Áine Brady (Kildare North, Fianna Fail)

I welcome the opportunity to contribute to this debate on Ireland's energy costs and the importance of improving our competitiveness versus that of other countries. In these challenging economic times, the focus of the Government must be on ensuring that we protect our existing jobs and attract as many new jobs as we can. In addition, we must protect the less well off as much as possible from the effects of this global recession. This debate gives the Government an opportunity to outline its policy platform to address the cost of energy for our people. Businesses and citizens need to be confident that we are dealing with this key challenge for the economy.

Energy costs are a key ingredient of our competitiveness. Since last September, I have spent quite some time meeting with business interests in my constituency — from the multinationals in Leixlip to small and medium enterprises in the wider area. A common theme of concern to the business community is the high cost of energy here compared to other European countries. Our energy costs are estimated to be 8% higher than the EU average. However, we must never underestimate the country's many positive attributes, such as a flexible educated workforce, a pro-enterprise approach and a low corporation tax policy. We must now focus on energy costs and this debate gives us a chance to take stock of the progress we are making in this respect. In this context, I welcome some recent initiatives which will assist in driving down energy costs. Last week, the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, announced that the EU has decided to award €100 million to our electricity interconnector project. This will enhance the country's competitiveness and give confidence to our business community that the Government is committed to reducing energy costs.

The east-west interconnector is a vital piece of infrastructure for our country and will bring many benefits. It will improve energy security, promote greater competition in the electricity sector of the all-island single energy market and offer opportunities for the export of wind-generated electricity, thus providing a further boost to our growing renewable energy sector.

The second initiative is the introduction of new suppliers to the energy market. Endesa, a large, international and experienced energy supplier, has decided to enter the Irish market. It will invest more than €800 million in the economy and will provide competition in the energy market. Endesa's new Irish operation will have a 14% market share when fully operational and will be in a position to expand, given that it has purchased generation-ready sites at Lanesboro and Shannonbridge.

The introduction of competition is the key to reducing energy costs. It is important to have a policy mix that generates an energy market which has the ability to attract competition into the energy sector and also sustain those who enter the market. The introduction of major new international competitors will give confidence to businesses that we now have a market structure where different energy companies will compete for business. This is a significant development and will bring prices down.

Reliance on imported fossil fuels is another barrier to a competitive energy supply source. The percentage of imported fossil fuels, particularly gas, on which we rely for electricity generation is much higher than in other countries. This reliance left us exposed when oil prices rose significantly last year. A recent report from the energy regulator indicated that if 40% of our power was generated from renewables, it would have a further significant dampening effect on prices. The Government has demonstrated its commitment to this policy with significant investment in the renewable sector.

At a time when public confidence in regulators is shaken, the energy regulator can use its good offices to ensure that there is transparency in the energy prices offered to consumers and businesses. Oil prices have been reduced significantly in recent months and while gas has not been reduced as much, a clear and quick response from the regulator to falling energy prices will help to restore confidence in regulation generally. In this context, I welcome the Minister's initiative to have the regulator, in conjunction with the energy companies, examine ways to fast track some of these downward trends for the benefit of businesses and consumers.

Encouraging a competitive, least-cost energy supply is a key policy objective for the Government. Rising energy costs are a major concern for all sectors of the economy and for consumers not only here, but in the EU generally. The Government has the necessary policies to bring about more competitive and secure energy supplies.

I commend the Government amendment to the House.

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