AN BORD Pleanála has reversed a decision by Mayo County Council by refusing planning permission for a combined heat and power (CHP) plant which would have seen an investment of €200 million in north Mayo and created 300 jobs.
Mayo Power had planned to build a 100mw mixed-fuel plant on the former Asahi site near Killala in north Mayo.
The predominant fuel for the project was to be biomass supported by locally sourced peat. Together they would produce lower CO2 emissions than a modern gas-fired power station.
An Bord Pleanála said it was rejecting the project as it "would be contrary to the national policy to reduce power generation from peat as a source of fuel".
In a statement yesterday, Mayo Power said: "No relevant Government authority had ever, at any stage of the planning process, said there was a national policy against the judicious use of an indigenous fuel such as peat in support of a significant renewable energy project.
"What An Bord Pleanála has done is to say no to the largest renewable solid biomass energy project in Ireland at a time of a major downturn in the Irish economy.
"It was also to be the largest capacity CHP facility for Ireland which is the top EU priority in the energy sector to which the Government is committed."
The plant received planning permission from Mayo County Council in December 2007 and was the subject of a number of appeals to An Bord Pleanála.
The Mayo Power statement said that its directors were extremely disappointed by the decision and would now be considering their options.