Statement by TUV leader Jim Allister:
“Back in April 2012 I met senior management at Michelin. After the meeting I stated:
“One issue on which Michelin in Northern Ireland is facing extra pressure is our higher and extortionate energy prices. Michelin demonstrated in its meeting with MLAs that in contrast to its GB plants, energy costs for its Ballymena operation are up to 50% higher. This is intolerable and is contributed to by the wrong-headed energy policy being pursued by the Stormont Executive. The facts are indisputable: since the Executive committed us to the all-island Single Electricity Market our prices have diverged from the lower GB prices to align more with the higher ROI prices. Why? Because in large measure we are subsidising the Republic’s highly inefficiently and costly generation and transmission systems.
“Competitive energy prices are imperative for a high consumption operator like Michelin. Thus, every penny in difference in the unit price of electricity makes a huge difference.
“These higher electricity prices are placing Michelin at Ballymena at a disadvantage in its internal competition with other Michelin plants and external competition with other tyre producing companies.
“I commend Michelin, which has been a lynchpin of the local economy for 42 years, for its commitment to North Antrim and look forward to it continuing to provide vital and worthwhile employment.
“But DETI and the Utility Regulator must help by facing up to the present regime of unbearable energy prices.”
“The high price of electricity in Northern Ireland is an issue I have repeatedly raised in the Assembly as can be demonstrated from the record. Sadly DETI has failed to listen and is instead focused on chasing the moonbeam of corporation tax devolution. If Stormont dealt with the powers it already had and took genuine steps to assist business it would be much more meaningful.”
Note to editors
See a report on Jim Allister’s comments in April 2012 here.
Among the questions Mr Allister has asked about the cost of electricity are the following:
AQW 1305/11-1
27/06/2011
Question: To ask the Minister of Enterprise, Trade and Investment (i) for her assessment of whether there was a trend of convergence in domestic prices between Northern Ireland and Great Britain prior to the introduction of the single electricity market on the island of Ireland; (ii) whether the single electricity market divergence has been to the detriment of Northern Ireland customers; and (iii) to detail local electricity prices compared to Great Britain and the Republic of Ireland in each of the last ten years. Answer:
Electricity prices in Northern Ireland have always tended to be higher than those in Great Britain. After many years of significant difference, there was a trend towards convergence in the period immediately prior to the introduction of the Single Electricity Market (SEM). However, in the post-SEM period, there has been a divergence once again. In comparing electricity prices between Northern Ireland and Great Britain it is necessary to take into account the different nature and size of the respective markets along with the different operating costs involved.
The Single Electricity Market (SEM) continues to run the cheapest generators available to meet demand across the whole island, hence minimising overall electricity costs and affording protection to consumers. An independent cost benefit analysis has estimated a net benefit of £45million for Northern Ireland from the SEM, most of which will benefit consumers. The SEM has also delivered greater security of supply for Northern Ireland, and has encouraged new investment in efficient generation on the island. Additionally, the Utility Regulator has been able to cancel unfavourable legacy generation contracts in Northern Ireland, and it is estimated that this will save consumers in excess of £80million over the next 5 years alone. The SEM has also provided greater transparency and therefore encouraged increased electricity supply competition, evidenced by Airtricity entering the retail domestic electricity market in Northern Ireland in June 2010.
In almost all of the last 10 years, domestic electricity prices in Northern Ireland have been higher than domestic electricity prices in Great Britain. Between 2004 and 2007 electricity prices in Northern Ireland were higher than in the Irish Republic. However since 2008, domestic electricity prices have generally been lower in Northern Ireland than in the Republic.
My Department will continue to work with the Utility Regulator and the energy industry to support initiatives aimed at putting downward pressure on retail electricity costs, which along with new electricity interconnection between Northern Ireland and the Irish Republic, and between Great Britain and the Republic, should see greater convergence between electricity prices as, in line with EU policy, greater market integration takes place.
AQW 1905/11-15
13/09/2011
Question: To ask the Minister of Enterprise, Trade and Investment if she is content that although the regulator in Great Britain, OFGEM, is investigating its electricity market, the regulator in Northern Ireland is taking no such action despite electricity costs here being significantly higher. Answer:
The electricity supply markets in Northern Ireland and Great Britain are significantly different, with the domestic and small business supply market in Great Britain having more suppliers and having been open to competition for much longer.
However, the historic dominance of Power NI (formerly NIE Energy) within the domestic and small business electricity supply market in Northern Ireland means the Utility Regulator retains a role in the rigorous scrutiny of Power NI’s electricity tariffs, with the Regulator only permitting efficiently incurred costs to be passed on to customers along with tight control of permitted profits levels.
The Regulator monitors the operation of Northern Ireland’s energy markets closely and will act to protect consumer interests, as it did in 2010 when it conducted an investigation into business electricity tariffs.
AQW 7004/11-15
24/01/2012
Question: To ask the Minister of Enterprise, Trade and Investment whether she expects that Northern Ireland electricity companies will follow the lead of companies on the mainland in reducing consumer prices in response to falling fuel costs. Answer:
I understand that the Utility Regulator monitors wholesale and retail energy prices on an ongoing basis and is keeping the matter under review. If wholesale energy costs continue to fall, this will be reflected in the electricity bills of Northern Ireland consumers in due course.
AQW 8513/11-15
20/02/2012
Question: To ask the Minister of Enterprise, Trade and Investment what is the estimated addition to the price of (i) electricity; and (ii) gas per kilowatt hour resulting from green taxes or policies. Answer:
Responsibility for green policies is spread across a number of Departments given their different remits. Green taxes are a reserved matter and therefore the impact is assessed at a UK level by HMT. This answer is therefore limited to those policies impacting on DETI policy areas. Information is only available as additional cost per bill.
Currently, the Northern Ireland Renewable Obligation is the main mechanism for incentivising renewable electricity generation. It places an obligation of financing the policy on energy companies which is then passed onto the consumer through energy bills and currently represents approximately £12 to £15 on an average annual domestic electricity bill. It does not impact on gas bills. Other policies such as the Northern Ireland Sustainable Energy Programme (due to end in 2013) and the NFFO/ROF add a further £11 to a bill.
Going forward, the Strategic Energy Framework estimates that the combined cost of renewable electricity installations, together with the cost of the grid investment necessary to meet the 40% target could be between £49 and £83 per household on an annual basis by 2020 at current prices. In addition, proposals for Electricity Market Reform (EMR), including the Carbon Price Floor, will also bring additional costs to consumers. The full impact of these policies is still being assessed.
AQW 21803/11-15
15/04/2013
Question: To ask the Minister of Enterprise, Trade and Investment, following the research by the Utility Regulator confirming that electricity costs for large businesses in Northern Ireland are among the highest in the EU, whether this is a consequence of competition not working in the Single Electricity Market, lack of investment in new efficient power stations and a lack of linkage between the Great Britain and Northern Ireland markets. Answer:
The paper produced by the Northern Ireland Authority for Utility Regulation (NIAUR) is intended to provide transparency on electricity prices for interested parties and to begin a process of constructive debate amongst stakeholders on energy policy and regulation. At this stage it does not provide specific reasons for price patterns and further analysis will be required to better understand the matters introduced in the paper. I believe that further analysis must be prioritised and have written to the Chief Executive of NIAUR to make this point. I would encourage all parties with an interest in this Paper to provide their feedback to the Regulator on the matters raised.
AQW 24736/11-15
26/06/2013
Question: To ask the Minister of Enterprise, Trade and Investment, in relation to protecting the interests of electricity consumers, to detail the information held on the comparative increases in electricity prices by Northern Ireland Electricity and those imposed in the Republic of Ireland, in the last five years. Answer:
My Department does not routinely collect or hold information of this nature.
AQW 26475/11-15
30/09/2013
Question: To ask the Minister of Enterprise, Trade and Investment to outline the reasons for the eighteen percent price rise for electricity consumers in Northern Ireland, but not in the Republic of Ireland, despite both being a part of the same electricity market. Answer:
The Regulator has advised that whilst Power NI, the regulated electricity supplier in Northern Ireland, does purchase wholesale energy from the same pool market as suppliers in the Republic of Ireland, the network and supply and tax elements of the final price paid by customers will be different. These non-wholesale elements make up around 45% of the final price.
The Regulator has further advised that despite the recent 17.8% increase, the Power NI standard tariff is today still cheaper than the Electric Ireland standard tariff. Electric Ireland is the main supplier in the Republic of Ireland.
AQW 30424/11-15
31/01/2014
Question: To ask the Minister of Enterprise, Trade and Investment what assurances she can give that the decision by Eirgrid to launch a compensation scheme for householders living close to new pylons will not be funded directly, indirectly or partly by any increase in charges to electricity consumers in Northern Ireland. Answer:
The Community Gain Fund announced by Eirgrid will be funded through network charges paid by customers in the Republic of Ireland. It will not be funded by any increase in charges to electricity consumers in Northern Ireland.
AQW 38791/11-15
14/11/2014
Question: To ask the Minister of Enterprise, Trade and Investment, pursuant to AQW 37669/11-15, and her statement to the effect that the additional cost would be of the order of £5 per annum to domestic consumers, (i) what is the estimated cost for commercial consumers; (ii) whether the projected additional costs relate only to the cost of upgrading the generators or also include any associated network upgrades; and (iii) if not, how will such upgrades be funded. Answer:
The impact on commercial consumers of the SONI contract with AES Corporation for an additional 250 megawatts generation capacity from January 2016 will depend on their electricity usage. The contract involves upgrading two existing Ballylumford B station generating units. The requirement for any electricity network improvements is being assessed. Any additional cost to consumers for network upgrading, if required, should not materially change the cost estimate already stated.