While I have no statutory function in either the regulated or non-regulated markets, I am acutely conscious of the impact of energy prices on citizens across the country. Responsibility for the regulation of the retail electricity and gas markets is a matter for the Commission for Energy Regulation, which is an independent statutory body. Prices in the electricity retail market are fully deregulated, and it is similar for gas, except in the case of BGE tariffs for domestic consumers. These BGE retail gas tariffs, however, will be deregulated from 1 July 2014.
Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. The most important factor affecting electricity prices in Ireland is the continuing high wholesale price of gas to Ireland.
Diversifying the fuel mix used in electricity generation can help to mitigate the impact of volatile fuel prices. The promotion of renewable energy by displacing imported fossil fuels can play a critical role in this regard. To date, wind energy has proven to be the most commercial technology in the Irish market. However, electricity generated from a range of renewable sources including water, biomass and landfill gas are also supported.
There are significant economic benefits already accruing to Ireland from the supports for renewable energy. A report published by SEAI last week found that in 2012 the use of renewable electricity resulted in greatly reduced use of gas, coal and peat, to the value of an estimated €245 million, and prevented the emission of 1.9 million tonnes of CO2, which saved a further €15 million.
The alternative energy requirement and the renewable energy feed-in tariff, to which the Deputy referred, are the primary means through which electricity from renewable sources is supported in Ireland and are funded from the public service obligation, PSO, levy. In the 2012-2013 PSO period the cost to the PSO of the two schemes amounted to €54.6 million, and the equivalent value for 2013-14##, as estimated by the Commission for Energy Regulation, will be €43 million.