An arm of the Irish Government that operates peat-fired power stations is planning a €4 billion (£3.2 billion) investment drive to build power plants in Britain, The Times has learnt.

ESBI, the international arm of the Irish Republic's Electricity Supply Board (ESB), which is 95 per cent owned by the Government, has earmarked the cash for construction of a string of gas-fired power stations and wind farms. The group plans to build up to 3,000 megawatts of gas-fired and renewable generation plants in the UK by 2020.

It has acquired a controlling interest in Bridestones Power, a company that is developing an 860MW gas-fired power station at Carrington, Manchester. ESBI is also a 50 per cent shareholder in Marchwood Power, an 842MW gas-fired power station under construction near Southampton scheduled to enter service next year. Together these projects will generate enough power to supply more than 1.5million homes.

ESBI is planning to invest significantly more than that in the UK with details of further acquisitions due to be unveiled at an event at the Irish Embassy in London this month.

Founded in 1927, ESB is Ireland's biggest vertically integrated utility with about two million customers, nearly 8,000 employees and turnover of €3.6billion. It operates more than 4,600MW of generating capacity, including two peat-fired power stations in Ireland, as well as gas, coal, oil-fired stations, wind, biomass, hydropower and pumped storage.

ESB has 51 per cent of the Irish market. Because of competition issues, it has agreed with the Irish energy regulator to reduce its market share in the domestic market to 40 per cent and is looking overseas for expansion. In the UK, ESBI has been active on a small scale since 1992, when it embarked on a joint venture to develop Corby Power station in Northamptonshire. However, its plan to commit billions of euros to the UK represents a big departure for the group and is likely to be welcomed by the Government, which is keen to attract foreign investment to the energy industry.

The projects could play an important role helping to plug a supply gap that is likely to open in the UK in the run-up to 2015, when a swath of large coal-fired stations are scheduled to be retired from service to meet tough new EU environmental laws.

In its annual report this year ESB said that it would “continue to develop material growth options for ESB ... in particular [focused] on achieving significant thermal power project opportunities in the UK and significantly expanding renewable business activities in Ireland and the UK”.

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