1. ESB Presentation Oireachtas Committee 2 nd November 2005

2. Content Emergent trends in Europe Full opening of the Irish electricity market All Island electricity market ESB International Investments ESB Investments –Networks –Power Generation –Environmental Compliance and Renewables Electricity prices Issues Going forward

3. Energy Policy SECURITY OF SUPPLY PRICE ENVIRONMENT Market Liberalisation Oil /Gas /Coal Volatility

4. Full Market Opening All customers free to choose supplier On time and on budget delivery of complex IT systems to enable Market Opening ESB commitment to facilitating competition –reduce market share –discount sale of power to competitors –ESB contracts with Independent Generators Viridian, BGE, Airtricity, Aughinish, Tynagh

5. All Island Market Commitment to integrate markets by July 2007 Welcome development => fully supported by ESB ESB market share reduced to 40%-45% – c 2000MW on new plant in 7 years –70% owned by Independent Power Producers ESB planning to “repower” Aghada power station

6. ESB’s Amorebieta Power Station in Spain

7. Distribution & Transmission Investment (€m)

8. Infrastructure Delivery 2001 - 2005 65,000 km’s of MV renewal 370,000 customer connections 250+ kms of new transmission circuits (+x%) 62 new transmission/HV stations 60+ refurbished transmission/HV stations Capital spend of €3 billion

9. Investment in Generation Strategy –Modernise and develop the Portfolio –Implement best practice O&M Commissioned two new Peat Stations Investment in Moneypoint Best practice agreed at many stations

10. ESB’s Wind Farm at Carnsore Point

11. Connection of Wind Generation  Approx 300MW connected  Another 600MW accepted offers to connect  Another 380 MW being offered to connect  Over 2,000MW of additional applications being processed More than 100 new applicants

12. Breakdown of ESB Price Increase In the period 2000-2006 ESB price increase has totalled 40%. –Generation / Fuel accounts for c 34% –4% relates to networks –2% relates to PSO’s (Public Service Obligations) and Supply costs

13. Gas prices (2004 to 2005)

14. Oil prices (2004 to 2005)

15. Installed capacity – fuel mix

16. Forecast Baseload prices 2006

17. Summary Imperative to deliver massive future infrastructure needs –Organisation capability –Funding ability Requirement to remain financially strong Need to reduce costs and meet regulatory targets Important to reach acceptable market share –Security of Supply Vs Liberalisation Requirement for international growth to maintain scale and skills