Plans for an all-Ireland energy market, which aim to bring down the cost of electricity for Northern Ireland consumers, have been unveiled by the North's economy minister, Mr Adam Ingram, following deregulation of the market.
The deregulation allows 240 larger customers in the North to buy electricity from generators, second-tier suppliers or from Northern Ireland Electricity (NIE), whose holding company, Viridian, is preparing to enter the market in the Republic through its project to build a £300 million combined cycle gas plant in Huntstown, Dublin. Mr Ingram launched an action plan which was published in response to the recommendations in the recent Department of Economic Development's Strategy 2010 report.
The plan envisages increased north/south electricity interconnection, and the extension of a natural gas pipeline from Northern Ireland into the Republic. "Electricity costs remain a major challenge which must be effectively tackled," Mr Ingram said.
The first phase of deregulation will occur in the Republic in February, and the gas markets are due to open in the North and the Republic in August.
The developments emphasised the need for an all-Ireland energy market, Mr Ingram added
"Though recognising clearly both the substantive nature of that challenge and the likely difficulties," he said, "we would like to see that progressed as a matter of urgency."
The action plan also envisages progressive market liberalisation and the establishment of a joint north/south environmental committee, Despite the efforts of the regulator Mr Douglas McIldoon, electricity prices in Northern Ireland remain well above the level in the rest of the UK, mainly because of the long-term contracts signed by NIE with the electricity generators when the stations were privatised.
"Tackling the generation contracts issue remains the regulator's most urgent challenge," Mr Ingram said. "The outcome of the current negotiations should soon be apparent. Meanwhile, government is prepared, subject to appropriate legal and financial appraisals, to use its £40 million support fund to buy out contracted capacity provided this can be done in a way which secures significant customer benefits."
Mr Ingram said that the action plan, entitled Vision 2010, provided a blueprint for the future.
"It sets in place the dynamics for change in the next century," he said, "through the development of an all-island market, increased liberalisation and competition, stronger regulation, and targets for energy efficiency and combined heat and power."
Mr David de Casseres, Viridian's commercial director, said the opening of the market was a turning point for the company and all competitors. In the long term, operators in the Republic would be able to sell in the North but there were two different systems in place with two different charge structures.
The ESB is already operating in the North through its shareholding in Coolkeragh, one of the four generating stations located there.
