Dáil Éireann Debate, Tuesday - 17 December 2013
364. Deputy Barry Cowen asked the Minister for Communications, Energy and Natural Resources if he will explicitly seek to have greater competition in the generation sector by encouraging and facilitating more independent generating players to enter the market; and if he will make a statement on the matter. [54266/13]
View answerThe regulation of the electricity and gas markets is the statutory responsibility of the Commission for Energy Regulation (CER). The Electricity Regulation Act 1999 provided for the establishment of the CER as an independent statutory regulator. Competition in electricity generation has been facilitated by European legislation and transposed into Irish law. The EU adopted its first package of legislation aimed at the liberalisation of the electricity and gas markets in 1996. This has subsequently been followed by two other packages, the most recent of which was approved in 2009. This legislation has allowed for competition in the electricity generation and in wholesale and retail supply markets.
The Single Electricity Market (SEM) is the wholesale electricity market for Ireland and Northern Ireland. The SEM came into operation on 1 November 2007 and commenced the trading of wholesale electricity in Ireland and Northern Ireland on an All-Island basis. It consists of a gross mandatory pool market, into which all electricity generated on, or imported onto, the island of Ireland must be sold, and from which all wholesale electricity for consumption on or export from the island of Ireland must be purchased. Independent analysis has indicated that the market has worked well and continues to deliver benefits to consumers through the use of efficient generation plant to meet demand across the whole island. The SEM model of setting prices in a transparent and cost reflective manner is not only assisting to promote competition and attract new investment, it has also contributed to improvements in the availability of generation plants.
The structure of the SEM has ensured that generators, including new players, have invested in the market, thus ensuring security of supply. This is evidenced by decisions to invest in the Irish electricity market by a variety of market players. Bord Gáis opened its 440 Mega Watt (MW) Whitegate power station in 2010 and ESB commissioned its 435 MW Aghada power station in the same year. The East West Electricity Interconnector (EWIC) commenced operation in 2012 with a capacity of 500 MW. Scottish and Southern Electricity (SSE) is currently constructing a 460 MW gas-fired power station at Great Island, Co. Wexford, and expect the plant to be operating from 2014. The SEM has also facilitated the connection of over 2,400 MW of renewable energy to the grid.
The SEM will continue to evolve in line with European electricity market developments, bearing in mind the primacy of the electricity customer when considering market evolution.
