Squeeze on electricity supply to last into 2030s, report finds

Rising demand will squeeze Irish electricity supplies into the next decade, potentially forcing the State to fall back on older fossil-burning power plants to keep the lights on, a new report indicates.

National grid operator Eirgrid predicts that all-Ireland electricity demand will rise 43 per cent over the 10 years to 2032, while suppliers have backed out on pledges to build new generators. The State company warns that the outlook remains challenging “with capacity deficits identified during the 10 years to 2032″.

Eirgrid says it expects electricity supply and demand to be particularly tight over the next five winters. Its report notes that steps taken to avoid shortages include keeping older power plants open beyond their scheduled closing date.

Late last year industry watchdog the Commission for the Regulation of Utilities agreed that the ESB-owned Moneypoint plant on the Shannon Estuary could continue operating as a “generator of last resort” past its scheduled closing date next year. The regulator stipulated that the plant should switch from burning coal to heavy fuel oil and continue operating up to March 2029.

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The State has also recruited temporary gas-fired power plants in counties Dublin, Offaly and Kerry to help plug gaps in electricity supplies. One plant on Dublin’s North Wall began producing electricity in the autumn, while the others are due to begin generating power this year.

Eirgrid’s General Capacity Statement, a snapshot of likely electricity demand and supply, partly blames the failure of developers to build promised new power plants for the shortage. Since the previous such statement, published in the autumn of 2022, developers have axed plans to build generators that would have provided 455 megawatts (MW) of electricity, the equivalent of a large gas-fired power plant. This is in addition to the 630MW which was terminated before the company published the 2022 statement. “This means that most new predictable capacity that was expected to come online over the coming years has now withdrawn,” says the report.

Many of the axed generators would have run on natural gas, which provides half of the country’s electricity and on which the system relies when weather prevents wind and solar plants from generating power.

Eirgrid’s report notes that since 2018 just 30MW of new natural gas-fuelled power generators have been added to the Irish electricity network.

State-owned ESB and Norwegian-owned multinational Statkraft are among the suppliers who terminated contracts and dropped plans to build generators that were scheduled to begin running between 2022 and 2032, the report notes.

Eirgrid says shortfalls will increase up to 2025 and begin easing as new suppliers recruited through auctions begin to produce electricity. However, demand will continue increasing, partly driven by a switch to using electricity for heating and transport required by the Government’s Climate Action Plan.

Eamon Ryan, Minister for the Environment, Climate and Communications, maintained that Eirgrid’s statement showed an improvement from last year. He said this was due to lower demand forecasts and action taken by Government and State agencies to manage the situation.

Mr Ryan pointed out that renewable capacity continued increasing in 2023. “New temporary emergency generation capacity has been delivered in North Wall, Dublin, and more back-up capacity will come on stream over the coming months.”

The Minister said Eirgrid’s statement was intended as a “signal” to industry that there is a shortfall or surplus.