Mr. Rory Somers:

Yes, but we need to be a little careful of the language here. Dynamic tariffs in a European sense are those tariffs that are reflective of changes in the wholesale market. A recent report from the EU's Agency for the Cooperation of Energy Regulators, ACER, on the experience of this type of tariff in Spain, where more than 1 million customers had been moved to dynamic tariffs, showed it had been a good system for those people when electricity prices were low, because they had benefited. As soon as electricity prices started to increase during the recent crisis, however, the customers on the dynamic tariff were exposed to the full market costs associated with those tariffs. It was quite a shock for many people. Therefore, there are many lessons to be learned around dynamic tariffs.

I think what the Senator was referring to, though, in the language we use, is "demand response", which is where messages are sent to end users to do particular things to deal with a specific and short-term benefit they can provide to the system. This is something the Department is certainly working on with the CRU. It does require the infrastructure of the smart meter system to be fully deployed. At the moment, there is a smart meter change in respect of the IT systems and a market settlement solution that goes with that. All the information gathered by those meters is sent back to the central database hub. ESB Networks then has the ability to share that information with suppliers on behalf of those end consumers who have registered with smart meters. That then allows the suppliers to be able to offer different tariff arrangements and different time-of-use tariffs and the type of dynamic pricing that the Senator referred to. This system is due to be implemented on 27 June. This is the latest information we have. We are therefore on the cusp of achieving this outcome in respect of the critical mass of smart meters we have available in Ireland. We will reach a stage where 50% of them have been installed by the end of this year. In that context, some 30,000 people have moved over to smart tariffs with a day-night peak. It is a small number of people as a percentage of the 750,000 meters deployed.

An initiative in this regard is under way involving the CRU and suppliers. I have seen recent adverts in the media promoting the use of smart meters. This is being done in the context of smart tariffs and the benefit those can yield to consumers on costs when we now have high electricity prices and people are struggling with their energy bills. It also, however, involves benefits for the system itself. From there, it will be another step forward for suppliers to react to the availability of all these data and offer tariffs not for products, but in respect of moving into the dynamic sphere of electricity pricing.

A good message we need to remember is that this is a complex area. As much as we do our very best to make this accessible to the end consumer, even professional energy services companies struggle with the complexities in the market and how much dynamic shifting there is in pricing and how that can create risks for them. There is no intention here to try to expose end consumers to any of these risks. Therefore, it is extremely important that we get clear messages out to people regarding whether participating will be something that will change their ability to sit back and relax and depend on fixed tariffs, as opposed to having to be careful about entering into commitments that will expose them to the market.