The ESB plans to sell three former power station sites and is considering disposing of its former peat burning plant in Bellacorrick, Co Mayo, previously confidential sections of the Deloitte report on the company reveal. Emmet Oliver reports.
The report, published on October 1st, included several sections that were withheld due to their commercial sensitivity. These show that the ESB is planning to off-load sites in Gweedore, Co Donegal, Screeb in Co Galway and Cahirciveen in Co Kerry. The report says these disposals will occur in 2006.
The sites are relatively small and their sale is unlikely to assuage the ESB's commercial rivals, who want the company to offload major stations to them so the market can be opened up further. While the sites in Gweedore, Screeb and Cahirciveen may not prove very attractive to rivals, the power plant at Bellacorrick, which closed two years ago, may be more attractive, as it comes with a grid connection and is close to the Corrib gas field off the Mayo coast.
Most new power stations in Ireland are gas-fired and the proximity of such a large gas reserve would be attractive to some utility companies. However, the objections from the Shell to Sea campaign have so far prevented Corrib gas being brought ashore.
The ESB is keen to build a new modern power station at Aghada in Co Cork, but the Government is likely to give approval for this only if the ESB sells off or leases out other stations in exchange. "A fair degree of horse trading will have to be done," said a senior Government source.
The Deloitte document also reveals that it would be possible for a new entrant to the electricity market to run a profitable business even with the strong presence of the ESB.
The Deloitte report says the ESB conducted its own analysis and found that even a company with only a limited presence in the market could reach viable levels of profitability (€20 million) with just 175,000 domestic customers within a three-year period.
The Deloitte report suggests that any new entrant would need to outsource "to the greatest extent possible" to make this a reality. So far, energy companies have steered clear of getting involved in the domestic market because of its low margins and need for large back office resources.
Meanwhile, Bord na Móna has agreed terms with German company E.ON to buy the Edenderry power station in Co Offaly for a consideration of about €80 million. It is anticipated the transaction will be completed by year end.
The station, which produces 120 megawatts of power, is currently fuelled by peat, but this could be changed to bio-mass, said Bord na Móna yesterday.
