Irish Natural Resources

Process of Asset-Stripping ESB Intensifies – Four Power Stations to be offloaded

The Spanish energy firm Endesa has stated that it has made a formal bid for €450m to buy four power plants from the ESB.

The ESB is being forced to sell the plants under a plan drawn up by the energy regulator, the Commission for Energy Regulation (CER), to reduce and downsize the publicly – owned energy companies share of the Irish Energy Market.

Endesa is a subsidiary of Enel and is bidding against other parties, including Viridian Group, Bord Gais, International Power and Star Capital Partners, all of whom have submitted bids for the power stations.

It is also thought that Scottish & Southern Energy, Britain’s second-biggest generator, and E.ON, Germany’s biggest utility, may also bid for the plants.

A year ago, the ESB announced its intention to bow to the CER request to reduce its generating capacity by 1,300MW and said it would be selling the peaking plants at Great Island in Wexford and Marina Steam Turbine in Cork together with the Poolbeg and Tarbert power plants.

The programme of asset sales will bring the ESB’s share of the newly expanded single energy market north and south of the border to about 27%, while its share of the Irish power generation market is about 44%.

Following the divestment of assets, the ESB said it will maintain its market share of power generation at well below 40% to facilitate continuing competition in the energy market, continuing competition, that is., from the large multinational energy concerns who are to be handed more than half of the Irish Energy market in one stroke.

In return for agreeing to the asset sales, the ESB was granted approval by the CER to construct a new 430MW power station at Aghada, Co Cork.

Endesa made its offer on June 11th 2008, and, along with the other bidders, will hear the outcome of the process in late July 2008. Endesa’s offer of €450 million is in line with a valuation of ESB assets by an independent consultant.

Under a strategy outlined recently by chief executive Padraig McManus, the ESB is to make a major commitment to renewable energy and to halving its carbon emissions within 12 years, with the aim of achieving carbon net-zero by 2035. It is extremely doubtful that the ESB will even exist by that date.

“About half of the expected €22bn investment package is geared towards investments in our renewable future,” the company said. Of this, €4bn will be directly invested in renewable energy projects and €6.5bn will be spent facilitating renewables, including smart metering and smart networks.

”The plan is that by 2020 the ESB will be delivering one-third of its electricity from renewable generation. This will include over 1,400MW of wind generation.”

It is extremely doubtful that this target will be achieved, given the established record of the Irish Government in developing Ireland’s potentially huge wind – power capacity. ESB statements about transferring power capacity to renewable and reducing  Carbon Emissions is simply more Government greenwash which is designed as a smokescreen for a massive transfer of existing power generating capacity which at present lies in the hands of the public to multinational corporations.