Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I will go through the note I have here but I agree with what Deputy Ryan talks about regarding his first amendment. There is huge merit in it. We are engaged at European level at the moment with the Commission on these very issues and I hope we will sign up by the end of this year to a new market design for the electricity market right across Europe. Many of the issues that Deputy Ryan has raised in his amendment are already included in the submission that we have made on this to the Commission regarding self-consumption of renewable energy, microgeneration onto the grid, storage, new customers, electricity networks, more flexibility, allowing customers to participate actively, facilitating flexible trading and so forth. We will include the aspects Deputy Ryan has proposed in his amendment in that overall discussion. We expect to have a decision on that by the end of the year. The concern is that if we accept this amendment at this stage, we will probably have to come back and revise and amend it again by the end of the year. It makes more sense to include it in the transposition of the directive that will come in at the end of this year.

I think there are a number of unintended consequences of what Deputy Ryan proposes in his second amendment and there are issues of cost. However, that does not take away from the principle or the point that he raises and it comes back to the proposed amendment to be tabled by Deputy Smith on Report Stage. I am very conscious of this but I do not think it requires provision in legislation. There is huge merit in what she talked about. I am actively considering it at the moment in the context of the replacement of REFIT. The big problem is getting access to the grid, the cost of getting access and the delay in getting access. Unless one has a lot of money to be able either to sit it out until one gets physical access to the grid or to buy quicker gate access to the grid, one is left high and dry. I do not believe that legislation is the way to do this. I think what Deputies Ryan and Smith are looking for can be addressed in other mechanisms. We are very actively engaged with this at the moment with the replacement of REFIT and we will come forward with draft proposals for public consultation towards the end of this year. I am quite happy for the committee to be involved in that public consultation or to have a separate discussion here at the committee, not just specifically on this, but also on the broader issue.

However, I see exactly where the Deputies are coming from and agree with the point they make. I am also very anxious to try to address the issue.

Turning to the formal note, I will speak to amendments Nos. 4 and 8 together. It is proposed to reject them. I commend Deputy Eamon Ryan for his desire to promote demand-side participation in the energy markets and provide a mechanism for consumers to participate actively in the market through the production, sale and possible storage of electricity to increase flexibility in energy markets and allow for the aggregation of services in the market. However, these services are already substantially provided for in legislation in the functions of the Commission for Energy Regulation, specifically in section 9(4)(b) of the Electricity Regulation Act 1999. The detailed rules for the operation of the wholesale electricity market are being fundamentally altered under the integrated single electricity market, ISEM, project. The project is being led by the regulators in the Republic of Ireland and Northern Ireland, overseen by the two Departments on the island and will deliver a flexible electricity market that will provide for the policies outlined by Deputy Eamon Ryan. They include the explicit facilitation of demand units in the high-level design and detailed decision papers. I can provide further information on this for Deputies if they wish.

Furthermore, the policies advocated by Deputy Eamon Ryan are supported by the White Paper on energy published in 2015. The White Paper acknowledges the crucial role of citizens in the transformation towards a decarbonised electricity sector. It acknowledges community-level energy efficiency and renewable energy projects such as the Aran Islands project and the Marino schools project and the role they will play in the transition. It also commits to supporting community participation in renewable energy and energy efficiency projects through the Sustainable Energy Authority of Ireland. It also commits the Government to facilitating access to the grid for renewable energy projects and ensuring grid connection policy will have due regard to current and future renewable energy policy.

As the Deputy is aware, the European Commission is drafting the winter package of legislative proposals, including proposed legislation on electricity market design. The Commission has consulted on this issue and my Department has responded to it. We expect the Commission to publish its impact assessment later this year, in advance of the proposals for market legislation which is due in December. The legislation will define how the new electricity market design should look in order to meet consumer expectations, deliver real benefits from technology and facilitate investment, especially in renewables and low carbon generation. The market design legislation will facilitate decentralised electricity generation, including for self-consumption, and support the emergence of innovative energy service companies.

Given these developments and the requirement for national compliance with EU legislation in the energy sphere, I suggest that if there are gaps in legislative and regulatory provision, they be addressed in transposing the imminent EU legislation. If we were to anticipate that legislation now in national primary legislation, it is quite possible that we would subsequently have to repeal the legislation if it conflicted with EU laws. We would then have to set about developing and drafting further and compatible legislation. It strikes me that it would be more efficient and prudent to await and influence the EU law as it is developed. Devoting time and scarce legal resources to legislating now and a second time in repealing or amending the legislation when transposing binding EU legislation would not seem to be an efficient way to proceed. Legislating prematurely could unintentionally generate infringements. We are quite happy to keep the Deputy up to speed on how the talks are progressing and the feedback received. I am also quite happy to receive his input on how we manage the process in the next few months.

On the matters pertaining to the regulation of the single electricity market for the Republic of Ireland and Northern Ireland, it has been the custom, since its inception in 2007, for legislation governing the operation of this cross-jurisdictional and all-island market to be amended in parallel in Northern Ireland and the Republic of Ireland in order that the substance of the legislation is mirrored. That has been the case in making the amendment in the Bill to facilitate the evolution of the single electricity market. The ministries in the Republic of Ireland and Northern Ireland have worked closely together to ensure the amendments to the definition of the market will have the same meaning in both jurisdictions.

Along with other Deputies, I wish as far as possible to adhere to the approach of parallel legislative development and enactment of largely similar content for the single electricity market.

On a technical drafting matter related to the proposed amendment No. 8, section 14(1) of the Electricity Regulation Act provides for the issuing of licences by the commission. Section 14(1)(e) and (f) of the Act enable the Commission for Energy Regulation, CER, to license a transmission system operator and a transmission system owner. Section 14(1) would not appear to be the appropriate location for the Deputy’s proposals. The proposal as worded by the Deputy would have the unintended effect of overwriting and removing the CER's function to license a transmission system operator or owner. The White Paper provides for a commitment for a review of the legal and institutional framework for the regulation of electricity and natural gas markets, including the CER's mandate. The review would be the more appropriate vehicle to develop proposals from the Deputy.