Power station deal lets German giant RWE enter Irish electricity market

GERMAN energy giant RWE yesterday took its first step into the Irish electricity market when it signed contracts for gas supply and plant operation at the proposed independent power station at Tynagh, Co Galway.

The company is behind the Npower brand that operates plants in Britain generating over 8,000 megawatts, double the size of Ireland’s entire demand for power. The firm will supply gas to the Tynagh plant, which is due to begin operations in 2006.

The plant is being built on the site of the old Tynagh mine by Tynagh Energy Limited (TEL), a consortium 80%-owned by Turkish construction company Gama, with the balance held by meat processing businessman Martin Blake. TEL was awarded a contract by the energy regulator last year to build a 400-megawatt plant that will be one of the biggest in the country when complete.

TEL director Brian Keogh said the deal was a significant milestone in developing the plant. He added RWE had been chosen because of its strong reputation in the utilities sector.

The contracts will create up to 40 jobs and will see RWE take responsibility for sourcing gas for the plant and ensuring that there is sufficient supply to produce electricity. RWE will also take some of the plant’s electrical output and sell it to large business customers under the Npower brand.

The plant will be operated and maintained by RWE employees. Brian Senior, managing director of RWE’s energy trading division, said Ireland was an important market for RWE and that the contract would allow it to demonstrate its capabilities at all stages of the power generation process.

“It demonstrates that we offer value across the full value chain, from plant operation to retail, from trading to risk management,” he said.

Dr Senior added that the company had been pleased with its performance since it entered the Irish gas market last year as the country’s first independent supplier. He said that it hoped to repeat this in the electricity market.

However, he declined to put a value on the contracts relating to the Tynagh operation.