The property group, Treasury Holdings, is planning to spend more than £50 million in an attempt to become a major player in the electricity market which opens up in February, The Irish Times has learned. The company is setting up its own electricity division, which will develop a series of combined heat and power (CHP) plants and wind farms.

The company is to build a 20 megawatt CHP plant, at a cost of £17 million, on its Spencer Dock site in Dublin's Docklands, to power the National Conference Centre.

The company intends to sell the power which is not required by the centre to other companies and will consider increasing the plant's capacity in future years. CHP plants operate by combusting natural gas and air to simultaneously generate electricity and heat. Unlike conventional production, the heat is retained and can be used in some manufacturing processes and in heating buildings.

Treasury is hiring a sales team for its electricity subsidiary, Wind Generation Ltd, and has held preliminary discussions with some potential customers.

Treasury Holdings owns large wind farms in Spain and Italy and has two smaller ones in Co. Donegal and Arigna, Co. Roscommon. It is planning two more in Co. Cork. The company will be able to avail of a tax break for investing in wind farms introduced in a recent Finance Act.

Speaking to The Irish Times last night, Mr Richard Barrett, a director of Treasury Holdings, said the company would "devote a lot of capital" to its plans.

"Most experts agree that demand for electricity will far outstrip supply in the next few years and there have been suggestions of a 700 megawatt gap in supply terms, we are undertaking our activities against that background," he said.

He said the majority of property developments involving Treasury Holdings would also use CHP technology, including the five star hotel being built at College Street in Dublin.

Under an amendment introduced a fortnight ago by the Government to the Electricity Regulation Bill, CHP projects are regarded as a renewable form of energy.

Because of this provision, companies like Treasury are entitled to supply 100 per cent of the electricity market, whereas conventional power operators like newcomers Viridian only have access to 28 per cent of the market.

The ESB is understood to be opposed to the amendment, because they believe companies like Treasury Holdings, could "cherry-pick" the most lucrative customers.