Electricity supply outlook positive following two warnings

National grid electricity grid operator said the outlook for supplies was positive on Thursday after lifting the second of two warnings on tight reserves.

EirGrid issued alerts on consecutive days warning electricity suppliers that the buffer between supply and demand was less than ideal, increasing the risk of power cuts.

However, there was no loss of electricity supplies to customers.

The State company has confirmed that it lifted the warning on Wednesday night as power plants shut down for repairs returned to action.

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“The outlook for Thursday is positive,” added the grid operator in a statement.

Unexpected power plant shutdowns, low wind speeds, which hit renewable generators, and low electricity imports, prompted EirGrid to issue system alerts on Tuesday and Wednesday.

Around one-third of Irish power plants were out of action earlier in the week, many because of unexpected problems that forced unscheduled shutdowns.

EirGrid pledged to continue monitoring the situation and working with generators and large energy users to maximise available supplies.

“We are also working with the regulator, the Commission for Regulation of Utilities and with the Department of Environment, Climate and Communications on solutions that will address security of supply in the medium to long term,” the company said.

Ongoing squeezes on Irish electricity supplies combined with the prospect of gas shortages have sparked fears that homes and businesses could face power cuts this winter.

Meanwhile, Tánaiste Leo Varadkar said the Government should give consideration to introducing a windfall tax on the profits of energy companies, but noted that taxing “expected profits” risks deterring companies from investing in energy solutions here.

Varadkar reaction

Speaking in Roscommon Town, Mr Varadkar said it was important to acknowledge that the spiralling cost of energy was being driven predominantly by global trends.

“People are paying more because the international cost [of energy] has risen,” he said. “Some of it may be increased profits by companies, but that’s not predominantly why people are paying more.”

Mr Varadkar warned against a “short-term fix” that would deter investment by energy companies in the national grid. “We need to be very careful to make sure that if there is a windfall tax, that it’s on the windfall element of the profits,” he said.

“If it’s a tax on the windfall, that makes sense. But if it’s a tax on regular profits, expected profits, there’s a risk there that you might actually tip companies away from investing in the grid, away from investing in a new generation, away from investing in renewables. That would be a short-term fix, that actually creates a long-term problem.”

Mr Varadkar also noted that a percentage of profits made by energy companies are invested back into the State in various ways.