Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context

Question 53: To ask the Minister for Communications, Energy and Natural Resources the stage discussions on the creation of a north west European electricity market are at; the estimated 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. [23048/07]

Eamon Ryan (Dublin South, Green Party)
Link to this: Individually | In context

As a peripheral island energy market, Ireland fully supports the progressive integration of European markets and European energy networks. The Energy Policy White Paper underlines the Government's commitment to the progressive development of a regional electricity market with UK and North West Europe over the coming years The all-island Single Electricity Market from November this year and the East West Electricity Interconnector by 2012 are key steps in this development.

My Department, the Commission for Energy Regulation (CER) and the Transmission System Operator, EirGrid, along with their UK and French counterparts, are 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.

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 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 Powergeneration 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 is 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 European Commission published proposals for a third package of energy legislation on 19 September. As part of this package, the Commission proposes to establish an Agency for the Cooperation of National Energy Regulators (ACER), with relevant powers and duties, to complement National Regulators. This is a welcome initiative in terms of the high level principles and will support both the ERGEG Regional Market Initiative and the All-island Energy Market. The detail of the Commission's proposals is the subject of on-going discussions at EU level on the draft legislation.