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Gas and Electricity Disconnections

Dáil Éireann Debate, Tuesday - 18 September 2012

Tuesday, 18 September 2012

Ceisteanna (945)

Dara Calleary

Ceist:

945. Deputy Dara Calleary asked the Minister for Communications; Energy and Natural Resources the measures he has implemented to improve competitiveness in relation to energy costs; and if he will make a statement on the matter. [37404/12]

Amharc ar fhreagra

Freagraí scríofa

I have no statutory function in the setting of energy prices, whether in the regulated or non-regulated parts of the market. Responsibility for the regulation of the electricity and gas market is a matter for the Commission for Energy Regulation (CER) which is an independent statutory body. Prices in the retail electricity market are now fully deregulated and since 1 October 2011 gas residential consumers are the only segment of the electricity and gas markets where prices are regulated. Prices in the electricity market and the unregulated segments of the gas market are wholly a commercial and operational matter for the suppliers. 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 business 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. At a national level, competitive markets in electricity and gas help put downward pressure on prices noting that global fossil fuel prices are a key determinant of Ireland’s gas and electricity costs. Energy suppliers compete with each other for market share by offering a variety of prices and products to consumers who may then choose the most advantageous offering.

Global gas and oil prices have risen sharply since the start of 2011 driven by events in the Middle East, North Africa and Japan and demand from the emerging economies of China and India. There are indications that international gas prices will rise further over the coming months. The deterioration in the Euro/Sterling exchange rate is also impacting on gas prices in the Eurozone. These trends are leading to higher domestic electricity and gas prices, as reflected by recent increases in domestic electricity prices announced by the suppliers competing in that market and by CER’s decision to allow an increase in BGE’s regulated gas tariff for the residential sector.

Given Ireland’s heavy reliance on imported gas and relatively small market size 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. While Ireland is a price taker for imported fossil fuels, focus must also be maintained on 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, including sustained focus on energy efficiency measures. The upward trend in energy prices reinforces the Government’s commitment to delivering national energy efficiency and renewable energy objectives which are aimed at moving the economy away from reliance on imported, carbon intensive fossil fuels. In particular, it is vital that SMEs as well as Large Energy Users engage with energy efficiency measures which deliver cost savings and support competitiveness and jobs. 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 Better Energy programme provides Exchequer supported incentives for energy efficiency and renewable energy upgrades, as well as bringing on board energy suppliers as partners to directly offer upgrade services to consumers. Delivery on these commitments will progressively reduce our dependence on imported fossil fuels, while supporting energy competitiveness and security as well as employment and economic activity.

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