British utility group Powergen is abandoning its electricity business in Northern Ireland. The company supplies power to about 12 commercial customers.

A spokesman attributed its departure to pressure on the cost of wholesale power due to the rising price of gas used to generate electricity. He said gas prices rose 55 per cent in the past six months and electricity prices rose 30 per cent.

The spokesman added: "The current market price for electricity in Northern Ireland - because of the market price of gas and the associated market risks - makes Powergen's position in the industrial and commercial market uneconomic.

"We simply cannot afford to supply at these prices and have therefore written to existing customers to inform them that we will not be tendering on this occasion and to recommend to customers that they contact Northern Ireland Electricity who are able to supply."

There would be no job losses because the business was managed by Powergen staff in Britain, the spokesman said. The company would review the situation when an electricity interconnector linking Scotland with the North was constructed.