Dáil Éireann debate -
Tuesday, 7 Dec 1999

Vol. 512 No. 3

Written Answers - Electricity Generation.

Austin Deasy

Question:

49 Mr. Deasy asked the Minister for Public Enterprise the instructions, if any, she has given to the ESB to increase its output of electricity to cater for industrial projects in the foreseeable future; and if she will make a statement on the matter. [26027/99]

Minister for Public Enterprise (Mrs. O'Rourke)

ESB has a statutory obligation under the Electricity (Supply) Act, 1927, to ensure the provision of an adequate supply of electricity to meet demand. I have no direct function in that matter. As the Deputy is aware, the electricity market will be open to competition from February 2000 in accordance with the provisions of the EU Electricity Directive. The ESB is currently in the process of bringing the final phase of its Poolbeg plant on stream which will provide an additional 160MW immediately and the IVO peat plant, which is scheduled to come into operation in December 2000, will provide another 120MW.

I indicated in a letter to the chairman of the ESB on 1 December 1999, which I made public last week, the conditions under which I was pre pared to approve of further capital expenditure by the ESB for the development of its proposed new 400MW gas fired plant at Ringsend. As the Deputy will be aware, a number of independent power producers have announced their plans to enter the Irish electricity market. I have every confidence that the electricity market will respond with the provision of the necessary capacity to meet rising customer demand.

Ivan Yates

Question:

50 Mr. Yates asked the Minister for Public Enterprise the decision, if any, she has taken on the option to be pursued for awarding the contracts for generating power stations for the 28% of the deregulated market; if recent media reports stating that these will be determined either by lottery or tender are accurate; and if she will make a statement on the matter. [25935/99]

Minister for Public Enterprise (Mrs. O'Rourke)

There are no contracts to be awarded for electricity generating stations for the approximate 28% of the electricity market to be opened to competition from 19 February next. Any independent supplier who wishes to compete in the eligible customer market would be required to apply for the necessary licence from the Commission for Electricity Regulation. The recent media reports to which the Deputy refers in his question concern the allocation of capacity in the natural gas network for the purpose of fuelling gas-fired power stations, rather than the award of contracts for the construction of power stations.

Forecasts of final demand for natural gas indicate that there will be enough capacity in the natural gas network to meet that demand for the next four to five years. However, the amount of capacity which has been sought in applications to Bord Gáis Éireann significantly exceeds the capacity which is likely to be available in the short term. Most of the parties who have expressed an interest in building their own power stations when the electricity market is opened up to competition in the new year favour gas-fired stations. They will need to be certain that they will have access to the necessary capacity in the natural gas network in order to proceed with these projects.

To ensure that the electricity needs of the State can be met, I have decided that a fixed amount of capacity in the natural gas network will be reserved specifically for the purpose of fuelling new gas-fired power stations. A selection mechanism will be necessary to determine which of the prospective power producers should be given access to the available capacity in the natural gas network. The Attorney General has advised that, having regard to the provisions of the EU gas and electricity directives, it will be necessary that any proposed scheme for allocating this capacity be put on a statutory footing. My Department has conducted a public consultation on a range of options for allocating this capacity for completeness, the full range of available options was included in the consultation. Having considered the views received, I have decided that capacity should be allocated through a selection mechanism based on an evaluation of planned commissioning dates for power plants. A draft Bill to provide for such a selection mechanism was agreed at Cabinet this morning and will be introduced to the House as soon as possible.