Vol. 574 No. 1
113 Mr. Eamon Ryan asked the Minister for Communications, Marine and Natural Resources if he will be giving a direction to the energy regulator on whether the future rules governing the sale of electricity into a central market will be designed in a manner which ensures the rapid development of the renewable energy sector. [26589/03]
The Commission for Energy Regulation, CER, in discharge of its duties under the Electricity Regulation Act 1999, is required to have regard to the need, inter alia, to promote the use of renewable, sustainable or alternative forms of energy. In addition, the regulator is required to ensure that the system operator gives priority to generating stations using renewable, sustainable or alternative energy sources when selecting generating stations.
I am empowered by section 9(1)(a) of the Electricity Regulation Act 1999 to issue a policy direction to the CER in regard to electricity trading arrangements. This power was exercised by the then Minister for Public Enterprise in July 1999, on foot of which regulations were made by the CER on 17 February 2000, which provide for an interim trading system to enable new entrants to participate effectively in the market, pending full market opening in 2005. The CER decided to accelerate the review required by that policy direction so as to provide existing and potential market participants with an increased level of certainty required for investment purposes.
Accordingly, on 16 July 2003, the CER made the Electricity Regulation Act 1999 (Market Arrangements for Electricity) Regulations 2003 with my consent. These regulations establish the new system of trading in electricity, that is the mandatory centralised pool, and pave the way for the detailed rules and procedures necessary to give effect to the new market arrangements in a fully liberalised market. The question of a policy direction to the regulator does not arise at this stage.
The detailed design of the new market arrangements in regard to renewable energy generation, CHP and embedded generation in the new market arrangements, taking account of the specific characteristics of green energy, has been the subject of recent extensive public consultation by the CER. The CER's consultation paper highlights the issue as to whether renewables or CHP could be more effectively supported through a mechan ism outside the market arrangements, through preferential treatment or via special rules under the trading arrangements. The CER has indicated that it favours supporting renewable and CHP plants outside the trading arrangements to allow true market signals to be seen, minimise market distortion, minimise system and market operation costs to the final customer; and afford greater transparency.
Consideration is being given by the CER to comments, submissions and representations received by it on foot of that process. In tandem with this exercise, I will shortly publish a detailed consultation document on the promotion of renewable energy technologies into the next decade and beyond. This document will, among other things, concentrate on the market's view on future targets and future support mechanisms for renewable energy technologies. I will be setting out possible market support mechanisms and consulting the industry and the public on the best way forward.
The Minister may understand the issues in this regard but we are laughed at by the OECD league. Last week at a European investment bank conference, speaker after speaker raised Ireland's dismal record in providing renewable energy. It is one hundredth of the amount Germany produces, despite the fact that we have twice the amount of wind resources. It was embarrassing to have our failure shown so publicly in such a forum. Will the Minister give direction to the regulator, because he feels he gives direction to the Minister? The consultation document to which the Minister referred states that—
The Deputy may not quote during Question Time.
I will refer to the tone of what the regulator said in the document. He says he will take cognisance of the review which the Department is carrying out and will take the review of the grid code for winds and examine the outcomes of these processes. He proposes to examine the deliberations of the Minister and his Department to see if they are compliant with the market arrangements which he is setting. In other words, the regulator will tell the Minister how the renewable energy sector is to be developed.
The Deputy must ask a question.
Will the Minister make a clear submission to the regulator in regard to the consultation document? I do not agree that it was an extensive public consultation since there was only one month between its publication and the closing date. On such a complex issue, that does not allow the public or other bodies to make an input. Will the Minister make an input and clarify his position? Does he believe that wind or renew able energy should have full priority access because a choice is set out by the regulator? Does he believe that wind and other renewable generation sources should have to pay negative prices, if the market indicates they go in that direction? Should the wind or other renewables industry have to pay if they fail to meet their agreed supply conditions, given that it is difficult for them to predict, unlike gas-fired stations, whether the wind will blow exactly as they thought it would?
Rather than the Minister telling me he understands the industry, I want to know what he will do about it. One of the most important things to do in the area of renewables is to set the market arrangements to ensure that the renewable energy industry is developed. I do not believe the regulator has that as his main ambition.
There are just 30 seconds remaining for the Minister to answer.
Will the Minister give directions to the regulator rather than accept directions from him?
It is wrong of the Deputy to criticise the CER in regard to what he says is a lack of consultation. Since I became Minister, I have had numerous meetings with the CER and his team and I have told the committee, of which Deputy Ryan is a member, that the CER is looking forward to an invitation to come before it. As far as I am aware, the committee has not yet had the CER before it.
I have had that invitation on the committee's work programme for the past year.
I meet the CER on a regular basis and I assume the Oireachtas committee would do likewise, rather than the Deputy using the two minutes allowed for asking a question when he already knows the position.
The Minister should stop blustering and answer the question.
Under the terms of his appointment, the CER is obliged to take into account the possibilities of renewable energy. In all the discussions I have had with him in this regard, it is not a matter of giving him a policy direction. Rather, he already has that within his remit and is aware of the discussions and consultations which have taken place. He will also be made aware of the final detail of the policy document, which I will launch soon, in conjunction with Sustainable Energy Ireland.
Will the Minister direct the CER?
The Deputy is all talk and no action.
The Minister has no answers.
