It is Government policy to promote the use of green energy aggressively, with the objective that 13.2 per cent of all energy will come from renewable sources by 2010.
Through competitions such as the Alternative Energy Requirement programme, the State effectively provides a subsidy to the renewable industry. The programme contracts involve wind energy suppliers getting 15-year contracts with the State-owned ESB which are priced above market rates.
In return, the ESB is compensated by what is known as a public service obligation levy. This levy, which also supports various peat stations, goes on the electricity bill of every household in the State. In other words all households are directly bearing the cost of promoting renewable energy.
But now the energy regulator, Mr Tom Reeves, has provided the Government with a dissenting view. While supportive of the agreed 13.2 per cent target, Mr Reeves has told the Minister for Communications, Marine and Natural Resources, Mr Dempsey, that there are wider concerns to be considered.
He queries whether the wind energy sector needs any more State assistance and asks if the current model is actually harming competition. He argues there is no need to stimulate the sector further at this time and says there is significant appetite in the market for self-financed wind plants, known as merchant plants.
Mr Reeves's questions are not unreasonable. Paying out €20 million via the levy adds one per cent to the electricity bill of every household. There is also the competition question - how can the wind energy sector ever develop into a normal self-sustaining industry if it is propped up by a form of subsidy in the long term?
Hopefully Mr Reeves's views will spark a debate on the topic. But the Government has wider policy obligations and objectives in relation to energy which must be taken account of in any such discourse. Economically, it is preferable to generate energy at home, rather than importing large quantities, either directly via electricity interconnectors or indirectly in the form of oil, coal and gas. Secondly, from a strategic standpoint, Ireland's location at the end of various European energy pipelines and grids is not ideal.
Reducing dependence on fossil fuels like oil and replacing them with green energy alternatives like wind is part of the solution to these problems. As of now, the consumer is being asked to foot the bill to achieve this objective, in what is still a development phase. Mr Dempsey should recognise this and continue the policy.