The Government has rejected proposals put forward by consultants for the partial break-up of the ESB, write Dick Ahlstrom and Martin Wall.
Consultants Deloitte said high labour costs and poor plant maintenance were costing the consumer up to €100 million in additional costs.
Details of a study of the ESB emerged yesterday in Dublin at the launch of the Government's energy Green Paper. Towards a Sustainable Energy Future for Ireland is the first Green Paper on the subject for almost 20 years.
The Deloitte report called for a partial break-up of the ESB and a restructuring of the electricity supply market, which it maintained would improve efficiency and bring down prices.
However, speaking at the launch of the Green Paper, the Minister for Natural Resources, Noel Dempsey, said the Government had rejected the proposal to fragment the company.
He said it was important that there be "a critical mass in the ESB", adding he wanted the State-owned power generator "to be a strong company". He said the fragmentation of the ESB could lead to higher prices and endanger security of power supplies and competitiveness.
He said the Government favoured the establishment of a land bank of suitable sites which could be leased to potential entrants to the electricity market.
This could include the sites of decommisioned ESB stations.
In such circumstances the ESB would get the benefit of the lease but the energy regulator would decide on who should build new power facilities.
Taoiseach Bertie Ahern said the Green Paper brought together all dimensions of energy policy in a single policy document for the first time in 20 years.
Energy had moved "to the very top of the political agenda", given the uncertainty over supply, he added.
The Green Paper put a particular emphasis on security of supply as a means of protecting continuing economic progress.
It calls for new interconnectors to the UK by 2012 and to the Continent by 2020. It also argues for greater diversity of energy supply, principally from the increased use of renewable sources of energy.
Renewables should be supplying 30 per cent of Ireland's energy needs by 2020, according to the Green Paper. This would be from wind turbines but also new, as yet unproven technologies including wave/tidal, biomass and liquid biofuels.
The Minister said he was not going to review the decision by the energy regulator to allow a 34 per cent increase in the cost of gas which took effect yesterday.
He said the practice was to have a single annual review, rather than constant price revision.