A new contender has entered the electricity generation and supply market ahead of deregulation next month. Eirtricity, which is initially targeting customers in the small commercial sector, will be supplying renewable energy from wind farms on the west coast.

The new brand is a joint venture between Future Wind Partnership and National Toll Roads and the company expects to offer daytime "green" electricity to business customers at rates up to 10 per cent below ESB.

While the domestic market is not a priority at the outset, the company says it can supply that market at prices equivalent to those of the ESB.

Future Wind Partnership was set up in 1997 by Mr Eddie O'Connor, former managing director of Bord na Mona, with Mr Brian Hurley, Mr Louis Fitzgerald and Mr John Lavery. National Toll Roads is the company responsible for the two Dublin toll bridges.

Under an amendment to the Electricity Regulation Act 1999, Eirtricity will be entitled to supply 100 per cent of the market with its green product.

According to an EU liberalisation directive, companies producing conventional non-renewable power only have access to ESB's largest customers - accounting for 28 per cent of the market.

Companies supplying so-called renewable energy can target the entire market.

There is a growing consensus that rising demand for electricity will outstrip supply in the next few years and some predict we are facing a 700 megawatt gap in supply terms.

Advances in technology have made wind farms increasingly competitive in the power generation market. The average cost of electricity production from wind farms is estimated at £800,000 per megawatt.

The ESB owns a wind plant in Donegal and says it plans to compete vigorously in the green sector.

Wind generated energy currently accounts for around 100 megawatts of ESB supply.

Eirtricity wind farms will be based in Donegal, Cavan and Kerry this year. The company has planning permission to build its first farm at Culliagh, Co Donegal. The 12 megawatt farm is expected to come on stream by October of this year.

Eirtricity has also commissioned Mr John Gillespie to build a two megawatt farm of wind driven turbines in Gweedore, Co Donegal, which the company expects will be in production by the end of March.

Speaking at the launch of Eirtricity in Dublin yesterday, the company's chief executive Mr Eddie O'Connor said more than 100 customers had been recruited already. He predicted Eirtricity would be producing between 100 and 200 megawatts within two years.

"Our relationship with the small commercial customer will be web-enabled, thus allowing the customer to monitor their account and consumption to a greater degree," Mr O'Connor said.

Eirtricity will be able to deliver power to any location in the state, by renting transmission and distribution wires from the ESB. A "top-up and spill" arrangement has been put in place to ensure customer supply is not interrupted.

The generic licence for new power companies will be published next week by the Commission for Electricity Regulation. A spokesman for the Commission said applications would then be processed immediately. There is no limit on the number of licences to be issued.

The starting date for the deregulation of the electricity market is February 19th.