The giant US power company AES Corporation is considering building a 400-megawatt power plant in Northern Ireland that would supply electricity to the national grid in the Republic. The project would cost up to $200 million (€173 million) to build.
Speaking to The Irish Times from London, the group manager of its subsidiary, AES Electric, Mr Michael Armstrong, said the new plant would be situated beside its existing Kilroot plant in Carrickfergus, Co Antrim. He said the new plant would be housed in the same buildings and planning permission had already been secured.
AES Electric is among seven generators that have expressed an interest in bidding for the next power station contract in the Republic.
The seven parties must submit detailed tenders to the Commission for Energy Regulation (CER) by September 5th. The CER needs a new plant to deal with an emerging power crisis. It is entitled to select more than one bidder and some believe it may select one large project and one or two smaller ones.
AES is considered to be one of the strongest challengers because of its size. It produces 55,000 megawatts of power around the world each year. When the company's name originally appeared on the list of seven, there was speculation about its precise plans.
Mr Armstrong said the company was still putting together its tender but, at this stage, a plant of 200-400 megawatts was being looked at. However, he said 400 megawatts was the most likely option.
He said the only obstacle was capacity constraints on the inter-connector with the Republic. Staff from AES are due in Dublin this week to discuss this issue with EirGrid.
"The lines are there, there is no problem connecting up, but we need to see what the interconnector can take," said Mr Armstrong.
The existing plant at Kilroot is large in terms of the Irish electricity market, producing 520 megawatts. It is powered by oil and gas, but the manager of that plant, Mr Shane Lynch, said the new plant would be gas fired.
Along with some of the other interested parties, AES has expressed some concern about the nature of the contract being offered by CER.
The winner will have a guaranteed arrangement to sell power to the ESB for 10 years. However, Mr Armstrong said this was not generous by international standards and was low at a time when banks and other financial houses were reluctant to grant credit to power companies.
"You will often see 15-year contracts, sometimes even 30-year contracts in other parts of the world," according to Mr Armstrong.
The other six bidders that have expressed an interest in the tender are: Aughinish Alumina Ltd, Ireland Power Energy Ltd, Mountside Properties, Rolls Royce Power Ventures Ltd, Scottish & Southern Energy plc/Bord Gáis Éireann and Viridian Power Ltd.
