€300m power plant in the pipeline

BORD GÁIS is planning to build a €300 million power station on the site of the Whitegate oil refinery in Cork.

The State-owned company said it has agreed to lease part of the Whitegate site from ConocoPhilips and hopes to have the 440MW gas-fired plant up and running by 2009.

When built, the power station will be capable of supplying nearly 10% of the country's electricity requirement.

Bord Gáis said the Whitegate site was ideal for a power plant as it has located near to an existing industrial development and has access to fuel storage facilities and electrical grid connection.

The proposal will require approval from EirGrid, the company that runs the electricity network, and will also need planning permission.

Head of strategic investments at Bord Gáis Dave Kirwan claimed the company has won an 8% share of the Irish electricity market since it was opened to competition in 2001. The company supplies about 2,500 companies.

Bord Gáis said its ability to continue growing its share of the power market was dependent on securing its own generation plants. It currently buys power from a number of other suppliers and wind farms and sells on to its customers.

"As a result of supply agreements, we have sufficient power to meet the needs of our expanding customer base. However, accessing long-term contracts in the Irish market is challenging. The current dynamic of the Irish market means that power contracts are not made available to all market participants equally, a fact that severely impacts on competition."

Despite the electricity sector being open to new operators, no challenger has emerged to take on ESB's dominance of the residential market.

But Mr Kirwan added: "As a company, we are committed to increasing the number of customers we supply in the business and, in time, the domestic market."

Aside from ESB and Bord Gáis, there are only a handful of players in the electricity market. The largest independent operator is Northern Ireland firm Viridian, which owns the Huntstown power station in Dublin and is building another on an adjacent site.

A new power station in Tynagh, Co Galway, which is majority-owned by Turkish construction firm Gama, is due to come on stream later this year.

A report on the energy sector by Deloitte Consultants is expected to recommend that the ESB sell of some of its generation stations.