"We are disappointed at ESB continuing to strengthen its dominant position in the Irish market. Allowing ESB to develop the Aghada plant is bad for the consumer, " said Mark Ennis, head of wind power generation company Airtricity's supply business.

"It is disappointing that the opportunity has been missed to run an open and transparent competition for the replacement of the Aghada power plant, " said Viridian spokesman Robin Greer.

Viridian, which is the largest electricity supplier in Northern Ireland, competes with the ESB in providing electricity to commercial customers in the Republic but does not operate in the consumer market.

Greer said the company was hoping that the Department of Communications could have put the contract to build the new plant out to competitive tender.

Alternatively, he said, it could have made the award of the contract to build the plant conditional on the ESB providing details of how it intends to fulfil its requirement to close or sell plants to competitors over the next three years.

The Commission for Energy Regulation requires the ESB to close or sell plants in order to divest itself of 1300MW of electricity generation. That would be equivalent to around 30% of the country's current electricity generation requirements or three large scale plants such as the 430MW development proposed for Aghada. The ESB has yet to provide details of what stations may be up for sale or a timetable for disposals.

"We would have expected to see ESB getting Aghada but conditional on a timetable on other sites being made available, " said Greer. Competitors such as Viridian are anxious to see which sites could be put up for sale before they make decisions on investing further in infrastructure in the Irish market. Viridian currently operates the 343MW Huntstown plant in Dublin.

Viridian would be in the market for some of the divested ESB plants depending on what is made available, he said.

A spokeswoman for Bord Gais appeared to rule out any bid from the energy company for any ESB assets. Bord Gais, which is in the process of building a power plant in Cork at Whitegate, had "no plans to take over any ESB plants, " she said.