Domestic market still dominated by state-owned ESB

Ireland has invited bids for a review of the national electricity sector, currently dominated by the state-owned Electricity Supply Board (ESB), in a pre-cursor to a more open power market. The move follows the recent opening of the supply market, criticised as little more than a gesture given the strength of ESB. Competition authorities have recommended splitting the group into generation, distribution and transmission sectors and the new review will investigate existing institutional arrangements and market structures before clear recommendations are made. ESB is moving towards reducing its stake in the generation sector to 60% from the current 80% by the end of the year, while the transmission grid has been separated from the larger group. Previously, 33% of the supply market was open to competition covering the 400 biggest customers following a 2000 government ruling. As part of the liberalisation programme, the Irish Commission for Energy Regulation (CER) is having its remit extended to protect customers in their dealings with suppliers in the competitive market but the majority of domestic customers will almost certainly stay with ESB for the time being.

Most competing supply companies, apart from Airtricty, are not even offering a service to domestic customers, given that prospective market entrants would almost certainly be constrained to buy from existing ESB plants. However, Northern Ireland’s Viridian is investing in new generation capacity south of the border and gas player Bord Gáis has expressed an interest in entering the power market as prices rise, though not in the short-term.

Wholesale privatisation of ESB has, so far, been ruled out, but Ireland is still in line with EU directives, which demand full competition in gas and power by 2007.