New power plants likely to meet just a fifth of energy need, industry figures say

Efforts to secure new power plants over the past three years will produce just one fifth of the extra electricity needed to meet likely growth in demand, industry players say.

Since 2018 national grid operator Eirgrid and market regulators have run several "auctions" meant to attract power companies to build new electricity plants to meet growing demand.

However, figures provided by industry sources calculate that these auctions will ultimately result in new power plants with the capacity to produce an extra 209 megawatts (MW) of electricity.

At the same time, they point out that peak demand for electricity is likely to have increased by about 1,000MW between 2019 and the winter of 2023/24.

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Eirgrid recently completed an auction meant to bring in extra electricity generators to be available next winter, 2022/23.

While that secured a total of 1,120MW, roughly equivalent to three average sized gas-fired plants, industry figures maintain that 895MW includes existing generators and suppliers.

The remaining 225MW included “demand-side units”, which are electricity customers who paid to halt or limit their power consumption during busy periods, and batteries.

Consequently they “do not contribute to solving the need for new generation,” one source argues.

Contracts

Separately, power companies won contracts for 1,239MW of electricity for new generators through auctions run since 2018.

Of this, 557MW was for a new gas-fired plant at Kilroot, Co Antrim, to replace a similarly sized coal burner that is due for shut down.

ESB was awarded a deal for 428MW but the State company had to abandon that as its suppliers were unable to guarantee that components needed for its facilities would be available on time and that they would meet EU standards.

The balance, 254MW, was three standby gas-fired plants meant for use when demand is high, but one of those was also abandoned.

The power companies behind these projects bid in the auctions for “capacity payments”.

These are flat months payments paid by the Irish single electricity market to companies whose plants commit to being available to generate power.

The sums are tied to each generator’s capacity, while the auctions favour the companies who seek the lowest payments. The market gives new plants 10-year contracts to aid them in raising cash for the projects.

Growing gaps

Eirgrid did not comment directly on the figures but noted that both it and the Commission for Regulation of Utilities have already warned of growing gaps between electricity demand and supply over coming years.

They calculate that the deficit could be 260MW in 2022/23, rising to 1050MW in 2023/24 and 1850MW in 2024/25.

Eirgrid noted that it is planning auctions for more than 2,000MW of gas-fired plants by 2030 and hopes to procure 300MW in emergency generation for winter 2022/23.

It can also extend the lives of older generators, including the coal-burning Moneypoint station, to delay the loss of 1,200MW from the system.

Eirgrid and the regulator noted in September that power companies faced difficulties in meeting contract deadlines, which hindered the development of new electricity generators.

The grid operator and Gas Networks Ireland have pledged to prioritise any new power plants seeking connections to their systems.