THE Irish government has told the energy regulator that he should get a private operator to build a new electricity power plant to prevent blackouts that would cripple Irish industry.

The new plant would guarantee security of power supply and increase the level of competition facing the state-owned ESB in the electricity market.

Ministers decided before Christmas to seek additional capacity after Noel Dempsey, the energy minister, brought a memo to cabinet warning of a narrowing gap between peak electricity demand and the existing system’s capacity.

Even though the government cannot tell Tom Reeves, the independent energy regulator, what to do, Dempsey has taken the unprecedented step of writing to Reeves urging him to invite tenders for “a mid-merit plant” — one that can be switched on and off according to demand — with at least a 250 megawatt (MW) generating capacity.

Normal generation capacity runs to about 5,000 MW a day, not including wind energy which can add 600 MW but is dependent on prevailing weather conditions.

Peak winter demand also runs at about 5,000 MW, which leaves little room for unexpected shocks to the system such as “outages” in some of the ESB’s older generating plants.

The Economic and Social Research Institute, IDA Ireland, the Competition Authority and consultants Deloitte have all voiced concerns about the security of supply. IDA Ireland said last month that concerns about the capacity could make it harder to continue persuading overseas firms to set up in Ireland. It called for the fast-tracking of building work on electricity interconnectors between Ireland and the UK.

Dempsey’s letter will do little to ease the tensions between his office and the ESB after a series of running battles between the minister and the state electricity company over the past year.

While the government last week approved the construction of a new 400 MW ESB plant at Aghada in Co Cork, Dempsey had resisted the company’s initial application to build it until the ESB agreed to mothball some of its older, inefficient plants. It also had to make the sites available for new private sector entrants to the market, according to government sources.

In granting consent to build at Aghada last week, Dempsey obliged the ESB to sell all the electricity from the efficient new plant to private sector distributors. The Aghada plant is expected to cost €350m to build and is due to open in 2009 or 2010.

Energy industry experts say a mid-merit plant could be put in place within 12 to 18 months once planning permission is secured for development on a cleared brownfield site.

In a statement last month Eirgrid, the national grid operator, predicted no serious problems in electricity supply over the next three years. It said: “Provided the existing power stations can maintain and improve their supply, provided that the new generation of power stations is constructed on schedule; and provided that there are no unexpected closures of existing stations, it’s our belief that the situation should be adequate.”

The ESB said yesterday that it had done everything it could to co-operate with the energy regulator to facilitate the entry of competitors into the Irish marketplace.

The company now generates just 63% of the national electricity requirement and has agreed to build no new plants in order to facilitate the entry of competition.

A spokesman said the company agreed with Reeves last November to offer for sale two stand-by generators at Rhode, Co Offaly, and in north Mayo, and to clear sites for construction at its lands in Shannonbridge, Co Offaly and Lanesborough, Co Longford. These could be available to private sector generators who wanted to enter market.

The state company also agreed to install a gas supply at the Shannonbridge site.

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