Seán Haughey (Dublin North Central, Fianna Fail)

I welcome the opportunity to address the issue of electricity prices for business and outline the steps the Minister for Communications, Energy and Natural Resources, Deputy Ryan, and the Government are taking to ensure Ireland's competitiveness.

Since last Friday price regulation has been removed from the entire business section of the electricity market and the ESB is now free to compete on price with the alternative suppliers in the business market. The Government introduced competition into the electricity market to benefit consumers and this competition is working. Many suppliers now offer a range of competitive products to business and the prices paid by business for electricity reflect this competition. In the past 18 months electricity prices for small businesses have fallen by between 10% and 12%, while prices for medium-sized businesses have fallen by more than 20%.

More Government involvement in the electricity market, in keeping with the Senator's call, would be a retrograde step, as it would shatter the confidence of those electricity suppliers which have entered the market on the basis of a stable and credible regulator regime. If the suppliers in question were driven out of the market, it would lead to higher electricity costs for all. Rather than seeking this end, Senators should encourage businesses which are concerned about the price they are paying for electricity to take positive steps to reduce their energy bills. Even today, after the focus on electricity prices in the past two years, more than 50% of small and medium enterprises have not yet switched their electricity supplier. Any business consumer who picks up the telephone and calls an alternative supplier can benefit substantially, regardless of his or her circumstances. Switching is quick, easy and capable of delivering real and significant savings.

Businesses can also save money on their electricity bills by taking advantage of a wide range of Government supported energy efficiency programmes. More than €90 million has been allocated to the Sustainable Energy Authority of Ireland in 2010 for the expansion of its energy efficiency schemes. The SEAI offers grants supporting energy efficiency retrofit measures in buildings and business operations. Free energy management, mentoring, training, advice and other support services are also available to any business willing to show a commitment to becoming more energy efficient. More than 1,600 businesses have availed of this programme which is available to many more companies. Every business with which the SEAI has worked has identified immediate savings, typically greater than 10% of costs. Total business cost savings from the programme already amount to close to €60 million per annum, thus avoiding CO2 emissions of more than 300,000 tonnes.

In addition, the accelerated capital allowance scheme, an energy efficiency tax incentive, was introduced in budget 2008 to encourage companies to purchase the most energy efficient plant, machinery and equipment for use within their business. The scheme was expanded in budget 2009 to cover 29 technologies and 5,500 individual eligible products. A further expansion in 2010 has resulted in the number of technologies covered being increased to more than 40. Accordingly, companies can write off the full capital cost of energy efficient equipment in the year of purchase. This encourages them to invest in products that meet the highest energy efficiency standards, saving them money and helping to lower our carbon emissions.

The Government has implemented measures that will deliver lower electricity costs to businesses and has done so in a transparent and credible manner that will maintain confidence in the electricity sector and regulatory regime. Key to these steps was the creation of a competitive market and facilitating the entry to the market of new players. The market is now delivering real benefits through lower electricity prices for business that are broadly competitive with those of our neighbours. For competition to be fully successful, businesses must be proactive in seeking out and availing of the best deals. Rather than calling for more State intervention and regulation, we should instead help the Government to educate these businesses on the savings available to them.