COMPETITION authorities in Brussels have cleared the ESB to retain ownership of Ireland's power infrastructure, despite rules that say power generation and networks must be split.
The European Commission has ruled that the ESB can continue to own the electricity grid here as long as the semi-state is split internally.
The decision ends fears that European authorities could fine Ireland, or even force a break-up of the ESB, if Ireland was found not to conform to a directive to "unbundle" the generation and supply of electricity.
In 2011, Communications Minister Pat Rabbitte reversed the previous government's proposals to break up the ESB by handing ownership of the power grid to Eirgrid, which is also state-owned.
He favoured allowing Eirgrid to operate the power grid while allowing the ESB to own the infrastructure.
That risked falling foul of the European Commission policy that favours splitting ownership of networks from ownership of power stations.
European authorities wrote to the Government here in April asking it to justify the current system, and they have now endorsed the Irish position.
The European Commission published its decision on May 21 and it became effective immediately. Ireland's own Commission for Energy Regulation has also signed off on the scheme.
Ireland had missed the previous 2011 deadline to prove the power market here was compliant. Yesterday, the ESB said it welcomed the decision.
"The ESB welcomes the European Commission's confirmation that the existing arrangements for transmission unbundling in Ireland are compliant with the EU Directive and the Regulator's decision to certify EirGrid as Transmission System Operator for Ireland," a spokesman said.
A spokesman for Eirgrid said the agency noted the decision and welcomed the fact that Eirgrid has been certified as transmission system operator (TSO) for Ireland.
Under the Commission ruling, the ESB still has to take action to ensure it is split internally to comply with the "unbundling" directive.
The Commission identified specific actions including transferring the ESB's transmission activities – including its licence, assets and staff to ESB Networks Ltd or another subsidiary, so that they are managed separately to both power generation and power supply activities.
That process is to be overseen by the Commission for Energy Regulation here.
As part of its decision the European Commission looked at the market in Northern Ireland, where the ESB also owns transmission through its Northern Ireland Electricity unit and confirmed that no change is needed there.