National grid operator Eirgrid will seek bids from electricity suppliers to build new power plants in the Republic to combat a potential shortage of energy.
Growing demand and the prospect that some existing plants may close mean the electricity network will need new power stations in late 2024 and early 2025 to guarantee supplies in the longer term.
Eirgrid plans to hold a “capacity auction” in January through which it will recruit power suppliers to build what are most likely to be gas-fired electricity generators.
It is not known at this point how many power plants the State-owned grid company will sign up, or how much electricity they are likely to supply.
Successful bidders will be known in February or March, from when they will have until the last quarter of 2024 or early 2025 to build their plants and connect them to the electricity grid.
Industry sources warn that this is a tight deadline, particularly if any proposals meet planning or other objections.
A similar auction held in January of this year, also meant to secure supplies into early 2025, attracted bids from power plants with the capacity to generate 6,138 megawatts of electricity.
However, only about 25 per cent of this was new; the rest was from existing operators confirming they would continue to supply electricity, prompting Eirgrid to launch a second auction.
Karen Trant, director of energy networks with the Commission for the Regulation of Utilities (CRU), wrote to Eirgrid recently instructing it to prioritise grid connections for any successful bidders in next January's auction that will be supplying power to the greater Dublin area.
Government, regulators and industry fear that growing electricity demand in the Dublin area will leave it vulnerable to power cuts if new suppliers do not begin providing power there.
Currently peak electricity demand in the State in winter hits 5,500 megawatts. Eirgrid has agreed to connect data centres likely to require 1,800 megawatts to the system, mainly close to Dublin.
It also has applications from facilities that are likely to need a further 2,000 megawatts of electricity. Legislation obliges the State company to connect data centres.
The CRU confirmed that it was working with the Department of the Environment, Climate and Communications, Eirgrid and Gas Networks Ireland (GNI) to "support security of supply during the transition to a lower carbon future".
The regulator recently agreed to a request from GNI, responsible for Ireland’s natural gas supply pipelines, to spend more than €26 million on its networks to aid it in connecting new power plants.
According to the commission, this is to support efforts to attract investment in gas-fired flexible generation, which the regulator says has a key role to play in securing supplies during the switch to lower-carbon electricity.
Flexible gas-fired generators can switch on or off quickly to meet fluctuations in electricity demand. These tend to be smaller than the so-called “baseload” gas plants that are designed to supply power more consistently.
Irish and European energy companies plan to spend billions of euro building wind farms off the coast that will ultimately supply thousands of megawatts of electricity to the national grid.
However, those projects are not likely to begin operating until the second half of the decade and later. In the meantime, demand for power is continuing to grow.
A report published by Eirgrid last year shows that data centres and other large energy users will consume 27 per cent of all electricity generated in the Republic by 2030.