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Turmoil in power as Airtricity pulls plug

THE Irish electricity market was thrown into turmoil yesterday after Airtricity confirmed its decision to withdraw from the market because of higher costs.

The company said it has been forced to exit the residential sector as a result of market failure and the lack of conditions conducive to promoting competition in the sector.

Out of the 51,000 customers on its books, 11,000 will be affected. Most of these are domestic users, while 5pc of them are business consumers.

Airtricity said a number of factors contributed to the move, including a moratorium on connecting new wind farms to the National Grid, imposed by the Regulator in December 2003.

It said that since then, it has found it increasingly difficult to import alternative power supplies through the North-South Interconnector, forcing it to source top-up power supplies from the ESB.

But despite a ministerial directive that the cost of this power should be regulated a year in advance, it has endured high and volatile power costs since August, averaging some 43pc above the projected costs.

Competition

Airtricity chief Mark Ennis said the company was "failed by the electricity market rules which have not provided a framework for any form of effective competition in the market".

But he said the company is pressing ahead with the building of four new wind farms and... more [truncated due to possible copyright]  
The company said it has been forced to exit the residential sector as a result of market failure and the lack of conditions conducive to promoting competition in the sector.

Out of the 51,000 customers on its books, 11,000 will be affected. Most of these are domestic users, while 5pc of them are business consumers.

Airtricity said a number of factors contributed to the move, including a moratorium on connecting new wind farms to the National Grid, imposed by the Regulator in December 2003.

It said that since then, it has found it increasingly difficult to import alternative power supplies through the North-South Interconnector, forcing it to source top-up power supplies from the ESB.

But despite a ministerial directive that the cost of this power should be regulated a year in advance, it has endured high and volatile power costs since August, averaging some 43pc above the projected costs.

Competition

Airtricity chief Mark Ennis said the company was "failed by the electricity market rules which have not provided a framework for any form of effective competition in the market".

But he said the company is pressing ahead with the building of four new wind farms and is pursuing the Government to release State-supported renewable energy.

"With these actions we would envisage being able to supply fixed power prices within eighteen months," Mr Ennis concluded.

The Commission for Energy Regulation (CER) said yesterday that it has been carrying out its own investigation of why electricity market prices were higher from August 2005 and will be publishing its report by the end of this week.

It also rejected Airtricity's contention that there has been market or regulatory failure and that it is ignoring the ministerial direction of July 1999 on the trading arrangements for electricity.

The decision drew an immediate response from other independents in the electricity market.

Viridian, the operator of the Huntstown power station, said customers will suffer from the reduction of competition following Airtricity's withdrawal from the domestic market.

Spokesman Robin Greer said that in addition to Airtricity's withdrawal, three major international players, RWE, EON and Statoil, have decided to leave the Irish electricity generation market.

"At a time when it was hoped that there would be increased competition in the electricity market, bringing choice and competitive prices to customers, we are instead seeing companies quitting the Irish market," he said.

Source: http://www.unison.ie/irish_...

FEB 21 2006
http://www.windaction.org/posts/1394-turmoil-in-power-as-airtricity-pulls-plug
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