Cheaper power ahead as Ireland joins EU market
ELECTRICITY prices are likely to fall when Ireland belatedly joins the European Unions' planned single market for electricity two years after other member states, the ESRI says in a report published today.
The EU will create a single electricity market for every country bar Ireland in 2014.
The Government here has asked for Ireland to be excluded until 2016 because providers here must make radical changes to the way electricity is traded to bring the domestic market in line with markets in Europe.
Ireland is likely to benefit more than most other countries when the single market is finally introduced, the Economic and Social Research Institute's Paul Gorecki says in the report. Ireland has some of the highest electricity prices in Europe and is particularly vulnerable to any rise in oil and gas prices because most of our energy is imported.
The single market should lead to more competition as suppliers from Great Britain and the rest of Europe will be able to enter the Irish market thanks to the construction of two interconnectors which link the island to Britain.
Interconnectors will lead to the "introduction of greater competition", the report says.
The ability to buy electricity from Europe will also increase the country's security of supply by giving Ireland access to a greater diversity of fuels such as hydro and nuclear power.
There will also be less need for maintaining expensive reserve capacity.
Mr Gorecki warned that there also dangers posed by a single market. Prices might rise as the country builds extra infrastructure to carry renewable energy which requires a different sort of network. Changes in UK energy policy could also have a big effect on policy here.