Brian Britton, Oriel Windfarm's managing director, said the company may be forced to seek a Northern grid connection as it could get connected there more quickly. He also said that Oriel, which is backed by Glen Dimplex founder Martin Naughton, might be able to claim British financial incentives for off-shore wind farms even though the Oriel wind farm is in Irish waters.

The move would be embarrassing for the new minister for energy, Eamon Ryan, who has stated he wants Ireland to become a leading player in renewable energy. The 330 megawatt (MW) project could produce enough electricity to meet 5% of the state's power demands.

The Northern Ireland electricity grid operation SONI confirmed to the Sunday Tribune that, once the all-island electricity market was introduced later this year, there would be nothing to stop Oriel from connecting to its grid.

Britton indicated this would be a last resort but said such a move would represent "a missed opportunity for the south of Ireland".

"Our preferred option is the Republic because, as an Irish company, it would be much simpler to make an Irish connection application and take it from there, " he said.

But Britton said he believed that under the State's wind farm licensing system . . . which licenses groups of wind farms at two or three year intervals . . . the Oriel Windfarm might not be approved until 2011, leaving the project two years behind the company's schedule.

He said the company hoped to avoid that problem by applying for a connection as a power plant. "We've come up with some innovative suggestions, which I am not at liberty to reveal, that should allow Oriel to be looked at as a power plant, " he said.

A department of energy spokesman said the minister was considering introducing incentives so that the country can reach its renewable energy targets but that it was too early to say what form they would take. He said it was likely there would continue to be delays in the state's wind farm licencing process.