Viridian plans second power station for Dublin

Northern Ireland electricity firm Viridian may build a second power station in north Dublin beside the existing plant now near completion.

Reporting a drop to £47.6 million (€74.9 million) from £48.5 million in adjusted half-year profits to the end of September, the company said yesterday that it would make a decision about the site at Huntstown in the next six months.

Viridian's revenues rose to £331.8 million from £305.3 million in the period. Its adjusted earnings per share rose to 16.4p from 14.1p while its interim dividend rose 3 per cent to 9.14p per share.

The performance reflected a first-time contribution from the Moyle interconnector between Scotland and Northern Ireland.

Viridian said the commissioning of the 360 megawatt (MW) power station already built at Huntstown would be completed by the end of this month. It has pre-sold some 300 MW of the output but will retain 60 MW for use on the spot market.

Viridian said it had planning permission to build another 260 MW plant but wanted clarity from the energy regulator, Mr Tom Reeves, about the next phase of deregulation. The company wants guidance from Mr Reeves about how the small and medium enterprises market will be opened to competition.

Viridian says its supply subsidiary, Energia, sells power to about 170 large industrial users comprising a quarter of the liberalised section in the market.

But profits at Energia fell to £500,000 from £900,000 due mainly to a £648,407 bad debt with the defunct Irish Fertilizer Industries (IFI). Mr Haren said this was unexpected, given IFI's strong credit rating.

Yet with rising demand for electricity suggesting that additional generation capacity will be required by 2005, the company is well positioned to make an additional investment in the Republic.

The ESB is obliged to reduce its share of the generation market, while the only other group planning to build a plant, Ireland Power, has so far failed to indicate that it will proceed with the development. Its joint-venture partner, BP, has been trying to sell its share of the project for more than two years.

A new plant could cost in excess of €250 million but Viridian's chief executive, Mr Patrick Haren, said the company could afford to take the additional debt required to build another plant at Huntstown.

Net debt at the end of September decreased to £512.6 million from £535.2 million on March 31st. This reflected ongoing expenditure on the Huntstown plant offset by proceeds from the £111.4 million sale of Viridian's Open + Direct consumer finance subsidiary.

Mr Haren said the Open + Direct sale and Viridian's withdrawal from the telecoms venture Nevada were designed to focus the business on core activities

Viridian sold its 50 per cent joint-venture partner Energis its half-share in the telecom venture Nevada for a nominal sum 12 days ago. Asked about the disposal, Mr Haren said some of the gloss had come off the telecoms market.