David Stanton (Cork East, Fine Gael)
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Question 305: To ask the Minister for Communications, Marine and Natural Resources if projections have been carried out into the demand for electricity over the next number of years; if so, the details of same; if he has satisfied himself that supply will be adequate to meet demand; and if he will make a statement on the matter. [40022/06]

Noel Dempsey (Meath, Fianna Fail)
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The economy and society overall require that energy supply meets the demands of Irish consumers and industry at all times. The Commission for Energy Regulation (CER) has broad statutory functions in relation to security of electricity supply in line with EU Directives. It is the duty of the CER to monitor the security of supply of electricity and to take such measures as it considers necessary to protect security of supply. In particular, the CER can host a competition to acquire the necessary generation or it can direct the Transmission System Operator, ESB or any licensed undertaking to put in place any arrangements that the CER considers necessary to protect security of supply.

EirGrid's statutory role, as the independent Transmission System Operator, is to deliver quality connection, transmission and market services to generators, suppliers and customers utilising the high voltage electricity system, and to put in place the grid infrastructure required to support the economy. In fulfilling this role, EirGrid is required to develop, maintain and operate a safe, secure, reliable, economical and efficient transmission system.

In co-operation with EirGrid, the CER carries out extensive ongoing monitoring to identify any factors affecting security of supply at an early stage so that any necessary measures can be taken.

Specifically, in discharge of its responsibilities, the TSO publishes an annual Generation Adequacy Report (GAR) which, inter alia, sets out estimates of the demand for electricity over a seven-year timeframe, the likely production capacity that will be in place to meet this demand, and assesses the consequences in terms of the overall supply-demand balance. In its most recent GAR published in December 2005 the TSO forecasts an average annual rate of growth of electricity demand up to 2012 of just under 4%.

In line with international norms, the generation system in Ireland is designed, planned and monitored such that it meets a standard which requires it to meet all reasonable demands for supply. This is designed to ensure that, in designing the system, the appropriate balance is met between protecting security of supply and the cost of building and running the system.

At my request, CER and EirGrid have been briefing me and my Department on a regular basis on the prognosis for winter 06/07 and generation adequacy in the medium term. The CER advises me that it is satisfied the generation system is currently adequate to meet demand, and provides a sufficient margin to meet the security standard. The CER has also advised that there is sufficient capacity and arrangements in place to provide for demand to be met in the short term.

The CER is taking measures to facilitate the development of the system such that it remains adequate to maintain that security standard. Security of supply will be enhanced in the longer term with the development of additional electric interconnection and the development of the Single Electricity, and the resulting all-island approach to security of supply.

With regard to existing generation capacity, the most recent advice to me from CER and EirGrid is that generation adequacy in terms of the supply-demand balance will be manageable up to 2009 provided however that projections by generation companies regarding performance and availability are met and that planned new generation capacity comes on stream to schedule. EirGrid will shortly publish its Generation Adequacy Review 2007-2013 which will set out its assessment of supply-demand over the period.

The Government is also concerned to ensure that adequate provision is also made to encourage the development of an electricity portfolio, which can support and complement the ambitious targets which we have now set for renewable growth. Decisions in this regard by the CER, EirGrid and the Government will be informed by the need to ensure capacity and competition in the generation sector while reflecting the overriding consideration of security of supply.

David Stanton (Cork East, Fine Gael)
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Question 306: To ask the Minister for Communications, Marine and Natural Resources his position regarding a proposed new power station to be constructed in Aghada in East Cork by the Electricity Supply Board; if and when he will give approval for the building of same; and if he will make a statement on the matter. [40041/06]

Noel Dempsey (Meath, Fianna Fail)
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Any decision to grant shareholder approval for ESB investment in a new power generation plant at Aghada would be conditional on agreement on a strategy to address the company's dominance and market power, particularly with regard to mid-merit price-setting plant. Any such approval would also be strictly contingent on compliance with all terms and conditions which would accompany the authorisation by the Commission for Energy Regulation.