Michael Moynihan (Cork North West, Fianna Fail)
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4. To ask the Minister for Communications, Energy and Natural Resources if he is concerned at the continuous rise in energy prices; the total revenue paid by EirGrid to wind energy providers in 2013 and to date in 2014; and if he will make a statement on the matter. [24808/14]

Michael Moynihan (Cork North West, Fianna Fail)
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Is the Minister for Communications, Energy and Natural Resources concerned at the continuous rise in Irish energy prices? What is the total revenue paid by EirGrid to wind energy providers in 2013 and, to date, in 2014, and will he make a statement on the matter?

Pat Rabbitte (Dublin South West, Labour)
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While I have no statutory function in either the regulated or non-regulated markets, I am acutely conscious of the impact of energy prices on citizens across the country. Responsibility for the regulation of the retail electricity and gas markets is a matter for the Commission for Energy Regulation, which is an independent statutory body. Prices in the electricity retail market are fully deregulated, and it is similar for gas, except in the case of BGE tariffs for domestic consumers. These BGE retail gas tariffs, however, will be deregulated from 1 July 2014.

Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. The most important factor affecting electricity prices in Ireland is the continuing high wholesale price of gas to Ireland.

Diversifying the fuel mix used in electricity generation can help to mitigate the impact of volatile fuel prices. The promotion of renewable energy by displacing imported fossil fuels can play a critical role in this regard. To date, wind energy has proven to be the most commercial technology in the Irish market. However, electricity generated from a range of renewable sources including water, biomass and landfill gas are also supported.

There are significant economic benefits already accruing to Ireland from the supports for renewable energy. A report published by SEAI last week found that in 2012 the use of renewable electricity resulted in greatly reduced use of gas, coal and peat, to the value of an estimated €245 million, and prevented the emission of 1.9 million tonnes of CO2, which saved a further €15 million.

The alternative energy requirement and the renewable energy feed-in tariff, to which the Deputy referred, are the primary means through which electricity from renewable sources is supported in Ireland and are funded from the public service obligation, PSO, levy. In the 2012-2013 PSO period the cost to the PSO of the two schemes amounted to €54.6 million, and the equivalent value for 2013-2014, as estimated by the Commission for Energy Regulation, will be €43 million.

Michael Moynihan (Cork North West, Fianna Fail)
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I thank the Minister for his reply. I am not sure if the Minister is aware that the UK's energy regulator recently wrote to the large power suppliers in Britain seeking an explanation for the fact that fuel bills had not decreased, given the decline in wholesale gas and other energy prices. We have constantly discussed this matter here when the energy regulator grants increases to energy suppliers following an increase in wholesale market prices, but there is now a decrease in wholesale market prices. I understand that the regulator is on a statutory footing, but the Minister is ultimately responsible to the House for these issues. It is time to arrange a meeting between the Minister and the regulator to ensure that energy suppliers are called in, hauled over the coals and asked why the reduction in wholesale energy prices has not led to lower fuel bills.

Pat Rabbitte (Dublin South West, Labour)
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I am aware of Ofgem's public statement in Britain. In addition, I have noted the comments by Ofgem's chairman, who is the former chairman of our own Commission for Energy Regulation. The situation is not directly analogous; the main driving force here is the wholesale price of gas, over which we have no control. I take the Deputy's point that I am ultimately accountable to the House but, unfortunately, gas prices are not within my control. I can list for the Deputy what the regulator is focusing on.

As it happens, I met with the regulator last week on this issue. I expressed concerns similar to the ones the Deputy has just articulated. I subsequently wrote to the regulator setting out my views. Unfortunately, however, exchange rate fluctuations, the small size of the Irish market and the extent to which we are reliant on gas to generate electricity are issues that are also outside the regulator's control.

10 o’clock

The issues on which the regulator concentrates are putting in place energy efficiency measures, creating the framework for competition in the market, including regulatory structures, and seeking to move away from a reliance on high-priced imported gas with its volatile and sometimes high prices towards a greater diversity of fuels used in electricity generation. The Commission for Energy Regulation scrutinises network costs for both transmission and distribution which form part of final retail electricity prices. I should say that is the focus of Government policy.

Michael Moynihan (Cork North West, Fianna Fail)
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The Minister met with the Commission for Energy Regulation recently. Did the public service obligation, PSO, and the possible increase in October come up at the meeting? Could the Minister offer an opinion in that regard?

It is a classic case that when the cost of oil goes up it is immediately reflected in the price at the pumps but when the price of oil goes down it takes months for the retail price to reduce due to storage and other issues. I accept the explanation is complex. We are aware that when the wholesale price goes up the retail price goes up and it is time to address the issue.

On renewables and efficiencies in the sector, have the Department and the various stakeholders examined the issue in terms of future renewable energy projects?

Pat Rabbitte (Dublin South West, Labour)
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I beg your pardon. I missed the point.

Michael Moynihan (Cork North West, Fianna Fail)
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Given the various subsidies available for renewable energy production, have the stakeholders considered such projects and their sustainability? It is grand while the subsidies are available but what will happen when they are no longer available? This might be my last occasion to debate Priority Questions across the Chamber with the Minister, Deputy Rabbitte, in this portfolio. I wish him the best of luck in the future.

Pat Rabbitte (Dublin South West, Labour)
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Thank you very much. I may need it. In response to his point on renewables, Deputy Moynihan will be interested to examine the SEAI report on renewables which I published on Monday morning of this week. The SEAI considered what savings accrued in 2012 as a result of the supports for renewable energy. It concluded that savings of €245 million were realised. If one adds to that the 1.9 million tonnes in CO2 emissions that were avoided, that added a further €15 million in savings. REFIT applies over 15 years. The idea is that the situation will normalise and find its own place in the market over that time.

A further study is due to be completed very soon that involves the ESRI, the SEAI, EirGrid and the Department. The quadrilateral study is focusing on precisely the question Deputy Moynihan raised and it will be very interesting to see the results of the study.

I did discuss the PSO with the regulator at the recent meeting. There are three elements to it; the renewables element, which includes the peat-burning stations in the midlands. Successive Governments have made the calculation that there is a public interest in maintaining such employment in the midlands. A contract will expire next year that was entered into in 2005 when the country was on a knife-edge in terms of energy adequacy in respect of Tynagh and Aughinish. That is a factor as well.

Michael Kitt (Galway East, Fianna Fail)
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Go raibh maith agat. We now go on to Other Questions. Questions Nos. 6 and 11 are grouped together.