Noel Dempsey (Meath, Fianna Fail)

I am pleased to have the opportunity to conclude the Second Stage discussion on this Bill. I thank all the Senators who contributed to this debate. I hope to discuss some of the points they made in greater detail on Committee Stage.

In response to Senator Leyden's last point, this legislation is being produced in parallel with the corresponding legislative provisions of the British Government in respect of the North. We have an obligation to synchronise the timescale of the legislation with that in Westminster. The order in council for the single electricity market legislation for the North was to be laid before the British Parliament on 19 February and will be considered by both Houses of Parliament in the week beginning 12 March. Once this is completed, by 21 March, the order in council will be made at Privy Council. It is hoped that we will have concluded our business here by that time.

This Bill is a key element of a suite of measures that will allow the Government to continue to drive forward a progressive energy agenda. The enactment of the Bill will underpin the establishment of the single wholesale electricity market on the island of Ireland. Like Senator Quinn, I hope this development will be to the benefit of all consumers, both individuals and industrial and commercial consumers. We should place the Bill and the creation of the new single market in the context of long-standing co-operation between the two jurisdictions on common energy issues. What has been achieved to date offers a model of best practice in developing co-operation between North and South. It is fair to say that of all the areas of co-operation and discussion, energy may be the area in which the most tangible progress was made in the last decade. I thank Members for the general welcome they have given the Bill and for their comments, some of which I will deal with now.

Senator Finucane referred to the potential benefits for consumers, especially domestic, from an enlarged market. While the focus of this legislation is on the wholesale side of the market, the long-term cost benefit analysis being carried out indicates a net social benefit of approximately €150 million over ten years. That benefit will be shared almost equally between North and South, with a slightly greater benefit accruing to the North.

Senator Quinn spoke about regulation and I do not take issue with the points he made. However, it is a similar situation to that of the man looking for directions who was told he should not start from where he was. We are halfway through a system which, with hindsight, was not the best possible model. However, we are stuck with it and must make the best of it. There is something perverse about the system but I do not blame the regulator because he must work within the regulations handed down from Europe.

One of the mistakes made in Europe was attempting a one size fits all model for the entire European market. We are a small peripheral nation at the edge of Europe with a small market and very little interconnection, which should have been taken into account at the time, although not in the form of special pleading. To put it crudely, Europe tried to introduce more competition by encouraging more players into the market to increase competitiveness. However, to make participation attractive in a market such as Ireland, with no interconnector and at a remove from the European mainland, the only way is to push up the price of electricity. That is not good for consumers, business or industry.

I do not disagree with Senator Quinn's analysis. However, we cannot persuade Europe to change the regulatory system, although I have raised the matter on a number of occasions. We must work within it and find ways other than raising the price of electricity to make it attractive for other players to enter the market. Some of what is in the Green Paper and what Senators will see in the White Paper, such as the decision by CER last November on licensing the Aghada plant, give an indication of where we want to go. We want to reduce the dominance of the ESB in the market, to make it more attractive for others to compete. As Senator Kenneally said earlier, it is easy to criticise the ESB for inefficiency, and such criticisms have been well made by a number of people, but we should balance it by acknowledging the very good job it has done over the years when nobody else was interested in the market. Time moves on, however, and business and consumers are entitled to expect legislators to seek to mitigate costs as quickly as possible.

A number of Senators, from all sides, said the competitiveness of the economy had to be the overriding consideration rather than the protection of monopolies or the ESB. We want to continue with a strong ESB but do not want that strength to be at the expense of consumers and industry because the general economy would lose out. I presume Senator Quinn was referring to a five-year dividend of €350 million because the dividend paid to the State last year was approximately €70 million. ESB profits were approximately €350 million but, because we have instructed it to act commercially, it must secure a rate of return so that it can borrow to continue to finance the major upgrade it has undertaken.

Senator Kenneally stressed the need for market certainty and stability, which is an essential point that goes to the core of the issue. Throughout the process we have held widespread consultations involving all the players. I have met utility companies and other stakeholders, such as regulators North and South, and have received no negative feedback. That consultation has enabled us to make the progress we have made. The licensing provisions in this Bill are phrased particularly to ensure a level and competitive playing field, which is very important.

Senator Leyden made a number of points on energy efficiency, as did Senator Finucane. That is not related to this Bill but will be a very important part of energy policy in future. Senator Finucane expressed the wish that Fine Gael would be in power after May so that it could look after these issues.