Viridian hopes to have a new €250 million power plant in north county Dublin operational within three years as demand for electricity rises again in the Republic.
The company informed the stock exchange yesterday of its decision to link up with Mitsubishi Corporation for the project. Mitsubishi will build the gas-fired station, which should be completed in mid-2007.
Once commissioned the station's output will be sold through Energia, Viridian's market supply business. Viridian said it hoped to sell the power at a significant discount to the ESB.
The company has been pondering whether to build a second power station since losing a competition held by the Commission for Energy Regulation (CER) late last year. The CER competition involved a guaranteed 10-year contract to sell power to the ESB. The latest Viridian plant is a "merchant plant", meaning it has no guaranteed outlet for its power.
The new station will produce on average 400 megawatts of power and be situated alongside the existing Huntstown plant near Mulhuddart, north Dublin. Planning permission has been obtained from Fingal County Council.
Mr Harry McCracken, group managing director of Viridian Power and Energy, said "the Celtic Tiger seems to be roaring again".
He said peak electricity demand was growing at between 2 and 4 per cent a year. He said he believed there would be a large market to supply when the plant was ready in 2007 . He said moves towards a north-south electricity market would also help.
With its two stations producing 743 megawatts in total, Viridian at that stage will be providing 17 per cent of the State's generation capacity.
At the moment, it remains the only independent large-scale supplier of electricity to the Irish market, although two plants - Aughinish Alumina and Tynagh Energy - are due to come into service within the next two years.
The company will fund the latest project from debt, although Dr Patrick Haren, Viridian group chief executive, said he was not ruling out getting involved in other projects like the electricity interconnector with Britain.
At the peak of construction the new station will provide 600 jobs, but only about 45 will be needed to operate the two stations.
In the year ended March 31st, 2004, Viridian posted a turnover of £127.9 million sterling (€187.9 million) from its energy business in the Republic, with profits of £14.4 million.
The company's results for the six months ended September 30th will be announced on November 23rd and a statement said they would be "in line with expectations".
