Trevor Sargent (Dublin North, Green Party)

——to EirGrid, and I hope there are further potential fields of agreement between the Government and the Opposition in the energy sphere.

I would like to address a number of the claims made by Opposition Members in their contributions. Specifically, I would like to respond to the accusation that our electricity prices are maintained at an artificially high level. I assure the House that nothing could be further from the truth. Our electricity tariffs are set at a level that is fully reflective of the costs borne by generators in producing the electricity. While it may be true that the State energy companies could produce electricity for lower than the current public electricity supply tariff price, at least for a while, they could only engage in this practice by cross-subsidising their electricity generation from other areas of the company. If we allowed them to engage in this behaviour, it could cause incalculable damage to our electricity market. Vital infrastructural development in distribution and transmission networks could suffer and it would impact upon the ability of these companies to deliver on the commitments contained in their corporate strategies. As stressed yesterday, any such move would also lead to a loss of investor confidence in the transparency of the regulation of the market and even potentially drive independent power producers out the market. I hope the Opposition can agree this would be a retrograde step.

Instead, we can lower the cost of electricity to consumers in a non-distortionary fashion, through an expedited review of tariffs. The Minister for Communications, Energy and Natural Resources is tasking the energy regulator to undertake an immediate review of options to bring forward a reduction in electricity prices to achieve this. This review will be conducted within the existing regulatory framework and if current trends in energy prices, particularly gas continue, I expect a double digit cut in electricity and gas prices to become a reality later this year.

With regard to the concerns that a number of Deputies expressed on oil prices at the pump, I reiterate that the Government does not control prices at the petrol pump. The National Consumer Agency recently undertook an investigation into diesel and petrol price movements in Ireland. This report concluded that there is little evidence to suggest unwarranted delays in the passing on of wholesale price changes to the consumer at the pump. The Department of Communications, Energy and Natural Resources is however, reviewing the methodology for collecting oil price statistics in Ireland with a view to ensuring this information is fully reflective of current market conditions, taking into account significant changes in the structure of the oil market in recent years. The only viable solution to the energy challenges we face is to make our energy supplies more sustainable in the longer term. This will reduce our dependence on imported fossil fuels, which account for a large percentage of the price we pay for electricity and which will, in turn, drive competitiveness in the electricity sector.

The importance of renewables in this equation cannot be understated. The Minister outlined to the House last night the analysis recently published by the CER, which delivers the heartening promise that the achievement of Ireland's renewable targets by 2020 will reduce our energy costs by 15%, compared to what they would have been without our development of renewable energy. The ESRI is researching the economic costs and benefits of renewables, which will provide further documentary evidence of the benefits of renewables. The upgrades required for our electricity networks are linked to this renewable development. These investments cannot be postponed and, as my colleague, the Minister of State at the Department of Communications, Energy and Natural Resources, Deputy Seán Power, put it so eloquently, we cannot put off until tomorrow the bills that we should pay today. The billions of euro due to be invested in modernising and upgrading these networks will serve as a potent fiscal stimulus for the economy.

Throughout this process, we will not forget the needs of the most vulnerable on our society. We have announced expanded services such as the warmer homes scheme and the home insulation grant programme. These services, coupled with the increases in social welfare fuel allowance payments, will ensure the less well off are protected from high energy costs. The Government has implemented measures that will deliver lower electricity costs to consumers in a transparent and credible manner, which will maintain confidence in our electricity sector and regulatory regime.

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