ESRI: Single EU electricity market should lower prices for consumers

THE eventual creation of a single electricity market for the entire EU should result in lower electricity prices for Irish consumers.

That is according to economic think-tank, the ESRI, which today issues a 130-page report into the implications for Ireland of a single market.

Speaking yesterday, thereport’s author, Paul Gorecki, said: “The creation of a single EU-wide electricity market offers significant benefits for Ireland. Competition will be keener, as suppliers from Britain and beyond will be able to enter the Irish market. This should spur efficiency and increase consumer choice.

“Security of supply will increase through access to a greater diversity of fuels — hydro-power from northern Europe and nuclear power from Britain and France. There will be less need for maintaining expensive reserve capacity to insure against supply interruption.”

A single EU electricity market has been in the planning stages for the past decade and 2014 marks the deadline for various codes, guidelines and legislation to be in place. However, the fact that very few interconnectors exist in Ireland and Britain means that countries like ours face a long wait to begin seriously trading within an all-encompassing marketplace. Ireland now has up to 2016 to meet legislation requirements to meet EU market standards.

The report agrees with a previous ESRI study, authored by John FitzGerald, which warned the single market could result in higher costs for Irish consumers, if certain targets aren’t met.

The latest paper suggests the benefits for consumers here will only come about assuming three points:

*No major failure in British energy policy occurring, that increases electricity prices which can’t be offset by increasing interconnection between Britain and France.

*Interconnectors not exporting more renewable electricity over the required amount to meet the 40% renewable energy target.

*Ireland implementing EU legislation without prompting costly changes to the existing all-island electricity market arrangements here.