ESB plans €600m plant in Wales

Mon, Aug 14, 2006, 01:00

The ESB is planning a new €600 million gas-fired power station near Port Talbot in Wales as its international expansion gathers pace. The company's international division, ESB International, is currently assessing various sites in the Port Talbot area for the plant.

Port Talbot, a port and market town, would be close to any new electricity interconnector between Ireland and Britain, which makes it an attractive location for ESB.

It is understood the town is also ideally situated to connect with the UK national grid.

ESB does not intend to develop the plant on its own, but will seek a joint venture partner, as is its practice with most international investments.

The company recently completed a deal for a new £400 million (€594 million) power plant at Marchwood, Southampton, with Scottish and Southern Energy.

ESB will need to get planning permission and other consents for the new Welsh station. Shareholder approval from the Government will also be needed.

But ESB chairman Tadhg O'Donoghue said at the company's annual results presentation last month that international expansion was vital for the company as its domestic market share shrunk.

Getting consents in place for major power plants can be a lengthy process, so construction of the Port Talbot facility is likely to be several years away.

A controversial new gas pipeline that will span the breadth of Wales is currently being constructed. It may bolster the business case for the Port Talbot plant.

The pipe will link two liquefied natural gas (LNG) terminals at Milford Haven with the national network. Phase one, which runs 120 kilometres (75 miles) from Milford Haven to the Neath Valley, is set to be completed in about a year.

The Welsh deal will bring to three the number of major international power projects ESB's international subsidiary is involved in.

Apart from Port Talbot and Marchwood, the company recently secured a site in the DuPont industrial complex near Avilés, Asturias, in north-west Spain for a proposed power plant. It plans an 800 megawatt combined cycle gas turbine plant at this site.

This will involve comprehensive consultation with the Madrid government, regional and local authorities as well as the local community.

This process is expected to take up to two-and-a-half years to complete and will allow construction of the plant to start in 2008.

The development cost is expected to be in the region of €500 million.

Wales has decided to move away from nuclear power for its future energy needs. Its only nuclear power station will close in 2010.

Its Nuclear Decommissioning Authority said recently there was no prospect of operating the Wylfa power station on Anglesey beyond its planned closure date. Welsh authorities have thus been looking at other generating technologies.

Port Talbot itself is the site for a new biomass plant. That plant will cost £33 million, but will be a relatively small project, generating just 10 megawatts of power.