The closure of older power plants, problems luring new investment and steeper than expected rises in demand pose increasing risks to Irish electricity supplies.
Since January, market regulators have issued eight “amber alerts”, warnings that demand was pushing electricity reserves close to the point where there may not have been enough power should something go wrong.
Part of the problem was long periods when there was not enough wind to generate electricity, another issue was that two gas-fuelled plants were out of action.
One issue is that a series of generators, capable of producing a total of 1,650MW, are due to close over the next four years
The power plants, Bord Gáis Energy's plant in Whitegate, Co Cork and one of Energia's two facilities in Huntstown, Co Dublin – the other continued to operate – are due to restart shortly.
Energia’s generator is scheduled to begin generating on October 23rd, while Bord Gáis has said its plant will return on November 4th. From that point, industry sources say, things will be “more comfortable”.
Without those plants, a report published today – Wednesday – by national grid operator Eirgrid says there could be an electricity shortfall of 280 mega watts (MW), enough power for around six large towns, at peak demand. The generators themselves produce a total of 800MW.
However, Eirgrid maintains that immediate risks to electricity supplies remain, while a crisis is brewing in the longer term unless developers build more gas-fired power plants.
Its chief executive, Mark Foley says "We expect system alerts to be a feature of the system over the coming winters and this winter is likely to be challenging."
The State-owned company’s figures show that in some scenarios, the shortfall for winter 2022/23 could be 260MW, more than half the total amount of electricity generated by either Huntstown or Whitegate.
That could rocket to 1050MW, around one fifth of total peak demand, the following winter, and hit 1850MW in 2024/25. This is happening against a background where electricity needs are growing. On one day in January, the Republic consumed a record 5,375MW of power.
One problem is that power plants have closed. In December, two peat plants, Shannonbridge in Co Offaly and Lanesboro in Co Longford closed. ESB shut a gas generator at the Marina in Cork in 2018.
These closures were a result of Government and EU policy on climate change and state aid. Fundamentally, these generators were old and burned fossil fuel, whose use the Republic is bidding to cut.
As the gas-fired plants will back up renewables, developers fear their businesses will 'take second place to wind'
As they only produced electricity when called on, as opposed to consistently, they were kept going with “capacity payments”, a system introduced in 2007 to ensure that enough power plants stayed open to meet likely demand. The EU decided that this was state aid, prompting the Government to change the market rules, ultimately leading to their closure.
The next issue is that a series of generators, capable of producing a total of 1,650MW, are due to close over the next four years. One of three gas-fired plants at Aghada, Co Cork, owned by ESB, is scheduled to shut at the end of 2023.
At the same time, SSE's oil-fuelled generator in Tarbert, Co Kerry, is due to close. Two year's later, the State's biggest plant, the ESB-owned, coal-burning Moneypoint in Co Clare, is scheduled to cease operations.
The plants that have closed and are due to do so account for around 2,000MW, slightly less than 40 per cent of peak demand in the Republic.
The difficulty is replacing them.
Since 2018, Eirgrid has held a series of auctions designed to recruit developers to build new, clean gas-fired plants that can be switched on and off easily at times when wind and other renewables cannot meet demand.
These have failed to bring in the required amount of new generators. Around 500MW originally pledged in one such auction will not now go ahead, while others did not raise the capacity targeted.
There are a few reasons for this. One is that developers believed they might not be able to source the equipment needed on time. Another was that they feared they would not get the necessary licences or connections to the grid or gas network to begin generating electricity on schedule.
The Commission for Regulation of Utilities (CRU) has directed Eirgrid and fellow State company, Gas Networks Ireland, to prioritise connections for successful bidders as part of a series of measures designed to tackle the problem.
Sources say there is another issue. As the gas-fired plants will back up renewables, developers fear their businesses will “take second place to wind”, possibly making it difficult for them to sell electricity and get a return.
As the Government wants 70 per cent of electricity to come from renewable sources by 2030, from 40 per cent today, the debate around the energy system’s future has focused on this, and not on the other 30 per cent.
Both the CRU and Eirgrid say today that a clear message has to go out to developers that gas will remain a key fuel for generating electricity in the Republic. This is particularly crucial, as the grid operator is due to begin a new auction this winter designed to lure investment in new gas-fired power plants.
If this is successful, it should help head off any crisis. If not, the State will have to keep the coal and oil fuelled generators open beyond their scheduled closures to avoid any power cuts.