Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I am going to make some general comments on the nature of the regulatory function. The key output of our meeting this evening is to engage ourselves in this OECD review process of CER.

The first point to make is that the OECD is in a certain state of chassis itself. It should be slow in telling any country what to do when one of its leading members, the American Government, is now a pariah when it comes to energy and climate policy. The first thing we should consider is what we will do with the OECD. Who wants to be in with an American Government which is defying science and acting in a rogue state way? We should be looking at the possibility of connecting with the Chinese or Indian Governments. The Chinese Administration has taken some initiatives in its energy policy, such as it silk road initiative, with grid plans and ambition for decarbonisation and developing renewables. We could learn much more from these than from the OECD.

The American Government’s role in the OECD is now in question because of its climate policy. The first question we should ask of any OECD review of us is what is it doing about advising other countries when one of its own leading members is outside the Pale in energy policy.

A really interesting question is how one manages a regulatory function in a Brexit-affected world. As seems to be the case from yesterday’s negotiations, it looks like a hard Brexit with Britain outside the customs union and the Single Market. It will also be outside of European Court of Justice rulings. That will be traumatic for our energy policy because it will tear up the whole market and co-operative mechanisms. We are in a crisis situation if that happens because we have moved towards a single electricity market, as well as having significant interconnection and gas security issues with the UK. What will Britain’s role be in the Agency for the Co-operation of Energy Regulators, ACER? These are the issues and everything else in ordinary time has to be put to one side.

If we were dealing in ordinary time without America being a rogue state and Britain tearing up regulatory rulebooks, we have benefited tremendously from the EU regulatory system. I do not believe we would have introduced this complex market regulatory system ourselves. It came from European directives over several decades. By and large, we have been quite good at regulation. From my experience as a former Minister and a Member, we have an independent, capable and professional regulatory system. While it is not the best in class, we are up there with European countries in telecommunications and energy policy. I would like to hear anybody argue differently. While there are failings in our system, by and large, we have a capable independent administrative system, including our regulators.

I cite as evidence the work we do. While it is very sporadic, haphazard and it is far from perfect - one could look at the event just two hours previous to this of discussing electric vehicles which was a bit of a bun fight with 50 people in the room - but that is the way we do things. We hear different stakeholders and different views. It is our connection, however, with the regulator that is slightly strange and does not follow the normal rules. I speak from my experience of more than ten years in the Oireachtas. We follow what the public interest is and the public stories at the time, which are varied. Six or seven years ago the price of electricity was the key issue at the time. It strays into areas such as the grid and the difficulties in building the grid and wind power infrastructure due to public opposition. How would Dr. McGowan and the CER explain to anyone in the OECD the situation in Ireland regarding water charges? How could Dr. McGowan assess the Commission for Energy Regulation's performance in terms of setting a proper charging system for water when we all know it was the political system and the political dynamics that dominated and which are very hard to explain?

If this meeting is to discuss Oireachtas oversight, there is a game changer, not just because of the US Government changes or Brexit, and that it is a wider change in the European Union. The days are over of the 1990s obsession with the market knows best approach. The market has a role and we need enterprise, but we are now in an environment where the State will take a stronger role. Ultimately, we need to meet the climate objectives to make such a radical change. The market cannot do it on its own and we cannot rely on market mechanisms. We must get the State with its regulatory, administrative and political systems to take some risks and to make some bets and investments that the market never would. If I was to change the system, I would look at where we are today with the lack of advancement and investment, smart metering, electric vehicles, offshore energy, solar power and demand management mechanisms. We have the real potential to be brilliant at this. In some instances, we are very good. We are very good at integrating renewable power. We are fairly good at energy efficiency in certain areas. We are not, however, grasping the goal which is a massive leap towards the low-carbon future. The regulator has a key role in that but it should not necessarily be just an obsession with market arrangements. I do not believe in the old trialogue of security and economic value and the environment. The environment must come first because it is a physics parameter that cannot be ignored. The other two aspects of competition and security of supply can be met in a range of different ways but we cannot ignore the physics of climate change anymore. The regulator and the administrative system needs to start taking a few more risks and bets and not worry about failing. If it fails the political system would carry the can. We need to make the same sorts of leaps made when the State was founded such the development of hydropower and others. We need to make that scale of jump. While the regulator has a role it is not on the old market-knows-best regulatory system, where the income will deliver it, which is no longer credible.