Tommy Broughan (Dublin North East, Labour)

In February 2005, Members were interested and excited by the opening of the market. People believed they would have a choice of generators and suppliers. However, aside from the ESB, operators such as Viridian have never shown an interest in the domestic market. This is a real problem with deregulation.

It is clear the Republic and Northern Ireland should accrue the greatest benefits from the single market. Key organisations such as the ESRI have repeatedly stressed that additional interconnectivity is crucial and Members welcome the proposal for the new east-west interconnector that was discussed during Question Time some time ago.

Members learned today that the ESB is divesting itself of 30% of its generating capacity. The CER has approved the possibility of the ESB doing so, subject to agreement with the company and its workforce. This would also constitute a significant step forward in the removal of the ESB's monolithic role, which will be accelerated by the all-island market. The end result, as we know, is that when the all-island market comes into operation we should have a much higher residual supply index, RSI. A measure of the potential market power developed by the California Independent System Operator would seem to indicate that at present ESB's RSI is approximately 0.39 and the company accounts for approximately 73% of generation capacity in the entire market. Modelling carried out by the ESRI indicates that in the most likely scenario for the Irish electricity sector in 2010, if the all-island wholesale market is implemented successfully and develops, the ESB's RSI should be brought close to the threshold of 1.2, which is a key figure in this model so as to ensure that the ESB would no longer control the price at the crucial peak periods, in other words, it could not set the marginal price through the mid-merit plants.

This ESRI modelling also indicates that in 2010 only 34% to 43% of generation capacity in the market would be the ESB's and this, of course, would be certainly within that range if the CER's announcement today comes to fruition and the company divests itself of 30%. Colleagues might say that the approval given to the Aghada plant is going in the opposite direction, but if one was here last week for Question Time and heard the repeated assurances on energy supply this winter of the Minister, Deputy Noel Dempsey, he seemed to be whistling past the graveyard, as he often does with various elements of his portfolio. He stated that others have assured him that there will be enough electricity in our market for the 2007 season. Of course, there would be hell to pay if he was Minister in a situation, as Deputy Durkan outlined, where we come in some evening and the lights cannot be put on, the heating systems cannot work and the streets are dark.

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