The closure of Viridian's two electricity generators at Huntstown in Co Dublin is "credit negative" for the company, according to Moody's, the multinational agency that rates organisations on their ability to pay their debts.

Viridian is warning that it will have to close both power plants at its Huntstown site after one of them failed to be awarded a contract in a capacity payments auction run by national grid operator Eirgrid, ahead of an electricity market shake-up.

A Moody’s note on the auction results states that much of the plants’ gross profit comes from capacity payments, rather than from supplying electricity. However, Viridian stated this week that both facilities were critical to Dublin’s power supplies.

Viridian is challenging the design of the new electricity market, of which the capacity auction was a part. Moody’s state the company may seek a transmission reserve contract from Eirgrid. This would involve a deal that the generators be available to supply power in Dublin should there be a risk of a shortage.