IDA Ireland is not encouraging energy-intensive industries to invest in some regions because of an escalating power crisis that will peak this winter.
The State agency has decided to stop encouraging industries that require more than one megawatt of power in regions where it is not satisfied demands for power can be met.
Operations that will be affected include Internet data centres, high-tech manufacturing plants and pharamaceutical/biotechnology firms.
The decision is a significant blow to the Government's regional development plan, which depends on delivering jobs and investment outside the Dublin area.
Confidential IDA documents released to The Irish Times show the agency's executive committee made a series of recommendations on the power issue to its board in early January.
A note summarising an IDA board meeting on January 8th states: "The concerns of the IDA board in May 2000 have proven warranted and there is a high risk of power shortages, particularly in winter 2001/ 2002."
The IDA is particularly concerned about weaknesses in the electricity transmission system that could cause brownouts (sudden voltage reductions) or blackouts (total voltage collapse).
Areas most at risk include Mayo, Donegal, Sligo, Tipperary, Wexford and Kerry, where capacity constraints are compounded because power cannot be exported from the eastern region due to transmission weakness.
The IDA has decided to become more actively involved in the public debate on electricity infrastructure to advance infra structure investment. It has pledged to support plans for six new Dublin sub-stations to service business parks by providing sites and negotiating with third party landowners.
It is also promoting the concept of locating a number of small distributed diesel fuelled power projects of between 10-20 megawatt capacity at business parks outside Dublin.
"Although not the ideal solution either from a cost or network integrity viewpoint, this would overcome the immediate need for high-tension networks," says the document.
The IDA is already encouraging its existing clients to generate as much power as possible on site to alleviate demand on the national grid.
Two of its client companies, Intel and Wyeth, are examining the feasibility of building combined heat and power plants, according to the documents.
Recommendations made by the IDA committee include:
using its marketing resources, at home and abroad, to support the effort to attract overseas contractors to participate in the national grid expenditure outsourcing programme;
working with the Commission of Electricity Regulation to market the Republic to electricity utilities, to interest them in setting up power-generation plants;
including expenditure towards in-house power-generation plants as eligible for the purpose of capital grants; and
a study of the feasibility of using the public-private partnership mechanism as a means to encourage small power-plant investment, particularly in the west/north-west.
The concerns expressed by the IDA follow a number of public statements by key business figures recently highlighting weakness in the State's national infrastructure.
