Dáil Éireann Debate, Thursday - 25 January 2024
93. Deputy Darren O'Rourke asked the Minister for the Environment, Climate and Communications if he is aware of EirGrid’s recent warning that capacity deficits have been identified in the ten years to 2032; what steps he is taking to address the structural features of the electricity market which contributed to the electricity market crisis as noted in the recently published McCarthy report; and if he will make a statement on the matter. [3414/24]
View answerIs the Minister aware of EirGrid's recent warning that capacity deficits have been identified in the ten years to 2032? What steps has he taken to address the structural features of the electricity market which contributed to the electricity market prices, as noted in the recently published McCarthy report? Will he make a statement on the matter?
The Government's energy security package, published in November 2023, contains a wide range of measures to strengthen Ireland’s energy security in the long term, including through reduced and responsive energy demand, a commitment to delivering on a renewables-led energy system, enhancing resilience across energy supply and enhancing oversight and governance mechanisms in the energy sector.
I welcome the publication of the All-Island Generation Capacity Statement 2023-2032, which is an annual report from EirGrid that examines the likely balance between electricity demand and supply for the next ten years. The most recent report shows an improved situation on the 2022 generation capacity statement, GCS, due to lower demand forecasts and the actions taken by the Government and State agencies to manage the situation. These actions include procuring both additional temporary and enduring capacity to generate electricity. The GCS is the principal forecasting tool to inform the setting of auction volumes within the single electricity market, SEM, and the SEM committee refers to the GCS analysis to make its capacity determinations for future capacity years so that there is a steady pipeline of required capacity.
The Commission for Regulation of Utilities, CRU, currently has a programme of actions under way to ensure the security of our electricity supply. Regular updates on this programme are published on the CRU website. The energisation of temporary emergency generation, TEG, units in North Wall in December 2023 as part of the programme, with further TEG units to be energised in Huntstown in the coming weeks, and Shannonbridge and Tarbert across 2024, will mitigate risks to our electricity supply, going forward. The energy security package concludes that Ireland’s future energy will be secure by moving from a fossil fuel-based energy system to an electricity-led system, maximising our renewable energy potential, providing flexibility and integrating into Europe's energy systems.
The EirGrid report notes that steps need to be taken to avoid shortages and those steps may include keeping older power plants open beyond their scheduled closing date. This has particular implications for the use of fossil fuels and emissions. Will the Minister outline if that is the intended strategy? An alternative is, of course, to deliver on and go beyond our renewable energy targets. Another alternative would be to reduce demand. My two questions relate to extending the lives of our existing plants and reducing demand. What are the Government's plans in that regard?
It is essential we do both. The most recent statement about what happened last year shows the benefit of that approach. As I said, we are slightly better positioned than we were last year because our demand has not grown by as much as EirGrid had expected because of efficiency measures applied in a variety of ways. We focus first on energy efficiency in everything we do. That is absolutely the case.
Last year saw a significant reduction in emissions from the power sector. We will get the figures in due course. What has driven that? Shutting down Tarbert and allowing much less running time for Moneypoint has driven it. That has to be the future. The strategy cannot be to rely on heavy emitting plants to meet our energy capacity needs. That will not work. We have to switch off coal next year and only have such plants as an absolute last-case backup in the event of all other systems being unavailable. That is not our strategy.
We need to look at what is working and what worked last year particularly was that the existing interconnectors allowed us to draw in power at times when the wind was not blowing here. That helped to reduce emissions and gave us greater security of supply. The introduction of new interconnection with the UK this year and with France in two years' time, and further interconnection, rather than reliance on heavy emitting base load power plants that are running all the time, as well as renewables and efficiency, will be the cornerstone of our security future.
I will ask about demand management and reduction in light of EirGrid's projections in respect of the significant expected increase in demand, especially for data centres, to 2032. I am sure the Minister is aware that the International Energy Agency stated that EirGrid has underestimated. That agency predicts that data centres in Ireland may double electricity consumption over the next two years. Is that something the Minister sees happening? If it is, how will that be managed in the context of a constrained electricity system?
I do not see electricity demand doubling in the next few years. We cannot afford for that to happen either on a security of supply basis or on an emissions reduction basis. That is not going to be tolerated.
We have a large number of data centres on our system. They account for a large percentage of demand. They bring enormous benefits to the economy, which we should not ignore. Additional data centres will come online because they were agreed prior to the formation of this Government. We saw that we cannot provide an open door because if we did, we would not be able to provide the power needed. Some data centres were contracted prior to that direction from me to the likes of Gas Networks Ireland, GNI. The Government does not reverse or break contracts so such contracts are likely to be filled. However, any future data centres and new connections are going to have to live within our climate budget. They are going to have to be flexible in terms of where they are located to support, rather than put pressure on, the grid. They will need to have demand flexibility and renewable power at the core of their systems. They need to have real flexibility to allow us to use waste heat from them to help with our efficiency. We are not saying "No" to new data centres but they cannot be agreed on a basis that breaches and breaks our climate budget. We are working with the CRU, the industry and the Department of Enterprise, Trade and Employment to make that a viable future.
