STATE COMPANY Bord Gáis Éireann (BGÉ) plans to invest €50 million in a wind power project in the west of Ireland.

The natural gas supplier and distributor said yesterday that it has bought a 30 megawatt (MW) wind farm development, which it hopes will be operational by 2011.

The facility should generate enough electricity to power 10,000 homes.

It would not reveal the location. However it is understood to be in east Co Galway. A group of local developers sold the project.

BGÉ plans to invest €50 million overall in the project, which includes the purchase price, as well as the cost of purchasing wind turbines, building the plant and getting it up and running.

Industry sources say that wind farms that are in the development phase sell for around €200,000 a MW, which puts a €6 million price tag on this project.

However, potential planning or licensing difficulties or other issues could cut this value.

The credit squeeze means smaller wind farm developers are having difficulty raising the cash they need to complete projects.

Bigger players such as BGÉ, the ESB and Scottish Southern-owned Airtricity are likely to buy up the better ones and begin consolidating the industry. BGÉ made its announcement as the Commission for Energy Regulation (CER) revealed that it is going to extend its next licensing round for green power by 900MW to 3,900MW.

The announcement will be good news for businessman Brian Britton and Glen Dimplex founder Martin Naughton, the backers of Oriel Wind Farm, a €600 million to €700 million offshore project proposed for the northeast coast.

In July the commission said that it would limit the round to 3,000MW worth of projects on a first-come, first-served basis, which left a number of key players, such as Oriel, Airtricity and Finavera, facing the likelihood that a number of their developments would not get licensed.