ESB gets ownership approval for €300m Cork plant

The ESB's power generation division will be allowed to own and operate the new €300 million power plant at Aghada, Co Cork, after Minister for Communications Noel Dempsey softened his stance on the issue of ownership.

In a letter sent recently, the Minister seemed to indicate that he wanted the plant to be ring-fenced from other stations and that it could not form part of power generation's various assets.

But another letter since sent by Mr Dempsey has clarified this is not a requirement. However, the Minister insists the station's output goes to non-ESB suppliers.

The Minister has warned that if ESB does not divest from other plants, in line with a recent agreement agreement with the Commission for Energy Regulation (CER), it could lose the ownership of the Aghada plant too.

The Minister last night formally gave permission for the ESB to build the gas-fired plant at Aghada, which replaces an older station on the site.

Speaking yesterday Mr Dempsey said: "This Government decision will help to address two significant elements of energy policy: security of supply and competitiveness in the single electricity market.

"The new power plant in Aghada is needed by winter 2009-10 in order to provide generation adequacy for the economy and consumers."

An ESB spokesman said the company had received clarifications on the original letter sent by Mr Dempsey and these would go to the company's board on January 18th.

It is understood the clarifications will be sufficient to assure the board of the company, although the trade unions remain opposed to the contents of Mr Dempsey's announcement.

Meanwhile, it is understood a large land holding owned by the ESB in Carnsore Point, Co Wexford, has been the subject of discussions between the Department of Communications and the ESB.

The ESB is believed to have more than 100 acres of land in the area, although a significant portion is taken up by a wind farm.

An ESB spokesman said 75 per cent of this site was used by a wind farm, with the rest used for agricultural purposes.

It is understood pressure has come on the ESB to off-load some of this land, but so far the company has resisted these suggestions.