Plans by ESB International and its joint venture partner, Coolkeeragh Power employees, to build a £150 million sterling (€242.4 million) power station in Derry, will not move forward until a crucial meeting of the Northern Ireland Assembly later this month.

Industry sources say the joint venture consortium has not yet committed a £5 million down payment to the group that will manufacture the new gas turbine for the power station, despite the September deadline by which it must be paid.

According to senior energy sources in the North the consortium has refused to deposit the £5 million advance payment because it is not convinced that public funding has been secured to develop the pipeline that will supply gas to the power station.

Without the supporting infrastructure - the contract to build and operate the gas pipeline - ESB International and Coolkeeragh Power employees are unlikely to proceed at this time with plans to develop the power station.

The Northern Ireland Assembly is now scheduled to discuss whether the proposed gas pipeline should receive public funding later this month.

The American group Questar and Bord Gβis have submitted a tender to build the transmission pipeline that will run from Belfast to Derry.

But industry sources say it is unlikely the companies will go ahead with their tender unless it secures some form of financial support from the Northern Ireland Assembly.

It is understood there is strong cross-party support in the North for the proposed gas pipeline to proceed but there are outstanding questions over certain issues including route planning and tariff agreements.

According to one energy sector source there can be no further movement from any interested party until the Executive debate, which is likely to take place within the next two weeks.

Meanwhile, the University of Ulster has said it plans to create a new research centre to investigate new and renewable sources of energy.

Work on the multi-million pound development is expected to begin later this year and should be completed by the autumn of 2002.

Funding for the project will come from the UK-based Science Research Investment Fund.

Sir Reg Empey, Minister for Enterprise, Trade and Investment, said his department would also make £600,000 sterling worth of grants available over the next three years to support research and development of energy generators such as energy crops and small hydro schemes in Northern Ireland.