Electricity shortages in Ireland: likelihood and consequences

Electricity shortages in Ireland: likelihood and consequences

18/12/2006

By Laura Malaguzzi Valeri and Richard Tol (ESRI)

Special Article in the Quarterly Economic Commentary, Winter 2006, to be published on 21 December (online).

The highest demand for electricity in Ireland occurs during the winter months, when the days are short and the weather is cold. The combination of high growth in electricity demand and an aging generation plant portfolio has created a tight market for the next few years.

In this paper, we find that:

• When all plants are available, the probability of a shortage is very small.
• However, in November 2006, 18% of generation capacity was unavailable because of unplanned outages.
• This was due in part because of outages at Poolbeg, Great Island and Tarbert, although in early December 2006 these plants were officially back in operation, apart from one unit at Poolbeg.
• The generating units at Poolbeg, Tarbert and Great Island are essential for the reliability of the system:

• when the units at Poolbeg, Tarbert and Great Island are running, the probability of a shortage is 0.5%.
• when none of these units is running, the probability of a shortage jumps to 47%.
• Unfortunately, these units are old and historically they have been unreliable.
• The probability of a shortage is highest in the two weeks before Christmas, particularly at times of low wind.

The risk that there might be power cuts suggests that contingency measures should be put in place.

• Hospitals and large businesses receive priority dispatch, so are least likely to suffer electricity disruptions.
• However, traffic signals, small businesses and households, within limited geographic areas, are the most likely to be cut off from the electricity grid for a few hours at a time.
• If traffic signals stop working during busy traffic hours, major disruptions to transport would occur.
• Poolbeg, Great Island and Tarbert should remain fully operational until replacements come on line, even though they might close by 2010.
• For this winter and next, plans to reduce demand should be adopted.
• For the winter after that, new generation capacity is needed, even if that increases the market power of ESB.