Power company Scottish and Southern has won licences to operate in the Republic days ahead of the launch of the all-Ireland electricity market.

The Perth-based electricity generating company applied to the energy market regulators in the Republic and Northern Ireland for licences to supply electricity and gas in both parts of Ireland.

Yesterday, Scottish and Southern confirmed that the Republic's Commission for Energy Regulation (CER) has granted it its gas and electricity licences.

The move came just before the Republic's and Northern Ireland's electricity markets are merged to create a single market tomorrow.

Under the system that will be introduced, electricity generators will sell power into a pool from which suppliers will buy it at wholesale prices.

The licences will allow the Scottish utility to buy and sell power in Ireland.

Initially, the company will buy spare capacity from operators with generating plants here, and it will also supply power from its own plants via an interconnector line linking Antrim with Scotland.

The company has applied to the utilities regulator in Northern Ireland for a generating licence that would allow it to build and operate a power plant in Ireland.

A spokesman said yesterday that Scottish and Southern will concentrate on supplying business and industry, and will not chase domestic users.

All operators can supply the two million-plus domestic users in the Irish market, however, the only players who supply this market are the State-owned ESB in the Republic and the regulated utility, Northern Ireland Electricity (NIE), in the North.

ESB International is building a power generating facility for Scottish and Southern near Southampton in England.

The Scottish company is the second biggest player in the British power market.

A spokesman for the CER yesterday welcomed the group's application and said that there are a number of other players interested in entering the Irish market once the two jurisdictions have merged.