The Deputy's question appears to be based on a misapprehension. In the first instance there is no proposal to move to a selection process for new generators under the new industry structure. The Deputy is aware of much of what I am going to say through his work in the Department. The choice under the relevant EU directive is between a tendering system for new capacity, in which case authorisation must also be granted if sought, or a simple authorisation system. There is no proposal to exclude ESB under either system of regulation.
The capital investment involved in any new generation capacity which ESB might wish to build will continue, as at present, to be subject to shareholder approval.
There are no valid grounds for believing that the advent of competition as required by the EU directive would lead to large-scale redundancy among the ESB's workforce as a result of ESB generation plants closing down. There are a number of reasons for this view: there is strong growth in demand leading to a need for more rather than less capacity — last year the ESB had more new connections than ever before; the small degree of initial market opening will limit the extent of potential new entrants; the finite capacity in the gas interconnector will act as a limit on the building of new electricity generation for some years and I have every confidence in the ability of the ESB and its workforce to react positively to competition.
The Deputy is aware that the directive came into force in February 1997 and that it will be implemented by February 2000. It requires that approximately 28 per cent of the Irish market be opened to competition, increasing to 32 per cent by 2003. Customers using more than 100 gigawatt hours per year will automatically be eligible to choose their electricity supplier in the competitive market. The franchise market will continue to be supplied exclusively by the ESB.
My Department issued a consultation document last May which led to the receipt of over 50 submissions from people in the industry and others, most of which were critical in nature. None of the submissions were supportive of the document. The officials studied the submissions and last January a forum was held where our stall was again laid out. The papers delivered at the forum were very helpful, as were the subsequent submissions. During the forum we indicated our view that the holding of open tendering competitions for future large-scale electricity generation might not be the best way forward. It was clear that a centrally planned tendering system was no longer feasible under the directive as it has emerged. There are various reasons for this.
The authorisation procedure is consistent with the approach being taken by many EU states in implementing the EU directive, including the UK, the Netherlands, Denmark, Sweden and Finland. I met all the unions yesterday. We had a very good meeting and went through all the related matters.
The ESB has a proud and honourable history but has had a monopoly since 1927. There is no doubt that open competition, even in a limited sense from 2000, will be difficult for management, employees and those in the political system. The best chance the ESB has is if the challenges and how to cope with them are approached collectively. A certain amount of this is taking place.
