Wednesday 12 December 2018

Viridian warned new electricity price regime would have 'chilling effect'


Viridian Group chief executive Ian Thom. Photo: Lorcan Doherty
Viridian Group chief executive Ian Thom. Photo: Lorcan Doherty
Samantha McCaughren

Samantha McCaughren

Power plant owner Viridian warned a senior Government adviser last year that a new pricing regime for the electricity markets would have "a chilling effect on foreign investments".

Last month Viridian, headed by CEO Ian Thom, said it might have to close its two power plants at Huntstown, Co Dublin, after one of them failed to secure a contract for new payments from national grid operator EirGrid. In a confidential Viridian presentation released under the Freedom of Information Act, the company outlined how new owner, US investment firm, I Squared Capital had invested in Ireland due to the strong economic outlook and stable regulatory environment.

It said it had "restructured a struggling company" since investing in the business in 2016.

"At acquisition, we paid down €190m of debt and recently completed a highly-successful bond refinancing of approximately $705m."

The new Integrated Single Electricity Market (ISEM) is a new wholesale electricity market arrangement for Ireland and Northern Ireland. The new market arrangements are designed to integrate the all-island electricity market with European electricity markets, enabling the free flow of energy across borders.

One of Viridian's Dublin power plants was awarded a capacity contract under the ISEM, but another of the Huntstown plants was not.

In the presentation, dated October 2017, Viridian warned that new pricing regulations "will undermine confidence in Ireland by forcing investors to close existing generation capacity rather than operating at a loss, thus compromising security of supply. In the long term, a regulatory regime that undermines existing investments will struggle to attract new investment and will likely pay a higher price for such investments."

Sunday Indo Business

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