Electricity trade plans announced

Proposals for interim electricity trading arrangements between February, 2000, and February, 2005, have been announced by the Minister for Public Enterprise, Ms O'Rourke.

She said that in order for the liberalised market to operate effectively, a mechanism to manage short-term imbalances between electricity production and the demands of final customers was needed. The trading arrangements, the details of which will be drawn up by the electricity regulator, Mr Tom Reeves, will enable licensed operators to compete within the 28 per cent market segment being initially opened to competition. The 28 per cent segment will be increased to 32 per cent by February, 2003. In 2005, the European Commission will review the Irish market and how it has complied with the EU directive on deregulation.

For the five-year transitional period, a regime for the provision of "top-up" and "spill" will be introduced. "Top-up" refers to the need of operators to buy electricity from the ESB at special rates when they experience temporary lags in their own production. "Spill" is excess electricity which can be sold on to the ESB under the same system.

"Under this regime, the independent sector will be able to purchase power shortfalls (`topup') and sell power surpluses (`spill') to ESB generation whenever their production does not exactly match the aggregate demand of customers of the independent sector," Ms O'Rourke stated.

The proposals were welcomed yesterday by a spokesman for Viridian, the Northern Ireland electricity company, which will be one of the new players in the independent sector. It plans to build a £300 million (€381 million) combined cycle-gas plant at Huntstown, Co Dublin.

Mr David de Casseres, Viridian's commercial director, said the proposals were a sensible interim solution but details of the grid code from the ESB were now required. "We need both of these things to understand how much money we will get for the electricity we will produce," he said. The ESB also welcomed the publication of the proposals, saying they were important for all parties. A spokeswoman said the details of the announcement were being studied but they were broadly in line with new arrangements being proposed for the Northern Ireland market. She said the announcement provided clarity and would aid in the development of a grid code.