Terence Flanagan (Dublin North East, Fine Gael)
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459. To ask the Minister for Communications, Energy and Natural Resources if he will respond to a query (details supplied) regarding gas and electricity prices; and if he will make a statement on the matter. [23750/13]

Pat Rabbitte (Dublin South West, Labour)
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Responsibility for the regulation of the retail electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. Prices in the electricity retail market are fully deregulated and similarly for gas, except in the case of BGE tariffs for domestic consumers. Customers can therefore avail of competitive offerings from electricity and gas suppliers. Prices are set by suppliers and are commercial and operational matters for them. I have no statutory function in the setting of electricity or gas prices.

With regard to the regulation of gas prices the position is that up until 1 October 2011 the CER regulated Bord Gáis Energy tariffs for its residential and smaller business customers but price regulation for the latter group ended at that point. The CER still regulates the Bord Gáis Energy tariffs for its residential customers. The timing for complete deregulation of the residential segment of the gas market, as has taken place in the electricity market, is an issue under active review by the CER.

Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. Global gas and oil prices are by far the most significant factor in the case of Ireland. Prices have risen sharply since the start of 2011 driven by events in the Middle East, North Africa and Japan and demand from China and India. Ireland is at the mercy of international fossil fuel prices which dictate the retail price of electricity.

At a national level, the competitive energy market in place helps put downward pressure on prices. In addition, we must focus on all possible additional actions to mitigate costs for business and domestic customers, including rigorous regulatory scrutiny of the network costs component of retail prices.

I am committed to working with enterprise and with the energy sector to ensure that the costs of energy are as competitive as possible. In this context, promotion of energy efficiency measures is an area within our control where action can be taken to reduce energy costs.

Energy efficiency represents a significant opportunity for both businesses and households to reduce their energy costs. There are energy efficiency measures in place to assist both business and domestic energy consumers, with significant funding allocated to them. The Energy Efficiency Fund, which I announced in February and which will commence funding specific measures in the near future, will assist energy efficiency projects in the public and commercial sectors.

Promotion of indigenous sustainable sources of energy will help offset the impact of volatile fossil fuel prices. The Government has a target of 40% of electricity being generated from renewable sources envisaged by 2020. Good progress has been made in meeting this target and its realisation will introduce more certainty in the energy fuel mix as well as boosting security of supply.