Peadar Tóibín
Ceist:438 Deputy Peadar Tóibín asked the Minister for Communications, Energy and Natural Resources the potential savings that can be made through an all-island approach to energy provision. [36820/12]
Amharc ar fhreagraThursday, 19 July 2012
Ceisteanna (431)
Freagraí scríofa
All island energy cooperation is governed by the joint All-island Energy Market Development Framework, 2004, which recognised that both Governments have a shared interest in more competitive energy markets, reduced energy costs and improved reliability of supply. That framework reinforced the benefits of ensuring that policy developments in both jurisdictions are progressed to mutual interest by delivering improved economic and energy supply benefits for both parts of the island. The potential for cooperation was demonstrably realised in recent years by the establishment of the Single Electricity Market (SEM) and is reflected in the current work to develop the Common Arrangements for Gas (CAG).
The Single Electricity Market (SEM), established in 2007, represents one of the first markets of its kind in Europe, creating a single market for the trading of wholesale electricity on the island of Ireland and joining two hitherto separate electricity markets in two EU Member States. All electricity produced on the island is now sold into one large pool, while supply companies buy their power out of this pool. The market is specifically designed to ensure that the cheapest possible price for electricity is determined in the wholesale market at all times. Another key objective of the SEM is to attract new and efficient generators to the island of Ireland. Because prices have been set transparently, the SEM has created a sound basis for new entry and investment.
The SEM Committee is the statutory decision-making body which governs the Single Electricity market, including regulators from Ireland (the Commission for Energy Regulation) Northern Ireland (the Utility Regulator) as well as independent member. In its latest Annual Report, the SEM Committee states that the market has worked well over the last three years and continues to deliver benefits to consumers through the use of efficient generation plant to meet demand across the whole island. It states further that the SEM model of setting prices in a transparent and cost reflective manner not only assists in the promotion of competition and attract new investment, but has also resulted in improvements in the availability of generation plants.
The SEM pool system, and the surety for new entrant suppliers that they can purchase electricity from the pool when they need it, has been an important factor in encouraging entry into supply markets. This has improved customer choice and delivered competition which contributes to downward pressure on prices.
The ESRI in its review of Irish energy policy last year concluded that one of the key successes of Irish energy policy in recent years was the implementation of the Single Electricity Market on the island of Ireland. It concluded that the SEM had ensured a secure supply of electricity and provided sufficient certainty for investors to ensure adequate investment.
Building on the success of the SEM, the two regulators and the 2 Departments, North and South, are working together to develop Common Arrangements for Gas (CAG) on the island, whereby all players in the gas market can buy, sell, transport and contribute to the development and planning of the natural gas market North and South on an all-island basis. The future evolution of SEM and the establishment of CAG will be profoundly shaped by the emerging rules and arrangements for the regional EU energy markets as part of the EU ambition for completion of the Internal Energy Market.