Energy blackouts loom on regulator’s radar

Ireland’s energy regulator is rattled. That is clear from the tone and the terms of the consultation document published this week by the Commission for the Regulation of Utilities (CRU).

The CRU itself admits that “it is unusual to implement changes to the structure of network tariffs in such a short time frame”, referring to the two-week holiday season window for consultation with a subsequent decision enforced just a month further down the line. It “considers that it is necessary to act quickly due to the electricity security of supply issues facing Ireland”.

It adds, frankly, that if no steps are taken to address the situation, it expects a capacity shortfall over coming years, with “particular challenges” expected this winter and next. When “winter” starts is a moot point but, being generous, the CRU is saying we have just more than four months to persuade people to use less electricity.

The regulator’s position echoes the words of Cambridge University professor of political economy Helen Thompson, writing on Friday in the Financial Times: “This coming winter will bring a reckoning” for western governments.

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The package of proposed additional charges, or tariffs, outlined has several strands, all of which are designed to ease demand on the national grid at times of greatest stress. And, as the CRU says, the heaviest pressure will fall on a smallish cohort of extremely heavy power users – data centres and the like.

For consumers, the most notable element is a suggested 24 per cent premium to the transmission tariff on power during the peak hours of 5pm-7pm each day. Where the standard off-peak consumer tariff will be €15.96 per Megawatt hour (MWh), that will rise to €18.83 at peak times.

But tariffs on the heaviest corporate users are considerably higher.

The CRU is also proposing a punitive charge on its heaviest users when it has to issue system alerts, as it did twice in recent weeks. On those occasions, heavy commercial users will pay an additional €215.40/MWh under its plan.

These large users will also be hit by a separate decarbonisation tariff. It will kick in when power generators are relying more heavily on fossils fuels to deliver power to the grid. The CRU suggests the charge should kick in when renewables – wind and solar – account for less than 25 per cent of generating power.

Already EirGrid is questioning the scale of the proposals and the energy providers – who will have to decide whether to swallow such charges or, more likely, pass them on to consumers – will certainly have plenty to say. But what is clear is that the regulator fears Ireland, alongside other countries across Europe, faces a real threat of blackouts this winter.