Strong indications are that key players face disappointment in competitionto build new stations

Major players in the electricity industry look set to face disappointment in the competition to build new power stations for the Republic.

There were strong indications last night that Viridian, which already operates the Huntstown power station in north Co Dublin, is not one of the preferred bidders.

The competition is being run by the energy regulator Mr Tom Reeves. Mr Reeves hopes the new stations can help address an expected shortfall in energy supply likely to arise in future years.

The Commission for Energy Regulation (CER) declined to name the preferred bidders for the contracts believed to be worth a total of €1.4 billion.

However, most sources agreed Aughinish Alumina in Co Limerick, which is proposing to build a 150 megawatt station, was one of the preferred bidders. However, its spokesman refused to comment on this.

The CER angered some of the consortiums last night by not releasing the names of the preferred bidders into the public domain. There has also been delays in getting to this stage and this has caused concern among some of the groups.

The companies that submitted bids were AES Electric; Aughinish Alumina Ltd; Ireland Power Energy Ltd; Mountside Properties Ltd; Scottish & Southern Energy plc/Bord Gáis Éireann; and Viridian Power Ltd.

Bord Gáis refused to comment on whether it was a preferred bidder, but other sources said the State-owned company was not one of them.

Preferred bidders can now enter into exclusive negotiations with the CER, although it is not guaranteed they will be awarded a contract. The contract involves supplying the ESB with a total of 3,400 megawatts over a maximum 10-year period. The sale of this power could be worth up to €1.4 billion.

Bidders were competing for the contracts on the basis of price, although other technical, financial and regulatory requirements had to be met.

Rolls Royce Power Ventures dropped out of the competition a few weeks ago. Nobody from the British company was prepared to comment but it understood the company no longer believed the deal on offer was attractive enough.

The company also experienced some problems getting a grid connection, some sources suggested.

A connection to the national grid is necessary for companies to advance to the tendering stage and, in certain parts of the State, there are capacity issues.

Rolls Royce Power Ventures owns a site in Dungarvan, Co Waterford.