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Electricity Generation.

Dáil Éireann Debate, Tuesday - 29 June 2004

Tuesday, 29 June 2004

Questions (60)

Eamon Ryan

Question:

52 Mr. Eamon Ryan asked the Minister for Communications, Marine and Natural Resources the role his Department has with regard to the introduction of competition in the electricity generation market here; if the Government has reached an agreement with the board of the ESB and the relevant trade unions such that the company will be able to retain a certain percentage of power generation within the market here; the effect which the electricity market liberalisation directive, due for transposition in July 2004, will have on such an agreement; if reports have been carried out in regard to this matter; and if so, if he will make them available to the relevant opposition spokespersons. [18124/04]

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Written answers

The February 2000 tripartite agreement between the Government, the ESB and the ESB group of unions recognised that the issue of the ESB's dominance in the electricity market must be addressed by willingly facilitating real and substantive competition. Against this backdrop, the ESB has publicly stated on several occasions that it is committed to reducing its share of the generation market to 60% by 2005.

By virtue of the Electricity Regulation Act 1999 and the European Communities (Internal Market in Electricity) Regulations 2000, a new regulatory regime, under the oversight of the Commission for Energy Regulation, CER, has been established in Ireland, designed to facilitate and stimulate properly regulated and fair competition. These two legal instruments implement EU electricity directive 96/92/EC concerning common rules for the internal market in electricity.

The Electricity Regulation Act 1999 provided for the introduction of limited competition in the electricity market and for the establishment of the CER. Under the Act, any party can apply to the CER for the necessary authorisations to build new plan, a licence to generate and-or a licence to supply. The first phase of liberalisation was introduced with effect from 19 February 2000, in accordance with EU requirements. Ireland exceeded those requirements by opening 31% of the market, whereby 400 or more of the largest electricity customers were enabled to choose their supplier. All customers also became free to purchase electricity from any green or combined heat and power, CHP, licensed supplier from February 2000 and April 2001 respectively.

Further market opening took place on 19 February 2002 when 40% of the electricity market, representing 1,600 business customers, became free to shop around for keener prices in the competitive market. The latest market opening on 19 February last extended this from 40% to 56%. All large and many small and medium-sized businesses are eligible to buy their electricity from suppliers licensed by the CER. The full liberalisation of the electricity market on 19 February 2005 is provided for in the Electricity Regulation Act 1999 (Eligible Customer) (Consumption of Electricity) Order 2003. Every single customer will then be eligible to source their electricity from any licensed supplier and the entire market becomes contestable. This date is well in advance on the July 2007 deadline for full liberalisation set down in the recently adopted EU electricity directive 2003/54/EC. This Directive makes no provision on power generation retention within the market here.

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