Olivia Mitchell (Dublin South, Fine Gael)
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Question 127: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she has communicated concern to other Departments regarding the effect high energy prices are having on Irish businesses and Irish economic competitiveness; and if she will make a statement on the matter. [31027/08]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Government is well aware of the importance of secure, competitive and sustainable energy supplies for the business sector and economic competitiveness. The Cabinet Committee on Climate Change and Energy Security compliment regular Cabinet deliberations on competitiveness issues, including energy costs.

My colleague, the Minister for Communications, Energy and Natural Resources, has responsibility for energy policy and the Commission for Energy Regulation has direct responsibility for setting electricity and gas prices for business users in Ireland. My Department works closely with the CER through a Competitiveness Forum, established in 2007, to ensure that competitiveness concerns are taken into account in the decision-making process.

Oil and gas prices are, of course, decided internationally. Ireland is a price-taker in this regard. We have witnessed remarkable fluctuation in energy prices in recent times, with price increases for gas and oil of 130% and 85% respectively in the twelve months to July 2008.

Though Ireland cannot influence world energy prices, we can maximise value for money by increasing competition in the Irish energy market. The Government is already committed to increasing competition in the electricity generation sector, with the target of reducing ESB's market share to below 40% by 2010. The all-island Single Electricity Market, live since November 2007, is designed to create a more attractive electricity market for international investment. The recent sale of two generating facilities and two sites with electricity grid connections to the Spanish electricity company, Endesa, is a significant step to improving competition, giving Endesa approximately a 16% share of the Irish market.

Competition is also being enhanced by the expansion of electricity interconnector capacity. Significant progress has already been made on the East-West interconnector, which will be owned and operated by EirGrid, under the regulatory oversight of the CER. EirGrid is also exploring the possibility of constructing an additional North-South interconnector. Proposals for a 400kv power line between Cavan and Tyrone are currently at the pre-planning consulting stage.

Irish businesses are encouraged to engage with Sustainable Energy Ireland. Last week, SEI launched a major awareness campaign highlighting the possibility of businesses reducing their energy bills by 20% or more through availing of the SEI Energy Assessment service. I understand that five hundred Irish SMEs have already availed of this service, identifying potential energy savings of over €25 million.

My Department continues to engage on these issues in the interests of enterprises. Keeping costs down for businesses in Ireland is essential to maintaining competitiveness in this challenging economic environment.