Ireland's Energy Industry Criticised As Epower Is Forced To Shut Down

by Amanda Banks, Tax-News.com, London

06 August 2001

Epower, the private Irish electricity supplier majority-owned by entrepreneur Denis O'Brien who is currently locked in a takeover battle for the Eircom telecoms company, has declared that it will cease trading because it can no longer afford to compete in the market after announcing a loss of £3.7 million.

Due to close down on the last day of October, the power company's customers comprising 117 commercial and industrial accounts will be left with the choice of signing up with Epower's biggest rival, the state-owned Electricity Supply Board (ESB) or Viridian, the Northern Ireland-based power company.

Epower was launched just 18 months ago and the blame for its failure to succeed in the Irish electricity market has been firmly placed in the hands of the industry regulator, headed by Tom Reeves. Epower's chairman, Leslie Buckley, has criticised the system of the ESB auctioning power to new electricity suppliers such as Epower. He also attacked the delays in connecting the company's power generating station to the national power grid and has called for Mr Reeves to resign his post and for a 'new effective regulatory regime' to be introduced.

'We were prepared to sustain losses on the supply side while the generation project was being developed,' explained Mr Buckley, 'but with regulatory delays on the generation side, the partners (in the project) lost confidence in the prospects for competition.'

He added: 'In my opinion, the regulator does not have sufficient powers to ensure proper competition and I have no evidence to suggest that he has ever looked to increase those powers.'

The departure of Epower has highlighted the dire straits that Ireland's electricity market has found itself in. In theory around 30 per cent of the market should have opened up to competition as required by an European Union directive on liberalisation but this has not taken place due to the ESB's delays and the lack of sufficient generation capacity. Chief executive of Viridian, now the only main rival to ESB, David de Casseres, has summed up the current mood as he stated that the closure 'underlined the fact that urgent action is required to ensure the development of a sensible market.'

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