Response to Consultation Call for “Renewable Energy Export Framework”
Sent 22nd November. Edited 25th November 2013
Attn: Mr. Alan Duggan, Sustainable and Renewable Energy Division, Department of Communications, Energy and Natural Resources, export@dcenr.gov.ie
See below comments under your headings:
‘Set out a clear national policy context for the export of renewable energy’
The context of ‘exporting’ renewable energy raises many issues that do not exist in the context of renewable energy consumed in Ireland. Export presupposes a sale that in turn raises the issue of ownership or the bundle of rights attached to renewable energy resources. This issue has never been discussed in the public domain. There is no shared understanding of the structure and assignment of property interests in Irish renewable energy resources, neither in the consultative document nor any other government policy document.
We can look only to Bunreacht nahÉireann, the Constitution of Ireland for direction. Unfortunately, the Constitution is less than fully clear in assigning ownership rights to natural resources within the nation. But if one follows the logic of the various Articles closely and in sequence, one can establish some answers. In brief, Articles 1,2,3, 4, 5 & 6 state that; the Irish nation comprises the people of Ireland who share the territory of the Island; the State derives from the people of Ireland and the organs of the State must deliver for the common good; all natural resources belong to the State (the people of Ireland sharing the island). Article 10 then says that the State (the people of Ireland sharing the island) claims all natural resources subject to pre-existing claims for the time being. We see that the State (the people of Ireland sharing the island) can do pretty much as it pleases with these natural resources including ‘alienation’ either temporary or permanently. Article 11 requires that all revenues including those from natural resources shall go into a single pot, unless law decides it otherwise.
The Constitution as it stands does not reflect contemporary knowledge of the importance and role of the environment as the basis of enduring social and economic wellbeing. Its most serious oversight is that it appears to permit the alienation of the Nation’s natural resources by the current generation of the people of Ireland by actions of the organs of the State against the interest of the common good of generations to come of the people of Ireland.
The Constitutional Convention should address this issue as a priority.
Until the Constitution is brought fully up to date, consultation for a national policy context for the export of renewable energy is dangerously premature. The issues that need to be resolved before public consultation can be fruitful include the following
1. Who can morally and lawfully claim rights to and value from our common wind energy resource?
Is it the land owners that give access to it; the local authority that gives it planning permission and imposes development levies and commercial rates; the developer of the wind turbine sites; the final owner of the energy generator assets e.g. wind turbine owners or wind company shareholders; the financiers of the wind turbines e.g. banks, or bondholders providing loans to the developers or investors: the local community living or working in the area the wind turbines are sited and if so how far does that area extend; the government of Ireland; or as the Constitution asserts, only the people of Ireland collectively? This question has important ramifications for planning and economic policies governing RE development.
It seems on the face of it that landowners have no prior claim to the value of wind energy simply because their land gives access to it. Neither does the local community appear to have a prior claim over the people in Ireland in general. The local authority however, could make a convincing claim to the wind energy value arising from its lawful powers to tax the operators of the turbines under commercial rates.
The accepted purpose of, or rationale for, commercial rates to fund local services has been overtaken by user charges like motor taxes, bin collections, and water charges. Rates are now more akin to a general property tax that pays for wider public services by capturing a portion of the rental value of the site. There is a strong argument for commercial rates to be levied on the owner rather than the occupant or operator of the building or facility in question, as he/she is the ultimate beneficiary of the rental value of the site as is now recognized in the local property tax. But leaving that argument aside for the moment, rates are levied on the occupier/operator of the building/facility; in the case of wind turbines, the wind turbine owner is liable for Rates.
2. How much of the value of the wind energy should be taxed or charged by the local authority and to whom do the revenues belong?
The first part of the question if we are guided by the Constitution is easy. The State has no right to assign the value of wind energy to any individual or group except to its rightful beneficiaries, the Irish people on the island of Ireland. All of the wind’s value therefore, and other natural resources, should be recouped through fees or taxes; – less the minimum necessary incentive to develop and maintain the energy technology to access the wind energy and less the portion that recognizes existing private property rights. Rates per turbine should be based on the most suitable size and MW capacity for the site and the best available technology i.e. the least negative impact and the fee/rates amount should be consistent in all local authorities areas throughout the country. This value translates into commercial rates per single 2MW turbine p.a. nearer €30,000, rather than the €5000-€8,000 variously levied by local different authorities.
Landowners have a right to full compensation for disturbance and inconvenience and for the reduction of their current use rights under their land’s previous designation. They also need an economic incentive of a minimum rental income sufficient for them to accept turbines on their land. This rental income, I suggest is considerably lower than the figure of €18,000 p.a. per turbine that the IFA has negotiated on behalf of landowners from developers Mainstream and Element. A fair recompense rent per turbine payable to the landowner is likely to be nearer €5,000 p.a. per turbine.
The natural monopoly nature of land might lead to landowners demanding more than their fair share of the value of the Nation’s wind resource which is why a fee/rate on the landowner of suitable wind sites whether or not the wind turbine is developed and operational should be considered. This change is not advisable or feasible until a democratic renewable energy plan with widespread Irish ownership of energy assets is in place.
The Department of Department of Communications, Energy and Natural Resources would be acting against the Constitution if it accepted special pleading from the farmers, a small sector of Irish people, over the common good of the people of Ireland. The last time this was allowed to occur was in respect of compulsory purchase compensation for farmland required for road building. The result of bowing to the farmer lobby is the most expensive roads in Europe, a higher debt burdens on taxpayers and unsustainably high farmland values to this day.
The Constitution is clear in regards the second part of Question 2. The nation’s natural resources, including its wind power, belong solely to the people of Ireland – not the county council / local authority nor the residents of the local authority area. The local authority must therefore act ‘in trust’ for the people of Ireland and distribute the RE revenue for their common good, less reasonable expenses.
This does not mean that local property owners and community should not get their fair share. The local authority should use wind energy revenues to give lump sum compensation all families living within 1.5 Kilometers of a turbine whose wellbeing is seriously affected. The compensation should be sufficient to allow families to relocate to a similar house in a safe settlement if their health is at risk from flicker, noise or low frequency vibrations or other RE impact. Their previous rural dwelling should be demolished as part of this deal.
Landowners should be given an annual sum to compensate for any out of pocket losses directly due to the wind farm development; for their loss of access to wind energy on their land that often results, and their loss of tourism potential on their land; all which reduces the capital value of their property. Ditto homeowners living further than 1.5 Kilometers, whose property value is reduced due to the loss of views and of the peace and quiet that they previously enjoyed, but not sufficient to cause health impact, should be given a commensurate annual sum in compensation.
The local villages through their development association or other local group should be given an annual sum of compensation for the loss of potential tourism development or other impacted business opportunity due to the destruction of views and peace and quiet of the local area.
Owners of Natura designated sites within the relevant local authority area with high wind speeds that can never be developed because of their biodiversity riches must also be compensated and rewarded for the services they provide for the people of Ireland by the local authority using revenue from the turbine rates/wind fee.
Finally, the surplus following compensation and no more than a l.a. 15% management fee should be given to a central fund to provide investment funds for public, cooperative, community and personal development of energy assets to avail of RE resources in the short term to accelerate the transition from fossil fuel dependence. In the longer term or if decided democratically at any time, the surplus should be distributed as part of a basic income on an equal per capita basis to the people of Ireland.
None of the above compensations should be attached as a condition to planning permission. The planning authority should judge the wind farm solely on proper planning and sustainable development criteria and no other. The wind-farm developer should have no role in deciding compensation so it cannot buy the support of local landowners with overly generous rental contracts, or local community compliance with a swimming pool or buy the withdrawal of planning observations from vulnerable people with empty promises. Developers should be legally prevented from applying pressure on any person to support their application even if that person has contracted with them to host turbines, underground cable or provide habitat to offset impact to wildlife.
This regulation is needed to prevent the current situation where close communities have been divided into a few winners and many losers mediated by the wind farm applicant who is most likely to flip the planning permission to another unknown developer who in turn will sell on to a hedge fund or other super rich investors. The system is especially cruel to nearby farmers and local residents who don’t make an planning observation/objection in order not to upset family and neighbours who stand to gain from the wind-farm, and who as a result reduce their chances of being compensated in favour of more educated and outspoken objectors.
Leaving developers to decide compensation is a completely unacceptable abdication of responsibility on the part of the government and local authority.
3. What else is being exported sold as a consequence or in addition to the electricity?
The carbon credits that attaches to the renewable energy by virtue of avoided emissions has a both a political and monetary value. Ireland has to reach a target for RE as outlined in the consultative document. In the case of export of RE to the UK, does the UK get the political credit for reaching its RE targets using Irish based RE or does Ireland, bearing in mind that the energy is consumes in a separate country.? Secondly, we must ask again, who owns the value of the carbon credits; the Irish or UK government or the developer such as Mainstream Energy or perhaps the Sovereign Fund that buys the wind-farm from Mainstream?
The Constitution would suggest that the people of Ireland own these credits and they should not be attributed or sold to another state, sovereign fund or private interest even if the energy is consumed and fossil fuel energy displaced elsewhere. There are only so much suitable land for wind energy generation, attributing carbon credits to another state, leaves Irish people at a disadvantage but without the resources to address that disadvantage.
4. What is our agreed policy for the development of renewable energy in Ireland under which we can consider its export and sale?
The NREAP is not a publically agreed policy because the Irish public was not invited to contribute to its formulation. Instead, industry insiders and a limited number of associations were asked to contribute to a poorly drafted, highly technical document that did little to clarify the major policy issues that needed to be discussed and resolved.
The recently ratified Aarhus agreement requires full participation in strategic decisions on environmental issues. Even though the NREAP was submitted to the EC prior to the Aarhus agreement taking effect in Ireland, it is against the spirit of the government’s commitment under Aarhus to proceed to build on the NREAP without revising it following a wide public information and consultative process. The government cannot therefore rely on the existing NREAP to frame the discussion for an export policy.
‘Broadly identify strategic areas in Ireland for renewable energy generation for export’.
5. Without first addressing the issue of property title to renewable energy as outlined above, it is impossible to fruitfully engage with this question.
For instance, offshore wind has a different ownership profile. No landowner can lay claim to it unlike on shore wind. Presumably the wind energy developer will claim stronger title and higher claim to the receipts from the sale of electricity from an offshore turbine. Can the local authority claim development contributions and commercial rates on an offshore wind turbine? What claim has the local community?
Secondly, what are the particular ownership and therefore export / sale conditions attaching to RE generated on land owned by a public body or semi state company such as Coillte or Bord Na Mona relative to land owned by private individuals and companies? Will Bord Na Mona retain all the income from electricity generation on its lands or will it be required to remit part of it to the government. As public bodies and charities currently are not liable to for commercial rates, the question arises whether Bord na Mona will required to pay rates on its turbines to the relevant local authority. Will Bord Na Mona be permitted to retain the rental income for turbines on its lands whether it sells its interest in a wind farm to private investors or it does not?
Provide guidance to planning authorities, including An Bord Pleanála, when considering any proposals for renewable energy export.
6. An Bord Pleanala should consider only the proper planning and sustainable development issues and the environmental, social and economic impact of the proposed physical application.
It does not have the remit, nor should it have its remit extended, to adjudicate on national economic and social policy issues that are properly decided by Dáil Éireann. In other words whether the electricity generated is exported under contract directly to the UK or other State, exported following local consumption under ‘top up and spill’ arrangements as surplus to Irish requirements or completely consumed in Ireland should not affect An Bord Pleanala’s judgment of the application.
The ownership structure of the RE asset should not be a valid planning issues under best practice Town and Country planning theory. This golden rule was ignored in Ireland regrettably, in the case of one-off, rural houses where the particular bloodline of the applicant e.g. of urban or rural stock, their employment type and other personal circumstances was made a valid planning consideration under the Sustainable Rural Housing Guidelines. If the folly of that planning policy change by the Department of the Environment is now not apparent as evidenced by the vast numbers of empty rural dwellings whose occupants have emigrated because of the lack of local jobs in part the result of poor settlement structuration and the mal-investment of scarce resources into consumption over productive enterprise, it should be.
7. RE policy, ownership and export issues should be fully resolved before an application comes to An Bord Pleanala.
An Bord Pleanala’s consideration of the environmental, economic and social impact of the application should be blind to the destination of the electricity produced and of the distribution of the receipts from that energy because these important issues should have been satisfactorily and clearly resolved in a national RE policy outlined in legislation enacted by Dáil Éireann. Disputes concerning on matters of detail and interpretation should be resolved by the Courts. Substantial divergences of understanding of the policy or policy conflicts should be resolved through amending legislation.
This will include guidance to planning authorities, in consultation with the Department of Environment, Community and Local Government, on the preparation of appropriate development contribution schemes for such types of development.
8. The response to the question re remit and discretion of An Bord Pleanala above also applies to planning authorities.
It is unwise and unjust that local authorities be given the discretion whether or not to grant an application based on a development contribution (or bribe to call a spade a spade) for the local authority itself, for a local community or for an individual.
Development contributions are a mechanism to recoup the cost of providing infrastructure and services that enabled the proposed development or that are needed for the proposed development to go ahead or to provide for the sustainable development of the local area and community. Section 27 and 28 of the 2000 Act were not designed and should not be used to buy acquiescence of local interests or to compensate property owners for loss of property value on foot of the development. To clarify with an example; it is not acceptable for a local authority to grant permission for a wind farm whether for export of energy or local use, whether owned by the public or a hedge fund, that would cause a significant negative impact on the health of the local people, on biodiversity, or on the quality of water in return for building a swimming pool.
The government should decide through a revised RE policy how to apportion the value or ‘planning gain’ of granting PP for a wind farm or other RE facility. The local authority should then simply apply the policy not as a planning gain but as compensation for the use the RE resource.
‘The main principles underlying the policy and development framework will include’:
- Delete : Maximising the sustainable use of low carbon renewable energy resources. Replace with : Maximizing substitution of fossil fuel energy generation by low carbon renewable energy.
Increasing RE without a matching reduction of fossil fuel energy is not desirable but is unfortunately likely to result from the current policy of supporting the Big Power from RE and balancing fossil fuel generators feeding into the transmission grid instead of Distributed Power i.e. small and medium scale RE producers and consumers connected with electricity storage and to the local distributed grid. The local distributed grids then ‘top up’ and ‘spill’ s to each other and the transmission grid.
- Delete: Any trading of renewable energy between member states must be sustainable in the long term and reduce dependence on fossil fuels. Replace with: Any trading of renewable energy between member states must be surplus to Irish requirements to reduce dependence on fossil fuels.
In these uncertain times on the brink of calamitous climate change while the 1% elite are frantically grabbing real resources in exchange for their spurious financial claims on the future, it is dangerous to commit to the permanent alienation of any Irish RE resources. That means that while ‘top up’ and ‘spill’ is acceptable, the ‘dedicated’ RE export of electricity to the UK or any other State bypassing the Irish grid and consumer is not. It is a time of accelerating technological development in wind and wave turbines, in electricity storage systems, in smart grid design which means that decisions can be disadvantageous in ways that simply cannot be foreseen by policy makers with all the good will in the world. Here the precautionary principle should apply with force.
- Delete: Fostering economic growth and increasing investment and employment opportunities; Replace with: Fostering sustainable development and increased investment and employment opportunities in Ireland;
Economic growth is not a suitable indicator for a secure and healthy future based on its record to date. Other indicators must be prioritized. Ireland needs higher yielding, more secure investment opportunities for its people in Ireland just as much as we need jobs. Both can be delivered with Distributed Power and the widespread Irish ownership of RE assets. This aim should be the basis for Irish RE policy. Exporting Irish RE is the equivalent of exporting cattle on the hoof with matching loss of local wealth creation, production expertise and employment that entailed.
- Delete: Achievement of Irish renewable energy targets not to be compromised; Replace with: Surpassing Irish renewable energy targets not to be compromised;
RE targets have been shown to be low bar in the latest terrifying climate change reports. We must be able to do better.
- Delete: No net cost burden on the Irish consumer; Long term improvements to infrastructure in Ireland; Replace with : Least cost burden on the Irish consumer is delivered by developing Distributed Power following best practice not Big Power feeding the Transmission grid; Long term improvements to infrastructure that benefit of the Irish people;
Recent studies in the US show that Distributed Power is threatening the financial viability of utilities that still work on the old model. The Irish consumer will not accept subsidizing an out-of-date electricity generation and distribution system that requires fossil fuel back up to offset RE intermittency and that discourages local generation and consumption. The much-vaunted European transmission grid linking wing generators has been tried in Australia and found disappointing. It is a Big Energy and Big Grid solution to RE generation that suffers all the faults of Big Banks and Big Insurance of too big to fail requiring public supports that destroy risk reward systems and co-opt government and regulators.
- Delete: Any infrastructure built is to facilitate interconnection to other European member states, either immediately or in the future, with minimum disruption; Replace with : Any infrastructure built is to facilitate top up and spill interconnection to other European member states, in the near future because we have very little time and limited resources; Only having secured Ireland’s immediate 100% RE needs will greater electricity exports be considered.
For the reasons outlined in No.1; – we live in dangerous and uncertain times.
- Delete: Protection of the natural, built and cultural environment, particularly residential amenity, to be a priority; Replace with : Protection of the natural, cultural and built and environment, particularly residential amenity, to be a priority subject to rapid transition to RE from fossil fuel – because residential amenity will be very low when the lights don’t work.
- Delete: Provision of real community gain or benefit to be essential. Replace with : Full recognition of the people of Ireland’s ownership of RE resources is essential including the distribution of its value fairly in respect of existing property rights and the remainder equally to the people of Ireland. Democratic and widespread Irish ownership of energy assets is also essential to prevent the 1% elite’s capture much of the value of the RE resource.
There is no time to respond under your Table given the short consultation period allowed. But I cannot let the fact that the Department is already developed a cost benefit analysis go without comment. This is a vital part of any consultation procedure and should have been shared with the public in this consultation. The structure and nature of the ownership of the wind resource and energy assets is vital in a thorough cost benefit analysis. If the wind turbines are owned by foreign sovereign, hedge funds or private investors of any kind, much of the advantage of RE resources is immediately is lost to the Irish people in terms of the balance of payments. Instead of paying outsiders for fossil fuel imports we will be exporting wind energy profits to foreign interests; one is as damaging as the other.
Please note that the environmental movement has few resources and what they have is very stretched responding to many current issues not least the Climate Summit in Warsaw that is taking place this week and last. The paucity of submissions is not due to their lack of interest and concern but the short time given for what is a very complicated and vital issue.
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Excerpts from BUNREACHT NA hÉIREANN, THE CONSTITUTION OF IRELAND
Articles 1 & 2 & defines the Irish Nation
The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.
It is the entitlement and birthright of every person born in the island of Ireland, which includes its islands and seas, to be part of the Irish Nation. That is also the entitlement of all persons otherwise qualified in accordance with law to be citizens of Ireland. Furthermore, the Irish nation cherishes its special affinity with people of Irish ancestry living abroad who share its cultural identity and heritage
It is the firm will of the Irish Nation, in harmony and friendship, to unite all the people who share the territory of the island of Ireland, in all the diversity of their identities and traditions, recognising that a united Ireland shall be brought about only by peaceful means with the consent of a majority of the people, democratically expressed, in both jurisdictions in the island.
ARTICLE 4, 5 and 6 defines the State
The name of the State is Éire, or, in the English language, Ireland.
Ireland is a sovereign, independent, democratic state.
All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.
These powers of government are exercisable only by or on the authority of the organs of State established by this Constitution.
Article 10 states that all natural resources belong to the State
1. All natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body.
2. All land and all mines, minerals and waters which belonged to Saorstát Éireann immediately before the coming into operation of this Constitution belong to the State to the same extent as they then belonged to Saorstát Éireann.
3. Provision may be made by law for the management of the property which belongs to the State by virtue of this Article and for the control of the alienation, whether temporary or permanent, of that property.
4. Provision may also be made by law for the management of land, mines, minerals and waters acquired by the State after the coming into operation of this Constitution and for the control of the alienation, whether temporary or permanent, of the land, mines, minerals and waters so acquired.
Article 11 states that revenues from all sources generally go into a single pot
All revenues of the State from whatever source arising shall, subject to such exception as may be provided by law, form one fund, and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law.
Emer O’Siochru and
EOS Future Design (emer@eosfuturedesign.ie) & Smart Taxes Network (Emer@smarttaxes.ie) 39 Windsor Road Rathmines Dublin 6 Tel: 01 4972564
