Wind may help determine future electricity prices

THE WIND is set to play a key role in determining the price of electricity after 2020 if both the Republic and Northern Ireland achieve their targets of generating 40 per cent of power from green energy sources.

Eirgrid, the State agency responsible for managing the country’s electricity transmission networks, yesterday published a report exploring the options for power generation after 2020.

The report, Low Carbon Generation Options for the All-Island Market, completed by multi-national energy consultants Poyry, looks at a range of scenarios for the Irish market, taking into account fuel, cost and competitiveness.

There is a single Irish electricity market and the Government and Northern Executive both aim to meet EU greenhouse gas reduction targets by generating 40 per cent of electricity from renewable sources.

Phil Hare, the Poyry consultant who wrote the report, said in this scenario “wind availability” would play a similar role in determining Irish power prices to that currently played by oil prices.

The price of oil is an important factor in determining what customers pay for electricity as it and natural gas are used to generate much of the power used in the country.

According to Dr Hare, wind availability can vary by 25 per cent from year to year in Ireland. He said this could have a “significant” impact on the price of electricity in a situation where it is used to generate about 40 per cent of the power used in the country.

Eirgrid chief executive Dermot Byrne said yesterday the report does not make recommendations about how the country’s power generation industry should be shaped in the next decade. “What we want to do is to open up the debate,” he said. Some of the biggest plants, including the coal-fired facilities at Moneypoint in Co Clare and Kilroot near Carrickfergus, are set to close after 2020, when they will have reached the end of their useful lives.

At the same time, peat will no longer be available to be used as a fuel for power generation. “We have a reasonably diversified fuel input now, but if you take away all of those, we are just left with natural gas and renewables,” Mr Byrne said. The agency wanted to look at different options and build a consensus with the industry on the best way forward, he added.

Eirgrid presented the report to the main players in the power generation and supply industries yesterday.