The International Energy Agency (IEA) has recommended the ESB be broken-up into competing companies to increase competition in the sector.
In a review of energy policies in Ireland published today, the IEA said the ESB's dominant role in the electricity sector remained an "impediment to new entrants" and to a complete reform of the sector.
It called on the Government to consider a means of "dispersing control of ESB generation among competing companies".
Today's report praised the State for what it described as "excellent progress" on market reform in the electricity and natural gas sectors.
The IEA's executive director, Mr Claude Mandil, said the reform of these sectors will "encourage the growth of a cheaper, more secure energy sector".
The report said about 40 per cent of the electricity market is now open, with 100 per cent market opening envisioned by 2005.
However it said Ireland faced a "serious challenge" in achieving its emissions target under the Kyoto Protocol.
The IEA recommended the implementation of emission-cutting measures as a "matter of urgency" to cut spiraling greenhouse gas emissions.
The Agency said: "Emissions grew 24 per cent from 1990 levels by 2000 and are believed to have grown substantially since then."
"CO2 emissions, which make up over 65 per cent of total greenhouse gases, have grown even more, reaching more than 40 per cent above 1990 levels in 2001," it said.
Under the Kyoto protocol Ireland has agreed to limit its greenhouse gas emissions to 13 per cent above 1990 levels by 2008 to 2012.
The Agency blamed much of the growth on the expansion of the economy in recent years.
However it said: "A significant share of greenhouse gas emissions reduction could be achieved with the closure of the Moneypoint coal fired power plant.
