ESB cash aids are `stifling competition', claims EPower

EPower, the newly-formed private electricity company, has called on the Minister for Public Enterprise, Ms O'Rourke, to require the ESB to sell its 70 per cent interest in a £200 million (€254 million) power station project at Ringsend, Dublin, claiming it is stifling competition.

The Minister recently sanctioned capital expenditure of up to £50 million on turbines for the 400 megawatt (MW) combined cycle gas station for which the ESB, together with its joint venture partner, Statoil, has formed a company, Dublin Bay Power.

But EPower, a joint venture between a consortium led by the entrepreneur, Mr Denis O'Brien, and a US power company, GPU International, says the sanctioning of the £50 million, and the use of public funds in general, "confers an unfair advantage on the ESB and will stifle competition".

Mr Paul Browne, EPower's chief executive, said no independent company could afford to commit £50 million for turbines in the current scenario.

"Would you buy turbines today if you did not know whether you would get gas to power them or not? The commercial answer to that is no."

But a Department of Public Enterprise spokesman said last night the ESB had undertaken to divest its share of the plant if it was seen to be abusing a dominant position.

ESB also strongly denied the claims. A spokeswoman said they were "a clear attempt to influence the electricity regulator, Mr Tom Reeves, in the consideration of these matters". She added that there was no credible basis for new players "coming late to the game" seeking to impede those had a serious commitment the industry.

"Far from enjoying competitive advantage, ESB will be entering the deregulated market with a portfolio of power stations which are of varying age and fuel type. Clearly, new competitors with brand new power stations will have competitive advantage over such existing plants," she said.

An Bord Pleanala gave planning permission earlier this week for the project but approval must now be granted by the regulator for the station, which is aimed at serving large commercial power users when 28 per cent of the market is liberalised in February.

EPower aims to compete as distributor of electricity in the short term before building a gas-fired power station of its own in west Dublin.

But a widespread view that, in advance of the building of the Scotland-Ireland gas inter connector, the gas transmission system will be unable to serve all of nine proposed gas-fired stations has led to the Epower claim that the ESB will have an advantage in the gas allocation competition.

There are nine gas power station projects involving a total of 3,000MW of electricity. ESB/Statoil is leading the race by being the first to receive full planning permission.