Noel Dempsey (Meath, Fianna Fail)

The Government's energy policy Green Paper, Towards a Sustainable Energy Future for Ireland, identifies the dominance of the ESB as one of the factors influencing the apparent reluctance of independent generators of scale to enter the market. This dominance arises from the ESB's continued ownership of a large and diverse portfolio of plant and particularly from the company's ability to set prices, through its ownership of virtually all mid-merit plant on the system. The Green Paper is informed by a range of analyses, including the Deloitte report, and it recognises this as an issue to be addressed as an immediate priority.

The Green Paper also notes that the ownership of prime generation sites capable of further development for generation purposes is perceived as conveying a number of advantages on ESB over new entrants seeking to establish themselves in the power generation sector, in terms of planning and access to infrastructure. In that context, we are giving consideration to the creation of a State-owned landbank of suitable generation sites to incentivise the development of new independent generation capacity.

Although it is the case that additional generation plant will be required for security of supply reasons in 2009, the question of the ESB being permitted to bring forward new generation plant must be examined in the context of the company's dominance in the power generation sector, the development of competition and the overall structure of the electricity sector. Any decision to approve ESB investment in new power generation plant at Aghada would be conditional on agreement on a strategy to address the company's dominance and market power, particularly with regard to mid-merit price-setting plant. Any such approval would also be contingent on compliance with all the terms and conditions that would accompany authorisation by the Commission for Energy Regulation, CER.

I confirm that in the context of developing the White Paper, discussions are ongoing on how best to progress and deliver the requisite reduction of market power and create the conditions for meaningful competition.

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