ESB promises to lower prices as plant opens
THE ESB has promised customers cheaper prices within the next 10 months as it opened the country's biggest new power station yesterday.
The semi-state energy firm will finally be allowed to compete with its rivals early next year -- and will slash prices as a result.
The ESB expects its rivals to secure a 40pc share of the Irish electricity market by February. This will finally allow it to emerge from the controls of the energy regulator and set its own electricity prices.
A price war is expected to begin from mid-March as the ESB, Bord Gais and Airtricity offer consumers savings on their energy bills. Irish electricity prices are among the highest in Europe.
The ESB yesterday opened Ireland's biggest new power station at Aghada in east Cork. The €360m natural gas-fired power plant -- built by French firm, Alstom Power -- is one of the most efficient and environmentally friendly facilities in Europe. Combined with a €75m upgrade of four existing power generation units on the Aghada site, the new plant will deliver 435 megawatts of electricity -- adding to 528 megawatts of existing on-site capacity.
The new plant's capacity is enough to supply 10pc of the country's peak demand -- or 20pc of off-peak needs. It will now form a strategic component of the ESB's southern supply grid.
ESB chief executive Padraig McManus said the new plant would be a critical part of the firm's energy delivery system for the coming decades.
"The challenge for all energy market participants is to deliver clean, safe and cost-effective electricity to our customers.
"The Aghada plant does all of this -- now we look forward to the opening of competition in all sectors of the electricity industry because value to the customer must lie at the heart of every strand of our business planning. ESB is now ready to meet that challenge."
The ESB predicts its market-share will decline to 60pc by next February, having enjoyed monopoly status for decades.
Once market share is at 60pc, the regulator is expected to allow the semi-State to set its own energy tariffs and actively compete for residential business.
A 40pc market share for ESB's energy rivals is deemed sufficient for them to have a base to withstand such competition.
Once it is free to set its own prices, the ESB is expected to campaign hard both to consolidate its remaining customer base and to persuade former customers to rejoin their network. ESB chairman Lochlann Quinn said the Aghada plant was the lowest carbon emitter of any conventional power station in Ireland.
Meanwhile, competition in the domestic gas market was turned up a notch yesterday when Flogas decided to offer deeper discounts to households who switch to it from Bord Gais.
Flogas says it will now offer households an 11pc discount on its gas, compared with 9pc previously, making it €68 a year cheaper than Bord Gais for a typical household.