If the ESB and other electricity companies do not improve the reliability of their plants there could be a significant shortage of power stations in the years ahead, a new report has warned.

In its latest generation adequacy report, the ESB National Grid warns that the availability of power stations remains a serious problem for industry and could hamper developments between 2005 and 2011.

The company, which is responsible for the national grid, outlines two potential scenarios for the years ahead. It says if electricity generators manage to improve the performance of their stations there will be no need for extra capacity before 2009.

However, in a more pessimistic scenario it suggests "there will be a significant shortage of generation plants over the next seven years".

It says the shortage is most likely to be about 500 megawatts.

"Short-term availability improvement measures and heavy reliance on the interconnector with Northern Ireland are potential ways to reduce the shortfall."

The report acknowledges that new plants - Aughinish Alumina, Tynagh Energy and Huntstown Phase 2 - are due to come into operation, but it says this would not necessarily completely close the gap if availability does not improve.

"Even if this plant is commissioned on time, plant shortages remain in the region of 500 megawatts for the period between 2006 and 2009," it states.

It says if plant closures take place during this period the shortages would worsen.

The report says the question of plant availability is central to future projections.

"A plant that is scheduled out of service for maintenance, or forced out due to mechanical or electrical failure, cannot contribute to meeting the demand," it says.

It says the Republic's collection of power stations has noticeably declined in performance in recent years causing major concern. On average, it finds only 77 per cent of plants are available at any one time.

However, it points out that the companies involved are hopeful about the situation and availability should rise to 81-85 per cent.

The report notes that the Republic's power stations perform "quite poorly" when benchmarked against their international counterparts.

"With some effort it might be considered realistic that these units could reach even the median or average of their peer group in terms of availability," states the report.

It makes clear that, if there is a shortage of generation, this will present an opportunity to the industry.

ESB National Grid is based in the ESB Group's Dublin offices, but operates independently.