Vol. 464 No. 3
19 Mr. Molloy asked the Minister for Transport, Energy and Communications the implications, if any, for the ESB and the Irish economy in view of the proposals in the draft EU Internal Energy Market Directive in its current format. [8147/96]
The revised draft electricity directive circulated by the Commission in February 1994 provided for a relatively modest degree of liberalisation of the single electricity market. The main proposal was that customers with an annual electricity consumption of 100 Gigo Watt hours per year or greater be given the right to contract directly for electricity with independent power producers. Since 1994, and particularly with the advent of the three new member states, there has been a considerable shift of opinion among member states in favour of a much greater degree of liberalisation of the market.
The latest compromise proposal by the Italian presidency reflects this shift but a number of member states consider that it does not move sufficiently quickly towards liberalisation and one or two favour a more gradual approach. The proposal is therefore not the final word and may be modified again before the meeting of the Energy Council on 7 May 1996.
However, if the proposed draft Directive is implemented as it stands it would mean a substantial immediate degree of liberalisation of the Irish market with a progressive widening of the number of customers who will be eligible to contract directly with independent power producers. My Department estimates that 25 per cent of ESB's customers would immediately qualify as eligible customers if the proposal becomes law. This will represent a significant opportunity for customers and present a challenge for the ESB. I expect that the introduction of significant levels of competition will bring considerable downward pressure on electricity prices. I am also confident that the ESB is taking the necessary steps to prepare for the challenges that competition will bring. I see no reason why the ESB should not prosper in a new open more liberalised market.
At the same time, there are sufficient protections in the Directive to assure the Irish consumer of a secure supply of reasonably priced electricity. There are specific protections for the important public service aspects of electricity such as ensuring that tariffs for the franchise market will be uniform throughout the country.
We are some minutes past the allocated time for Questions. I will hear one concluding supplementary from Deputy Molloy who has tabled this Question.
Can the Minister give any estimate of the savings to consumers should the draft directive on electricity be adopted and liberalisation be introduced? In view of Ireland's imminent assumption of the Presidency of the European Union in July, what will be the Government's approach to this energy-electricity directive if the draft has not been adopted prior to Ireland assuming the Presidency? Will it be an objective of the Irish Presidency to ensure the adoption of the electricity-energy directive?
This directive is the subject of ongoing discussion and negotiation. The Italian Presidency hopes it may be able to bring the matter to a conclusion at the May meeting. I clearly outlined our position at a meeting in December 1995 and, for the benefit of the Deputy, I will forward him a copy of the statements I made on behalf of our electricity sector.
