Mr Chairman, members of the Regional Committee, fellow guests, ladies and gentlemen, thank you for inviting me here to address you tonight.
I know that this is an important annual occasion in your diaries. It is an opportunity for all those engaged in the energy sector to come and share a meal together and consider all that has happened in the sector over the last year. I know you use it as an opportunity to renew friendships and acquaintances and you can rest assured that I don’t intend to keep you from that engagement with friends old and new for too long.
I note how the Institute has become invigorated. The merger sometime ago between the old Institute of Petroleum and the old Institute of Energy has created a strong professional body with critical mass, as a result, the Irish Region is really making its presence felt.
I extend a warm welcome to the incoming Regional Committee, under what I know will be the robust Chairmanship of Liam Connellan.
I would like to just highlight briefly some of the key developments from a Government perspective in terms of energy policy.
As you are aware, the Green Paper on energy policy was published just over one month ago. It sets out policy actions currently underway and policy options for the future, building a vision for how the energy sector in Ireland should look by 2020.
As you are aware, our energy policies is built on three pillars:
- Security of supply
- Environmental sustainability
- Competitiveness
These pillars interact and reinforce each other. Failure in one of these tests means we have failed in our energy challenge. Success in one leads to success in all. Any success depends on our collective willingness to lead. I want briefly to deal with each of these in turn.
In terms of security of supply, I believe that more integration and interconnection with other markets is crucial. For this reason the Government has decided to proceed with enhanced electricity interconnection with Northern Ireland and the development of a new electricity interconnector with Britain to be completed by 2012, and sooner if at all possible. Further interconnection, possibly with the European mainland will be underway or in place by 2020.
The All-Island Energy Market project is the logical first step towards creating a regional market between the island of Ireland and Britain. The Single Electricity Market will have the capacity to deliver the cost-efficiencies, transparency and investments needed to promote an efficient and secure electricity market.
Fuel diversity is another method of ensuring security of supply. By 2020, however, we will be using a much changed fuel mix in our electricity, transport and other sectors, especially because of our 30% renewables target.
Renewable energy brings me to the second pillar of energy policy, sustainability.
In 2020, I want Ireland to be the “Renewable Energy Island”. We have one of the richest potential renewable energy resources in Europe - wind, ocean and bio-energy. In 2020, the best commercial ocean energy technology should be Irish. Biofuels and biomass will play a major role by 2020, underpinned by an overall long term National BioEnergy Strategy, which will be published next month.
Through energy efficiency, each one of us individually, has the power to contribute to the 2020 vision. In this regard, you may have seen the Power of One campaign. The Green Paper sets a target of a 20% reduction in energy demand by 2020.
By cutting out waste, eliminating unnecessary use and investing in more efficient equipment we get more value from the same energy.
2020 will see a vibrant and active Irish energy research sector and more importantly, a significantly ramped up energy research capability.
Turning to competitiveness, we are all in agreement that the future continued success of the Irish economy can only be guaranteed if it is underpinned by sound energy policies going forward.
Therefore, we will want to see a stable and transparent market, regulatory and investment framework, well before 2020.
Such a framework will enable the energy sector to be competitive and to support national competitiveness, in a high growth economy and inclusive society.
Because high global energy costs are a fact of life and because we are price takers, our focus therefore must be on addressing domestically controllable costs.
The Deloitte Review of the Irish electricity market found that the size of the Irish market is a significant factor in our cost base. So is the dominance of ESB arising from its ownership of a large and diverse portfolio of plant and from its ability to set prices.
It states that without changing the current structure, we will continue to face difficulties in attracting new entrants to develop competition and choice for consumers. This is not in the interests of market players or consumers. Nor is it in the interests of the competitiveness of energy costs and the economy.
The electricity market needs more competition, more innovation and more choice for consumers. I firmly believe that structural reform is necessary in the interests of the market, of the consumer.
To help facilitate this goal the Green Paper suggests the creation of a ‘landbank’ of suitable sites, this option would see all suitable sites being effectively controlled by an independent body, such as CER or the TSO and being made available to new entrants to the market as necessary.
Finally, the retention of natural monopoly networks in State ownership is also a core policy tenet for the Government. This direction has been confirmed by the Government’s recent decision to have EirGrid, the fully-fledged legally independent TSO since 1st July 2006, own the East/West interconnector transmission asset, when it is built.
Let me summarize, then, my energy vision for 2020. Ireland will be an island at the heart of Europe in energy terms, delivering for consumers, the economy and for all our citizens.
I look forward to the Institute’s input into the Green Paper consultation and to ongoing positive interaction on matters of key common interest in the year to come.
We will be listening carefully to your views during the consultation period.
I would also like to acknowledge the fact that Assistant Secretary Martin Brennan was honoured by the President of the Institute this summer when he was conferred with the title of “Honorary Fellow of the Institute”. Well done Martin!
Ends