More choice in power market

Some 12,000 commercial users of electricity will be able to choose their power supplier from February next year when the Government opens an additional 16 per cent of the power market to competition.

A change signalled yesterday by the Minister for Communications, Marine and Natural Resources, Mr Dermot Ahern, will see the market eligible for competition opened to 56 per cent on February 19th, 2004, from 40 per cent at present.

This is in advance of full market opening in February 2005, when all electricity customers will be entitled to choose their electricity supplier. The effect of the change is to avoid a one-step jump to 100 per cent market opening in 2005 from 40 per cent.

But while competition is designed to foster lower prices, they have only increased since market opening began in 2000. The latest increase of an average 9.8 per cent was introduced at the start of the year, 15 months after another rise.

In addition, only one large-scale independent gas generator has entered the market. Others have shied away from the market, meaning that the generation business will still be dominated by the ESB in 2005.

This will effectively restrict market opening, because even independent suppliers will be sourcing their electricity from the ESB. However, Mr Ahern said the increased market opening next year "should act as an incentive to new players to enter the generation and supply market".

He said the development would reduce the eligibility threshold for competitive market to 0.1 gigawatt hour (GWh) of electricity per annum, resulting in a seven-fold increase in the target customer base for independent operators.

Mr Ahern added: "We will have a fully open and competitive electricity market in two years' time. This will, I believe, help underpin the future competitiveness of the Irish economy."