Government plans to reform the State's electricity market are "essential", the Competition Authority said today.
Competition Authority Chairman Bill Prasifka
The authority said the plans outlined in the Government's White Paper on Energy, published yesterday, were the "next logical step towards a truly competitive electricity market".
Competition Authority Chairman Bill Prasifka, said: "Removing the ownership of the electricity transmission system from the ESB is absolutely essential to bring about real competition in electricity generation in Ireland.
"It is vital that Ireland has real competition in electricity generation, not just the illusion of competition."
The White Paper proposes to transfer ownership of the national transmission grid, which carries power from power stations, from ESB to EirGrid, which currently manages the system.
Mr Prasifka said it was not realistic to expect competition in the electricity market to emerge if the ESB remained the dominant firm and the owner of an essential facility such as the transmission grid.
However, union leaders at ESB are to seek a meeting with Minister for Communications, Marine and Natural Resources Noel Dempsey over the plans
The Technical Engineering and Electrical Union - which represents some 2,000 ESB workers - claimed the proposal is at odds with the social partnership agreement Towards 2016.
Bill Prasifka
TEEU national industrial officer Davy Naughton claimed the plan appeared to breach a seven-year-old agreement between the Government, the ESB and unions that ownership of the grid would remain with the company.
"If this is the case it is a clear breach of social partnership and the Towards 2016agreement that the Taoiseach Mr Ahern cited as one of the principles underlying the development of energy policy," he said.
"The Minister's proposals also appear to conflict with his previously announced strategy that the ESB would remain a strongly, vertically integrated company."
The employees own 5 per cent of the ESB and its assets, including the transmission system. The transmission system is currently valued at up to €20 billion.
The reform of the system is designed to keep costs down. But Mr Naughton said he could not see how savings could be made, and he also questioned how EirGrid workers would be affected by the move.
The paper sets a series of new targets aimed at reducing reliance on fossil fuels and tackling greenhouse gas emissions through greater use of renewable energy.
Other reforms include the establishment of a land bank for new power plants, and an effective ban on the ESB generating profits from operating and maintaining the distribution grid, which brings power to homes and businesses.
The paper also includes proposals for congestion charges and road pricing, to be introduced once "sufficient" public transport infrastructure is in place. Other proposals aimed at reducing energy demand from consumers include smart metering to allow consumers to chose suppliers and electricity prices.
