The electricity regulator Mr Tom Reeves said yesterday he was reasonably confident competition would begin in the industry within 10 weeks when the EU directive on deregulating 28 per cent of the market comes into force.

Mr Reeves, speaking after a public forum in Dublin on electricity deregulation, said he was in favour of the ESB having to sell capacity to competitors at wholesale prices as a mechanism by which they could enter the market immediately on February 19th. The competitors could then sell on the electricity to some of the 300 larger customers eligible to enter the market.

But he said it was a matter for negotiation between him and the ESB. Preliminary discussions have taken place but it is believed the ESB view is that wholesale trading would be on a voluntary basis, although independent power generators could purchase "top up", which are power shortfalls, when their production does not match demand.

Currently, there are no major electricity generators in the independent sector with the capacity to generate their own power, although some companies have projects at various stages of development. Competitors will be seeking market entry at an early stage in order to build their profiles.

Mr Reeves also said he was in favour of an independent transmission system operator, the body which will have overall responsibility for operating the deregulated system.

Mr Reeves also said he was in favour of stimulating competition in the short term by allowing participants buy electricity from Northern Ireland via the interconnector, which is jointly owned by Northern Irish Electricity, Viridian's Northern Irish branch, and the ESB.

"It is the only place where there is any spare power," he said. He would be meeting with the Northern Ireland electricity regulator, Mr Douglas Ildoon, to formulate a discussion paper on the issue within the next two weeks.