Tuesday, 21 May 2019

Questions (551)

Bernard Durkan

Question:

551. Deputy Bernard J. Durkan asked the Minister for Communications, Climate Action and Environment the way in which the cost of producing electricity here compares with other countries throughout Europe with particular reference to maintaining competitiveness throughout industry; and if he will make a statement on the matter. [22103/19]

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Written answers (Question to Communications)

Overall electricity costs in Ireland are influenced by various drivers, including global gas prices, the costs of capital, exchange rate fluctuations, and the small size of the Irish market, geographical location and low population density. Data for electricity and gas retail price statistics are collected by Eurostat for European Union Member States including Ireland and these statistics are published regularly. These Eurostat data do not include measures of comparative electricity generation costs and have only recently started to provide indicators on the disaggregated components that make up business retail electricity prices. The SEAI publishes biannual reports on Irish retail electricity and gas price statistics, which present these Eurostat electricity and gas price statistics for Ireland and European Union Member States. The most recent such report is available on the SEAI website at the following link: www.seai.ie/resources/publications/Electricity-and-gas-price-in-Ireland-1st-semester-2018.pdf.

The primary driver of electricity price rises over the previous two years has been the sharp increase in international gas prices, which has pushed up the cost of wholesale gas and wholesale electricity for Irish energy suppliers. Ireland is particularly exposed to volatile international gas prices, which can be the price setting fuel in Ireland’s all-island Single Electricity Market (SEM). Indeed, natural gas accounted for 50% of Irish gross electricity generation in 2016 versus the 19% EU average.

The Government believes that competition is a critical means of exerting downward pressure on electricity prices and also towards ensuring diversity of energy supply to reduce our exposure to high and volatile external energy prices. Additionally our heavy dependence on gas in the electricity mix underlines the need to maintain the focus on the limited controllable cost factors. Among the actions being taken are to increase the penetration of indigenous secure renewables in the Irish electricity system and promote energy efficiency in businesses.