Wednesday, 6 November 2013
Department of Communications, Energy and Natural Resources
105. To ask the Minister for Communications, Energy and Natural Resources if his Department has reviewed the most recent capacity assessment by the UK energy regulator, Ofgem, published in June 2013, which warned of an increased risk of energy shortages over the coming winters; if his attention has been drawn to proposals by the UK's National Grid that large energy users could be forced to shut down their operations from 4 p.m. and 8 p.m. during peak winter energy usage periods; if, in view of Ireland's almost full dependence on imported energy, including the fact that 96% of our gas comes from the UK, his Department is concerned about these energy issues; what plans, if any, his Department has drawn up to deal with possible energy shortages and significant energy price hikes; and if he will make a statement on the matter. [47293/13]
The Energy Regulator for Great Britain, Ofgem, published its most recent annual Electricity Capacity Assessment on 27 June, 2013. The assessment analyses security of electricity supply in Great Britain over the forthcoming five winters. It shows that the buffer between peak electricity demand and supply could be lower than previously expected and proposed for consultation certain measures to address this issue.
In contrast, the most recent All-Island Generation Capacity Statement published in January 2013 forecast that the adequacy situation in Ireland is positive for the next 10 years. Indeed, there is considerable generation surplus forecast for the Irish electricity system. These electricity Capacity Statements are required to be published annually by Eirgrid and the Transmission System Operator in Northern Ireland, SONI, and take account of interconnection with Great Britain.
Turning to the issue of gas, it is correct to say that currently Ireland is dependent to a large extent on imported gas from Great Britain. In terms of long term plans for energy security, Ireland's approach is to diversify fuels and supply sources. The use of indigenous gas and access to Liquefied Natural Gas storage will enhance diversity.
Continuing to develop indigenous renewable electricity is also a key strategy in ensuring supply diversity. Currently over 19% of electricity is generated from renewable sources and supports are in place to ensure we attain our target of increasing this to 40% by 2020. In addition, the Sustainable Energy Authority of Ireland, funded and assisted by my Department has, over the past decade, been proactive in maximising energy efficiency. Several successful initiatives have been undertaken while new initiatives are also being considered which will further improve the efficiency of energy consumption, thus reducing our consumption (including consumption of imported energy) and contributing to security of supply. As well as enhancing long term energy security, there are detailed operational plans in place to deal with any unexpected short term disruption to energy supplies. In the unlikely event of a major disruption, EirGrid and Gaslink would implement their respective emergency plans to deal with the situation.
On the issue of prices, electricity and gas costs in Ireland are influenced by various drivers, including wholesale gas prices, the cost of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. Wholesale gas prices are by far the most significant factor with prices rising since 2009 driven by events in the Middle East, North Africa and Japan and the significant growth in demand from China and India. At a national level, the competitive energy market in place helps put downward pressure on prices. There is an ongoing 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.