The ESB is to approach the Government shortly, seeking sanction to spend up to €360 million upgrading the State's largest power plant at Moneypoint in Co Clare.

The company's board yesterday voted in favour of a plan to install new desulphurisation technology at the plant which will radically reduce sulphur emissions. The company has also secured what it calls a "best practice agreement" from workers at the plant.

Both developments clear the way for Moneypoint, a coal-burning station, to remain open for another 20 years. The ESB has rejected suggestions from some quarters that a new gas-fired plant should be built at the Moneypoint site instead.

The company has taken the view that an over-dependence on gas throughout the electricity network would be the wrong move. Moneypoint is a vital national asset producing more than 900 megawatts of power a year.

Sources indicated last night that consumers would not have to pay directly for the capital cost of upgrading Moneypoint.

"There will be no levy or anything like that," said a source. However, the ESB will have to ensure the plant pays its way in future and the company will seek a reasonable price for power produced at Moneypoint. The energy regulator, Mr Tom Reeves, is currently devising a new system for generators to sell their power to suppliers.

Meanwhile, talks between ESB management and unions over a new pay agreement continue, with some sources suggesting a breakthrough is unlikely in the short term. The group of unions at ESB is looking for a 14.5 per cent share in the company and an 18.5 per cent pay increase.

The ESB chief executive, Mr Pádraig McManus, has asked Mr Luke Shinnors, human resources manager (networks), to lead management discussions. The talks are described as difficult, with unions meeting stiff resistance from management on the main pay claim.

The deficit in the pension fund is in the background with management telling unions a major pay rise will only increase the pension deficit. The management representatives have also told unions they cannot allocate staff any more equity in the company, as this is a Government matter.

Gordon Deegan adds: SIPTU spokesman Mr Gerry Talty welcomed the ESB's decision. He said: "The staff are happy that the board has shown, through their decision, confidence in the future viability of the station."