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Green wind quick off the mark -- Ireland liberalisation

Renewable energy producers now have the market edge in Ireland. They are the only sector yet allowed to sell power to both business and domestic customers in the liberalising electricity market. Other independent power producers are restricted to selling to the country's 320 largest electricity owners only -- just 30% of the market.

With the partial opening of the Irish market from February 19, green electricity companies are already in the forefront of suppliers emerging to take advantage of renewables' privileged position. A further advantage is the access renewables suppliers have to independently produced power. A limited amount of wind electricity is potentially available from four wind farms built outside the Alternative Electricity Requirement (AER) support system. Suppliers of "brown" electricity, however, lack available independent generation. The first trading is likely to be with power accessed from Northern Ireland through the interconnector, but it will take several years before new independent generation comes on line.

To help new "brown" suppliers enter the market during this period, the government intends to auction 400 MW of generating capacity options -- known as the "virtual independent power producer" (VIPP) -- from the state owned Electricity Supply Board (ESB) "as soon as possible." This amounts to around 10% of ESB's capacity. There are also plans for a similar auction for renewable energy suppliers.

Ireland has liberalised its power market to comply with the EU electricity directive which requires 28% of the market to be open by February 2000, rising to 32% by 2003. Under the new market arrangements, the AER will continue to be supported through a public service obligation levied on all customers.

Green entrant

The first green energy company to market wind electricity in the new market is "Eirtricity." It claims its customers can save up to 10% and protect the environment at the same time. The company was launched in late January and is a joint venture between Future Wind Partnership and National Toll Roads. Future Wind was established three years ago as a wind development company. Its directors, Eddie O'Connor and Paul Dowling, formerly worked for Bord Na Mona -- the peat producing company that built Ireland's first ever wind farm. National Toll Roads is a major long term investor in infrastructure assets.

Eirtricity is aiming initially at small and medium enterprise (SME) companies who have been paying a premium for their power compared with the domestic sector. From 2002 it intends to extend its product to domestic customers. "We are proud to be the first company offering green electricity to Irish SMEs, and especially pleased to be able to do so at a significant cost reduction on existing ESB prices," says O'Connor.

Power will come from Eirtricity's own planned wind farms along the west coast in Donegal, Kerry and Cavan. The first to come on stream will be a 12 MW plant at Culliagh in Donegal, expected to be operational by October. The company also plans to contract power from other wind energy generators and its first customers will be supplied from Gweedore wind farm in Donegal. Other renewable technologies may supply Eirtricity as they become more competitive and available.

Eirtricity hopes to begin trading from the end of March. In its first year of business it expects to have many thousands of customers. Already more than 100 purchasers have signed up. Customers will get information on the specific wind farm generating their supply.

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