Viridian, the parent company of Northern Ireland Electricity, has confirmed that a site for a new £150 million gas power plant in Dublin has been acquired.
The company says it is likely to make a formal announcement about the plant in the next two months. It declined to comment on the location but it is understood the site is Huntstown Quarry in north County Dublin which is owned by CRH.
The plant will represent a major competitive challenge for the ESB as Viridian hopes it will supply some of the largest electricity customers in the Republic, many of whom have already held talks with the company.
While the exact details are not known, the building of the plant will be a joint venture between Viridian and CRH and will result in major cost savings for CRH as it will be able to avail of significantly cheaper electricity. It is currently one of the ESB's largest customers.
A spokesman for CRH would not comment on any arrangements between the two companies, but said that discussions have taken place in recent months with Viridian.
It is understood an environmental impact statement is currently being prepared for the site which covers a large area. A planning application will be made to Fingal County Council.
The chief executive of Viridian, Dr Patrick Haren, said yesterday that a site had been acquired and a partner chosen but he did not want to comment in detail at this stage.
The electricity market will be partially liberalised in the year 2000 when the top 300 corporate users will be allowed to choose their own provider. Dr Haren said a certain number of customers will need to be gained to make the new plant viable but Viridian's prices will be lower than the ESBs.
He said the plant will most likely be debt financed. He added that the appointment of an electricity regulator by the Government would help clarify how independent operators can access the electricity network.
Viridian is also looking at a number of combined heat and power projects (CHPs) which would see it linking up with third parties who need cheap power and heat to provide them with what is effectively a miniature power station.
Guinness already has its own CHP, producing about 15 megawatts as do a number of large hotels in Dublin. Dr Haren said the company has held talks with several Irish companies interested in having a CHP. He was speaking after the company announced a 6.4 per cent increase in pre-tax profits from £39 million sterling to £41.5 million sterling for the six months to September 30th.
Viridian's turnover rose from £199.7 million to £211.1 million, while earnings per share were up 19.6 per cent from 21.9p to 26.2p. The company said its financial ratios "remain strong" with net debt (including loan notes) now down to £17.5 million. Dr Haren said a cost-cutting programme by the company had helped increase profits and new subsidiaries, like NIE Financial Services, made a contribution.
It was also announced that the company's chairman, Mr David Jefferies, has decided to step down and will be succeeded by Mr Philip Rogerson, who joined the board in July. Mr Rogerson is a former deputy chairman of BG plc.
