Dáil Éireann debate -
Tuesday, 30 Jan 1996

Vol. 460 No. 6

Written Answers. - European Energy Directive.

Seán Ryan

Question:

254 Mr. S. Ryan asked the Minister for Transport, Energy and Communications the revised directive under the Spanish Presidency which will provide for a third party access model; the effects, if any, on the uniformity of electricity tariffs throughout the country; the impact, if any, on the Irish economy; and the steps, if any, he proposes to take to secure special treatment for Ireland's unique position in Europe. [2126/96]

Derek McDowell

Question:

259 Mr. D. McDowell asked the Minister for Transport, Energy and Communications if he will make a statement in relation to the meeting of the European Council of Energy Ministers in December 1995, and in particular in relation to the draft directive on third-party access in electricity generation. [1951/96]

Robert Molloy

Question:

263 Mr. Molloy asked the Minister for Transport, Energy and Communications the current position regarding the EU proposal for the introduction of competition in the energy market. [2064/96]

Minister for Transport, Energy and Communications (Mr. Lowry)

I propose to answer Questions Nos. 254, 259 and 263 together.

The Council of Energy ministers on 20 December 1995 discussed a range of issues, the most important of which was the draft directive on the internal market in electricity.

Following extensive discussions since 1992, characterised by opposing views on the key aspect of third party access, much progress has been made on the draft electricity directive.

Consensus has been reached on the following points: member states may impose public service obligations relating to security, including security of supply, regularity, quality and price of supplies and to environmental protection. New generation must be allocated either by an authorisation or tendering system and even if tendering is chosen autoproducers and IPPs must be entitled to authorisation. Authorisation can only be refused for objective criteria. Fifteen per cent of the market may be reserved for indigenous fuels. Integrated electricity companies must keep separate accounts for generation, transmission and distribution activities and must not discriminate, cross subsidise or distort competition. Eligible customers above a certain threshold of consumption yet to be decided may contract directly with independent generators. Generators may serve their customers via direct lines.

Discussion is continuing on the arrangements for access to the system: the question of member states choosing negotiated or regulated third party access or single buyer systems. The threshold for eligible customers has yet to be settled. Pressure also exists to allow distributors to be eligible customers or to allow a percentage of their customers to be eligible customers.

At the Energy Council on 20 December 1995, I accepted the concept of eligible customers and I opposed the recognition of electricity distribution companies as eligible customers and the continuing progressive opening up of the electricity market without review. I strongly took the view that by their nature public service obligations result in additional costs and the directive must explicitly acknowledge the right to recover these costs from all consumers. I stressed that Ireland is particularly concerned to recover the public service costs which are generation related — the costs of national security of supply. All consumers must be able to share in the benefits of the internal market but the costs must be fairly shared also.

The EU proposals have always recognised that transmission and distribution networks will continue to be monopolies. This will allow us to continue the long standing policy of uniform charges throughout the country.