, Independent)
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In response to Deputy Stanley, this is the point when one examines legislation. Deputy Bríd Smith talks about community generators and she is correct. Deputy Stanley talks about microgeneration, and he is correct as well.

Brian Stanley (Laois, Sinn Fein)
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And community generators.

Denis Naughten (Roscommon-Galway, Independent)
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Yes. We must ensure that whatever is put into legislation will not cause a problem for either or both of those. At present, the commission is reviewing its connection to the grid system, how that is done and how it is prioritised. I have very strong views on this.

I have always had them; this is not something I have approached quite recently. If people wish to check the Dáil record they will see my views on it. They are not too dissimilar to the views being reflected here this morning. None of us disagrees on where we want to get on this, but how we get there is the issue. The Commission is examining this at present. Many of these issues can be teased out more appropriately with the Commission. If the Commission comes back to us and says there must be a change to the existing legislative structure to achieve these objectives, of course we will consider that at that stage but-----

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Why not give the direction?

Denis Naughten (Roscommon-Galway, Independent)
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I do not believe that is the problem. I do not believe that what the Deputy is raising as the problem is the issue at present. It is far broader than that.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I am not raising it as a problem, but as a positive.

Hildegarde Naughton (Galway West, Fine Gael)
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Deputy, let the Minister continue.

Denis Naughten (Roscommon-Galway, Independent)
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I have said we will examine this again on Report Stage. The Commission is examining its connections policy at present and it would be appropriate to explore that with the Commission as well.

Hildegarde Naughton (Galway West, Fine Gael)
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How stands the amendment?

Eamon Ryan (Dublin Bay South, Green Party)
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I wish to comment on what the Minister said and to discuss the issue, because it is important to use this opportunity. Half of the new German renewable power is community owned and micro-generation. The Germans did not wait for the Commission to do that. Grid access is not the be all and end all-----

Denis Naughten (Roscommon-Galway, Independent)
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Exactly, that is my point.

Eamon Ryan (Dublin Bay South, Green Party)
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However, we have a problem with grid access and we must address that.

Denis Naughten (Roscommon-Galway, Independent)
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Yes, I know.

Eamon Ryan (Dublin Bay South, Green Party)
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I have a broader question. The Minister says the Commission will produce a paper at the end of this year on new market rules. What is the process after that? Does that have to go to the Council and then must be agreed in trilogue with the European Parliament?

Denis Naughten (Roscommon-Galway, Independent)
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Yes.

Eamon Ryan (Dublin Bay South, Green Party)
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That is likely to take a year or two, perhaps even three, in view of previous experience. Does the Minister agree that is an accurate timetable?

Denis Naughten (Roscommon-Galway, Independent)
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Yes, it could take two years.

Eamon Ryan (Dublin Bay South, Green Party)
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We and the Minister have one chance in the next two years to do something interesting. We could sit back and wait but we will be doing well if this Parliament is here in three years time. The Minister correctly makes the case that we must ensure we are integrated with the rest of the market, and that will be very complicated because of Brexit. If these amendments were on the issue of balancing payments, capacity payments, market closure rules or all of the complex aspects of that interconnection issue the Minister talks about, I would accept what he says. However, this is nothing. This is all about local markets and local demand management. I can see no way where the amendments, and perhaps the Department will come back to the committee and highlight this, might interfere with regional electricity markets that will be developed. I cannot see how the promotion of demand management and self generation, micro generation or community generation could in any way affect the rules around interconnection and market integration with the rest of Europe. That is the first point.

The Department says that we are currently well served by section 9(4)(b). The sum total of what that says is that we must secure that all reasonable demands by final customers of electricity for electricity are satisfied. That does not say anything. That is the old way, the big base load plans chasing demand for electricity system. We must get away from that, and we must lead. This country has, first, an isolated synchronised grid so we have a real issue with balancing variable power supplies. We have one of the largest elements of variable power supply. It is all very well for France or other countries to work on that old system of nuclear power chases base load, but we are not that country.

We are an island with huge amounts of variable power supplies. Most of the top tech industries are here. Communities are yearning to get involved but they are blocked in terms of being able to get active in the electricity market in the same way as many other countries. This is happening across Europe. We do not need to wait on Europe to lead. If we do that we are not just followers; we are laggards. We need to start leading. I would love to hear from the Department officials by Report Stage which of the suggested amendments they believe will be in breach of any European legislation or that will cause difficulties in terms of interconnection or regional market rules. If we wait for Europe to legislate and then come back here, and we know it will be difficult to close any legislative gaps, I do not believe we will get it through the House and it will be the next Minister who will have to do it, which would be a terrible shame.

Denis Naughten (Roscommon-Galway, Independent)
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The Deputy would admit that some of the definitions in the amendment are vague. We would need to examine the wording in terms of inserting it in the 1999 Act. I do not disagree with the thrust of the Deputy's suggestions. Many of them can be accommodated within the current legislative structure. Section 9(4)(b) refers to integrating large and small scale production of electricity and gas from renewable resources and distributed production in both transmission and distribution networks in the most cost effective way. Paragraph (v) refers to facilitating access to the network for electricity generation and for gas production, and particularly removing barriers that could prevent access for new market entrants and for electricity and gas from renewable energy sources.

The Deputy is right. It is not just about the issue of grid access. There are other issues that must be addressed. The commission is examining the issue of grid access. This is a two-year legal process but some of the suggestions in this amendment can be facilitated in that they do not require a change to the existing legislation.

A far more comprehensive review of this legislation is taking place at European level not just in terms of interconnectivity and interoperability across the network, but how that is applied in member states. Yesterday morning, I made the specific point to the Council of Ministers on microgeneration and ensuring that people are not left behind. I do not disagree what the Deputy is saying. The difficulty is to have it drafted in a manner that encompasses what we all want to do and that achieves the objectives while ensuring we will not have to revisit the issue. We will re-examine it in the context of Report Stage to see if it is possible to move on the issues the Deputy raised. I am not in disagreement with any of the amendments put forward today. It is the vehicle and the mechanism to achieve them. We will have a look at it again.

Eamon Ryan (Dublin Bay South, Green Party)
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I appreciate the Minister's flexibility. If he or his officials could come back to me before Report Stage with an alternative wording that encapsulates what I am trying to achieve, I would be happy to withdraw my amendments. In terms of acknowledging the point about movement towards community generation, local demand management and flexibility, he might ask his officials to draft appropriate amendments and if there is any difficulty in the wording and he wants to change it, we look forward to seeing that on Report Stage.

Denis Naughten (Roscommon-Galway, Independent)
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In the context of the contribution from the three members, and I do not disagree with them, we will try to make a stab at this in advance of Report Stage.

We have a very tight window on this but I do not disagree with the Deputy. As I said on the day I was appointed, my inclination is to try to facilitate members in so far as possible. We are trying to get the Bill enacted before the summer recess, and in fairness the members have facilitated us in trying to do that, but I will examine the amendment in the context of the discussion we had here with all three members.

Hildegarde Naughton (Galway West, Fine Gael)
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Is the amendment being withdrawn?

Eamon Ryan (Dublin Bay South, Green Party)
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I will withdraw it for now.

Hildegarde Naughton (Galway West, Fine Gael)
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Amendments Nos. 5 and 9 are related and may be discussed together.

Denis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 5:

In page 25, lines 8 and 9, to delete “after consultation with the holder of a licence under subsection (1)(b), specify in the licence concerned” and substitute “in a licence under section (1)(b), specify”.

I will speak to both amendments. These are minor textual amendments. Sections 14 and 19 provide that the commission may specify in a licence such standards of performance and quality and connection with the supply of electricity or natural gas to final customers as the commission determines ought to be achieved. It is proposed to remove the requirement of consultation with the licenceholder in sections 14 and 19 as this is an unnecessary duplication and is inconsistent with the powers of the Commission for Energy Regulation to modify a licence.

As the commission is the licensing authority, it is also an operational matter for the commission as to the format and context of the licences it issues. Under section 19(2) of the Act of 2009, the commission can modify an electricity or natural gas licence it issues with or without the consent of the holder. The process of the modification of the licence is set out in sections 20 to 22 of the Electricity Regulation Act 1999, which include processes for the publication of a notice by the commission in regard to an intended modification of a licence and also the consideration by the commission of any representation or objections regarding any proposed modification of a licence. Furthermore, section 29 of the 1999 Act provides for appeals against a decision of the commission to modify a licence.

Denis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 6:

In page 25, between lines 15 and 16, to insert the following:

“Issue of notice by Commission concerning contraventions, etc.

15. Section 24 of the Act of 1999 is amended—(a) in subsection (1) by inserting “has contravened,” before “may be contravening”,

(b) in subsection (2)(a)—

(i) in subparagraph (i) by inserting “has contravened,” before “may be contravening”, and

(ii) in subparagraph (ii) by inserting “constitute,” before “may constitute”,

(c) by substituting the following for subsection (4):

“(4) On consideration of any representations or objections, the Commission may give a direction to the holder of a licence or an authorisation—

(a) to take such measures as are necessary to cease the contravention or to prevent a future contravention, and

(b) where there has been a contravention, to undertake such remedial actions as are necessary to rectify the situation and to prevent a reoccurrence of the contravention concerned.”,

and

(d) in subsection (10)(a) by substituting “(where the direction or revocation concerned relates to the Single Electricity Market)” for “(where the proposed modification relates to the Single Electricity Market)”.”.

The provision makes minor amendments to section 24 of the Electricity Regulation Act 1999 to provide for the insertion of the phrase "has contravened" in section 24(1) and 24(2)(a), and the word "constitute" in subsection 24(2)(a) to clarify that the Commission for Energy Regulation, CER, may issue a direction under section 24 regarding a past contravention of a licence.

The insertion of a new line to the text at section 24(4)(b) is to enable CER give a direction in respect of a past contravention that the holder of a licence or authorisation undertakes whatever remedial action is necessary to rectify the situation and to prevent a recurrence of the contravention concerned.

The correction of a typographical error in section 24(10)(a) of the Electricity Regulation Act is to replace the reference to "modification" with a reference to "direction or revocation". These are three technical changes.

Denis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 7:

In page 25, between lines 15 and 16, to insert the following:

“Determination by Commission of specified breach

16. Section 25 of the Act of 1999 is amended in subsection (2)(a) by substituting “(where the determination relates to the Single Electricity Market)” for “(where the proposed modification relates to the Single Electricity Market)”.”.

The amendment corrects a typographical error that occurs at section 25(2)(a) of the Electricity Regulation Act of 1999. The amendment substitutes the words "the determination" for the phrase "the proposed modification" where it occurs in the original text.

Hildegarde Naughton (Galway West, Fine Gael)
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Amendment No. 8 was discussed with amendment No. 4.

Eamon Ryan (Dublin Bay South, Green Party)
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I move amendment No. 8:

In page 25, between lines 15 and 16, to insert the following:

“Amendment of section 14 of Act of 1999

15. Section 14 of the Act of 1999 is amended in subsection (1) by the insertion of the following—

“(e) to provide access to electricity markets for consumers, third party aggregators and energy service companies looking to provide demand-side resources to wholesale, balancing and ancillary services electricity markets, or

(f) to supply electricity to consumers within a regional or local area and to facilitate the aggregation of electricity demand from consumers within the same local area.”.”.

Eamon Ryan (Dublin Bay South, Green Party)
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I was acting the devil in opposing the section.

Denis Naughten (Roscommon-Galway, Independent)
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The Deputy would never do that.

Eamon Ryan (Dublin Bay South, Green Party)
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The section provides for the winding down of the carbon levy, which was introduced to offset some of the gains large utilities generated under the European ETS and the grandfathering of carbon permits. There was a Supreme Court decision on this four years ago. Why did the Minister not delete the entire original section? Is it because other levies may be imposed? Did the original section only relate to the introduction of the carbon levy or could other levies be imposed? Is it dead in the water?

Denis Naughten (Roscommon-Galway, Independent)
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The advice from the experts is this is a technical amendment on the advice of the Comptroller and Auditor General for the formal, orderly winding down of the levy. I can get the Deputy a more detailed note on it.

Eamon Ryan (Dublin Bay South, Green Party)
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If I could get a more detailed note, I would appreciate it.

Denis Naughten (Roscommon-Galway, Independent)
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Absolutely.

Denis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 9:

In page 26, to delete line 37, and in page 27, to delete lines 1 and 2 and substitute the following:"9(1F) of the Act of 1999, in a licence under subsection (1)(a), (c) or (d), specify such standards of performance and quality in connection".

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I move amendment No. 10:

In page 28, between lines 12 and 13, to insert the following:"(11) The Minister shall also reserve a place on the Board for a representative of the not for profit environmental NGO sector with a record of campaigning against climate change and for sustainability.",".

The thinking behind the amendment is that the mission of SEAI is to play a leading role in transforming Ireland into a society based on sustainable energy and, therefore, given the board has a mix of people from academic, business, technical and even legal backgrounds, I hope people from an environmental or community background could be board members, particularly those with experience of sustainable energy and with an interest in fighting for climate change measures. The amendment speaks for itself.

Denis Naughten (Roscommon-Galway, Independent)
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I thank the Deputy. I do not disagree with where she is coming from in this regard. As Deputy Ryan will be aware, when one is making appointments and the chairperson of the board is looking for specific qualities or specific expertise, one may not have the required flexibility that one needs to make them along the lines of the amendment. There is a great deal of merit in doing what Deputy Smith suggests. There are three vacancies on that board at the moment and I am willing to try to facilitate having a person of the calibre she describes included on the board.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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The Minister could appoint three of them. I could change the number to three.

Denis Naughten (Roscommon-Galway, Independent)
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Yes. I do not have a difficulty one way or the other in respect of this but normally the chairperson of the board asks for specific expertise in a particular area when it comes to these appointments.

Plenty of individuals within NGOs may have the required expertise and may come from this background, but the amendment does not provide for the flexibility I would like. What the Deputy is seeking has a great deal of merit and I ask her to discuss the amendment with the senior official who works with me on the appointment of board members to ensure that when we advertise these posts, we can reflect the principle of what she is looking for and we can appoint someone to the board from that background.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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The amendment seeks the appointment of "a representative of the not-for-profit environmental NGO sector with a record of campaigning against climate change and for sustainability". What would the Minister like that would give him more flexibility than that?

Denis Naughten (Roscommon-Galway, Independent)
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The composition of the SEAI board is provided for under section 10 of the Sustainable Energy Authority Act 2002. The legislation makes particular provision regarding the competence of persons to be appointed to the board and provides that appointees must have experience and competence in areas specifically relating to the functions of the SEAI. Among the competences listed in section 10(3) of the Act is "environmental matters". The legislation, as drafted, adequately provides for the appropriate representation on the board to enable the remit of the authority to be met. Under the system, it is open to representatives of NGOs with a track record of environmental campaigning in the area of sustainability and climate change to apply for a position on the board of the authority or, indeed, on any other State board, provided no statutory restrictions apply.

The current legislation provides for this but the issue is there is not a representative from this background on the board currently. The Deputy is seeking the appointment of someone specifically from this background. I do not have a difficulty with that. I am prepared and willing to facilitate that, and legislative provision is in place in this regard. It is not an issue of legislating; the issue is getting candidates to apply who meet the requirements of the board. I agree with the Deputy and I suggest that we advertise these posts through the Public Appointments Service and set down specific criteria, including those that requested by the chairperson of the board, if he wants expertise in a particular area. I am willing to provide in the advertisement for the appointment of someone with the expertise sought by the Deputy. I ask her to withdraw the amendment and engage with my officials. We will do exactly what she wants in this regard because it is provided for in the primary legislation. The difficulty is that it is not happening at the moment.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Exactly. That is why I seek to amend the legislation to reserve a place for someone with an environmental or community background. There is no shortage of NGOs and qualified people who have expertise and, not just an interest in, but a passion for this area. If the Minister were obligated by legislation to appoint such a person to the board, he would find him or her. However, the legislation does not obligate him to do so and, therefore, he may load the board with other commercial, legal or industry interests rather than balancing the membership with somebody who fights climate change and advocates for sustainability.

Denis Naughten (Roscommon-Galway, Independent)
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There are two issues. First, if I make a legal provision in respect of one specific type of person, everyone else will ask for the same.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I disagree with that.

Denis Naughten (Roscommon-Galway, Independent)
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I do not disagree with the principle underpinning the Deputy's amendment. However, its application would mean that if the appointee got sick or resigned from the board, the board could not function until another appointment was made. It takes approximately six months to go through the PAS system to make an appointment.

Do we suspend and leave the board in abeyance for six months because we do not have the required formula for its make-up? That is not the Deputy's intention and my intention is to facilitate in practical terms what is set out in the legislation at the moment. The legislation provides for the type of person the Deputy is talking about to be on that board. I am willing to assist in the appointment of someone from that background to the board. There is a process that we go through at the moment with the Public Appointments Service. It is the intention to put that on a statutory footing by the end of this year. It is a very useful mechanism and it is quite common to set out that we want people from a particular background. I want to see far more women on these boards. I am asking the Deputy to engage with my officials. We will do in practical terms what is already provided for in the legislation but if I make a specific provision in the legislation for one particular type of expertise, it could leave the board in a situation where it could not function if that expertise is not on it.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I disagree. The Minister is over-complicating something that is really just about ensuring that the lobby for sustainability and against climate change can set about doing things like giving communities access to the grid, empowering communities to produce their own electricity and moving away from the use of fossil fuels. It is about ensuring that the strong voice of that lobby is guaranteed a place on the board. It does not mean the board cannot meet if that person is sick or gone on holiday to the Aran Islands or something like that. If the chairman was ill, would it mean the board could not sit or the deputy chairman could not fill in? The Minister is over-complicating something that is, in effect, something he says he wants to achieve. I am saying if the Minister wants to achieve that, let us reflect it in legislation so that when the Minister is gone, the next Minister, or the one after that, is bound by the same legislation to ensure that voice is reflected on the board. I am very happy to hear the Minister wants to achieve this and that he and his officials are willing to meet with us to discuss that but I do not see the big problem with putting it in legislation. Why over-complicate it? All it states is, "The Minister shall also reserve a place on the Board for a representative of the not for profit environmental NGO sector with a record of campaigning against climate change and for sustainability." Surely that is the way we all want to go. Even the European Union says it wants to go in that direction. That is what the Paris Declaration was all about. This is not very complicated but the Minister is making it sound that way.

Denis Naughten (Roscommon-Galway, Independent)
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The difficulty is when one starts tinkering with this, it can become complicated. There is provision there for expertise on environmental matters. It is adequately provided for in the legislation at the moment. We will have a look at it in the context of Report Stage. We will look at it again.

Hildegarde Naughton (Galway West, Fine Gael)
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The Deputy can withdraw the amendment if she wishes.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I do not wish to.

Hildegarde Naughton (Galway West, Fine Gael)
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Is the Deputy pressing the amendment?

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Yes.

Denis Naughten (Roscommon-Galway, Independent)
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Does the Deputy not want me to look at it?

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I want the Minister to look at it-----

Denis Naughten (Roscommon-Galway, Independent)
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If the Deputy is pressing the amendment-----

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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-----but I want it to stay there.

Denis Naughten (Roscommon-Galway, Independent)
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By pressing the amendment, a decision is made on it now.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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We can make a decision next week but I do not want it removed.

Denis Naughten (Roscommon-Galway, Independent)
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I am not asking the Deputy to remove it; I am asking her to withdraw it. She can resubmit it for Report Stage.

Hildegarde Naughton (Galway West, Fine Gael)
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Would the Deputy be agreeable to looking at the amendment on Report Stage?

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I am afraid I am a bit innocent on the procedure.

Denis Naughten (Roscommon-Galway, Independent)
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That is fine.

Hildegarde Naughton (Galway West, Fine Gael)
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The Deputy can work with the Department on it.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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The Minister has a big team working with him.

Denis Naughten (Roscommon-Galway, Independent)
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I accept that. We are both looking for the same result from this. Let me have a look at it in advance of Report Stage.

Hildegarde Naughton (Galway West, Fine Gael)
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What the Minister is saying is that the Deputy withdraws the amendment for the moment and then-----

Denis Naughten (Roscommon-Galway, Independent)
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The Deputy would need to reintroduce it for Report Stage. She can resubmit it for Report Stage.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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If I do not withdraw it, what will happen?

Hildegarde Naughton (Galway West, Fine Gael)
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It would go to a vote now.

Denis Naughten (Roscommon-Galway, Independent)
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We would make a decision on it here and now.

Hildegarde Naughton (Galway West, Fine Gael)
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There would be no room for working with the officials in the meantime. The Deputy can raise it on Report Stage.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Who gets to vote on this? Is it the Minister's team?

Denis Naughten (Roscommon-Galway, Independent)
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No, just the members of the committee.

Hildegarde Naughton (Galway West, Fine Gael)
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Deputy Smith can vote on this on Report Stage if she is not happy. She can bring it up in the Dáil.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Why do I not trust the system, I wonder?

Hildegarde Naughton (Galway West, Fine Gael)
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The Deputy can still vote.

Denis Naughten (Roscommon-Galway, Independent)
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There is the safety net of Report Stage. We will come back to this next week.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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We will come back to it next week.

Hildegarde Naughton (Galway West, Fine Gael)
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The Deputy can raise it in the Dáil on Report Stage so she is not missing out if she is not happy between now and Report Stage. Is the Deputy withdrawing the amendment?

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Yes. It will come back next week.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I move amendment No. 11:

In page 30, between lines 33 and 34, to insert the following:“(c) The Agency shall publish a report—

(i) each year, on the impact of the Biofuel obligations levy on indigenous producers of biofuels to ascertain the impact of this scheme and the importation of biofuel on local production of all forms of biofuels, and

(ii) to document the impact of the growth in the use of biofuels on the food needs of developing countries.”.”.

I want the National Oil Reserves Agency, NORA, to publish a report each year on the impact of the biofuels obligation levy on indigenous producers to ascertain its impact and the importance of biofuel with regard to local production of all forms of biofuels, and to document the impact of the growth in the use of biofuels on the food needs of developing countries. These reports are important because there are many flaws in the policy on biofuels. It is becoming evident but we need to keep track of it.

Denis Naughten (Roscommon-Galway, Independent)
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I will read the note first and then deal with the issue. I appreciate the Deputy's concerns about the need to review the possible impact of the biofuels obligation levy on indigenous producers and also her concerns about the bigger picture of the impact of the growth in the use of biofuels in the food needs of developing countries. It is something very close to my own heart. It is part of NORA's role to administer the biofuels obligation scheme. Section 30(1)(a) and section 30(2) of the National Oil Reserves Agency Act 2007 provide that the agency, "If required by the Minister ... shall provide the Minister with information in relation to ... the performance of its functions ... in such form and within such period as the Minister may direct." It would appear that the issue raised by the Deputy could be addressed via the existing legislation. Furthermore, in section 31(2) of the National Oil Reserves Agency Act 2007 there is provision for the chief executive of the agency to account to the Oireachtas and committee for the performance of the functions of the agency. Therefore, a more user-friendly and immediate approach may be for the committee to request the agency to brief it on its functions and the administration of the biofuels obligation scheme, including the issues Deputy Smith has raised. In turn, this could inform the format of the information the agency could be asked to provide to the Minister under section 30 of the Act. During such discussions, information may emerge on what existing or future economic research, whether at national or EU level, will be undertaken or planned. On that basis, I propose to reject the amendment.

I do not disagree with the principle of the amendment tabled by Deputy Smith. I do not know if she has had an opportunity to look at the annual report of NORA on the biofuels obligation scheme. I can give her a copy of it when the committee's proceedings end today. There is a lot of very detailed information about where the biofuels come from and the percentages that come from different parts of the world. The most significant percentage of our biofuels obligation, which is 18.5%, comes from the UK. Denmark is a big supplier as well. Quite a lot of them are developed countries.

I do not know if that addresses the issues the Deputy is talking about. The difficulty is the bulk of what comes in comes from other EU countries. Where does it come from before that? Is it generated in those other EU countries or other developed countries? Is it generated in third countries or developing countries? It is not that easy to find that information. We do not have country of origin information on biofuels like we have with beef. It is very easy, at the press of a button, to find out exactly where beef is coming from and how much of it is being imported from specific countries.

I suggest the Deputy should have a look at the annual report of the National Oil Reserves Agency, NORA. She should ascertain whether there are insufficiencies in the detailed report it produces on the biofuels obligation on an annual basis and we then can consider how to best address that. This committee could bring NORA before it and the agency could explain what it does and what information is available to it. I honestly think this is a far broader issue. While some people present are quite critical of the European Union, this is something that could be appropriately addressed at European Union level whereby the Union itself could ascertain what is the source of the biofuels coming in and what impact it is having on the communities involved. I am conscious of this issue with regard to biofuels and the same issue could be raised regarding the wood chip and biomass being imported into both Ireland and the European Union. It is not just direct imports but imports via second countries. We may be purchasing either wood chip or biofuel that is coming in from another EU country but the issue is from where it is being sourced in the first place. It is a complex issue and the capacity and resources are not available to NORA or any other agency in Ireland to deal with that. The carrying out of a thorough investigation of what is going on probably would be more appropriately dealt with at EU level and there would be huge merit in doing that. I suggest members should look at the contents of the NORA report that is presented annually. NORA could be brought before the committee to establish whether there are other additions to the reporting mechanism that can be improved. If the capacity is not available at an Irish level to provide whatever requirements there are, over and above what is being provided by NORA at present, then it can be looked at in a European context.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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Just as the Minister appealed to me on the last amendment to give him time to consider it and come back to me next week, I ask him to give me time to look at the NORA report and to not oppose this amendment until I do some more investigation.

Denis Naughten (Roscommon-Galway, Independent)
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Yes, that is fine.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I point out, however, that despite importing biofuels, we still are not reducing our use of oil or gas. This is highly worrying because in other countries, the use and production of biofuels has led to huge land grabs and rising food prices as a result. Just as we think we can use Europe to control and regulate our markets, let us try to impose our will on Europe to step up to the plate in respect of its environmental responsibilities. I ask the Minister to give me time to look at it and I will come back to him next week on it.

Denis Naughten (Roscommon-Galway, Independent)
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The Deputy is correct. Europe has a far greater role to play in this regard. I think she is right-----

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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We can start here.

Denis Naughten (Roscommon-Galway, Independent)
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The Deputy should look at what is in the NORA report. We cannot do this in isolation at present and as she will see from the figures, the vast bulk of what we import is from within the European Union. The question is from where it is sourced before that, that is, whether it is indigenous production of EU countries or comes from somewhere else. As the Deputy will see from the detail it provides, NORA provides as much information as it can but is not in a position to answer that. It probably would be useful to have NORA appear before the committee and to ask it whether there are deficits in this reporting mechanism it could clarify in the next report it will present to me. If there still is a void in information, I would be happy to work with this at European level and push it up the agenda because I seek the same result as the Deputy in this regard. I already have discussed this with biomass providers to make sure that something like this cannot happen. It is far broader than the biofuels issue. While the issue of biofuels is to the fore at present, biomass will become a far greater issue in the future. Let us get this right both at Irish level and across Europe because Europe can enforce such provisions on international imports into the Union.

Hildegarde Naughton (Galway West, Fine Gael)
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Does the Deputy wish to press or withdraw the amendment?

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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I would like it to be discussed again to give me a chance to came back on this issue.

Hildegarde Naughton (Galway West, Fine Gael)
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Does the Minister have any final comments before we conclude?

Denis Naughten (Roscommon-Galway, Independent)
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No. We have a long day ahead of us.

Hildegarde Naughton (Galway West, Fine Gael)
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As no member has a final comment to make, I thank the Minister and his officials for their attendance.