Electricity prices to drop 10pc in battle for customers
THE end of a long-standing price control could trigger an energy price war that will benefit hard-pressed consumers.
It is estimated that electricity prices could fall by up to 10pc over the next four years as the ESB, Bord Gais and Airtricity battle for customers.
The ESB expects its main rivals to secure a 40pc share of the Irish electricity market by next February.
When the 40pc barrier is breached, the semi-state firm will be free of the Commission for Energy Regulation and can set its own electricity prices.
Another factor in the anticipated price war is a dramatic increase in electricity generation capacity now coming on stream in Ireland with a new €400m Bord Gais power station opening today.
The new facility -- which is located at Whitegate in Cork harbour -- ranks as one of the biggest engineering projects ever undertaken in the State and, when fully operational, will be capable of generating 445MW, sufficient power for 500,000 homes.
Bord Gais's showpiece plant will be opened by Foreign Minister Micheal Martin.
In nearby Aghada, the ESB commissioned a €360m new facility last May.
The Aghada plant's 435MW capacity is enough to supply a tenth of Ireland's national peak demand, or a fifth of its off-peak needs.
On its own, the new Aghada plant can supply power for 450,000 households, enough for Cork, Limerick and Waterford combined.
When the Aghada facility opened, ESB boss Padraig McManus said the company eagerly awaited the ability to compete on price with its rivals.
But the ESB market fightback will only be allowed once its main rivals secure a 40pc market share.
This will allow householders to secure discounted rates once they commit to set-term supply contracts.
A 40pc market share for ESB's energy rivals is deemed enough for them to have a base to withstand such major competition.
Once it is free to set its own prices, the ESB is expected to campaign hard to consolidate its remaining customer base, and persuade former customers to rejoin its network.
Earlier this year, Bord Gais unveiled deep discounts for its electricity customers -- and stressed that it would not be beaten for price in the market. It currently has 350,000 electricity and 650,000 gas customers.
Airtricity also unveiled a package which offered householders who switched to its supply network discounts of between 6pc and 13pc.
Meanwhile, the Bord Gais Energy Index -- an Irish-specific index designed to measure the prices in the wholesale energy market -- increased by 8pc in November, it was revealed yesterday.
This increase was due to a combination of higher commodity prices following greater energy demand during the earlier-than-expected colder weather, and a weakening of the euro.