Energy market ‘too small’ for competition

IRELAND’S energy market is too small to support the kind of competition that results in cheaper prices, according to a Government green paper on energy.

The discussion document, to be published next month, is expected to call for more interconnectors between Ireland and Europe to strengthen the country’s ability to buy cheaperenergy.

It argues that the lack of connections to European electricity grids is hampering Ireland’s ability to take renewable energy and lessen the reliance on fossil fuels.

The Government has set a new target of 30% of the country’s fuel needs being supplied by renewable energy within 14 years.

It is likely that grant aids will be introduced in the December budget to boost the take-up of alternative energy by consumers.

The paper, however, argues that breaking up the ESB would damage its prospects for competing in a larger regional market.

It also points out that the break-up of the ESB would reduce the value of the State asset as well as reducing its capacity to borrow and buy fuel cheaply.

It was disclosed at the weekend that the document is likely to suggest that the ESB should dispose of 1,100 megawatts of energy toreduce its dominance in the wholesale electricity market.

Such a reduction isbelieved to be the equivalent of three of the ESB’s six ‘mid-merit’ stations,although the paper does not identify those stations that should be decommissioned.

The ESB has already planned to dispose of its 620 megawatt plant at Tarbert, Co Kerry, which employs 200 staff.

It is expected that the independent sector will be encouraged to build new ‘mid-merit’ plants.

An ESB spokesperson said the company would not be commenting on a document it had not seen.

An official of the Department of Communications, Marine and Natural Resources, said the green paper would be published on October 1 and the department would not be commenting on the document in advance of the launch date.

Meanwhile, Energy Minister Noel Dempsey is under pressure to act over spiralling gas bills after an Irish Examiner investigation revealed that prices in Ireland are almost double those in Britain.