Ms Jenny Pyper:

That is the historic position. As new plant has come on and, as Mr. Blaney mentioned, new investment has come through, the situation has changed in terms of the supply. Partly that is due to the fact that we have a single market. Before 2007 we had two small separate markets, neither of which was particularly efficient. We now have a single market that maximises opportunities to drive down costs on an all-island basis. I have not heard any commentators state it would have been better if we had not created the single electricity market. No matter what a person's political persuasion is, everyone can see the obvious efficiencies and benefits one gets from moving two small inefficient markets to a single, larger and efficient market. It is the creation of that larger market, from 2007 on, that has sent market signals about where investment is needed.

Deputy O'Donovan asked about what Northern Ireland was doing and why it was not investing separately. A single market sends signals about the need for investment on the island and the success of that is shown on the graph which illustrates a significant capacity availability on the island. The difficulty for us is that we cannot share that electricity without a second North-South interconnector.

The Senator asked about the Moyle interconnector. I remember only too well, having worked previously on government policy as a civil servant in Northern Ireland, the Moyle interconnector was built, primarily, to help drive down prices in the very small Northern Ireland market before SEM was created. At the time the cost of electricity in Northern Ireland was high but the cost of electricity in Scotland was lower. As a result, the suppliers in Scotland simply priced up in response to what was happening in Northern Ireland. Therefore, the initiative did not drive down prices but it provided an opportunity for security of supply.

What we have done now, in creating this unique market and which Northern Ireland entered into as an equal partner with Ireland, was to create and send signals on having an all-island supply. The difficulty that has arisen is that the two transmission networks were never planned on an all-island basis. Northern Ireland had its own small transmission network and Ireland had its transmission network. The single electricity market now gives us an opportunity to plan and look at investment on an all-island basis and achieve efficiencies. Those efficiencies are the numbers that Mr. Blaney talked about. The inefficiencies, or the constraint costs, that we are bearing at the moment are of the order of about €10 million - that is a conservative estimate - rising to €30 million or €40 million over the next 20 years. Customers could get those savings but we are not getting them. We assumed that we would get some of them in SEM because we assumed that the second North-South interconnector would be built sooner. The opportunity still exists to access those costs. The challenge going forward is to see how we can get those costs at that same time we make investments in and plans for the new more efficient integrated single electricity market.

The Senator also asked what is the total demand in Northern Ireland. It is of the order of about 1,800 MW and the Irish demand is 6,000 MW.