The Competition and Consumer Protection Commission (CCPC) is to carry out a phase 2 investigation into a proposed joint venture between the ESB and Coillte.
The move follows the completion of a preliminary investigation that the CCPC says led it to determine that a full probe is necessary.
This, it says, is "in order to establish if the proposed transaction could lead to a substantial lessening of competition in any market for goods or services in the State."
In February last year both companies said they were entering bilateral discussions to explore a partnership opportunity on renewable energy.
It was to focus on developing 1,000MW of new renewable energy by 2030, primarily on land owned by the state forestry company.
Coillte and ESB have successfully collaborated on a range of renewable energy projects since 2003.
The planned venture was notified to the CCPC on February 12 this year.
The CCPC said today that it would publish its Phase 1 determination no later than 60 working days after the date of its completion and after it had allowed the parties the opportunity to request that confidential information be removed.
Interested parties have been invited to make submissions by the close of business on New Year's Eve.