The graph begins at midnight and continues until midnight the following day, reflecting the half-hour prices over the day. In general, when there is lot of wind in the system, prices are lower. On the two days in question system demand was very similar. It would be unfair to choose very different days. The difference between the high case and the low case in fossil fuels amounted to a figure between £46,000 and £63,000 in savings, demonstrating that wind can bring down prices in the energy market.
The next slide looks at the cost components of the energy bill, which is very important for us to get across. People think that it is made up entirely of high energy prices and obviously that is something we need to do something about. However, only 55% of a domestic customer's energy bill is made up of generation and supply. Effectively, our control will cost only 55%. The rest of the bill is made up of distribution and transmission charges, SEM charges and VAT. Therefore, our control costs are very low. To be fair, if one considers what influence we have on world energy prices, our control is very small.
There is much debate on electricity pricing and cost competitiveness but to put it simply, for almost ten years Airtricity has been delivering consistent savings to energy customers in Ireland. Information on our price movements for small business customers in Ireland over the past ten years shows a consistent approximate saving of 10%. We have been in the domestic market since March so we do not have a slide showing information on it. Since March, we have been offering customers a 13% discount which is being maintained.
Competition can help deliver customer cost savings. However, we need to address a number of issues. Cost transparency is crucial. "K factors" are correction factors which compensate for price forecasting errors. The ESB should be made to bear the same risk as us. At present, it does not do so. If it makes an error in its forecasting or price fluctuations occur it is passed on to customers the following year. We do not have that luxury. We do not have a level playing field in the cost of entry and the cost to acquire customers. The ESB and Bord Gáis did not have to pay any money to acquire their customers but we do. Our IT system set-up costs alone were millions of euro.
With regard to marketing, we do not have brand strength to the extent that Bord Gáis and the ESB do. We do not have vans with "ESB Networks" or "BG Networks" on them. These promote their unregulated businesses through their regulated businesses. Ease of switching is also an issue. Believe it or not, our marketing costs should be spent on telling customers how wonderful we are and how much money we can save them. Unfortunately, some of our marketing budget must be spent on telling customers that it is easy to switch, that their meters will remain the same, that there will be no power cuts and that all they will see is a cost saving on their bills. Part of our hard-earned marketing budget must go on a switching campaign, a type of campaign which the ESB and Bord Gáis do not have to run.
The ESB and Bord Gáis have vast databases against which they can leverage but we do not. Issues of cross-subsidisation arise between regulated and non-regulated businesses. They use the same billing systems and sales force and have the same customer bases and collections. We do not have that luxury and it is not a level playing field.
The single electricity market, SEM, and the British market are different. I could explain the differences but I will not do so at present. Because they are different, hedging is difficult. The market with which we do most trade in Ireland is the British market. The fact that the Irish and British markets are different makes hedging difficult and when hedging is difficult, it makes it difficult to make cost savings that can be passed on to our customers.
There is no control or competition on metering. I acknowledge that the ESB's performance in metering has improved recently. However, if it does not read our customers' meters, they suffer and we pay. If the ESB has not read our customers' meters, they receive an estimated meter reading. The customers then phone our customer service staff — who represent a cost to us — and are told by them to read the meter. The customers read the meter and send us a reading. We then bill the customer again — at an administration cost — and recoup the money from the customer from an accurate bill, which has cashflow implications. The point I am trying to make is that there is no competition in that market space and competition is required.
Cost transparency is crucial and we must have a level playing field. Competition in regulated assets will bring down costs. We have vast experience and the purpose of an earlier part of my presentation, when I described how we were second and third in various matters, was to show our great experience in these markets. We should be using this experience for the benefit of Ireland. At present, we trade with the British market. We believe a single Ireland British traded market is the way to go, is the logical route to the European market and underpins the market for renewables. We should be expanding renewable generation with more wind, wave and tidal energy. We have these in Ireland and we should be using them and exploiting our natural resources. We should be trading with Britain and helping everybody to lower the cost of carbon reduction.
To sum up, what we are stating is that competition means customer cost savings and, more to the point, that we believe Airtricity is the real competition. I thank the committee.