The new €100 million power plant at the Aughinish Alumina facility at Askeaton, Co Limerick, could lose significant sums if some kind of financial support is not provided, the company warned yesterday.

Last December the company won a competition to operate the 150 megawatt combined heat and power (CHP) plant at the site, but chief executive, Mr Damien Clancy, said the plant was effectively a green energy project that should qualify for some kind of support. He said this was common in other countries.

The Taoiseach, Mr Ahern, and the Minister for Communications, Mr Dempsey, are due to visit the site today.

Aughinish, one of the largest consumers of electricity in the State, has a 10-year contract to supply its output to the ESB, but Mr Clancy said this was a "double-edged sword".

"We are delighted to win the competition and it is great for the area and the company. It is the culmination of a 20-year dream. But the way the contract is structured does leave us a little hamstrung," he said.

He said because the company used steam to produce its alumina end product, it would be necessary to run the plant virtually all the time. He said this meant the company could end up bearing losses at certain low demand periods, especially in the summer. "It's that exposure which concerns us."

Nevertheless, Mr Clancy said it still made sense to enter the competition last year. "It was the only show in town."

He said this was not an issue for combined-cycle gas turbine plants, which could be shut off and re-started relatively easily. "Throughout Europe CHP plants receive some kind of support because it is a green form of energy and attracts support from environmentalists," he said.

He said energy represented 30 per cent of the costs annually for the company and it was important that the investment paid off.

He said a capital grant towards CHP projects or a guaranteed "floor price" for power from the new plant should be considered. He said it was not a matter for the Commission for Energy Regulation, but for Government.

CHP has been growing strongly in the Republic over recent years. The high efficiency levels achieved by the plants greatly reduce greenhouse gas emissions. CHP plants are encouraged by the Environmental Protection Agency and by the EU in general. The Aughinish project is scheduled to supply by November 2005.