The ESB board has said the controversial Rhode power station in Co Offaly will close on April 7th, almost two years after the last watt of electricity was produced there.
The board gave the 104 workers until Friday to accept an enhanced closure package believed to be worth about €20 million. The workers are holding a postal ballot on the deal and indications are that a majority will vote to accept it. The vote is being undertaken by post because of fears the ballot might be disrupted.
Votes will be counted on Friday and if staff vote No they will have to settle for the standard ESB voluntary severance package. Staff wishing to remain in the company will be retrained and re-deployed to other ESB locations. The workers have already rejected the package, but after meeting the ESB group of unions recently they decided to re-ballot. The enhanced package is worth up to €250,000 to each worker.
A company statement said if the workers voted No, they would also lose a 10-month retainer payment with holiday buyback and a €5,000 special award to compensate them for early closure.
Meanwhile, Goodbody stockbroker has said the ESB's main rival, Viridian, is well positioned to expand in the Republic over the next few years. In a broker's note by Mr Neil Clifford, the stockbroker said the company should develop a second generating station at its Huntstown power site in north Co Dublin. It also said a share buyback of 5 per cent of the company's shares was feasible.
The broker suggested Viridian invest about €130 million in the construction of a second power station in Huntstown. It said a power purchasing agreement - possibly with the ESB - needed to be secured. It said the "most attractive option" would be a second development at Huntstown and a share buyback. It said this would give shareholders a short-term return and the Huntstown development would provide longer term "growth opportunities".
It said the company was in a prime position to capitalise on the deficit of electricity which would arise in the Republic from 2004 onward.
The Commission for Energy Regulation recently requested expressions of interest in a new power station and Viridian and several other large companies, including Babock & Brown, are expected to indicate interest.
Goodbodys said the unregulated electricity markets north and south were unlikely to appeal to large international power groups. It said large corporations would be more interested in lucrative opportunities in the UK and Europe. It said 40 per cent of the Republic's electricity market was already open to competition with full opening by 2005. Presuming Viridian could maintain its current 25 per cent share, it should be in a good position to develop further in the Republic.
Electricity demand was expected to grow on average at 3.5 per cent over the next seven years, said Goodbody, and this compared favourably with a sluggish growth rate of just 0.8 per cent in England and Wales.
