Irish consumers are facing electricity blackouts this Christmas because of consistent Government failures to plan ahead, introduce greater competition to the marketplace and provide for a secure supply of energy. It is an appalling vista because shortages were predicted in a number of official reports. And the situation is likely to worsen within the next few years as demand for electricity exceeds supply.
The latest exposure of Government failure to confront the near-monopoly enjoyed by the ESB has come from the Economic and Social Research Institute. Its survey of electrical output and demand at peak times has concluded there is a near-50 per cent chance of shortages this winter if a number of ageing ESB plants experience breakdown. Householders and small businesses could lose power for five hours in the most pessimistic scenario, while road traffic would be seriously disrupted.
We have been here before. Blackouts were only avoided in 2001 and 2002 because the Government agreed to bring in temporary US generators at huge expense. And the closure of Irish Steel, a large electricity consumer, cut demand. In spite of that close call, the remedies identified have not been acted upon. After five years, a cross-channel electricity interconnector, which would have provided for security of supply and an expansion of wind farms, is still an aspiration. The Government now hopes to build one by 2012.
Last year, a report from the Department of Enterprise Trade and Employment warned that Ireland's business prospects are being damaged by electricity costs and the ESB's dominant position. It noted the entire cost of upgrading the distribution network was being charged to current users. And it found no provision for investment had been made in the National Development Plan.
An EU directive required the Government to introduce competition in the late 1990s. But its response has been tentative, at best. A decision from 2001 to separate the distribution and generating systems only took effect last July when EirGrid was formally established as an independent, State-owned company. But ownership of the grid remains with the ESB. And a large number of wind developers are awaiting connection.
As with the transport sector, this Government appears unwilling to confront trade unions and vested interests. Under pressure from the EU, it encouraged foreign involvement in new generating capacity, while restricting ESB investment. That did not succeed because of the State company's dominant position and control of the network. Since then, the ESB has invested in Northern Ireland as part of an all-island electricity market. And a cross-Border interconnector has been built. Not much sign there of a reduction in dominance. But then, the Government has a vested interest. For the past three years it has taken up to 30 per cent of the ESB's hefty profits in the form of an annual dividend. It is time consumer needs took precedence.