The Government must accelerate the construction of electricity interconnectors to the United Kingdom to stave off major power shortages, IDA Ireland has warned.
The new electricity links to the UK are due to be completed by 2012 under plans before Minister for Natural Resources Noel Dempsey.
However, the IDA, in a response to the Minister's Green Paper published in October, has said: "They need to be fast-tracked as a top priority and put in place in advance of 2010."
In a separate warning, the ESB has said Ireland is facing significant electricity shortages as early as next winter unless extra power stations are built immediately.
The issues of energy supplies and rising prices have "significantly increased" the concerns of Irish-based multi-nationals, the IDA warned in its submission, which is strongly critical of the Government's energy policy.
Pointing to gaps in the proposals produced so far, the IDA, which is responsible for securing investment from overseas, said the Government "should spell out in more detail how the critical issue of adequacy of electricity supply will be secured over the next 3-5 years".
In particular, urgent plans were necessary to create a safe gap by 2010 between peak demand and peak generation capacity, while existing electricity stations must become significantly more efficient within four years, the IDA said.
Outlining its priorities, the authority said power companies operating in the Republic must deliver guaranteed security of supply and competitive prices.
"We must not allow an issue as fundamental . . . as energy to lag behind what is available in other countries in terms of cost, security of supply and infrastructure quality," it told the Minister.
Furthermore, the electricity grid must be improved so that companies have the choice to base operations in more remote areas, which is difficult to achieve now.
Energy demand in the Republic is expected to grow by 2-3 per cent a year until 2020, and the country remains heavily dependent on imported fossil fuels, despite efforts to increase the use of green energy.
In the Green Paper - the first stage in the preparation of legislation - the Minister said 30 per cent of Ireland's energy supplies should come from renewable sources by 2020. Furthermore, homes, factories and transport must become more energy efficient - though production of carbon dioxide last year grew at a faster rate than the growth of energy for the first time in years.
Pointing to the lack of private energy companies operating in Ireland, the IDA said the Green Paper proposes some measures to encourage their establishment, including offering them land.
However, it added: "It is difficult to identify a clear plan of action in the paper that could make a major impact on this situation in the short to medium-term."
The Government must provide "a clearer and more specific plan of action" to show how the energy market in the Republic will be developed over coming years: "This is vital if the objective of achieving significant private-sector investment in the energy sector in Ireland is to be realised," the IDA said.
The Government must also put forward plans to link Ireland into the electricity market of Continental Europe, and not just the UK, the document sent to the Minister said. "Otherwise, Ireland risks becoming overly dependent on one jurisdiction for much of its electricity supply."
In an indirect criticism of the Commission for Energy Regulation, the IDA said regulation should "take more account of the need to ensure security of supply and international price competitiveness".
Mr Dempsey is to publish a White Paper "in early 2007".