Pat Carey (Dublin North West, Fianna Fail)

The jolt of increased energy prices, whether gas or oil, in the past year has served to focus minds on the conservation and renewal of energy as well as examining new ways of producing it. The controversy surrounding gas supplies through Ukraine was a wake-up call for everybody, demonstrating how interdependent we all are when it comes to energy supplies. Deputy Deenihan referred to the ESB's decision on Tarbert but, according to the same report, the Ringsend power station in Dublin may face the same fate. We need to examine that matter.

Yesterday's announcement by the British Prime Minister that he will pursue a nuclear energy policy with renewed vigour was unfortunate but he is free to make it. Given the renewed debate at national, European and international level, it is particularly appropriate that this Bill is being considered by the House. When enacted, the Bill will provide an important component in driving forward the Government's progressive energy agenda. In this context, I welcome the Bill and compliment the Minister for introducing the Second Stage debate.

At national level, we have been discussing the changing energy landscape internationally, including how to deal with the recent increases in oil prices, while striving to liberalise our national energy market. That will not be easily achieved and we should all be acutely aware that there will be winners and losers. Places like Tarbert could be among the losers.

With regard to competition, I pay tribute to this Minister and previous Ministers for working towards a more liberal energy market to allow an opening up of competition. We have new independent power plants in Mulhuddart, Galway and Shannon. I can speak with some knowledge of the one operated by Viridian at Huntstown, which is a fine, modern plant producing an important component of electricity into the national grid. There has been progress but as the slogan put it, "A lot done, more to do".

At European level, there have been discussions on the need for a common European energy policy. The Bill is timely, given Europe's dependence on a small number of external suppliers and security of supply issues, such as occurred in Ukraine. Increasing demand on fuel resources and concerns about long-term availability of supplies are driving the need for consensus on a wide range of energy issues. There are two sides to the energy crisis coin: supply and consumption. If we consider that energy is at the core of any economy, being vital to the way people live and work, it is imperative to put in place the proper structures to manage both our supply and consumption of electricity. The challenge can be ascertained from thriving emerging economies such as China and India. Europe has been somewhat complacent about energy issues for quite some time. Although Ireland is not unique in this respect, we have certainly taken our eye off the ball in terms of seeking alternative sources of energy and have been over-reliant on traditional ones. I will revert to that point later.

The Bill is significant in terms of energy supply and a key feature is a move towards all-island markets and electricity interconnections, which underscores the interdependency to which I referred. We must ensure that both economies on this island and all communities have access to safe, secure and sustainable energy supplies obtained through competitive energy markets. There is no doubt that this challenge can be met more effectively, and to our mutual benefit, if we work together. From my contacts with our parliamentary counterparts in Northern Ireland and Britain through the British-Irish Interparliamentary Body, I know issues such as an all-island energy market and the need for proper interconnections have come to the fore. I envisage that body will play a proactive role in the ongoing debate.

I welcome the fact that in the forthcoming national development plan there will be a concentration on all-island development, including all-island energy regulation and production. The Bill will provide a legal basis for the energy regulator, the Commission for Energy Regulation, to engage in the development of an all-island energy market. Such a project involves collaboration on issues ranging from improved interconnection, competitive markets and harmonised trading arrangements to generation adequacy, security of supply, sustainable energy and energy efficiency measures. No so long ago it was not possible to operate the famous interconnector linking North and South, but as a result of the peace process the facility is now functioning without fear of interruption. I hope supplies will never be interrupted again.

A milestone date of 1 July 2007 for a single electricity market North and South has been established. There is a long way to go in terms of how the two regulatory frameworks, North and South, will marry. Fortunately, there is extensive and wholehearted support for the all-island energy market and this legislation marks another step in that process. I hope that when the Northern Assembly and executive are fully functioning, with North-South bodies, we will see a renewed effort in this area.

The benefits of an all-island market are clear. This larger market will remove market distortions and minimise the wholesale cost of electricity. That is the objective which I hope will be achieved. There should be open and transparent competition at all levels and for all energy sources, including combined heat and power, and renewables. It will also mean a more stable and attractive investment location and provide a boost to the competitiveness of the wider industrial sector. There are times when we underestimate our capacity to avail of what is literally at our shores, doorsteps and mountain tops. I am referring to wave and wind power, to which I will revert later. Our natural gas and other resources should be fully explored and exploited. I compliment the Minister on his initiatives in this regard, including the current issue at Rossport in County Mayo. I hope that source of supply can be exploited safely and for the benefit of all, including the people of that hinterland, at the earliest possible date.

The major test by which the value of an all-island market will be judged is that energy users throughout the 32 counties are better off than they would be in two smaller markets. Clearly, that is a welcome development.

Another important aspect of the Bill is the redefinition of the energy regulator's role. At times, it seems the regulator's responsibilities have been in conflict with each other and the question is one of prioritising them. As a lay person, there have been times when I have not been clear about the regulator's policies and decisions. Unfortunately, until now, political direction could not be given. However, it is essential that there is political direction stemming from a coherent and agreed policy. The Bill allows for this.

Accessing electricity and gas within more competitive markets is another facet of our energy supply policy. The Bill includes provisions enabling the Minister to introduce the full opening of the gas market by ministerial order. Benefits of liberalisation have previously been enjoyed by industrial and commercial consumers, a point that has been undersold. It is a few years since liberalisation was introduced. When one talks to significant employers throughout the country, they are very conscious of the benefits that have accrued to their companies from this new approach. The opening of the market has benefited customers by broadening customer choice and already some 42% of the market is supplied by independent suppliers.

There is now scope for all customers, household and non-household alike, to seek out keener prices in the competitive market, which must be welcomed. While the process is more difficult than the telecoms industry shifting from one telecoms provider to another, nonetheless, a clear policy needs to be established by Ireland, on its own and within the European Union, to facilitate a greater level of competition leading to reduced prices in a more competitive market.

As many speakers have noted, the dominance of the ESB is a major hurdle to true competition. The all-island market will deal to some extent with the dominance of the ESB, as will other sectors of the market. I welcome that the Bill provides that some utility other than the ESB can provide interconnection facilities. It has been suggested the market is so small that there may not be a great take-up for this, but I do not agree. If there is the environment, the take-up will follow. Independent energy companies are keen to provide this and I hope the Minister will be favourably disposed towards it.

We must take strong action and take care how we proceed on the question of dominance. Airtricity has indicated that the market is not viable and we must take its reservations seriously. The question of regulation, which changes so often, and the lack of a coherent policy make it difficult for companies to conduct business here, or so they suggest. I hope the Bill, by providing policy direction from the Minister, will facilitate progress in this area.

Through rationalisation of functions in regulation and system operation, the Bill also aims to bring about more efficient and secure energy generation. In doing so, it will undoubtedly result in longer-term savings, including in rationalisation and consolidation.

The Bill includes provisions to enhance further the safety of energy consumers and the public, ensuring Ireland continues to meet international best practice in respect of electrical and natural gas safety. When one considers the horrific incidents near Lagos in Nigeria last week, one realises how serious we need to be in terms of safety.

The regulator has been given robust new safety functions which include the regulation of electrical contractors and natural gas installers. Considerable progress has been made in this area but further progress is necessary. Thankfully, we have passed the stage where we had a fair number of — I am sorry to use the phrase — cowboy operators in this area. I compliment organisations such as RECI which have done a great deal in the area of self-regulation of the electrical industry. The regulator has also been granted additional powers to ensure rigorous enforcement, including the power to designate safety supervisory bodies, as well to establish standards for training and registration, introduce certification schemes and prosecute rogue installers.

In the current environment, where there is high employment and many new employees are coming to our shores to work, it is imperative the highest safety standards apply to all. If this necessitates the introduction of multilingual training and safety programmes such as those run by the Health and Safety Authority on construction sites, for example, that should be done. As that process has possibly begun, the House will forgive me if I refer to what is already happening.

While the Bill will bring about very real and welcome benefits, it is certainly not the answer to all concerns surrounding the energy issue. For example, although we are making progress on improved energy supply in terms of electricity and gas, there has not been enough progress in the adoption of new technologies. We all realise that we will be playing catch-up. However, if we invest in a targeted way in research and development, we probably can catch up. The Institutes of Technology Bill which was before the House yesterday will enable the institutes of technology sector to become more engaged in research in that area. I realise they already have some involvement in this regard but the institutes are not a significant actor like the mainline universities. This research should be spread more widely into the institutes of technology sector.

We have not provided enough encouragement to the wind energy sector. We often seem to be taking two steps forward and one step back in terms of encouragement and discouragement. I appeal to the Minister to do all he can to radically encourage a dramatic increase in supply from the wind energy sector. Today's weather forecast anticipates that there will be wind speeds in the region of 100 km/h before evening. Perhaps we should be battening down the hatches. I note that Deputy Durkan is already looking concerned about the prospect, although I do not want to be facetious. A resource is available and we ought to be able to exploit it. When one considers that the Danes produce approximately 20% of their energy requirements from wind energy, there is no reason Ireland cannot do the same.

Another under-exploited area, given that the west has some of the most spectacular waves in the world, is that of generating energy from wave power.

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