EU defers vote on power liberalisation

EU energy ministers last night deferred a final decision on the six year battle over electricity liberalisation for a month when the issue will be determined by a qualified majority vote.

At that stage it is inevitable that at least 25 per cent, and almost certainly substantially more, of the Irish market will be opened up to competition to callow large users buy power freely from outside sources.

Yesterday's tense meeting did, however, see an important concession to the Irish position when ministers agreed to retain a public service commitment effectively a guarantee that the ESB would not be financially disadvantaged by having to supply remote rural areas or by being forced to use peat. Governments will be allowed to insist that 15 per cent of national energy needs be met by indigenous fuels.

The Minister for Transport and Energy and Communications, Mr Lowry, said last night the agreement would prevent the "cherry picking" of the larger lucrative customers and ensure the interests of smaller consumers were protected. The decision was a crucial "copper fastening" of the, 2,200 jobs in the Midlands dependent on the ESB and Bord na Mona, he said.

The public service commitment will probably be expressed in the form of a levy on power bought from non ESB sources.

But the crucial decision on the number of companies which will be allowed to bypass the monopoly "single buyer" and buy directly on the market has not been agreed. Nor has the time scale for further liberalisation.

Ireland and France are still backing compromise proposals from the Italians under which users in excess of 40 gigawatt hours a year would be allowed direct access to the free market. In Ireland that represents the 250 top energy users in the country, or 25 per cent of the market.

Germany is demanding total liberalisation, backed by Sweden and Finland. Britain is willing to settle for a figure of 80 per cent access to the market.

Sources in the council suggested last night the French may be willing to move towards freeing 30-40 per cent of the market a figure that represents several thousand Irish companies. It is extremely unlikely Ireland will be able to continue to maintain its current position.

Mr Lowry said last night he had absolute confidence that the industry in Ireland would rise to meet the challenges. "The Cost and Competitiveness Review (CCR) in the ESB is an essential requirement to enable the ESB to meet the challenge of whatever competition emerges. The full implementation of the CCR is now more urgent than ever."