Coal is suddenly back in fashion. According to some estimates, the amount of the fossil fuel we have burned to generate electricity this year has quadrupled. In July, it provided 12 per cent of the power that homes and businesses used, reaching 25 per cent at certain points. Figures published this week by Gas Networks Ireland show that during August coal was responsible for up to 18 per cent of electricity consumed in the Republic.
Our reliance on the fuel, condemned for its high greenhouse-gas emissions, could continue well into the next decade. This week, one of the solutions proposed by the Commission for Regulation of Utilities (CRU) to a pending crisis in electricity supplies was keeping coal- and oil-burning electricity generators open beyond their scheduled closing dates in 2023 and 2025.
These include the Republic's two biggest power plants, the coal-burning Moneypoint, in Co Clare, owned by the ESB and due to shut in 2025, and an oil-fired facility in Tarbert, Co Kerry, owned by SSE, scheduled for closure in two years. Keeping these older generators going beyond those dates would be an embarrassment for a Government that recently published ambitious plans to tackle climate change, which include ending the use of coal for electricity generation by 2025.
The fact that the Green Party, whose leader, Eamon Ryan, is the Minister responsible for energy, is part of that Government would only aggravate this embarrassment.
However, Ryan himself pointed out that there were alternatives to this, as continuing to burn coal and oil is only one of several solutions proposed by the CRU. Its statement, a response to a warning from national grid operator EirGrid of looming shortages in electricity, stressed that these “carbon-intensive” generators should be kept going only in the absence of other options and only for as long as they are needed.
Central to those other avenues are plans to recruit investors through a series of auctions, beginning early next year, to build flexible, cleaner, gas-fired generators, which can be used at times when wind-generated renewable electricity is not available.
Those auctions could ultimately result in new generators capable of producing at least 2,000 megawatts (MW) of electricity between them. To put that in context, the average conventional gas generator in the Republic generates about 400MW. The 2,000MW total takes us up to 2030, but the CRU says that a significant amount must be secured in next year’s auction.
Without the power that the new plants could provide, EirGrid says the Republic could find itself with an electricity shortfall of 1,850MW in 2025, assuming Moneypoint, Tarbert and others close on schedule. If new investment does not materialise, the CRU says the “closure of a number of older generators in 2023/24 and 2024/25 would give rise to significant risks to security”.
In short, with neither old nor new generators, the prospect of power cuts becomes real, which would inflict both short- and long-term damage on the Republic and its economy. One of the attractions of investing here for overseas companies is that we have always had reliable energy supplies.
So luring developers to build new generators will be key to maintaining those supplies and meeting our target of cutting greenhouse gas emissions by 7 per cent a year until 2030. However, not all auctions held since 2017 to bring in new investment have reached their targets, or committed investment has dropped out.
Grid connections
One problem is that investors fear they may not get connections to the electricity or natural gas grids on time. To combat this, the CRU has told EirGrid and Gas Networks Ireland to prioritise connections for the new plants.
A second issue is getting the equipment. In 2019, the ESB was awarded capacity for nine projects overall, but in December confirmed that it could not go ahead with two in Dublin, where demand is strongest. The State company explained that the main manufacturer providing the plant notified it late that “their equipment could not meet EU environmental standards”.
This is a widespread problem, according to both the CRU and EirGrid. Power-plant developers are not confident that they can get the right components on time from manufacturers based mainly in the Far East.
The next problem is “messaging”. As the Government has focused heavily on the target of generating 70 per cent of electricity from renewables by 2030, it has ignored the other 30 per cent, which will be gas, which now provides about half our power.
In fact, Don Moore, former managing director of ESB International and a member of the Irish Academy of Engineering, points out that out consumption of this fuel will not fall much at all, even if we hit the 2030 renewables target, because our climate plans mean we will use more electricity, as it will power transport and heating along with everything else.
“If we hit the 70 per cent renewables target, will still be using 80 per cent of the gas that we now burn to generate electricity,” he says. Moore, who stresses that the academy stands “four-square” behind the Government’s climate plan, argues that no one has made this clear to the powergen industry.
He remarks that is only in recent weeks has he heard Ryan publicly acknowledge the role that gas will continue to play in future electricity generation. Moore predicts that will be the case for decades, as alternatives are still in the early stages of development.
Clarity
The CRU acknowledged the problem this week. Its statement pledged that the commission will provide “clarity that additional gas-fired generation is vital for the successful delivery of Ireland’s 2030 renewable electricity and climate targets”. The commission welcomed Ryan’s recent statements about the fuel’s importance.
Other industry figures, who do not want to be quoted, blame not just Ryan, but all politicians for sending out the wrong signals to the energy sector as a whole. One senior executive says this began with the then taoiseach – now Tánaiste – Leo Varadkar’s surprise statement to the United Nations in September 2019 that the Republic intended to ban offshore oil exploration, which by extension meant gas, made just a month after his government published a document trying to encourage further activity in this sphere.
"That was purely politically motivated," he says. The executive argues that since then, Fianna Fáil and Fine Gael have ceded the energy ground to the Greens, while all politicians are now afraid to say anything that could be perceived as running counter to the public's desire to tackle climate change.
However, even if that imbalance is tackled, there is still a key issue for anyone building a power plant – wind power will always be first in the queue – so that raises the question of whether or not they can get a return. Moore explains that the flexible gas plants are expensive to build. Day to day they have to be kept idling, ready to kick into gear as wind speeds drop, with no guarantee of when they can sell power.
That does not mean they get no return at all. The auctions, set by the Single Electricity Market Operator and run by EirGrid, offer developers “capacity payments” a mechanism designed to reward power plants for being available to generate electricity when they are needed. The powergen companies bid in the payments they will need, with the lower tenders favoured first.
Moore suggests that some bidders in previous auctions have been testing the ground, hence the dropout rate, the ESB was not the only investor unable to take up their contract. To tackle this he says that the process should include penalties for successful bids that do not materialise into actual development without good reason.
While no one can predict future wind speeds, any flexible gas generator would have received a healthy return this year, as wind speeds have been below normal, not just here but in western Europe as a whole. This is part of the Irish system's problem. Last year, two peat-fired plants in Longford and Offaly closed, while two years ago a gas plant in Cork shut. This increased our reliance on wind, as no conventional generation stepped in to fill the gap.
The temporary closure of the Bord Gáis Energy plant in Whitegate, Co Cork, and one of Energia's two units in Huntstown, Co Dublin, aggravated the problem, leading to a series of warnings about stretched capacity through the year. Those generators will reopen this month and next. Nevertheless, EirGrid chief executive Mark Foley stressed this week that this winter would be "challenging". Ryan meanwhile conceded that he could not be certain there would no power cuts in coming months.
Rising demand
While their reopening should hopefully get us through this winter, the combination of closing plants and rising demand, partly but not wholly fuelled by data centres and other industrial users, poses long-term challenges. If the trend continues, and we lure no new investment, then the predictions in EirGrid’s all-island generation capacity statement, published this week, could come true.
Demand is central to the picture too. For a few hours last January, electricity consumption in the Republic hit 5,375MW, breaking a 10-year-old record. There is no sign of that abating. So another solution involves cutting your cloth to suit your measure.
John Mullins, chief executive of solar power investor Amarenco, who began his career as a senior engineer with what is now EirGrid – it was then part of the ESB – points out that renewables are not "base-load" power. That is, they cannot generate electricity around the clock every day. "You have to match base-load power with base-load demand," he says.
That is another solution under consideration. The CRU is consulting on the rate that data centres are connecting to the grid – EirGrid is legally obliged to agree to any requests from that industry – and its findings are due in a matter of weeks.
However, Moore maintains that data centres have become whipping boys for a series of broader problems. The debate and “hysteria” sparked in recent weeks about their impact on electricity supplies, he argues, is down to a lack of information from the Government about its climate ambitions and their implications for our energy system.
It is the Government and not agencies such as EirGrid who should be taking the lead on all these issues, he maintains. The responsible Ministers must “treat Irish people like grown-ups” and explain all consequences of the climate plan clearly, including the need for gas to back up renewables. “The whole climate programme is well-intentioned, but it’s riddled with fudge,” Moore says.
