Dáil Éireann díospóireacht -
Tuesday, 11 Nov 2003

Vol. 574 No. 1

Written Answers. - Electricity Generation.

Paul Nicholas Gogarty

Ceist:

190 Mr. Gogarty 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 maximum possible development of the renewable energy sector. [26344/03]

Minister for Communications, Marine and Natural Resources (Mr. D. Ahern):

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 and to require that the system operator gives priority to generation stations using renewable, sustainable or alternative energy sources when selecting generating stations.

Under section 9(1)(a) of the Electricity Regulation Act 1999, I, as Minister, am empowered to issue a policy direction to the CER on 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, with my consent, the Electricity Regulation Act 1999 (Market Arrangements for Electricity) Regulations 2003. 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 for 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 renewable energy generation and CHP could be more effectively supported through a mechanism outside the market arrangements, through preferential treatment or via special rules under the trading arrangements.

The CER has indicated that it favours supporting renewable energy generation and CHP plant outside of the trading arrangements in order 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 currently 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 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.