Tuesday, 10 February 2004

Ceisteanna (219)

Conor Lenihan

Ceist:

295 Mr. C. Lenihan asked the Minister for Communications, Marine and Natural Resources the plans he has to open up the power supply sector to competition; and the timescale he envisages for the opening of competition in this area. [3889/04]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Communications, Marine and Natural Resources)

In the context of the liberalisation of the Irish electricity market, the supply sector is defined as that part of the market concerned with the sale of electricity to customers purchasing it for their own use. Liberalisation of the electricity market is well under way and is proceeding on a phased basis under the regulatory oversight of the Commission for Energy Regulation, CER. As provided for in the Electricity Regulation Act 1999 — No. 23 of 1999 — any party can apply to the CER, for the necessary authorisations to build new plant, a licence to generate and — or a licence to supply. Details of the authorisations and licences issued to date by the CER can be found on its website atwww.cer.ie.

The first phase of liberalisation was introduced with effect from 19 February 2000 by virtue of the Electricity Regulation Act 1999, in accordance with the EU Electricity Directive 96/92/EC, concerning common rules for the internal market in electricity, which was in force at that time. Ireland exceeded the requirements of that directive by opening 31% of the market, whereby 400 or so of the largest electricity customers became eligible to source their electricity from licensed electricity suppliers other than the ESB. In addition, all customers became free to purchase electricity from any green or combined heat and power, CHP, licensed supplier from February 2000 and April 2001 respectively.

The second tranche of electricity market opening took place on 19 February 2002 when 40% of the electricity supply market, representing some 1,600 customers all large businesses and many medium-sized businesses, became free to shop around for keener prices in the competitive market. The third increment of market opening will take place within the next fortnight.

On 19 February next, the current level of electricity market opening will increase from 40% to 56% by virtue of the Electricity Regulation Act 1999 (Eligible Customer) (Consumption of Electricity) Order 2003 — SI No. 632 of 2003. This further step of market opening will allow an additional 12,000 or so industrial and commercial customers, whose annual consumption is greater than 1 giga watt hour, to source their electricity from independent electricity suppliers. It will result in a seven-fold increase in the target customer base for independent players in the market. The Electricity Regulation Act 1999 (Eligible Customer) (Consumption of Electricity) Order 2003 also provides for the full liberalisation of the electricity market in one year. On 19 February 2005, every customer will be eligible to source their electricity from any supplier licensed by the CER. This date is well in advance on the July 2007 deadline for full liberalisation of electricity markets set down in the recently adopted EU Electricity Directive 2003/54/EC.