Energy supplier Viridian has won an appeal against changes to the electricity generation licence for its Huntstown power plants, raising hopes that they can remain open and save 40 jobs.
Viridian warned earlier this year that it would have to close the Co Dublin plants after one facility failed to secure a contract for new payments from national grid operator EirGrid in an auction overseen by the Commission for Regulation of Utilities (CRU).
The company appealed the change to a statutory panel assembled by the Minister for Communications, Energy and Natural Resources, Denis Naughten. The panel ruled in Viridian's favour and found that Huntstown was needed to ensure security of electricity supplies to Dublin.
The panel of three barristers, Eilis Brennan, Aoife Carroll and Joe Jeffers, found that because Huntstown was needed for security of supply, the CRU had made "a serious and significant" error in changing the licence terms, without having some mechanism in place to make additional payments to the company. It directed the regulator not to make the changes.
The panel’s ruling means it is likely that the CRU will have to allow EirGrid to agree a new contract with Huntstown, raising the prospect that Viridian will not close the plants with the loss of 40 jobs.
Standby payments
The dispute arose when EirGrid in the Republic and System Operator Northern Ireland cut standby payments to generators by a total of €200 million in a reorganisation of the all-island energy market that is due to come into force in October.
They ran auctions last year to determine which plants would receive the payments, meant to ensure that there are enough generators available to supply power in all circumstances. One of the two Huntstown plants, which produces 750 megawatts of electricity, was among a small number that failed to get a contract.
Viridian said it would have to close both plants as a result. However, the CRU refused to relax a requirement that the company give three years’ notice of plans to close.
The appeals panel argued that this forced Huntstown to generate power at a loss and “dooms them to a slow and inexorable march towards insolvency”.
The three lawyers found that the CRU should have put a specific contract mechanism in place to allow the grid operator make extra payments to power plants that are needed for security of supply, but which do not qualify for support under the new market’s rules.
Viridian yesterday called on the regulator to address the issue so that it could continue to supply power to the Dublin market and provide certainty for its workers.
The CRU said it was examining the panel’s findings but indicated that Huntstown was likely to come to some arrangement with EirGrid.
“The decision of the panel does not affect the current process in place between the transmission system operator, EirGrid, and Viridian Power in regard to a targeted contract with the Huntstown generation plants,” the regulator said.
