Gay Mitchell (Dublin South Central, Fine Gael)
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Question 54: To ask the Minister for Communications, Marine and Natural Resources the discussions he has had with the ESB, or the wind or alternative energy sectors on the liberalisation of the electricity market; if he has given an indication to or received proposals from the potential services providers in this regard; and if he will make a statement on the matter. [13801/06]

John Browne (Wexford, Fianna Fail)
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I can inform the Deputy that the Minister engages the Department in regular discussion with all market players on energy issues, including electricity market liberalisation.

The Commission for Energy Regulation, CER, established by the Electricity Regulation Act 1999, is the statutory body with responsibility for regulation of the electricity market in Ireland. Under the Act, the CER may grant or refuse to grant a licence to generate or supply electricity. The CER must require the system operator to give priority to generating stations using renewable, sustainable or alternative energy sources.

The conditions for competition are being created through progressive liberalisation of the electricity and gas markets. In the opening of the electricity market, the position is that liberalisation of the electricity market has proceeded on a phased basis since February 2000 under the regulatory oversight of the CER.

The market has been open and contestable since February 2005, in advance of EU directive requirements. The CER advises that it has ensured that the support systems and processes are in place to enable new entrant electricity suppliers to serve any customer in Ireland. To date suppliers have primarily focused on larger customers because this was the first segment of the market to open to competition — a pattern that is common in other newly liberalising markets. Over time the CER expects to see those benefits extended successfully to the domestic customer.

In an all-island context, work is progressing on the development of a single electricity market, SEM. In June last year the CER and the Northern Ireland Authority for Energy Regulation published their high level decision relating to the proposed design for the SEM. The market is planned to go live on 1 July 2007.

The potential benefits of a mature SEM include: a larger, single market with competitive prices; open and transparent competition at all levels of the marketplace; a stable and attractive investment location; improved competitiveness; greater security of supply; robust, integrated infrastructure; a more diverse energy mix; greater energy efficiency and consumer choice; and longer-term savings.

Within the context of the all-island energy market development framework views were sought on how the electricity infrastructure on the island might best develop to allow the maximum penetration of renewable energy.

The consultation paper identified that further information was required on the resource potential for different renewable electricity technologies on the island of Ireland in 2020, the extent to which partially dispatchable and non-dispatchable generation can be accommodated, network development options and the economic implications of the policy options outlined within the paper.

A working group was established to specify and oversee the completion of studies that would provide more detailed information on the above issues. The working group recommended an all-island grid study and work is progressing on this project a priority.