Power plants face closure as energy market is reorganised
Electricity grid operators on both sides of Border cutting ‘capacity payments’ by 30%
Kilroot power station: Its owner, AES Corporation, said the station could close by May. Photograph: Robin Somes
Several power plants around the country are facing closure, with a possible loss of hundreds of jobs, following the first step in a planned shake-up of the Irish electricity market.
The electricity grid operators on boths sides of the Border, Eirgrid in the Republic and System Operator Northern Ireland (SONI), are cutting some payments to generators by more than 30 per cent as part of a reorganisation of the all-island energy market.
Kilroot in Co Antrim, one of the North’s key power stations, is one of those set to lose the so-called “capacity payments” made by the grid operators following an auction last month.
Management there warned that it could close by May with the loss of 270 jobs and a further 120 contract positions. US-based AES owns the generator.
Ballylumford power station’s B unit, also owned by AES, faces a similar fate and could close in December.
The State-owned company pledged to consult with workers in both on the implications. Neither of the ESB nor Viridian would say how many workers were likely to be affected.
Electricity generators receive the capacity payments to help maintain and invest in power plants, but the new system will cut these revenues and limit them to the cheapest and most efficient operators, meaning some will lose out.
Eirgrid maintains that the move will save consumers and businesses €200 million, as the payments are funded through network charges paid by all electricity users.
Last month’s auction, in which all electricity generators took part, was meant to identify the cheapest and most efficient power plants.
Payments were only offered to plants with the combined capacity to generate a total of 9,000 megawatts (MW)of electricity.
The industry as a whole can produce more than 10,000MW. The payments themselves were cut to around €38,000 per megawatt from €55,000.
Ian Luney, president AES UK & Ireland, said its failure to secure new contracts had come as a surprise because Kilroot had been “integral” to the security of supply of electricity in the North.