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Energy Prices

Dáil Éireann Debate, Wednesday - 2 May 2012

Wednesday, 2 May 2012

Ceisteanna (87, 88)

Bernard J. Durkan

Ceist:

90 Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the extent to which he is liaising with Bord Gáis and the ESB with a view to ensuring that gas and electricity prices here in both industry and the domestic market are comparable to other EU states; and if he will make a statement on the matter. [22193/12]

Amharc ar fhreagra

Bernard J. Durkan

Ceist:

91 Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the action, if any, he can take to persuade the gas and electricity authorities to keep prices at the lowest possible level in order to assist economic recovery and alleviate the burden on the domestic market; and if he will make a statement on the matter. [22194/12]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 90 and 91 together.

I do not have a statutory function in the setting of energy prices, whether in the regulated or unregulated market. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. Prices in the retail business and residential electricity markets are now fully deregulated. From 1 October 2011 gas residential consumers supplied by Bord Gáis Energy are the only segment of the electricity and gas markets where prices are still regulated by the CER. Prices in the electricity and gas markets, with the exception of residential gas customers supplied by Bord Gáis Energy, are wholly a commercial and operational matter for the suppliers concerned. Ireland's electricity and gas markets, both wholesale and retail, are characterised by vigorous competition regulated by the CER.

The Government recognises that the cost of energy in Ireland is a serious competitiveness issue facing energy consumers during this difficult period for the economy. The provision of secure, sustainable and competitive energy supplies is critical for the economy and is a challenge we are determined to meet. Global gas and oil prices have risen sharply since the start of 2011, driven by events in North Africa, Japan and the Middle East and by high demand from the emerging economies of China and India. These trends are leading to higher domestic electricity and gas prices. Given Ireland's heavy reliance on imported gas and oil and relatively small market size, it is a price taker in the global fossil fuel market. The economy is therefore vulnerable to fossil fuel price fluctuations and price rises. Competitor countries are in many instances facing the same prospect and the objective in the context of higher global prices must be that we retain or improve our competitive position.

Ireland's concerns about high oil and gas prices are shared at EU level and by fellow Member Countries of the International Energy Agency (IEA). The EU and IEA agree that high fossil fuel prices which pose a threat to economic recovery underline the need to reduce dependence on fossil fuels by radically enhanced energy efficiency measures and the development of renewable energy.

At a national level, our competitive energy market helps put downward pressure on prices. Energy suppliers compete with each other for market share by offering a variety of prices and products to consumer who may then choose the most advantageous offering. In addition, we must focus on all possible additional actions to mitigate costs where possible for business and domestic customers. This is essential for competitiveness, employment and for economic recovery. I am committed to working with enterprise and with the energy sector to ensure that the costs of energy are as competitive as possible through those measures at our disposal including sustained focus on energy efficiency and renewables. I would urge all businesses to engage with the Sustainable Energy Authority of Ireland (SEAI) to access the Authority's energy efficiency support programmes.

The latest analysis of data published by EUROSTAT for electricity and gas prices is published by the SEAI and covers the period January to June 2011. The figures show Irish electricity and gas prices performing well by reference to the EU average for medium to large business customers (above 2,000 MWh/annum). The VAT-exclusive electricity price in Ireland for these business consumers ranged from 10% to 17% below the EU average and from 13% to 19% below the eurozone average. These customers accounted for 48% of the business electricity market. Prices for gas customers were below the EU average by 4% to 25% for most business gas categories. The EUROSTAT figures also show that larger domestic electricity consumers, representing 64% of the domestic electricity market (over 5,000 kWh/annum), experienced price reductions between 6.1% and 7.6% over the period. The prices for these consumers were between 7% and 19% below the EU average.

The same source shows that in the first half of 2011 natural gas prices for household consumers fell by 3.3%. The EU average for gas price reductions for the same period was 1.4%. For this period the price of gas for Irish householders was 10% below the EU average.

Questions Nos. 92 and 93 answered with Question No. 29.
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