State to import new electricity generators for next winter as energy crisis bites
New plans to import emergency electricity generators worth hundreds of millions of euro for winter 2022 are underway, after efforts to secure them for this coming winter were abandoned last month, the Business Post can reveal.
The Business Post understands that the Commission for Regulation of Utilities (CRU) will write to Eirgrid this week instructing it to go ahead with plans to procure emergency generators for winter 2022. The new emergency generation is being procured because of a projected mismatch between growing electricity demand and available power generation.
Such emergency measures may well be needed for a number of years, as Ireland’s power sector tries to catch up with the rise in demand being driven by data centres and the electrification of the economy.
Eirgrid, which operates the national power grid, and the CRU previously sought approval from Eamon Ryan, the Minister for Environment, Climate and Communications, to import 200 megawatts (MW) of power this winter at a cost of €130 million because of extremely tight supply margins. The plans were abandoned following difficulties in securing the generation on time, a legal challenge to the procurement process, and improved prospects for Whitegate and Huntstown power stations coming back online this winter after prolonged outages.
The failure to secure emergency generation this winter will leave Ireland with some of the tightest power supply margins in many years and the potential for blackouts.
With the opportunity to secure emergency generation this winter now gone, the state has turned its attention to winter next year, where the mismatch of power supply and power demand is expected to worsen despite a resumption of generation at Whitegate and Huntstown power stations.
The Business Post understands the new generators being sought for next winter will have at least the same power output as what was being sought for this winter (200MW), but could be much more.
This is because of continued growth in demand from data centres in the short term, which has made up effectively all of the power demand growth over the previous five years. It is also because of a shortfall in gas generation due to the ESB pulling out of two gas power stations it had been contracted to build in 2022.
Speaking to the Business Post, a spokesman for the Department of Environment, Climate and Communications (DECC) said it had been advised by the CRU that delivering enough electricity to meet demand in the coming years would be “challenging” and confirmed that emergency generation for winter 2022 was now being secured.
A spokesman for the CRU said the emergency generation procurement process would get underway shortly.
“EirGrid have identified a need for temporary emergency generation to address security of supply risk. CRU are working with DECC in order to facilitate the commencement of a public procurement process to deliver this service. This is one of a number of measures we are working on with both DECC and EirGrid in order to address security of supply over the coming years, and we will be providing more comprehensive information on this programme of work in the coming weeks,” the spokesman said.
A week ago, the Single Electricity Market Operator (Semo) issued two system alerts, also known as amber alerts, warning that “due to a generation shortfall in Ireland”, electricity margins would be extremely tight until further notice.
Since the beginning of 2020, Semo has issued eight system alerts for Ireland to warn of capacity shortages on the electricity grid, compared with just 13 alerts over the previous ten years.
Speaking in the Dáil last week, Eamon Ryan said he recognised the seriousness of the electricity supply challenge facing the country.
“This is a complex situation. There is multi-annual complexity. We have to look forward to the next decade and beyond, but particularly to the next three to four years. Our expectation is now that we will not have outages this winter, but we never know,” Ryan said.