Written answers

Tuesday, 13 October 2009

Department of Communications, Energy and Natural Resources

Natural Gas Grid

12:00 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Question 29: To ask the Minister for Communications, Energy and Natural Resources if he has a policy of pursuing an all-island gas market following the successful completion of an all-island electricity market; and if he will make a statement on the matter. [35585/09]

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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The two regulators, North and South, have been working together since late 2007 to develop joint proposals for the Common Arrangements for Gas (CAG) whereby all players in the gas market could buy, sell, transport and contribute to the development and planning of the natural gas market North and South on an all-island basis. The work of the Regulators has included a Cost Benefit Analysis of the potential mutual economic and strategic benefits that the project could bring. The analysis has shown quantifiable and strategic benefits for the two jurisdictions. Following further independent review of that analysis undertaken on behalf of both Departments North and South, I am supportive of the project which I believe has the potential to achieve the strategic benefits identified.

The two regulators are working closely with my Department and the Department of Enterprise, Trade and Investment in Northern Ireland (DETI) on the project. They are also continuing to engage with industry on the development of the high level design for CAG. Work to date has focussed on the key areas of system operations, transmission tariffs and gas quality which are the foundation stones on which the project can be built. The Regulators have also commenced work on security of supply and the retail market. To date, a number of consultation documents have been published and industry workshops held.

In tandem with the work on this project, the EU Third Energy Package aimed at further reform of the European gas and electricity sector includes new rules for the promotion of regional and bilateral solidarity between transmission system operators and regulators leading to the establishment of regional gas markets. These are objectives which dovetail with the CAG project. Further work on CAG proposals will be fully informed by the EU internal gas market reforms including the structural arrangements for joint operation of the gas networks. With a view to working towards conclusions at an early date on the high level design of the CAG while also achieving compliance with EU legislation I will, over the coming months, be considering the advice from my Department on optimum structural arrangements for CAG and discussing further with the Minister for Enterprise, Trade and Investment in Northern Ireland.

Implementation of the project would require arrangements to be underpinned by enabling legislation in both jurisdictions as was the case for the Single Electricity Market. In light of work by the Regulators to date and the completion of further analysis by both Departments, I am hopeful that Minister Foster and myself can reach agreement in the coming months on the way forward and agree a clear timetable for the gas industry for progressive delivery of the CAG.

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