Ireland may close power plants to cut cost of grid

• 6 years ago (2017-05-01)
• David Flin

Europe 1061 Transmission 181

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The Irish energy regulator has said that it is considering plans to shut several power plants to reduce the cost of guaranteeing electricity supply. According to the plan, up to 2000 MW, 20 per cent of the total capacity, will be taken out of the system by 2024. This is intended to reduce the €515 million annual capacity payments bill.

Currently, in addition to payment for energy produced, generators also receive a capacity payment for being available to produce if required during periods of high demand. A new system will require generators to bid into an auction process, and some plants will not remain commercially viable if they don’t secure capacity payments in the new market.

National grid operator EirGrid said that it was possible that those which didn’t win contracts would go out of business. A spokesman said: “It is possible that some generating units that fail to secure capacity payments may not be commercially viable.” EirGrid said the amount and timing of the reduction was uncertain. It will not be clear which plants risk closure until after the auction takes place later this year.

Currently, 6878 MW is needed across the island. There is 10,000 MW available. This will fall to 8000 MW by 2024, through changes being introduced under EU rules.

Wind generators receive the least through capacity payments, around 7 per cent of the total spend of €515 million. Peaking plants, which are only occasionally used, receive the most. In some cases, some 30 per cent of peaking plant revenues were generated from capacity payments.

In 2015, peak generators accounted for just 1 per cent of all power generated, but received 13 per cent of total revenues.

While some plants, including Tarbert in Kerry and North Wall in Dublin, are already earmarked for closure, because they are old or cannot meet EU emissions directives, others risk being put out of business. Among the peaking plants that might possibly be affected are Huntsdown and Poolbeg in Dublin, Tawnaghmore in County Mayo, Tynagh in County Galway, and Rhode in County Offaly.