Brussels highlights dominance of ESB

The European Commission has highlighted the dominance of the ESB in the Irish energy market and the high costs of using the electricity network in the Republic.

A Commission report on the internal market for gas and electricity notes the Republic's progress in opening up the market for business customers but also finds the ESB to be one of the most dominant generating companies in Europe.

The report is likely to trigger further debate over the role and position of the ESB in the market.

At the weekend the Minister for Communications, Marine and Natural Resources, Mr Dempsey, said he would initiate a review into the energy market this year, including the future of the ESB.

Last night Mr Joe Le Cumbre, a Technical, Electrical and Engineering Union official and deputy chairman of ESB, described this as an "unfortunate intervention".

"There is a tri-partite process in place and I hope the Minister's comments will not undermine that process. I was astonished that the Minister seemed prepared to countenance the break-up and privatisation of the company. Such comments will be a major concern to staff," he said.

The Commission report, which notes the progress made across Europe in gas and electricity liberalisation, studies the presence of large dominant producers in the various European markets.

Based on its research, the ESB, with 85 per cent of the market, based on generating capacity, is the sixth most dominant company in Europe.

The report also looks at access to the electricity network and how much it costs the various users. In this area, the Republic has the fourth most expensive network access charges, at €50 per megawatt hour.

The ESB declined to comment last night on these findings or on Mr Dempsey's comments. A spokesman did say, however, that the company would be happy to participate in any review the Minister was planning.

The electricity network, both transmission and distribution elements, have traditionally been expensive. Some observers believe this is because of the State's low population densities.

Viridian has welcomed the announcement by Mr Dempsey. "It has been widely recognised for some time that dominance is a barrier to a competitive market. Therefore, the Minister's intention to carry out a thorough review of the options is very welcome," it said in a statement.

"There is little point in going to all the trouble and expense of implementing a new market if the customer has little prospect of seeing any benefit," it added.

However, the Labour Party spokesman on energy Mr Tommy Broughan, said key infrastructure must remain in public hands.

He said that "the mistakes of the past" in the telecoms market must be avoided at all costs.

"A review of the energy market is long overdue, especially as the electricity market is set to become fully open from February 19th. However, any such review must ensure that ESB infrastructure and key generation assets, especially the national grid, are retained in public ownership," he said.

The Chambers of Commerce of Ireland said the ESB should be broken up, but not necessarily privatised. Chief executive Mr John Dunne said he strongly welcomed the review announced by Mr Dempsey.

"Consumers have much to gain from the opening up of the energy market which, in its current state, is uncompetitive. Accordingly, a break-up of the company is required to ensure the physical infrastructure remains in public ownership while allowing the electricity supply market to be opened up."