The electricity markets in Northern Ireland and the Republic must be harmonised if consumers are to reap the benefits of a fully liberalised all-Ireland market, ESB chief executive Pádraig McManus said yesterday.
Speaking at the Energy Ireland conference in Dublin, Mr McManus said that an all-island market would deliver greater customer choice, improve quality of supply and enhance economic development.
It could also reduce annual costs by as much as €70 million, resulting in a 4 per cent decline in electricity prices for consumers, he said, citing ESB research.
"An all-island market is one opportunity to increase scale economies," Mr McManus told delegates gathered at the two-day conference. A regional market between Ireland and Britain, something he thinks is likely after 2010, would provide even greater benefits, he said.
"The inescapable reality is that the electricity supply industry across all of Europe is changing rapidly, driven by regulatory and commercial pressures, hence the question of a regional market of GB and Ireland is not a question of "if" but rather a question of "when."
However, in his opinion, much remains to be done before an all-island market can thrive.
While the electricity market in the Republic was opened up ahead of schedule, the North still remains too closed, and without significant changes will not achieve full market opening in 2007, he told delegates.
He urged the regulators, in both the North and the Republic, to address the "substantial barriers" to competition in the North, where customers must pay £295 (€439) to switch from the incumbent Viridian's PES business to a competing supplier.
"Equivalent regulation north and south is important if a true all-island market is to be realised," he said, adding that the regulator must also address what he calls a "huge differential" between prices.
The importance of co-operation between the two markets was also emphasised by Angela Smith, the North's new energy minister, who yesterday met Noel Dempsey, the Republic's Minister for Communications, Marine and Natural Resources, for the first time. Together they reaffirmed their commitment to an all-island energy market and the importance of a single electricity market.
"We need to consider how we can best deliver sustainability in energy supplies, not just by exploiting the opportunities for locally based research and innovation in alternative energy sources, but also by exploiting the opportunities at an all-island level," Ms Smith said in a presentation to conference delegates.
Moving on from the electricity market, Mr Dempsey told delegates that with the current state of high oil and gas prices it was time to switch the focus to alternative sources of energy.
Mr Dempsey announced plans to take proposals to Government next week for a fixed price support scheme aimed at boosting the use of renewable energy.
He said that while some renewable technologies are becoming more competitive, they are still not able to compete with fossil fuels. The scheme, he hopes, will act as an incentive to build more capacity.
Use of renewable energy has increased considerably over the past few years, and Ireland now has more than 660 megawatts of renewable energy connected to its system. However, that figure needs to double if the country is to meet its target of having 13.2 per cent of energy generated from renewable technologies by 2010.
"It is incumbent on this generation to make continued improvements and changes to the way we produce and consume our energy," he said.
