Bernard Durkan (Kildare North, Fine Gael)
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Question 361: To ask the Minister for Communications, Marine and Natural Resources his views on the recent report by the EU Competition Directorate that found Ireland has the second least transparent electricity market in western Europe and which warned that the threat of market power abuse is high, in view of his role fostering competition in industry here; the steps he will take to ensure the market becomes more transparent and the threat of market power abuse is removed; his views on whether there is little hope of encouraging further independent investment and greater competition in the electricity market until such steps are taken; and if he will make a statement on the matter. [12634/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 372: To ask the Minister for Communications, Marine and Natural Resources his views on the recent report by the EU Competition Directorate that found Ireland has the second least transparent electricity market in western Europe and warned that the threat of market power abuse is high; the steps he will take to ensure the market becomes more transparent and the threat of market power abuse is removed; his views on whether there is little hope of encouraging further independent investment and greater competition in the electricity market until such steps are taken; and if he will make a statement on the matter. [12630/07]

Noel Dempsey (Meath, Fianna Fail)
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I propose to take Questions Nos. 361 and 372 together.

I am aware of the European Commission's Final Report of the Energy Sector Inquiry 2005-2006, which was conducted by DG Competition and published by the Commission last January.

The Inquiry comprehensively investigated the barriers currently impeding the development of a fully functioning open and competitive EU-wide energy market. It examined the situation under a number of headings in each Member State.

The Commission's findings in essence are that while there is progress, a number of further measures are needed to achieve a complete internal energy market with open competition and effective regulation across Europe.

One of the areas highlighted by the Commission is the critical importance of transparency for the efficient working of wholesale electricity markets. All market players must have timely access to the information necessary to trade, particularly in relation to demand, supply and transmission network issues. This is endorsed by the European Regulators (including CER), the European Transmission System Operators and the European Electricity Industry and Trading Groups. The Inquiry found that there is still a lack of transparency in most Member States when measured against a range of information headings.

It is the case that Ireland scored low in terms of the league table on the number of issues for which information is published. It is also the case that CER and EirGrid are working to steadily improve the availability of information to all market participants. Addressing the transparency of information barrier, together with the other barriers to a fully level playing field in the electricity market is a key priority. An immediate objective is to ensure that the Single Electricity Market is fully transparent in all key respects. The Regulators North and South, together with EirGrid and SONI as the Transmission System Operators are working to put this in place.

The Commission's Energy Sector Inquiry further serves to underline the crucial importance of the comprehensive policy actions, set out in the Energy Policy White Paper, which we are taking in order to create an open, fair and competitive electricity sector which works in the interests of the consumer. The Government's decision to transfer the ownership of the transmission assets from ESB to EirGrid by the end of next year is critical in that context. The combining of the ownership and operation of transmission in EirGrid is proportionate, will create efficiencies, and is necessary for effective competition. It will instill confidence in all market players that the transmission system is operated independently of commercial interests in a strictly non-discriminatory manner. We will also ensure the progressive reduction in ESB's market share in power generation to around 40% in an all-island market context by 2010 through implementation of the CER-ESB Asset Strategy Agreement. EirGrid will be working with CER to develop a landbank of ESB owned sites by 2008 to facilitate independent power generation investment up to 2020. This will complement the release of ESB sites under the CER-ESB Agreement this year and incrementally up to 2010.

The White Paper also endorses the actions by CER to progressively reduce the dominance of ESB PES in competitive sectors of the retail electricity market which will see the delivery of real and effective competition in energy supply. The White Paper also commits to a comprehensive review of the Irish energy regulatory framework following the introduction of the Single Electricity Market. The review will take into account the further developments in the EU internal energy market.