Oireachtas Joint and Select Committees

Wednesday, 11 December 2013

Committee on Transport and Communications: Select Sub-Committee on Transport, Tourism and Sport

Rationale for Sanctioning Energy Price Increases: Discussion with Commission for Energy Regulation

2:40 pm

Mr. Dermot Nolan:

I will do my best to answer Deputy McGrath. I am sorry he has no faith in us. All I can do is assure him that we are trying to keep costs as low as we possibly can.

He asked about the mandate. Our mandate is to set prices at the efficient cost. I can go into more detail, if the committee likes. The efficient cost of producing energy in Ireland has risen considerably, and, indeed, almost continually, for the past five or ten years. There are a number of factors for that which I can go into. I would also note that this has happened in many, not all, other European countries but I can explain that too. I would look at the prices, for example, in the United Kingdom, which has a similar energy mix to us in the sense that they also rely mostly on gas and to some extent coal, and they used have nuclear. Prices in the United Kingdom have risen considerably. Over the past five or six years, they have risen by more than prices in Ireland. Prices in France have not risen so much. France is 80% nuclear. Prices in Norway have not risen much. Norway has 95% hydroelectric. These countries are not subject to fossil-fuel prices. They are not subject to external forces in the price of fossil fuels which, frankly, we, as a small country, cannot control.

Given our mandate, we are supposed to set prices at efficient cost. We are - all I can say is I give the committee my assurance for whatever that is worth - doing our best to keep it low. I accept that it has been a most difficult five to six years for the Irish people. I accept prices have risen and it is difficult to pay but we are doing all we can to keep prices as low as possible. I am not sure if there is much more I can say on that.

On wind, I was asked about the idea of networks. I touched on this early. The idea is we approve expenditure. The planning structures, etc., on how that is done are ultimately a matter for EirGrid. I would very much hope that there is open consultation. I understand the idea that communities are affected by these matters and want to have their views taken on board.

On the last comment on the proliferation of wind turbines, that is a policy issue. The Government decided that there would be a 40% renewable target for various reasons, many of which are to do with climate change and carbon reduction. That is ultimately a policy issue. If the Government and the country want to achieve that, no doubt wind is our best and, to some extent, only option. It is really not a matter for me to say whether that is the right choice or not. The CER's job will be to ensure that it is done as efficiently as possible.

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