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Joint Oireachtas Committee

Joint Oireachtas Committee. Communications, Marine and Natural Resources IBEC Large Energy Users Delegation Wednesday, 2 nd November 2005. Since 2000………………. Rapid increase in international commodity prices Lack of Infrastructural Investment 25 year underinvestment legacy

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Joint Oireachtas Committee

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  1. Joint Oireachtas Committee Communications, Marine and Natural Resources IBEC Large Energy Users Delegation Wednesday, 2nd November 2005

  2. Since 2000………………. • Rapid increase in international commodity prices • Lack of Infrastructural Investment • 25 year underinvestment legacy • €3.5 billion currently being spent on electricity networks • Ad-hoc development of energy market • Absence of a national energy policy • Market Liberalisation

  3. Ireland V’s EU 2005 Eurostat This indicator presents electricity prices charged to final industrial consumers, which are defined as follows: annual consumption of 2 000 MWh, maximum demand of 500 kW and annual load of 4 000 hours. Prices are given in Euro (without taxes) per kWh corresponding to prices applicable on 1 January each year.

  4. Ireland v’s EU 15 Average 31% Eurostat

  5. Gas Price – cost drivers • International Commodity Prices • Network Infrastructure Investment • Regulated Tariff Structures • complex structure, cost base, regulated tariff formula • 25% increase 2005/6

  6. Gas Price Trends Industrial Gas Prices, Jan 2005 (€ per GJ– 4186 GJ per annum with taxes and VAT) Eurostat

  7. Business Impact - IBEC/Amarach Summary • IBEC/Amarach Energy Survey • 75% feel they are at a competitive disadvantage because of energy costs • Only 3% of respondents passed on increased costs to their consumers *value of product leaving factory now 5% less than 3 years ago (CSO) • 97% absorbed all or part of costs • 24% of respondents are considering re-locating business • 30,000 manufacturing jobs lost in the past 3 year, 500 currently being lost a month

  8. Short-Term Solutions • Continued deferral of ESB Revenue (€89 million) until commodity prices ease • Investment of dividend paid to Government (€ 184 million, 2002-2005) • Greater flexibility in tariffs

  9. Medium/Long Term • 2007-2013 NDP funding for Energy Infrastructure • Publication of a National Energy Policy

  10. Medium/Long-Term • All-Ireland Energy Market • Bring scale to the market • Stricter scrutiny of regulated market • Liberalisation model?? • Maximise efficiency of market players • Security of Supply • Improved Incentives • Supporting initiatives e.g. SEI

  11. Summary • Rapid changes with significant negative business impacts • Industry has responded – increased efficiency, decoupling of intensity and GDP • Need a regime that will balance competitive needs of all energy stakeholders

  12. National Electricity Price Trends – CER Averages 9+3.5

  13. Actual Price Increases

  14. Appendix Slides

  15. Energy Intensity Industry Improvement in energy-efficiency expressed as % change in toe/ M€95 in the period 1990-2000.

  16. Eco-Efficiency in the Industry Sector EPA, 2005

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