Why do large businesses in Northern Ireland pay nearly the highest energy prices in Europe?
According to the North's utility regulator, it could be a question of market size or economy-of-scale issues. But it is determined to find an answer to why energy costs could be making big businesses in Northern Ireland uncompetitive. The utility regulator is looking at just how competitive the local energy market is for industrial and commercial electricity customers in the North.
Across Europe there is a major debate about energy prices, and the Irish presidency of the Council of the European Union is helping to shape that debate. The EU wants to integrate all of Europe's national energy markets by 2014, and one of the key priorities during the Irish presidency is to help make this happen.
There has been a single electricity market (SEM) on the island of Ireland since 2007 when, in a pioneering move, a single wholesale electricity market was established.
Minister for Energy Pat Rabbitte firmly believes the success of the SEM highlights just how important further energy co-operation between North and South could be and how it could "unlock benefits for all customers".
Energy future
Speaking in Belfast at an energy conference organised by the Irish Business and Employers' Confederation and the Confederation of British Industry last week, Mr Rabbitte said co-operation on energy projects would help create a better energy future for consumers and businesses in the North and South. "There is no doubt but that our gradual movement towards enhanced energy market integration and co-operation in these islands over the last five years has had, and will continue to have, many benefits.
“A physical manifestation of benefit of cross-Border co-operation is shown by the east/west electricity interconnector. The interconnector is a strategically vital energy project for the island of Ireland, a hugely significant step in delivering electricity connectivity between Ireland and Britain and also a step towards lessening our isolation as an energy market,” the Minister said.
The energy conference in Belfast brought together key policymakers and lead players from energy regulation, generation and government.
Mr Rabbitte took the opportunity to warn them that while “considerable progress” had been made towards creating a “fully functioning internal energy market” across the EU, there were a few obstacles still remaining.
He urged government, regulators, the energy industry and the European Commission to “ramp up the pace of their work to ensure successful implementation of the internal market”.
Mr Rabbitte told his Belfast audience: “I believe in the potential of further market integration, learning from the success of the SEM and taking account of further energy co-operation across these islands, to unlock benefits for all customers through the completion of a truly competitive energy market across Europe.”
Business leaders North and South agree a more competitive energy market is vital to recovery. Ibec chief executive Danny McCoy said a new EU internal energy market could help equalise prices across borders which would deliver a boost for Irish exporters.
Local growth
CBI Northern Ireland president Ian Coulter said energy costs are impeding growth.
“In the longer term, improved integration and competition across energy markets in the EU could mean a better deal for local business users and domestic energy users.”
A fully functional internal energy market in Europe would offer “unprecedented opportunity for energy companies to become exporters to Britain and further afield”.
