1. Joint Oireachtas Committee Communications, Marine and Natural Resources IBEC Large Energy Users Delegation Wednesday, 2 nd November 2005

2. 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

3. Ireland V’s EU 2005 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.

4. Ireland v’s EU 15 Average Eurostat 31%

5. Gas Price – cost drivers  International Commodity Prices  Network Infrastructure Investment  Regulated Tariff Structures –complex structure, cost base, regulated tariff formula  25% increase 2005/6

6. Gas Price Trends Industrial Gas Prices, Jan 2005 (€ per GJ– 4186 GJ per annum with taxes and VAT) Eurostat

7. 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

8. 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

9. Medium/Long Term  2007-2013 NDP funding for Energy Infrastructure  Publication of a National Energy Policy

10. 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

11. 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

12. National Electricity Price Trends – CER Averages 9+3.5

13. Actual Price Increases Business sector20052006 CER Average12.5%8% Mining21.4%19.5% Plastics13.15%12.59% Chemical20.3%15.9% Building Materials18.4%15.4 Retail15.9%12%

14. Appendix Slides

15. Energy Intensity Industry Improvement in energy-efficiency expressed as % change in toe/ M€95 in the period 1990-2000.

16. Eco-Efficiency in the Industry Sector EPA, 2005