Dan Boyle (Cork South Central, Green Party)
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Question 34: To ask the Minister for Enterprise, Trade and Employment his plans to take action on foot of his Department's recent publication of the Irish Electricity Market — Principal Challenges discussion paper; and if he will make a statement on the matter. [18381/05]

Micheál Martin (Cork South Central, Fianna Fail)
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In February this year my Department published a paper on the electricity market as part of the Department's policy to highlight competitiveness issues. The paper was written from an enterprise policy perspective and is intended as a contribution to the elaboration of an overall national energy policy.

With regard to the electricity market, the Minister for Communications, Marine and Natural resources has initiated a review of the electricity market sector. This review will examine the institutional arrangements and market structures and assess their appropriateness. The impetus for this review stems from the perceived difficulties relating to the ESB's dominance and the need to attract new entrants and develop competition in the sector. The paper prepared by my Department will contribute to this review.

Dan Boyle (Cork South Central, Green Party)
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I thank the Minister for his response. One of the key findings of the Department's report was that the ESB's market share in electricity generation should reach a 60% market share by 2005, but currently its share stands at 83% of the market. If current trends are maintained, by 2007 its market share will still be around 75%. Is the Minister in discussion with the Minister for Communications, Marine and Natural Resources, the Taoiseach and his predecessor in the Department, on this matter with regard to competitiveness and related issues?

With regard to the nuts and bolts of the effect of the lack of competition in the electricity market, we have seen a change of situation from the mid-1990s, ten years ago, where Ireland had among the lowest electricity prices for industry in Europe to a position where, for the past five years, we are among the three highest in Europe; only Italy and Cyprus are higher. In terms of competitiveness this is felt most markedly among the food and beverage, the pharmachem and electronic sectors of industry, which are responsible for more than half the money spent by industry on energy costs, even though they are the mainstay of employment here and are responsible for more than three-quarters of the gross value added of goods produced here. On those terms, is the Minister seeking to initiate a Cabinet debate on the issue? What legal mechanisms exist, for him or the Government, to bring the ESB in line with what is a voluntary commitment on its part in reaching a 60% market share by this year?

Micheál Martin (Cork South Central, Fianna Fail)
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The document my Department produced is a contribution to the debate and, in particular, to the review the Minister for Communications, Marine and Natural Resources has initiated. My Department has no responsibility for how the market is structured, how it evolved or how it can be reformed and developed. Control of these issues has been transferred to an independent energy regulator and that must be accepted. Also, in terms of the strategic developments in the market, EU directives govern that development.

That said, our concern and that of Government is the impact on competitiveness. The Deputy is correct to draw attention to the deteriorating competitiveness position in terms of energy pricing that we have witnessed over the past five or six years. There are counter arguments as to why this happened. Various arguments have been put forward by the ESB and others citing, for example, the historic under investment in both the generating and transmission infrastructure over a 20 or 30 year period. That is one argument cited for the rapid investment in recent times. The ESB has been trying to ensure that capacity is at a level that meets the significant rise in demand that has occurred as a result of the very dramatic growth in the economy over the past five or six years.

We are conscious that the cost of electricity for an Irish industrial user is approximately 40% above that of a similar UK firm. That is a matter of serious concern to the Government. It is obvious the Minister for Communications, Marine and Natural Resources had that clearly within his sights when he initiated the review. He is conscious of the concerns. It is obvious the members of the Government work collectively and coherently on issues of this nature, which are of national importance.

Dan Boyle (Cork South Central, Green Party)
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I accept that the Minister's role does not involve making decisions on how the electricity market is structured. However, I would like him to express his opinion on whether the 60% target can be achieved. Is there a need for specific legal mechanisms to help to meet the target? Is the Minister prepared to discuss the need for such mechanisms with his Government colleagues? All we have received from the ESB is a voluntary commitment. Not only do we need reviews of this nature so that debate can be generated, but we also need the Government to make decisions on the measures needed to bring about this eventuality.

Micheál Martin (Cork South Central, Fianna Fail)
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I think I have answered the Deputy's query. Given that the current rate is 83%, it is clear that we are nowhere near achieving the target, which involves the ESB having a 60% share of the electricity generation market. The Minister for Communications, Marine and Natural Resources has initiated a comprehensive review to ascertain whether we can add new elements to the existing infrastructure and policy framework and free up the market to an increased extent. The initiatives taken — we have appointed an independent energy regulator, for example — have not resulted in reduced prices.