CRU Publishes Security of Supply Information Note

CRU Publishes Security of Supply Information Note
  • Information note highlights the changed generation needs, predicted by EirGrid’s most recent 2021 Generation Capacity Statement (GCS).
  • Information note outlines the programme of work and actions to provide long-term resilience of supply, while mitigating medium-term risks identified in the 2021 GCS.
  • Short-term supply risk has declined due to planned return to operation of generators, but margins will remain challenging during the winter period.

 

The Commission for Regulation of Utilities (CRU) has today published an Information Note, outlining a programme of work to address the increase in forecasted generation capacity needs over the next four to five years, and how it will provide additional stability and resilience to the Irish energy system.

The CRU Security of Supply programme of work is in response to EirGrid’s recent identification of a potential capacity shortfall, if no action is taken, for the following winter periods of 2022/23 to 2025/26, which is set out in the EirGrid’s most up to date All Island Generation Capacity Statement 2021.

The CRU will take ownership of this programme of work and will ensure delivery, working in cooperation with EirGrid, the Department of Environment, Climate and Communications, the energy industry and other stakeholders.

This follows confirmation by EirGrid that risks to short-term electricity supply for the forthcoming winter 2021/22 period have declined due to the planned return to operation of the Huntstown 2 and Whitegate generators in October and November respectively. Although the risk has declined, it is still expected that this winter supply margins will remain tight and there may be System Alerts over the Winter period.

 

EirGrid’s 2021 Generation Capacity Statement (GCS)

Every year EirGrid publish a long-term outlook which outlines the generation needs for the coming 10-year period. The 2021 GCS, in response to developments since the publication of the 2020 GCS, has identified an increased need for generation between Winter 22/23 and Winter 25/26. The major causes for this change are as follows:

  • Approximately 500MW of contracted generation expected to be delivered in 22/23 will now not be delivered, leaving a significant generation gap in advance of the planned retirement of existing elements of the existing generator fleet.
  • Actual electricity demand has continued to increase – Ireland experienced record system demand peaks in the winter of 2020/21, on the 3rd (5112MW) and 7th December (5357MW). The previous record was in place since the extreme weather event of December 2010. EirGrid, in the 2021 Generation Capacity Statement, has also increased its expectation for demand growth, primarily related to the data centre sector.
  • The reliability of the existing, older, fleet has declined beyond typical expectations, as evidenced by the prolonged outage of two reliable large gas generation units. Factors contributing to this decline in reliability include not only the age of the fleet but also their operation to complement wind generation, requiring them to turn on and off more often than they would originally have been designed to do.  This increases the need to have more generation in reserve in times of high demand.
  • In a tight system, it becomes increasingly difficult to schedule outages on the transmission system which allow for necessary maintenance of the wires and the connection of new demand and the conventional and renewable generation required to meet our 2030 goals. EirGrid has identified a requirement for additional reserve to facilitate this transmission outage planning.
  • A lower-than-expected response from the market to the most recent Capacity Auction which was targeted at the Winter 24/25 period, leaving a shortfall that requires to be made up.

Taking account of these new factors, EirGrid has identified in its All-Island Generation Capacity Statement 2021 a potential capacity shortfall, if no action is taken, of 260MW for the capacity year 2022/23, rising to 1050MW in 2023/24 and 1850MW in 2024/25.   The programme of work, outlined in CRU’s Information Note, incorporates the recommendations of EirGrid in its role as Transmission System Operator, and includes a number of actions which have already commenced in recent months.

 

Security of Supply Programme of Work

To address the challenge, the CRU, incorporating the recommendations of EirGrid and in conjunction with the Department of Environment, Climate and Communications (DECC), has developed a programme of work actions that will be delivered by this group in the coming months and years.  These include:

  • The delivery, through the all-island capacity auctions of over 2000MW of enduring flexible gas-fired generation capacity by 2030, to provide for growing demand, replace retiring generators and support additional penetration of renewables in order to meet our 2030 policy goals.
  • Procurement of up to 300MW of temporary emergency generation capacity for Winter 2022/2023 to remain available until the necessary replacement capacity has been secured. This capacity will not operate in the Single Electricity Market (SEM) and will only be called upon in the event of a shortfall in market-based capacity and where the alerts on the system are likely.
  • Extending the operation, on a temporary basis, of older generators to delay the loss of up to 1200MW of existing capacity. As these tend to be lower efficiency and higher carbon emitting generation units, and more expensive to run, it is anticipated that the market will continue to utilise renewable and other, less carbon intensive, forms of capacity in the first instance, and generally call on these generators when other resources are exhausted.  This temporary retention will remain in place until replacement generation capacity is procured, delivered and operational.
  • Temporary transmission outage planning system service procured by EirGrid (350MW)to provide enhanced system services to support Transmission Outage Planning flexibility to the TSO and generators to facilitate the necessary maintenance, upgrade and delivery of infrastructure to meet 2030 targets.
  • Actions to enhance the responsiveness of existing Demand Side Units in the SEM and develop additional demand side capacity​. In parallel with this programme of actions, the CRU is continuing to develop its Data Centre connection policy, following the recent public consultation​.
  • CRU is also advancing work on the regulatory frameworks to support delivery of two new electricity interconnectors: the 700MW Celtic interconnector to France and the 500MW Greenlink interconnector to Great Britain, which are due for completion in the middle and latter part of the decade and will further support electricity security of supply. It is also essential that the North-South Interconnector is progressed, to provide greater all-island resilience.

Commenting on the programme, Commissioner Jim Gannon said: “EirGrid’s latest Grid Capacity Statement has identified a new and heightened challenge, arising from a range of different causes, that will face Ireland in the coming years. Along with EirGrid, the CRU has developed a programme of work, that we will execute in the coming years with the Department of Environment, Climate and Communications. This programme of work, some of which is already underway, is being delivered in order that that, as we secure the longer-term enduring capacity that we need in order to reach our 2030 targets, we can mitigate the more medium-term risks that EirGrid have identified and continue to meet the demands of our growing and de-carbonising economy.”

The full version of the Information Note is available to view.