Transcript Presentation by IBEC Large Energy Users Delegation

Joint Oireachtas Committee
Communications, Marine and Natural Resources
IBEC Large Energy Users Delegation
Wednesday, 2nd November 2005
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
Ireland V’s EU 2005
Electricity Prices 2005
0.1
0.09
0.08
€ per KWh
0.07
0.06
0.05
0.04
0.03
0.02
0.01
Latvia
Bulgaria
Sweden
Estonia
Lithuania
Poland
Finland
Norway
France
Croatia
United Kingdom
Czech Republic
Slovenia
Austria
Greece
Denmark
Malta
EU (25 countries)
EU (15 countries)
Spain
Belgium
Hungary
Slovakia
Romania
Portugal
Luxembourg
Germany
Cyprus
Netherlands
Italy
Ireland
0
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.
Ireland v’s EU 15 Average
Electricity Cost: Ireland v's EU 15 Average
0.1
0.09
31%
0.08
€ per KWh
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0
1994
1995
1996
1997
1998
1999
2000
EU (15 countries)
2001
Ireland
2002
2003
2004
2005
Eurostat
Gas Price – cost drivers
 International Commodity Prices
 Network Infrastructure Investment
 Regulated Tariff Structures
– complex structure, cost base, regulated
tariff formula
 25% increase 2005/6
Gas Price Trends
Industrial Gas Prices, Jan 2005 (€ per GJ– 4186 GJ per annum with taxes and VAT)
Eurostat
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
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
Medium/Long Term
National Developmet Fund 2000-2006 € billions
Energy, 0.14
 2007-2013 NDP funding
for Energy Infrastructure
Education, 2.1
Social Housing, 7.8
Health, 2.5
Public Transport,
2.8
 Publication of a National
Energy Policy
Environment
Services, 3.8
National Roads, 5.9
Local
Infrastructure, 4.3
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
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
National Electricity Price Trends – CER Averages
9+3.5
16
14
12
10
% Increase 8
6
4
2
0
14.1
12.5
8
6
4.2
2001 Price 2002 Price 2003 Price
Increase
Increase
Increase
2004/5
Price
Increase
2006
Increase
Actual Price Increases
Business sector
2005
2006
CER Average
12.5%
8%
Mining
21.4%
19.5%
Plastics
13.15%
12.59%
Chemical
20.3%
15.9%
Building Materials
18.4%
15.4
Retail
15.9%
12%
Appendix Slides
Energy Intensity Industry
Energy Intensity % Change toe/M€95 1990-2000
% change
10
0
-10
-20
-30
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la
Ne
nd
th
er
la
nd
s
De
nm
ar
k
Au
st
Lu
ria
xe
m
bo
ur
g
Be
lg
iu
m
G
re
ec
e
Po
rtu
ga
l
-40
Improvement in energy-efficiency expressed as % change in toe/ M€95 in the period 1990-2000.
Eco-Efficiency in the Industry Sector
EPA, 2005