Ryan likely to seek partial break up of Bord Gáis

MINISTER FOR Energy Eamon Ryan is likely to seek a partial break up of Bord Gáis in a move that could see the State-owned company face competition in the domestic natural gas market.

Mr Ryan is currently considering a report on an EU directive designed to boost competition in member state’s energy markets that includes a proposal to restructure Bord Gáis, the chief supplier of natural gas to the Republic’s households.

The company’s distribution network, which transmits natural gas around the country, is likely to be taken over by a new Bord Gáis subsidiary that will have its own board and be largely independent of its parent.

The move will be designed to increase competition across the Republic’s natural gas markets.

Both the ESB, which is also State owned, and Airtricity, which is controlled by British utility Scottish Southern Energy (SSE), are considering offering natural gas to households in competition with Bord Gáis.

Airtricity has already declared it intends becoming a dual-fuel supplier to householders, offering supplies of both electricity and natural gas.

An ESB source yesterday confirmed that the company, which is the dominant player in the Republic’s electricity market, is actively looking at taking the same route.

“The ESB is actively exploring the requirements of entry into the gas retail market, and has had preliminary discussions on the matter with the Department of Communications, Energy and Natural Resources and the Commission for Energy Regulation,” the source said.

However, the source added that the company had yet to make a final decision.

The ESB already supplies gas to large industrial users and to its own gas-fired power plants. The company is one of the biggest purchasers of the fuel in the country.

If it were to begin supplying natural gas to households it is thought that it will enter the market sometime in the final quarter of this year.

Bord Gáis has already moved into the electricity market, and supplies both commercial and household customers.

It is competing with the ESB and Airtricity in both these markets, and with other players such as Viridian in the industrial market.

Bord Gáis is building its own power plant in Cork Harbour which is due to begin generating electricity later this year.

It has also bought a number of wind generators, including SWS, one of the larger independent players in that sector.

Mr Ryan is expected to announce restructuring proposals for Bord Gáis shortly. The report he is considering in advance of the move deals with the EU’s third directive on competition in energy markets.

Bord Gáis will publish its annual report today.