Eamon Gilmore (Dún Laoghaire, Labour)
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Question 113: To ask the Minister for Communications, Marine and Natural Resources the stage of discussions on the creation of a north west European electricity market; the estimate of the percentage of the market the ESB would hold in such a scenario; if this development would entail the incorporation of CER into a regional regulatory body; and if he will make a statement on the matter. [11332/07]

Noel Dempsey (Meath, Fianna Fail)
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As a peripheral island energy market, Ireland fully supports the progressing integration of European markets and European energy networks. The Energy Policy White Paper "Delivering a Sustainable Energy Future for Ireland" sets out the Government's plans for the progressive development of a regional electricity market with UK and North West Europe over the next five years, underpinned by new interconnection.

My Department, the Commission for Energy Regulation (CER) and the Transmission System Operator, EirGrid, along with their UK and French counterparts, are actively working towards the development of a regional electricity market, as part of the EU Commission's initiative to develop regional energy markets through ERGEG (European Regulators Group for Electricity and Gas).

The objective of the ERGEG Regional Initiative is to make concrete improvements in the development of a single energy market in Europe by first integrating national markets in electricity and gas into regional markets. This is achieved through the identification and removal of impediments to trade at a regional level.

The France, Ireland and UK electricity Regional Electricity Market initiative is led by the British Energy Regulator (Ofgem) and aims to integrate national markets in the three countries. The Irish authorities are actively participating through the Regional Coordination Committee and Stakeholder and Implementation Groups. Progress is being made in addressing the key priorities of congestion management and intra day trade, balancing and transparency issues.

This work is a natural progression from the key Government priority to develop with the Northern Ireland authorities the All-Island Energy Market and to deliver the Single Electricity Market (SEM) on November 1st this year. It is complemented by the Government decision to deliver, through the CER and EirGrid, a 500 MW East West Electricity Interconnector by 2012.

Annual electricity consumption in France, Ireland and the UK is around 30% of the EU 25 electricity market. At present ESB has a total installed generation capacity of just over 60% of the generation market in the Republic of Ireland. The CER-ESB Asset Strategy agreement, which includes an agreement for ESB to divest 1,300 MW of its existing capacity, in conjunction with the SEM, will ensure that ESB's share of the all-Island power generation market falls to approximately 40% by 2010.

It is in this context that ESB will continue to compete in the island of Ireland and, eventually, as the regional energy markets progress, the wider single energy market in the EU. The scope for European-wide competition will be determined also by the availability of physical interconnection between systems. Ireland endorses the priority being given to interconnection under the Energy Policy for Europe.

The development of a regional regulatory body is outside the scope of the ERGEG Regional Initiatives. In its recently launched Energy Policy for Europe, the EU Commission addresses the need to balance the role of national energy regulators. The EU Commission has outlined a range of options, including a European network of independent regulators with enhanced powers and a new single body at Community level.

I am supportive, in principle, of measures which deliver more effective and proportionate energy regulation. I welcome the proposal to work towards a level playing field for regulatory authorities across Europe. Varying degrees of independence and the differing mechanisms by which regulatory authorities are funded and resourced need to be analysed in this context. I look forward to further elaboration of the Commission's proposals at an early date.