Bord Gáis - State energy needs get timely boost

WITH the uncertainty that pervades global oil supplies at the moment and into the future, the announcement yesterday by Bord Gáis of its intention to develop a power plant at Whitegate, in County Cork, is to be welcomed.

The State-owned natural gas company has signed an agreement to build a €300 million 440 MW gas-fired electricity generating plant on a 25-acre portion of the ConocoPhillips site.

Although it is not expected to be operational for at least another three years, the news is reassuring for consumers who face increasing oil and gas prices caused by the US-Iran nuclear crisis, and the inevitability of an approaching interest-rate hike, as signalled by the European Central Bank.

The plan by Bord Gáis to construct and operate an electricity-generation plant will provide the company with a long-term source of power, and will represent a relevant factor in allowing it to expand its role as a contributor of electricity in the Irish market.

In this regard, it should prove quite a healthy position, in that the company will impact considerably on the other State-owned company, the ESB, which has enjoyed a virtual monopoly in the generation of electricity in this country.

While the proposed plant will be subject to planning permission parameters, and a connection agreement with Eirgrid, it would appear to be earmarked for an appropriate site. As the company pointed out, it will also be the subject of a comprehensive liaison programme with all interested parties, and it will be located in proximity to an existing industrial development, with access to substantive standby fuel storage facilities, site services, seawater cooling and electrical grid connection.

Although Bord Gáis is more popularly associated with its domestic gas products, it is not a complete novice in the electricity market and not without experience.

Since it entered the electricity market in 2001, it has successfully built a market share of 8%, by currently supplying the electricity needs of over 2,500 large enterprises and SMEs.

Obviously, it will increase its business customer base with its new enterprise, but importantly, it will make a strong impact on the domestic market in the longer term.

Because Bord Gáis has to currently source electricity from a range of power producers, including a number of wind developers, it is important from its customers’ aspect and for its own future development that it be independently able to rely on its own source of power.

It will also have the affect of levelling the playing pitch to a greater extent for Bord Gáis, because at the moment it is depending on supply agreements to meet its customer requirements. To considerably increase its growth in the electricity supply market, it is crucial for the company, and the consumer, that it undertakes this next step.

This should secure more independence for itself, and realise its expectation to then be able to offer electricity to the domestic customers, of which it already has 500,000 gas customers. This will be an exceptionally welcome development.

Apart altogether from the energy implications, the construction of such a major plant will have important connotations for employment and the local economy.