ESB told to transfer green energy to rivals

The energy regulator has told the ESB to transfer a large amount of its green energy to rivals in an auction to be held in early summer.

Companies like Airtricity, Bord Gáis and Energia, the sales arm of Viridian, are likely to take up some of the 183 megawatts - the equivalent of half the output of a conventional power station.

An ESB spokesman said the company would comply with the instructions of the regulator and believed the move would increase competition in the market and boost the renewable sector.

The ESB receives the green energy from various small wind-farm owners around the State, but this energy will now be passed on from ESB to other suppliers, most likely Airtricity.

"This auction will enable licensed green suppliers to increase their sources of green generation by successfully bidding for the right to purchase electricity on the standard terms," said the Commission for Energy Regulation (CER).

The ESB owns wind farms, which are operated by Hibernian Wind Power Ltd. The company also has hydro resources. Neither of these sources will be affected by the CER's decision.

A CER spokesman denied the move was being made to solely facilitate Airtricity, which left the domestic market last month. At that time, Airtricity said it could not secure enough power and was forced to buy expensive "top-up" power from the ESB.

The price of wind energy in the Republic is supported by what is known as a public service obligation (PSO) levy. This levy is then applied to all electricity bills. This means renewable power is guaranteed a reserve price, regardless of changing demand.

Dermot O'Kane, chief executive of Airtricity's supply business, said his company would be interested in the power, but the current proposals were not acceptable. He said bidders were being asked to pay this reserve price, plus an additional amount, to win the auction.

"We have been saying for some time that ESB should not have a monopoly over publicly supported green power, but these proposals do not go far enough to change that."

He said if Airtricity eventually won the power, it would be used to supply small and medium enterprises. It was highly unlikely to reverse its decision to pull out of the domestic market.

Spokesman Robin Greer said Viridian, which already has a substantial renewables portfolio, needed time to consider the CER proposals before responding.