A new company called Mayo Power Limited is to set up Ireland's latest €140 million power station which will be fuelled by a mixture of coal, peat and wood.

The station will occupy the old Asahi plant near Ballina, Co Mayo, which has a connection to the national grid. Few new electricity plants have been set up in the Republic in recent years, although the Mayo Power project still requires planning permission and approval from the energy regulator before it can go ahead.

A planning application is being prepared by Stephen Dowds and Associates and should be ready within two months.

The plant, which will produce 100 megawatts of energy, is expected to provide 250-300 jobs during construction and about 40 when the plant becomes operational. The plant will switch between coal, wood and peat depending on price and availability of supply. The plant should start producing power by 2010, said businessman Myles Staunton, one of its promoters.

The establishment of the plant will bring a new entrant into the Irish energy market in the shape of Rockland Capital. It was formed in 2003 with the aim of identifying and investing in power projects. It is believed to be the major shareholder in the project, with Mr Staunton, who has been a champion of the project for some time locally, taking a minority position. Rockland's investment is in turn supported by Weichert Enterprise, a privately-owned fund managed by Irish-American Gerald Crotty.

The promoters of the station said yesterday at a press briefing that the station would help the Republic's security of supply position and increase competition in the power generation sector, which is currently dominated by the ESB with its 19 stations.

Who the power will be sold to is yet undecided, but the promoters said "bilateral contracts" with various parties were being considered. The plant will place a heavy emphasis on bio-mass. This refers to organic materials that can be burned to produce energy or converted into a gas.