Patrick Haren, group chief executive, said the group would file a formal planning application next month to develop a site in the Republic, where demand for electricity is growing at 6-7 per cent a year against a more modest 3.8 per cent in Northern Ireland.
The group is also preparing a bid for some of the portfolio of combined heat and power plants which Yorkshire Electricity is putting up for sale.
Having handed back pounds 67m to investors via a buyback last year, the group now has the support of shareholders to use its strong balance sheet to develop growth opportunities, said Dr Haren.
"There is an ongoing capacity shortage in the South and we in Northern Ireland are right next door. Ireland is currently looking at its regulatory structure. We are advancing plans for a station on the basis that there will be a competitive regulatory framework by the year 2000," he said.
The group yesterday beat City expectations with a 6.4 per cent rise in first-half pre-tax profits to pounds 41.5m. At the same time it announced a 10 per cent higher dividend of 6.66p a share. Dr Haren said the group would also be handing back another cash rebate to customers on top of the pounds 7m rebate in April and an 8 per cent cut in tariffs last year.
However, he said further benefits to customers would hinge on the success of the group's campaign to get wholesale prices down in the Province.