15 companies interested in new peat plant

UP to 15 companies have expressed an interest in building and operating the new peat burning power plant.

The competition for the £120 million plant in the Midlands was formally announced only earlier this month. Formal indications must be lodged by the beginning of May.

However, it is understood that almost 15 companies have already expressed their interest.

The only Irish company understood to be interested is the ESB. However, it has yet to make a formal decision, which is expected at a board meeting later this month.

Northern Irish Electricity is also said to be interested, as is Scottish Power. The Finnish group IVO is also said to have entered.

Following the initial pre-qualification, when the companies must simply prove themselves technically and financially capable of undertaking the project, detailed bids will have to be submitted.

UK consultants Stone Webster, which is running the competition will then narrow the field to four or five contenders.

The UK power generators have recently been disposing of generating capacity because of competition requirements. They are thus keen to expand internationally. Ireland is seen as a suitable destination not only because of its proximity and familiarity but also because this is one of the few states where demand for electricity is still expanding rapidly.

Last year demand grew at 7 per cent, while it has averaged 5 or 6 per cent over the last 10 years. Demand in Britain is virtually flat while most European countries have only a small increase in demand, if any at all.

The winner also gets a power purchase agreement for 15 or 20 years. This is seen as a guaranteed investment and a secure way to do business.

Scottish Power has already bought one British utility and is seen as favouring an expansionist route. It has already moved into the Irish market and is involved in a 15 mega-watt wind farm in Co Donegal.

However, one disadvantage that Irish and British companies have is their lack of experience with peat plants. Peat generating plants are more common in Sweden and Finland. IVO uses peat in its domestic plants and has also been involved in the project from its earliest planning stages.