Plans for major reforms in the electricity market are facing serious opposition from trade unions who have accused the Government of reneging on previous commitments in relation to the ESB.
The Energy White Paper, published yesterday, proposes to transfer ownership of a significant proportion of the ESB's assets to a separate firm.
Announcing the plan, Minister for Communications, Marine and Natural Resources Noel Dempsey said the ownership of the national transmission grid, which carries power from power stations, would be transferred from ESB to EirGrid, which currently manages the system.
Mr Dempsey said the measures would "transform the landscape of the Irish electricity market and improve its attractiveness for new and existing players", and would "ensure the benefits of competition result in lower prices for the consumer".
However, Davy Naughton of the the Technical, Engineering and Electrical Union (TEEU), which represents 2,000 workers in the ESB, said the proposal contradicted a seven-year-old agreement with ESB unions that there would be no removal of assets from the ESB. "If this is the case, it is a clear breach of social partnership and the Towards 2016 agreement," he said.
Mr Naughton said the White Paper marked a U-turn on the Green Paper on Energy, when Mr Dempsey said a break-up of the ESB would not improve competition and could increase prices.
The proposals are expected to lead to detailed discussions between the Government and trade unions, with suggestions already that the State may offer significant compensation in cash or shares in lieu of the proposed changes to the structure of the ESB.
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 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 landbank 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 outline 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.
Claims that the Government's proposed transfer of the transmission grid would lead to price cuts in power have been questioned by ESB chief executive Pádraig McManus, who said there was a possibility that it would actually increase costs.
Yesterday the Government also insisted that its target that one-third of all electricity would come from renewable sources by 2020 was achievable.
Mr Dempsey said suggestions that the Government could not meet this target, or new targets on reducing greenhouse gas emissions by up to 20 per cent, were "absolutely unfair, inaccurate".
Last night the Government was accused by Fine Gael environment spokesman Fergus O'Dowd of having one of the worst records in Europe on greenhouse gas reductions and promoting renewable energy. He said it was "a desperate, last-gasp effort by the least 'green' Government in the history of the State to reverse 10 years of neglect on the environment".
Green Party energy spokesman Eamon Ryan accused the Government of "green spin".
"The Energy White Paper released today was long on rhetoric but short on real substance. It will take a change of Government for this matter to be addressed with the urgency it requires," he said.