Belfast Telegraph

View from Dublin: power plant closures and outsourcing anxieties

By Rchard Curran

Viridian, the parent company of suppliers Power NI and Energia, is considering closing its two electricity plants in the Republic. This followed the failure of one of the plants to win a contract from Eirgrid, the company which manages the country's electricity requirements.

You win some, you lose some, should be the mantra from Viridian, but it isn't. The company has suggested that it would not be economically viable for it to run just one plant here.

According to Eirgrid, any generator chosen to provide supply must give three years' notice before shutting down and withdrawing from the market.

Talks are ongoing between Viridian and Eirgrid but they are likely to generate plenty of electricity if Viridian proceeds with plant closures in just a few months' time.

Recent accounts for Viridian Power show how much the electricity generation market has changed. In 2013 turnover was €163m (£144m).

This fell to €132m (£117m) in 2014 and €90m (£80m) in 2016. Viridian Power, which operates at Huntstown in Co Dublin, made a loss in 2013, 2014, and 2016, but made a profit of €7.5m (£6.6m) in 2015. Viridian Group was bought by US investment firm I Squared Capital for €1bn in 2016 and it obviously isn't happy about the latest development in the market here.

Security of supply will be the challenge for Eirgrid given that Viridian can supply a huge percentage of Dublin's electricity needs. But if Viridian wants to fold up its tent, Eirgrid will just have to find it elsewhere.

Meanwhile, outsourcing is taking quite a hammering in 2018. First came the collapse of Carillion and last week Capita announced that it was raising fresh capital and cutting its dividend.

Capita is seen as well-stretched but not a candidate for liquidation. Analysts believe the outsourcing company, which employs a few thousand in Ireland, can be turned around. It will take some sale of assets and about two years they reckon.

But how come it didn't show up on the radar before now? The company has not grown organically since 2014 yet its share price soared through 2014 and 2015. Shares were trading at £132 in July 2015 and are now down to £1.60. Somebody took a close look under the bonnet and saw what was really there.

It makes you wonder, how many others are out there like that.

Belfast Telegraph

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