novembre 30, 2022

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Price triples as Eirgrid agrees to deal for new gas stations

Eirgrid, the national power grid operator, has completed an auction with power companies that will lead to the construction of nine new gas generators across the country.

The contracts will see an additional 1,471 megawatts of power added to the national grid, which is about a third of the current average generation capacity.

It also includes some battery and biomass energy storage contracts and « demand-side units »; Large users enter into contracts to reduce their energy consumption when required by the network operator.

The price per megawatt per year is just under 147,000 euros. That compares to €47,821 per megawatt-year per year at the 2021 auction, and €46,150 at the 2019 auction.

The three-fold increase in tariffs reflects the massive increase in gas prices on international markets over the past year. The auction guarantees these higher payments for periods of up to ten years, once the factories are up and running.

Ergrid says the new plants are expected to come online from October 2024.

Any new plants to be built must have applied for planning permission to enter the auction.

Successful companies include Kilshane Energy for a power plant in the Huntstown area of ​​Dublin, Midlands-based Castlelost Flex Gen Ltd, Galway-based EP Energy Developments and ESB.

ESB was fined €4.1 million in « termination fees » by the Facilities Regulatory Commission for five projects agreed at the 2019 auction, which did not reach the agreed targets.

Environment, Climate and Communications Minister Eamon Ryan TD welcomed the announcement. He said in a statement, « ..the results of the temporary auction published today are an essential step towards providing the required generation. It is now vital that these projects are developed. »

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CRU also welcomed the results.

« …the auction is one of a number of actions outlined in a CRU information note published in September, which are intended to address the increased security of supply risks identified by EirGrid in its 2021 generation capacity statement, » it said in a statement.

Under the government’s Climate Action Plan, a target of 80% renewable energy by 2030 has been set.

However, the need for more modern gas-fired plants – in times when renewables can’t generate enough power – was identified last year. This came after several « amber alerts » on the network, when supply came close to not keeping pace with demand.