ESB International could receive planning permission for a new £150 million sterling (€249 million) power station at Coolkeeragh in the North before the end of the summer, industry sources have hinted.
Construction of the gas-fired power station on the outskirts of Derry is not expected to begin until January 2002 but it is believed that planning permission is likely to be granted several months ahead of schedule.
The new station, a joint venture between ESB International and staff and management at Coolkeeragh, will replace the existing facility and is expected to be operational by early 2004.
Once planning permission is secured for the new station, it will increase the pressure on the North's industry regulator, Mr Douglas McIldoon, to award the contract to build the pipeline that will supply gas to Coolkeeragh.
Only one bidder has emerged for the contract, a consortium made up of Bord Gais and Questar, an American company.
Mr McIldoon is currently in discussions with the consortium over its tender document, but is expected to give his decision on its bid before the end of the summer.
According to industry sources the consortium is confident that its bid will be accepted. It has already held preliminary discussions with the ESB and Coolkeeragh.
The ESB supplies about 25 per cent of an eligible 35 per cent of the industrial electricity market in Northern Ireland. However, it has been forced to buy supply through expensive generator contracts in Northern Ireland which has made it difficult for the company to be price competitive.
The ESB is unable to renew its contracts until early next year, when it hopes the electricity market in the North will be further opened.
European Union directives have ruled that the market in Northern Ireland must be fully deregulated by 2005. However, Mr McIldoon has advocated that the market should be at least 50 per cent opened up by 2003.
ESB International believes the new North/South Interconnector and the Moyle Interconnector from Scotland will encourage more competitive electricity prices in Northern Ireland next year.
According to Mr Michael Aherne, the ESB's Northern Ireland manager, the company is determined to grow its presence in the market in the North initially by providing cheaper electricity to large industrial users.
"Increased interconnection will undoubtedly drive prices down in Northern Ireland. The current reality is that generation costs make it very difficult to compete on prices, but this will change, and we see a good opportunity to develop our current position," he said.
