(2004/C 78 E/0428)

WRITTEN QUESTION P-2460/03

by Patricia McKenna (Verts/ALE) to the Commission

(16 July 2003)

Subject:   Anti-competitive actions of the Irish State in the electricity market

The Irish State has announced the results of the latest AER support scheme for renewable energy. The main beneficiaries are subsidiaries of the national electricity utility ESB and their partner companies.

Given that the ESB is absolutely dominant in the Irish electricity market, with enormous resources at its disposal, does the Commission consider that permitting ESB subsidiaries to participate in the AER competition constitutes a distortion of the market? Does it further amount to a discrimination, given the fact that it can use the extensive resources it has accumulated under State ownership, with its State backing, to undercut independent producers?

Is the Commission willing to instruct the Irish State to halt the awards to ESB subsidiaries and partners while it investigates the foregoing questions in relation to this competition?

Answer given by Mr Monti on behalf of the Commission

(3 September 2003)

The Commission state aid decision regarding the rural electrification scheme (AER) (1) does not impose any requirement as to the nature of bidders. It is designed to increase the volume of electricity produced from renewable sources of energy in Ireland and there is nothing to prevent subsidiaries of the Electricity Supply Board (ESB) from participating in this increase provided that they satisfy the necessary conditions for bidding successfully.

The Commission takes the view that, as the majority shareholder in ESB, the Irish State is free to manage the company's capital as it sees fit, provided that it complies with the market-economy investor principle. In the case at issue, the Commission does not possess any information suggesting that ESB subsidiaries receive aid from their parent company in the form of, say, supplies at lower-than-market prices.

The Commission has no intention, therefore, of amending its above decision so as to exclude ESB subsidiaries from the AER scheme or of intervening in the awarding of contracts to ESB or its partners.

(1)  Commission decision in Case N 553/01, OJ C 45, 19.2.2002.