€1.7bn energy plan funding

 ENERGY:Renewable energy businesses to benefit from Government pledge

Renewable energy businesses will benefit from a Government pledge to spend €1.7 billion on developing the Republic's electricity and gas networks, according to Minister for Energy Eamon Ryan.

The Minister for Finance, Brian Cowen, said in yesterday's Budget speech that the cash had been allocated under the National Development Plan (NDP).

At a subsequent briefing, Mr Ryan signalled that much of the spending on the national electricity grid would be directed at bringing into the system more power generated from renewable sources such as wind.

Mr Ryan pointed out that the Republic's target of producing one-third of all its electricity needs from renewable sources by 2020 would require "major" investment in the national grid, which transmits power from generators to the distribution network that delivers it to customers.

"Everything we are doing is being done to support renewable development and energy efficiency," he added.

The department's energy budget will be increased by €26.1 million to €86.3 million in 2008, making it one of the big winners in yesterday's package.

The money will be used to fund a range of measures, including a €12 million allocation to pay for research and development into renewable energy.

Mr Cowen said €7 million of this would be spent on research into ocean energy - a move which came in for criticism yesterday, with industry figures pointing out that wave energy was a long way from commercial development.

However, Mr Ryan said this resource needed to be supported and pointed out that other sources would be getting the State's backing.

Businesses will be allowed write off the total cost of purchasing energy efficient technology against their corporate tax bill. Mr Ryan said the details would be worked out in next year's Finance Bill.

Homeowners will benefit from a €5 million household insulation scheme. There will also be money available to State body, Sustainable Energy Ireland, to develop the Greener Home and House of Tomorrow schemes.

The department will have €13 million to spend on energy conservation measures.

However, the National Offshore Wind Ireland, an industry lobby group seeking State support for offshore-based electricity wind farms, said the Budget was proposing very little to support renewable energy.

Chairman Mick McBennett said the State's support for the sector lacked clarity, which was putting off big international investors.

Cork-based Ocean Energy, which is testing a wave power system, gave an enthusiastic welcome to the news that €7 million will go to research in its sector.