Viridian's subsidiary Huntstown Power warned yesterday that the generating plant it was building in north Co Dublin would lose money if the electricity trading system was not changed.

Its chief executive, Mr David de Casseres, said at a briefing that the partially liberalised market was proving "very difficult" for power firms and this had prompted a number of investors to abandon the market.

Such groups include Huntstown's original co-investor CRH; and BP, Scottish Power and ePower, controlled by Esat founder Mr Denis O'Brien.

Mr de Casseres said no alternative investor had yet emerged for the plant at Huntstown, now wholly-owned by Viridian.

The €250 million (€317 million) plant will produce 343 megawatts (MW) of electricity by December next year, enough to supply up to 700,000 homes. But Mr de Casseres said it would be exposed to "significant financial loss" if the wholesale price paid by the ESB for surplus power was not raised.

The power trading system allows the State-owned company to import power that Huntstown cannot sell either through fluctuating demand from its customers or because it is at the market-entry phase of its development.

Mr de Casseres said the "spill" rates set for surplus power were fixed at low "distress" levels and should be increased by 20 or 30 per cent.

ESB estimates that Huntstown might have surplus production of 30 per cent of capacity at various times might be correct, he said, although the company was determined to avoid that. The State-owned company said the existing spill price was fair and accused Huntstown of seeking a subsidy from all existing customers.

Mr de Casseres had advised the Minister for Public Enterprise, Ms O'Rourke, and the electricity regulator, Mr Tom Reeves, of the position and Mr Reeves had undertaken to review the regime by the end of the year.

Huntstown Power has already spent €100 million on the project and its sister company, Energia, claims to be the exclusive electricity supplier in the Republic to CRH, Kerry Group, Coca Cola and others.