A public consultation on security of electricity supply, initiated by the Commission for Regulation of Utilities (CRU), closed recently.

The CRU oversees the electricity, gas and water industries and their immediate concern is the rapid growth in power demand from data centres, a contributory factor in growing pressure on the electricity system and the rising risk of blackouts.

Ireland has traditionally been able to maintain a resilient electricity system with a decent margin of spare capacity, sufficient to ensure that occasional outages at generating stations are unlikely to result in customer disconnection.

This has a cost – the reserve of available generation must be paid for, but the benefit is substantial.

Households and small businesses take it for granted that the lights stay on and secure supply, with negligible frequency of disruption, helps attract inward investment.

Extra reserve costs

In recent decades, the extra reserve costs have been mitigated through running the grid jointly with Northern Ireland and through interconnection to Great Britain, so that generation availability can be enhanced at modest cost through sharing the reserve capacity.

Aside from extra demand from data centres, Ireland now has a substantial reliance on renewables, mainly wind power.

Next time Ireland gets caught short, the UK might not have spare power to export

The wind industry likes to draw attention to days when output of renewable power reaches new record levels, but it cuts both ways.

Last week, there were days when renewables contributed almost nothing since the wind declined to blow.

Several gas-fired units happen to be out of action temporarily and, despite running the large Moneypoint coal station flat out and substantial imports over the interconnectors, there have been numerous close shaves.

The UK system is not flush with capacity either and next time Ireland gets caught short, the UK might not have spare power to export.

Fluctuations in demand

Electricity cannot readily be stored and fluctuations in demand must be met, almost instantaneously, with adjustments in generation.

Storage technologies are being developed, but will not be available at system scale in time to make any difference to Ireland’s supply predicament.

In the background is a Government target of sharp reductions in emissions, which requires heating demand from buildings and propulsion of road vehicles to be met through electrification.

Demand for electricity, without any extra data centres, is likely to expand anyway, after two decades of little growth and declining emissions.

The turf stations in the midlands are being wound down and the same fate awaits the Moneypoint coal station

The composition of generation has been changing steadily, not just through additional reliance on interruptible wind power, but also through the closure of older, high-emission units.

The turf stations in the midlands are being wound down and the same fate awaits the Moneypoint coal station in Co Clare.

Ironically, the poor wind output recently may have deferred the date when it would be safe to scale back use of the three units at Moneypoint, which have far higher emissions than the gas-fired plants currently unavailable.

These will be back sometime in the autumn, but there could be more alarms along the way. In the meantime, emissions will rise for 2021 as coal replaces gas.

Sticking plaster

The ESB has been funded by the regulator to install temporary gas-fired units as a precaution, but this is just a sticking plaster.

If Moneypoint is to be retired, there will need to be new dispatchable (always-on) capacity.

This means more gas stations, perhaps to be used only intermittently, but they will cost money to build and intermittent operation is costly too. Further renewable capacity must also be funded.

Since electricity is a commercial business funded by customers, this means higher tariffs

If the Government means to deliver on renewable targets, there will also be a big investment in grid capacity, since dispersed generation, including offshore, needs to be linked in.

The distribution network, the low-voltage local lines which connect over two million premises around the country, will also need strengthening to carry the extra loads, as homes and business premises use extra power for heating and for charging electric vehicles. Since electricity is a commercial business funded by customers, this means higher tariffs.

Nobody knows how much higher since the sums, remarkably, have yet to be done.

Three options

The CRU consultation offers three options for dealing with the threat of yet more demand from data centres.

Engineers have been warning about this unwelcome explosion of demand for several years and one option is to simply call a complete halt, as has already been done in and around the Dutch city of Amsterdam.

The ‘do-nothing’ option is on the list, there to be ignored, since it implies widespread blackouts and soon.

A third option is to contain demand and to direct location decisions away from Dublin, the area least able to accommodate new facilities.

The attractions of Ireland for data centres include a deal on connection tariffs which was simply too generous and which has outlived its usefulness as a tool to attract foreign direct investment.

The unlisted option is to charge extra and see what happens.