Electricity firms may seek to recoup lost earnings

Electricity firms may seek compensation for lost revenue following the disclosure that the electricity interconnector with the North is to be seriously disrupted over the next few months.

As disclosed in The Irish Times yesterday, ESB National Grid has informed all the major energy firms that capacity on the interconnector will be seriously reduced in the period ahead. Initially, capacity will drop from 330 to 250 megawatts (mw), but later this will drop further to 120 mw.

Viridian, the ESB's main rival, last night said penalties should be considered if ESB National Grid did not remedy the situation as soon as possible.

ESB National Grid this week said it was doing everything in its power to rectify the situation, but that power flows over the interconnector were never 100 per cent guaranteed.

The disruptions will have a serious commercial impact on ESB Independent Energy, Viridian, Bord Gaís and Airtricity, which all use the interconnector.

The ESB is especially concerned about the impact on the new 400 mw Coolkeeragh power station in Co Derry, which needs to export a significant portion of its power into the Republic via the interconnector. While the latest disruptions are a serious blow, it has no plans at this time to temporarily close the plant, a spokesman said this week.

One of the reasons the interconnector is facing problems is because a 300 tonne transformer recently developed a fault and a replacement needs to be sourced in Sweden. Two new power stations at Aughinish Alumina and Tynagh Energy also need to be connected to the national grid, which has a knock-on effect on the interconnector.

Last night, Airtricity Supply chief executive Mark Ennis said the company understood that transformers could break down, but it was disappointed "that the loss of capacity due to planned connections was not communicated to the industry".

"This potentially adds a huge cost to the system and it is not acceptable that electricity costs should rise due to poor planning. The interests of customers must be considered and compensation should be paid when ESB National Grid's actions cause unnecessary increased costs."

He said that ESB National Grid needed to restore capacity on the interconnector to its normal level as soon as possible.

Viridian spokesman Robin Greer said: "This situation severely curtails independent businesses accessing the Irish market, causing more expensive generators to run than is necessary, and ultimately higher costs for customers. It also restricts competition in a market that badly needs more competition.

"We recognise there can be circumstances that give rise to the need to restrict power flows in certain parts of the system but participants need to know and to see that those organisations charged with taking these decisions are operating in the best interests of everyone. Network owners and operators should have incentives and penalties to ensure they maintain the system in the best possible state."