The ESB's new "jewel in the crown" power station at Ringsend, Dublin, will underperform for three years after its connection this week to the national grid.

Serious technical difficulties with the turbine in the €250 million (£197 million) plant mean it will be commissioned before refitting work needed to secure full production can be carried out.

The power station is part-owned by Statoil and is seen as the workhorse plant in the ESB portfolio.

Senior figures in the State company believe its success is crucial because the ESB is facing competition in the electricity generation business for the first time.

Advances in technology mean that many of its older power stations are much less efficient than modern plant. Because newer plant will be used first, the complete integration of the most modern plant is vital.

Sources said this was unlikely to happen for up to three years because the new power station would be performing below standard.

This is not the first setback for the initiative, which is known as Synergen. The plan has already encountered difficulty with the European Commission, which has not yet signed off on the ESB-Statoil partnership.

One senior official in the EU competition directorate is known to have described its connection contract with the national grid as a "violation of European law".

In addition, the ESB's expenditure on the turbine was sanctioned by the Government only after it gave an undertaking to sell its share of the partnership "if competition law makes it appropriate".

The ESB owns 70 per cent and Statoil holds 30 per cent of Synergen. The technical problems mean that neither company will complete payment to the turbine-maker, the French multinational Alstom, for some time. It is thought that costs associated with the additional work will be met by Alstom. The equipment was initially ordered from the Swiss engineering group, ABB, whose electricity division was later acquired by Alstom. It is understood that the plant will be connected to the grid this week.

This process, known as "hot commissioning", will see up to 80 megawatts (MW) fed into the national system initially in a process which takes some months.

But while the power station was expected to produce up to 408 MW of electricity when fully commissioned, several sources have indicated it will be possible in the medium term to produce only about 380 MW.

"Part of the plant has to be refitted. It's not commercially viable at this stage to stop the plant before its first overhaul," according to an informed source. Such an overhaul was not expected for up to three years.

Commissioning difficulties with electricity-producing turbines are not unusual. Alstom is thought to have encountered difficulty with its GT26 turbine at up to 25 projects, indicating the problem at the Synergen project is one fundamental to the technology.

Similar problems were encountered with the introduction of another turbine, the GT24.

In stock market statements, the company has cited "technical issues" and a "localised deficiency" with the turbines, which require modification.

Alstom also acknowledged in the past that modifications were "causing delays in scheduled deliveries" and "resulting in lower performance and efficiency output committed to customers".

Informed figures said the combined heat and power technology in the plant was the most advanced available. But as a new technology, it was untested when ordered by the ESB.

Because of competitive pressures, the person said the ESB had an obligation to use the most advanced equipment available.