Dáil Éireann - Volume 639 - 11 October, 2007
Written Answers. - Electricity Generation.
Deputy Joe Costello Deputy Joe Costello
Deputy Joe Costello asked the Minister for Communications, Energy and Natural Resources if he will report on his policy to remove the transmission network from the ESB; if he will bring forward legislation to divest ownership of the ESB transmission network to Eirgrid; his proposed time-frame for carrying out this action; the way he will guarantee the objective of achieving lower prices for consumers through breaking up the ESB; his views on whether the splitting of the ESB is unnecessary for generating competition and that splitting the ESB will endanger the long-term energy security of the people here; and if he will make a statement on the matter. [23045/07]
Deputy Eamon Ryan Deputy Eamon Ryan
Deputy Eamon Ryan: The White Paper on Energy Policy and the Programme for Government endorse the case for a process of structural change in the electricity sector. The effective working of the all-island market, the competitiveness of energy costs, the interests of consumers and the economy require it. We need to create the conditions which will deliver more competition, real consumer choice and support greater innovation in the electricity market and the strategic development of the distribution and transmission networks.
The Government is committed to the transfer of the electricity transmission network assets from ESB to EirGrid establishing EirGrid Company by end 2008. EirGrid already manages the assets as a fully independent entity. Combining the ownership and operation of the transmission assets makes sense. It will ensure that the system operates transparently and effectively giving confidence to all market players. The present structure is complex and cumbersome and adds to costs. It creates additional overheads and transaction costs, duplication of skills and activities and the risk of blurred accountability. It also makes for more complex regulation.
The mechanisms to implement the transfer to EirGrid of ownership of the assets comprise a range of legislative, commercial, legal and finan cial dimensions. The detailed implementation process will involve my Department working with both ESB and EirGrid with the involvement, as necessary, by the CER.
I intend to bring the necessary legislation forward for Government approval over the coming months. The Bill will include provisions enabling EirGrid to own infrastructure and undertake any necessary borrowing. The legislation is also likely to include a range of amendments to existing electricity legislation to fully reflect the new arrangement. The advice of the Attorney General on the precise parameters of the legislation will determine the scoping of legislation.
In line with successive Partnership Agreements, there will be a full process of engagement with the Management and Unions of both ESB and EirGrid on implementation of the Government’s policy decision. The process will also include engagement on legitimate concerns of the ESB’s Employee Share Ownership Trust (ESOT).
The transfer of ownership of the transmission assets will be implemented in a way that ensures the future of both EirGrid and ESB as strong semi-State companies, as well as reflecting the position of the State and the ESOT as shareholders. There is no question of breaking up the ESB. The ESB Group will remain a strong, commercially viable and integrated entity after completion of this process. I have no doubt that the ESB has a vibrant future ahead. Given its prominence and central role in the Irish energy sector, ESB has a crucial contribution to make in the challenges ahead. It is equally the case that EirGrid, has a crucial national role to play in the new energy landscape.
Both ESB and EirGrid will be stronger and better placed strategically as a result of the Government’s actions.
We will have a healthier more transparent energy market which will reinforce the benefits of the Single Electricity Market and encourage investment. Transparency in relation to access to the Grid and Transmission assets will attract more players into the market and encourage competition. Competition on its own is not necessarily a panacea for lower energy prices but a more competitive and transparent environment will benefit the energy sector and Irish business and the consumer.
The Energy Policy White Paper and the Programme for Government contain a range of actions to deliver energy security of supply and a low carbon future for Ireland. ESB, EirGrid and Bord Gais Eireann together with all the players in the energy sector have crucial contributions to make in the collective challenge to address security of supply, competitiveness and climate change.
Dáil Éireann 639 Written Answers. Electricity Generation.