There was a subtle change in the wording of an ESB campaign this year. The punch line changed from "Where do they get their energy?" to "Where will they get their energy?".

Officially the reason for the change was that the company wanted to focus people's attention on the millennium and the future. But the irony of the revision has not been missed following the ESB's warnings that it may be unable to meet growing demands for electricity.

The question of where the ESB will get its energy to meet the soaring demands of a booming economy is taxing its senior management. Unless the ESB can convince its biggest customers to reduce their demand at peak periods and can keep its existing generators going for longer, power cuts are predicted for the winter of 2001-2002.

The crisis also raises the question of how a modern economy got itself into such a mess in the first place.

On paper, the ESB has adequate capacity to meet existing demand. The semi-State company can generate 4,400 megawatts (MW) - each MW is the equivalent of the power needed by 1,000 households.

Current demand is running at 3,800MW. The 600MW difference between maximum supply and maximum demand would appear to be sufficient.

But the 4,400MW generating capacity includes 350MW generated by wind and hydro plants, which cannot be depended on to provide energy whenever it is needed. In fact, wintertime peak demand can often coincide with dry, calm periods of high pressure when these plants would be idle.

The 4,400MW figure is also based on all 19 major power plants and 26 smaller generating facilities operating at full capacity. However, all these plants need to be maintained and, especially with ageing stations, they break down.

Ms O'Rourke, the Minister for Public Enterprise, was assured last week by the ESB chairman, Mr Billy McCann, that there would be no supply problems this winter. No reference was made to the ESB's warnings about next winter. Traditionally, energy demand peaks in the second week of January, and the greatest demands are placed on the ESB in January and February. However, the ESB came within minutes of being unable to meet demand last month, long before the expected peak demand.

On October 21st, unexpected faults occurred at a series of power plants, coinciding with planned maintenance work at others. Even with the cross-Border interconnector running at full capacity and importing 200MW of power from Northern Ireland, the ESB was facing a 25MW shortfall.

The crisis was averted when a fault was corrected at the Aghada power station in Co Cork and started generating again just minutes before the daily 5 p.m. to 8 p.m. peak demand.

Had the crew in Aghada not come to the rescue, the ESB would have begun its contingency plan of phased blackouts, distributed evenly across the State. Such drastic measures have not been needed since the late 1970s, before Moneypoint opened, when there was not enough power to go round.

Regular power cuts could be a feature of the winter of 20012002, as generating capacity and new stations just coming into operation may not be able to meet predicted growth in demand.

Energy demand is increasing by 200MW per year. But the 150MW steam turbine station at Poolbeg starting up before the year's end, and the 117MW Europeat plant due to begin generation in Co Offaly by early 2001 will not meet this demand.

The ESB is responding by trying to increase the generating capacity of its stations by carefully maintaining them in the hope of reducing down-time. Their goal is to increase capacity by 1 per cent.

The company is also addressing the demand side of the equation. It has written to its largest 450 industrial customers to offer them a financial incentive in return for their co-operation during peak periods. Those who agree will be offered financial incentives in return for agreeing to curtail their usage when the ESB asks them. These demands will be made at short notice, on the morning of the day they want the firm to stop production between 5 p.m. and 8 p.m.

The ESB believes the crisis will end after the winter of 2001-2002, when new power stations are expected to start up. Appeals against planning permission for two stations are before An Bord Pleanala and are expected to be heard within a few months.

The ESB and Statoil are seeking permission to build a 400MW gas-fired station at Ringsend. CRH and Viridian have sought permission for a 400MW plant in Huntstown, Co Dublin.

Some 28 per cent of the Irish electricity market will be deregulated from February. However, private firms will not provide a solution to the supply problem until they build their own plants, which could take two to three years.

At the heart of the problem is the uneasy relationship between the ESB and civil servants responsible for the State's finances.

"The Department of Finance views the ESB as a bunch of hoarders who want to build power stations on the back of the public capital programme," economics lecturer Dr Sean Barrett explained.

Faced with ESB forecasts of power-demand increases, the State funded a series of new stations in the 1980s. But the downturn in the economy meant there was over-capacity, with the result that some stations shut down, he said.

Power stations that are not immediately required represent resources wasted, a Department of Enterprise spokesman said. Rapid development of new technologies and fuel uses meant that stations built but not needed for a three or four years soon became less efficient.

The Department of Public Enterprise insists the impending energy shortage is due to the unforeseen economic boom and the resultant surge in energy demand. The time taken to process planning applications for power stations has also contributed to the problem, the spokesman added.

However, the ESRI's research professor, John FitzGerald, noted that the Government was aware of the predicted power demands. The ESRI electricity forecast of April 1997 accurately predicted the situation, he said. "We have not changed our forecasts for 2000, but I have revised downwards my forecast for 2005," he noted.

Prof FitzGerald believes the bottleneck has been created by the Government's decision to deregulate the market.

They have been toying with the idea since the British government privatised the Northern Ireland electricity service in 1992.

Any move to attract in new power generators would have been made less attractive if the Department gave the green light for a major ESB plant-building programme. It is understood that the Department received legal advice earlier this year, warning that legal action could be taken by private generators if new ESB stations were commissioned.

"The Department has been reluctant to see the ESB building more stations," Prof FitzGerald said. With the exception of the new Poolbeg unit due to start up next month, the last ESB station was commissioned in 1987.

Eamon Timmins can be contacted at etimmins@irish-times.ie