Ofreg outlines electricity competition

Ofreg chief Douglas McIldoon has today published a paper outlining the next steps in relation to increasing competition in Northern Ireland’s electricity market.

In the paper the electricity regulator said that in a period of increasing costs for the business community it is "essential" that further steps are taken immediately to drive down electricity costs. As a result of this, the imminent arrival of more efficient generation capacity this is the right time to press ahead with generation competition.

Mr McIldoon said: “Care must be taken to design a liberalised market that not only works to put pressure on prices but also integrates the public policy objectives of reducing greenhouse gas emissions and fuel poverty. As well as freeing energy producers, suppliers and customers to trade more freely, customers must be informed and empowered so that the market works for them.

“It is particularly important that we ensure that the liberalised market does not increase pollution. Therefore it must be ‘Combined Heat and Power’ and renewable-friendly and not exclusively fossil fuel focussed.

“We must also seek to reduce the cost of electricity generation by ensuring that all generators are able to fully tap their potential.”

The paper stresses that an island-wide electricity market will only be in the interests of customers here if it produces, on a long-term basis, even lower cost, cleaner energy than Northern Ireland can produce on its own. Ofreg said it would be exploring this area fully with its counterparts in the Republic of Ireland over the next two years as the proposals contained in today’s paper are implemented.

Welcoming the document Northern Ireland Electricity (NIE) Communications Manager Robin Greer said: “If efficiently implemented, an competitive all-island market will bring competitive prices to customers. It will also provide the electricity industry with the opportunity to invest in the new and efficient generating capacity that will be required to meet the ongoing growth in electricity demand that accompanies growth in the economy.”

Mr Greer added: “Without real competition at the wholesale level, it will be a difficult task getting reductions in generation costs.”

NIE has business interests in selling “green” electricity and said that it would support an expansion of renewable generation capacity, but stressed that a "realistic approach" must be taken.

Energia, the first independent electricity supplier in Ireland, also welcomed the proposals.

Dr Allister McQuoid, managing director of Energia, said Ofreg’s view that an island-wide electricity market will only be in the interests of customers here if it produces, on a long-term basis, even lower cost, cleaner energy than Northern Ireland can produce on its own in line with Energia’s long-term generation strategy.

Energia already supplies 3,500 businesses throughout Ireland. Three thousand of these have opted for Energia’s renewable electricity which will be supplied exclusively by wind farms in Northern Ireland.

(MB)