The review of this State's energy policy, which has been promised by the Government, cannot come soon enough for electricity consumers. It is six years since deregulation of the electricity market began and so far it has delivered negligible competition, higher prices and concern over supply at peak usage times. However, to say that deregulation has not delivered on its promises would not be completely accurate. That deregulation has not been allowed to work would be closer to the truth, and the continued dominance of the ESB, with 85 per cent of the market, has much to do with that.
Mr Dempsey, the Minister for Communications, Marine and Natural Resources, said that the review would examine the ESB's dominance and evaluate a range of options on the future of the State-owned company. Hopefully, the review will manifest a clear statement of policy for the energy sector. It will be the first such statement in nearly 20 years, a period in which the electricity market grew by more than 50 per cent.
Mr Dempsey says nothing has been ruled out. But some developments are unlikely. The electricity distribution and transmission systems are vital infrastructure and should not be sold off. Electricity-generation, however, is another matter. The ESB is happy to offload some of its less-efficient power stations but, to no great surprise, the private sector has shown little interest. It is the case that the private sector is getting involved in generation: Aughinish Alumina and Tynagh Energy are building stations, while the Northern Ireland-based company Viridian has potential to grow. But the resultant competition will still be ineffective unless and until the ESB sells off some of its more efficient plants.
The review will also have to take stock of the disappointing progress on alternative energy. The Government, in line with the Kyoto Agreement, has a target of 13.2 per cent of our energy coming from renewable sources by 2010. As things stand that target is not going to be reached. Meanwhile, Denmark already produces close to 20 per cent of its energy from wind power. This State generates 1 per cent from that source .
The electricity market is anti-competitive and anti-consumer. The European Commission regards the ESB as one of the most dominant generating companies in Europe and says that access to its network for would-be competitors is too expensive. The ESB's trade unions, understandably, will object to even part-privatisation, but it is unavoidable if the needs of domestic and business consumers, not to mention the EU's directives on liberalising the market, are to be met.