Bord Gáis to take on ESB with 'dual fuel' supply scheme

BORD GÁIS will go head to head with the ESB from today and compete to supply electricity to domestic customers.

The company, which supplies gas to more than 630,000 homes, says it aims to become the second biggest energy player in Ireland, and plans to be the first “dual fuel” supplier in the Republic, offering gas and electricity to homes.

Bord Gáis chief executive John Mullins said that the company will be offering double digit discounts to customers who switch providers. Its prices could be up to 14 per cent below those which the ESB is obliged by the regulator to charge its customers.

The discounts will apply to the price of the electricity and not to the “standing charge” element of domestic bills, which is imposed to cover network costs.

Bord Gáis hopes to win about 25 per cent of the ESB’s domestic customers. Mr Mullins and his colleague, David Bunworth, managing director of Bord Gáis Energy, explained that the experience in other countries has shown that about 50 per cent of household electricity customers move when a new player enters a market where previously there was one established supplier.

The Republic’s electricity market has been open to competition for the last four years, but none of the independent operators has made a serious effort to compete with the ESB on this front as the customer support infrastructure is expensive.

Scottish Southern Energy’s Irish subsidiary, Airtricity, is planning to target domestic customers with a “dual fuel” offer this year.

The ESB pointed out yesterday that it cannot offer discounts on the domestic prices set by the Commission for Energy Regulation. “It is open to all competitors to charge what they like,” the company added.

Bord Gáis is also joining forces with Mountside Properties, a shareholder in the Tynagh Energy electricity venture in Galway, to build four specialised electricity generating plants at a cost of €250 million.

These facilities will follow the completion and firing up of its own €400 million electricity generating station in Whitegate, Co Cork. This is due to begin producing power next year and will have the capacity to supply electricity to 400,000 homes.

The Whitegate plant will produce up to 445 megawatts of electricity. The four plants in which Bord Gáis is investing with Mountside will produce another 400 megawatts, while renewable energy projects, in which it is investing €250 million, will bring its total capacity up to 1,000 megawatts.

“That will give us a very significant position in Ireland’s future generation stock,” Mr Mullins said.

Bord Gáis will be the majority shareholder in the venture with Mountside and it plans to build four 100 megawatt peaking plants at four different locations, Cahir, Co Tipperary, Kilkenny, Athlone, Co Westmeath and Claremorris, Co Mayo.

Mr Mullins explained that peaking plants are used to back up wind generation when wind speeds fall off and to help plug gaps in areas where the national grid is weak.