Committee for the Economy: Energy Strategy Report

Part of Committee Business – in the Northern Ireland Assembly at 3:45 pm on 23rd November 2020.

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Photo of Gordon Dunne Gordon Dunne DUP 3:45 pm, 23rd November 2020

As a member of the Economy Committee, I welcome the opportunity to speak on this important issue.

There is no doubt that energy affordability and security of supply are key issues, and we must ensure that they are kept high on the agenda. The cost of electricity to consumers continues to be a real challenge to domestic and commercial energy users. Energy has been an important issue in the Committee for some time, and the micro-inquiry has been an opportunity for stakeholders in the sector to have their say and to engage on this important issue.

The ongoing COVID-19 pandemic has presented unprecedented challenges for businesses and domestic consumers. While having a strategy in place to ensure that we have a sustainable energy future is important, it is paramount that our short-term challenge is to ensure that energy is affordable. The manufacturing sector has huge challenges with energy costs. Its high energy costs are very challenging for the sector in being able to compete globally in the world marketplace.

Wind energy has been the main source of renewable energy in Northern Ireland, which we all seem to be proud of, and it has achieved its renewable target of 40% by 2020. That was heavily incentivised through the renewables obligation certificates (ROCs) scheme, which has now closed. However, I question the total cost of the scheme, which providers have been tied into with 20-year contracts.

There are, of course, drawbacks with wind energy as wind is not consistent, and many wind turbines are producing surplus amounts of energy, which could be transferred to battery storage units for later use or to be fed into the grid system. However, there are many major challenges in getting sufficient battery capacity to deliver that.

Connections into the grid continue to be a challenge for wind turbines due to weak infrastructure in some parts of the country. There is a problem with most of the generation being in the west of the Province while there is greater demand for supply in the east of the Province.

The gas network needs further support. More needs to be done to encourage consumers to connect to gas. Suppliers such as Phoenix Natural Gas continue to encourage uptake within the greater Belfast area, which ranges from 30% to 60% where networks exist, and gives consumers more value and cleaner energy. Approximately 70% of households across Northern Ireland still have oil-based heating systems, and the current price of home heating oil is relatively cheap in comparison with just a number of years ago as it has an average price, as I understand it, of £235 for 900 litres. It is important to have a mix of energy sources to ensure that no one is left in fuel poverty and to ensure that costs are kept competitive for domestic consumers and businesses.

I recently had a discussion with Phoenix Natural Gas about the use of hydrogen to replace natural gas. I believe that that will work within the existing network and will produce cleaner and more efficient energy. Hydrogen energy has also been described as the main driver for decarbonising the global economy. We have an opportunity here to become a world leader in hydrogen production and technology. Wrightbus is involved in development work on hydrogen buses, and I understand that Dublin is slightly ahead of us — it is hard to believe, but that is true — as it is trialling hydrogen buses. That presents an exciting opportunity for Northern Ireland. However, it will require significant investment, and I know that the Prime Minister has committed to investing in this new technology. There is the potential to create many jobs in hydrogen technology, in the aerospace industry and in advanced materials sectors and supply chains.

There is a role for education in a future strategy to encourage energy efficiency through focused education. We now have the green light for the development of the North/South interconnector, which went through in September. That will help to improve network stability and security of supply for energy users in Northern Ireland.

I look forward to hearing from the Minister, and I know that she is committed to bringing forward a fit-for-purpose energy strategy for Northern Ireland.