Eirgrid questions regulator’s electricity charge hike

Bid to cut peak energy demand by increasing grid costs challenged

The State’s electricity grid operator has questioned whether the regulators’ bid to prevent power cuts by boosting peak-time charges would work, it has emerged.

The Commission for the Regulation of Utilities (CRU) proposes increasing electricity charges for the 5pm-7pm peak this winter, adding €26 to household bills.

National grid operator Eirgrid wrote to the commission in June warning that parts of the proposal may not be feasible and cautioning against the regulator’s approach.

The commission is partly focused on cutting peak demand from large energy users, mainly employers, including pharmaceutical makers, food processors, data centres and other industries.


However, Margaret McCarthy, Eirgrid’s interim head of regulation, said in a letter to the commission that significant numbers of large energy users cannot simply adjust their demand at different times.

Manufacturing processes

“In particular, a large manufacturing plant typically operates on the basis of established manufacturing processes which cannot usually be interrupted or adjusted,” she said.

Ms McCarthy noted that only 4 per cent of all demand on the electricity grid during the peak is down to the large energy users on which the commission is focused.

The CRU wants Eirgrid to increase charges for use of the national electricity grid during the peak to encourage all customers to cut consumption.

The commission’s proposal aims to ensure that large energy users carry a bigger share of likely extra grid costs and to give them an extra incentive to cut their demand.

Eirgrid’s letter highlights several challenges, including the two-week period allowed for consultation on the proposals.

The commission’s proposal stems from the National Energy Security Framework, the Government’s response to extra threats to electricity supplies posed by the war in Ukraine.

Part of that involves cutting dependence on oil, gas and coal imports, which Russia supplies to Europe.

Ongoing threats

However, Eirgrid argued that the CRU seems to be conflating efforts to cut fossil fuel imports with ongoing threats to the security of electricity supplies.

Ms McCarthy agreed that the war has aggravated these threats, but states that it is not their only cause.

She said Eirgrid recognises that cutting demand helps reduce energy imports and supports supply security.

However, Ms McCarthy warned that Eirgrid cannot support measures that expand efforts to cut fossil fuel use so that they include tackling security of supply problems, or that seek to recover all the costs of this from one small group of customers.

In response, Robert O’Rourke, the CRU’s senior manager of electricity networks, points out that Eirgrid’s own analysis shows that strong demand from large energy users could worsen security of supply challenges.

Therefore he argues that any effort to slow that growth would benefit security of supply.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas