Over 200 companies saved a total of close to €5 million in energy costs last year by taking part in a national grid-sponsored scheme aimed at cutting demand for peak-time electricity.

Independent electricity transmission operator, EirGrid, said yesterday it paid €4 million in rebates last year to 244 large industries that took part in its winter peak demand reduction scheme.

On top of that, the companies made total estimated savings in their electricity bills of between €500,000 and €1 million.

The average saving involved per company was over €20,000.

The businesses that take part in the scheme are large industries in areas like technology, biotech, pharmaceuticals and other productive industries.

According to an EirGrid spokesman, the businesses involved reduced their electricity use by a total of 90 megawatts (mw), the equivalent of 900,000 100 watt bulbs being switched on at once.

"To put that in context, peak demand is growing by 200mw a year, so the saving was close to half the annual increase in demand," he said.

The scheme operates by offering financial incentives to big industries to cut their electricity use between 5pm and 7pm from November to March inclusive.

This is when demand for electricity is at its heaviest. It's also when the most expensive and least efficient power plants come on stream, as the transmission system operates by using the cheapest plants first and the most expensive last.

The most expensive generating plants tend to use fossil fuels, which also add to the State's carbon dioxide emissions, the spokesman pointed out.

At peak last year, the Republic used 4,828mw. There is currently enough generating capacity to meet growing demand in the State until 2009. This is based on the assumption that three planned stations begin operating on schedule and none of the existing facilities shut down.

Two of the three plants, Tynagh in Galway and Aughinish Alumina in Limerick, have already come on line.

A third, the Viridian plant being developed at Huntstown in north county Dublin, is still being completed.

New plants are adding 400mw annually to the national grid.

Last year, an EirGrid survey of electricity-generating capacity concluded that extra power would again be needed between 2009 and 2012.

EirGrid is running workshops next week in Dublin and Cork for anyone interested in taking part in the winter peak reduction scheme.