Power plant developer accuses Eigrid over incentive plan

The developer of a €300 million power plant has accused the national grid operator of attempting to push through the introduction of incentives that will directly benefit its own activities in the latest stage of a row between the pair.

Lumcloon Energy, which is planning to build a gas-fired generator in Ferbane, Co Offaly, this week threatened legal action against State-owned grid operator Eirgrid, which it accused of delaying the introduction of regulations that will allow the plant to go ahead.

New payments
Yesterday, Lumcloon said that Eirgrid is recommending to the electricity market regulator that it introduce new payments that would boost the amount handed over to the country's two electricity interconnectors with Britain to €50 million from €18 million a-year. As Eirgrid operates the largest and newest of these, Lumcloon says that this recommendation will benefit the grid operator directly and reduce the amounts that can be paid to the developers of new power plants. Its lawyers, Brussels firm Benoit Keane, have written to the Single Energy Market Committee, which operates the system for setting electricity prices, claiming that Eigrid is abusing its dominant position, which is contrary to EU and domestic law.

However, Eigrid flatly denied Lumcloon’s claims yesterday, describing them as being untrue and and without any basis.

“Eirgrid does not, and could not, benefit from any payments for system services, as those services are a pass-through under the regulatory arrangements for the building and operation of the interconnector,” it said.

"Any revenues paid for ancillary services in Ireland or in Great Britain are fully cycled back to Irish consumers and do not affect EirGrid's bottom line or profits.

“Therefore the allegation is without any foundation.”

Response to calls
The agency went on to say that its recommendations to the single market committee were actually a response to calls from generators, including Lumcloon Energy itself.

The Ferbane plant will cost around €300 million to build while its construction will create 500 jobs.