Bord na Móna to invest €800m in two midland power stations

State company Bord na Móna plans to invest €800 million in building two power stations in the midlands. Managing director John Hourican told The Irish Timesyesterday that the company was going to seek planning permission to build two 400megawatt (mw) power plants.

The company already owns an electricity generating facility at Edenderry in Co Offaly, and has a considerable landbank in the midlands. Mr Hourican indicated that, as Edenderry already has a connection to the National Grid, the system for transmitting power from generating plants to the distribution network, this site would be favoured for one facility.

"We have a number of other sites in the midlands that are strategically placed," he said.

Two plants on this scale would cost €400 million each to build. Mr Hourican pointed out that the level of investment required for power plants runs at €1 million per mw. (A megawatt is enough electricity to power roughly 1,000 homes). The proposed plants would be powered by natural gas.

Bord na Móna was originally established to manage the State's peat, but has moved into energy and waste management over the last five years. Along with Edenderry Power, which has the capacity for 128mw, it is building a 320mw wind farm in Co Mayo.

"We are planning to be the number two in renewable power generation in this country," Mr Hourican said yesterday.

Bord na Móna is also supplying peat to two recently-built ESB plants at Lanesborough, Co Longford and Shannonbridge, Co Offaly, which were shut down last month after corrosion was discovered on equipment used to stop them emitting sulphur into the air.

The plants' builder, Finnish group Foster Wheeler, is carrying out repairs and they are expected to return to service in September, ahead of the increased demand in winter.

Mr Hourican warned yesterday that if the problem continued in the medium-term, Bord na Móna would be forced to lay off between 300 and 400 workers involved in the fuel supply business.

"We don't anticipate that happening though," he said.

The two plants encountered similar problems last year and, as a result, Bord na Móna's pretax profits dropped 14 per cent in the 12 months to March 28th to €29.2 million from €34 million in 2006.

The company released results yesterday showing that turnover grew 1.2 per cent to €299 million. It paid its first dividend to the State in its 61-year history - €3.9 million.

It also received Government permission to increase its borrowing limit to €400 million from €127 million.

Bord na Móna recently bought waste management business, Advanced Environmental Solutions (AES), for €62 million. Between that and the €79 million it paid for Edenderry Power, the company has spent €143 million on acquisitions over the last year.

AES has 6,000 commercial customers and 55,000 households. Bord na Móna is in the process of developing a waste management facility that will eventually involve a €50 million investment at Drehid in Co Kildare.