Energy watchdog agrees €12.8m funding for gas filling stations
THE energy regulator has approved funding for Gas Networks Ireland (GNI) to roll out compressed natural gas (CNG) filling stations across the country.
In a decision paper, the Commission for Energy Regulation (CER) found that although projections on uptake provided by GNI were "uncertain", and despite concerns that the project might not stack up financially, the utility will be allowed spend €12.8m installing 13 stations to help reduce transport emissions and encourage a switch to cleaner fuels.
The move comes after the Irish Independent yesterday revealed that GNI plans to develop a network of 70 fast-fill stations over time across the county to encourage hauliers, transport companies and commercial firms to switch from diesel. While vehicles are 15pc more expensive to buy, fuel savings can be as high as 30pc and emissions sharply reduced.
The CER said that GNI was provided with almost €6m last July from the European Commission to undertake a study into the potential for CNG in the Irish market. This funding was dependent on additional funding of €12.8m being approved by the regulator, and following a previous allocation of €6m secured by GNI. The total cost of the so-called 'Causeway Study' is €23.47m. The funding approved will be added to gas customer bills, which will increase by €1.20 a year.
Despite raising concerns, the regulator said it was "appropriate" that funding be approved as innovation funding could include projects "where the financial benefits are not certain".
In its submission, GNI said it believed the market will be made up of 266 trucks and 254 buses by 2024. However, it believes that the potential market is made up of 20,000 HGVs and 12,000 buses.
CNG can play an important role in cutting pollution by decarbonising the transport sector, where emissions have sharply risen in recent years as economic growth resumed. Last year, they rose by 6pc. The Environmental Protection Agency predicts they will rise by 10pc to 16pc over 2014 levels by 2020, and it is highly likely that binding EU targets to make deep cuts will be missed.
The application for funding was supported by a number of firms including Bus Éireann, Celtic Linen and food and drinks giants Diageo and Glanbia. The Department of Transport also lent support, and will shortly publish a public consultation on a national policy framework aimed at supporting uptake of alternative fuels in the sector, including CNG.
In Budget 2015, the Government introduced a reduced rate of excise for CNG, which will remain in place until 2023.