A substantial number of new power stations will be needed between now and 2013 to meet growth in demand and cope with the withdrawal of 1,300 megawatts of generation over the next five years, according to the Generation Adequacy Report from EirGrid, the independent transmission system operator.

In addition, electricity demand is expected to grow by between 3.8 per cent and 4.1 per cent annually over the next seven years.

EirGrid said that premature or unforeseen closing down of older power plants could present a risk of supply shortages in the short to medium term, but with proper management of the generation portfolio, this situation could be avoided.

Around 20 per cent of existing power stations that have reached the end of their life cycles will be closed in the coming years.

EirGrid said that there had been significant interest among developers in providing replacement plants but also said that there was a need for improvement in performance of existing generation plants on the Irish system.

The report also predicts significant changes in the way Ireland generates its power in the coming years, with the closure of older fossil fuel plants and the rapid deployment of large amounts of wind-powered generation.

"Like any period of change, this will present both opportunities and threats," it said.

A total of 700 megawatts of wind farms will be in place by the end of this year and Ireland is on target to meet 15 per cent renewable energy target by 2010, EirGrid said.