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Speech at the turning of the sod for the New Combined Heat and Power plant



I am delighted to be in the Limerick and Shannon region today for a number of important engagements. Following the turning of the sod for this combined heat and power plant, I will be opening both the new national broadband management entity in Roxboro and a new bridge on campus at the University of Limerick. Later, I will address the Shannon Chamber of Commerce Business Symposium on the exciting future prospects for the region.

That I am here today for so many important events is indicative of the major developments that are taking place in this region. It highlights the confidence that exists in all sectors, be it industry, the telecommunications sector, or indeed education.

That confidence is mirrored across the national economy with employment continuing to grow, inflation remaining low and the public finances continuing to strengthen.

Furthermore, these functions come at the end of a week in which my colleague, Martin Cullen, Minister for Transport opened the final link in the motorway between Dublin and Portlaoise. That link will be of enormous benefit to this region, with journey times between Limerick and Dublin improving significantly.

Aughinish Alumina

Today is a milestone in the history of electricity generation in Ireland. I am delighted to turn the sod on the site of the new combined heat and power plant here on the Shannon Estuary. This facility represents the biggest investment in Aughinish Alumina's 20 year history and will deliver tangible benefits to the local economy. When commissioned, it will enhance security of electricity supply and contribute to Ireland's environmental commitments under the Kyoto protocol.

Contribution to Economy

Aughinish Alumina's operations make a direct contribution of over €90 million per annum to the local economy. That the company is investing €100m in this new CHP plant, creating 200 construction jobs, is a welcome development.

I understand that when commissioned in November 2005, the CHP facility will provide a significant portion of the refinery's heat and all of its electricity needs. It will also generate additional electricity, which will be supplied to the electricity system.

By capturing the heat from the electricity generation process on-site, this CHP plant will provide the company with energy savings of up to 25%. In addition, those savings will result in a reduction of approximately 150,000 tonnes of carbon dioxide per annum.

It is clear therefore, that CHP offers a very real opportunity for industry to reduce their energy bills and CO2 emissions. This will be the largest CHP facility in Ireland, and will be one of the top 50 largest schemes in Europe more than doubling the total installed capacity of CHP in Ireland.

CHP Policy in Ireland

Environmental and energy policy is becoming ever more important and increasingly needs to move towards greater sustainability. The Government is committed to ensuring that the Energy Sector meets the environmental obligations associated with its energy production and use. Ireland was one of eight countries to have its Emissions Trading Plan approved by the EU Commission earlier this year. The 150,000 tonnes of carbon dioxide savings at Aughinish Alumina will also contribute to Ireland's Kyoto target.

The National Climate Change Strategy has set a target for CHP of a further reduction of 250,000 tonnes of carbon dioxide per annum. In acknowledgment of the increasing importance of CHP in Ireland, the Department of Communications, Marine and Natural Resources established the CHP Policy Group in March of this year. Aughinish Alumina is represented on this group and I understand that the group's recommendations will be finalised shortly.

Aughinish Energy Management Policy

Aughinish Alumina's contribution to environmental objectives goes beyond the benefits of this individual facility, however. The company has displayed a strong commitment to energy management and sustainability. As active participants in Sustainable Energy Ireland's "Large Industry Energy Network", Aughinish has consistently reduced its energy intensity year on year since 1995.

Aughinish Alumina is also the first firm in Ireland to achieve compliance and certification with internationally recognised energy management standards.

Last night, Sustainable Energy Ireland presented Ireland's first ever Sustainable Energy Awards. The awards focus on those who demonstrate a commitment to introduce energy management as part of their day-to-day business. Aughinish Alumina had the honour of receiving the overall award for Coordinated Energy Management Programme. This is the highest energy award that can be attained by any organisation and is a tribute to all of those who work at Aughinish Alumina.

Electricity Generation and Supply

Aughinish Alumina's achievements in the area of energy efficiency are a commendable example to all large industry operators. The decision to install this CHP facility is also landmark in terms of overall energy and electricity supply in Ireland. I congratulate the Company, the Board, management and employees of Aughinish for this notable achievement as a "new-comer" to the power sector. New entrants to the electricity market, such as Aughinish, are particularly welcome in the drive to bring about real and meaningful competition, as well as contributing to the security of electricity supply. I am also heartened by the recent decision of another company to invest in a major generation facility in Dublin. This is a huge vote of confidence in our economy.

Liberalisation of the electricity market allows competition to take root and flourish for the benefit of consumers and the economy. It is a key priority of this Government. In a little over three months time, the market will be fully open. Every single customer will be eligible to source electricity from any supplier licensed by the CER.

A safe, secure and sustainable supply of electricity is vital for the well being of local communities and industrial production and jobs.

The last decade has witnessed a period of unprecedented growth in the Irish economy and in the demand for electricity. A feature of the ongoing economic success is the growth in electricity consumption. Electricity demand in the last decade grew at a rate of 6.9% per annum on average, and is projected to grow at a rate of between 2.9% and 4.3% per annum over the next six years. We are currently embarked on a €3 billion investment programme to upgrade the national electricity network.

This facility at Aughinish Alumina uniquely embraces all three pillars of energy policy in Ireland -sustainable economic growth, security of energy supply, and environmental sustainability.

Once again, I congratulate you on this major initiative and I wish Aughinish Alumina continued success in the future. Thank you