Bord Gáis
has blamed the decision to sell its four-year-old
Whitegate
power plant to
Centrica
for a fraction of the €400 million it cost to build on factors including an upsurge in electricity produced using renewable sources, as well as a fall-off in electricity demand from the recession.
The price of coal, which is used to fire ESB's competing Moneypoint power plant, has also plummeted since the gas-fired Whitegate was commissioned, undermining the Cork plant's value.
Centrica said this week that it was paying €129 million upfront, net of cash, for Whitegate and the retail business of Bord Gáis Energy, which includes a book of 680,000 electricity and gas customers.
A further payment of €21 million may be paid over three years depending on performance.
Centrica led a consortium that has agreed to pay a total of €1.1 billion for Bord Gáis Energy, including €700 million from Brookfield for its wind business, and €200 million from Icon Infrastructure for its Firmus unit in the North.
However, senior industry sources told The Irish Times they believe the price paid to the State by Centrica is "far too low". It was suggested the retail book and Whitegate together could have been valued at closer to €400 million.
One source said that, even with the destruction in value caused by cheaper alternative to gas-fired plants such as coal, Whitegate, the most modern power plant in the State, should still only have been devalued to €240 million.
Valuation
It was suggested the customer base should "easily" have attracted a valuation of more than €160 per customer giving a total price for the assets of at least €350 million.
Sources close to the transaction rejected those figures.
Angelos Anastasiou, a utilities analyst at Whitman Howard in London, said Centrica had gotten a “very good deal” by paying a maximum of €150 million for the power plant and retail book.
Michael Moynihan, Fianna Fáil spokesman for energy, said he had "major concerns" over the valuation on Whitegate and the retail business.
The Department of Energy said the price paid was “reflective of market prices available today” and the Government has received professional advice that it “represents fair value for the Bord Gáis Energy business”.
