Developer Lumcloon threatens legal action against Eirgrid
Firm claims grid operator bidding to force it to quit €300m Offaly project
The backer of a proposed €300 million power plant is threatening action in the Irish and European courts against State body Eirgrid, which it claims is effectively trying to force it to abandon the project.
Lumcloon Energy, which has planning permission to build a power plant at Ferbane, Co Offaly, accused national electricity grid operator, Eirgrid, of dragging its heels over the introduction of regulations to allow the plant to go ahead and of attempting to force terms on the development that would render it uneconomic.
The company’s lawyers have written to the Single Energy Market Committee, which operates the system for setting electricity prices, asking it to demand that Eirgrid provide a clear timetable to complete the introduction of new rules and incentives to allow its plant to proceed.
Lumcloon says Eirgrid’s offer of connection to the national grid was for seven years, far shorter than the 10 or 20 years given to other generators.
The company claims this, combined with Eirgrid’s pricing proposals for the plant, make it extremely difficult to enter the market and are effectively stifling competition.
A spokesman said Lumcloon Energy is considering taking action in the High Court and the European Court of Justice . The company’s statement yesterday warned that Eirgrid could be exposed to substantial fines and damages claims for breaches of EU competition law.
Its competition law claims are partly based on the fact that Eirgrid operates an electricity interconnector between Britain and Ireland that can import up to 500 mega watts of power, the equivalent of a medium-sized generating plant, which the company argues makes it a commercial player .
However, Eirgrid said yesterday that it has no commercial interest in generating electricity and operates in a fair and equitable manner in compliance with Irish and European law.
Lumcloon is backed by two Irish companies, RR Projects and Terotech International. The gas-fired plant it intends building at Ferbane is designed to support wind generation.
It applied for planning for the generator in 2008. Building and commissioning the plant will employ 300 people over a two-year period.
The company has fallen out with Eirgrid over the progress of the so-called DS3 consultation process, which is designed to pave the way for the construction of enough wind-powered generation to meet the Republic’s target that 40 per cent of all electricity would come from this source by 2020.
Eirgrid pointed out yesterday that the terms highlighted by Lumcloon have not been finalised as they are still the subject of the consultation process.
The State agency said that it would encourage anyone with views on these issues to make submissions to the regulatory authorities.