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27 April 2007 - Ireland has done away with its problematic system of virtual power plant auctions and revenue regulation, by requiring the state-owned incumbent, ESB, to sell off many of its generation assets.
Datamonitor reports that Irish regulators have announced that no one market participant will be allowed to own over 40 per cent of Irish generation capacity.
Ireland was one of the first European countries to fully liberalize its retail energy market, with all consumers becoming eligible to switch power suppliers in February 2005, over two years before European Union (EU) requirements come into play.
The country is also taking great strides in achieving network independence. In July 2006, Eirgrid was created to own and operate the transmission assets of state-owned power incumbent ESB. Of course, Eirgrid and ESB have the same shareholder, but there have not been any major complaints.
This is not the case in Northern Ireland, where there have been complaints around transparency at SONI, the transmission system operator, which has been insufficiently unbundled from incumbent utility Northern Ireland Electricity (NIE). However, the push to create an all-island market is helping to resolve this issue.
In March, regulators in both jurisdictions signed a memorandum of understanding, which, among other things, calls for SONI to be fully divested from NIE by November 2008.
This memorandum also calls for the phasing out of regulated tariffs in market segments where there is sufficient competition. The one remaining stumbling block for deeper retail competition is the dominance of ESB in power generation.
The stopgap solution of the Irish regulator has been to require ESB to enter into virtual power plant (VPP) auctions. However, with ESB Independent Supply picking up much of the auctioned capacity, the VPP system can hardly be said to be working effectively.
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