Worst energy bills ahead as ‘no end to crisis in sight’ – Eamon Ryan

The worst is yet to come for electricity and gas customers as there is “no end in sight” to the forces driving up bills, Energy Secretary Eamon Ryan has warned.

r Ryan said there was “no magic bullet” and “no way to cushion everyone” from the impact of the war in Ukraine on energy prices.

“We are in an absolute crisis. People won’t really see it coming until the bills come in November, December, January and February,” he said.

“The way this war looks, there’s no end in sight and that’s the scariest thing.”

The minister was addressing an emergency meeting of the Oireachtas Energy and Climate Committee convened to examine growing energy security concerns.

Fears of blackouts this winter have mounted as demand for electricity has grown faster than the capacity of generators to produce it, while contracts to buy additional power generation capacity have collapsed in litigation.

However, Mr Ryan said he had to be frank with the public that the biggest energy-related issue they would face was price.

Wholesale gas prices were now 14 times higher than average, impacting gas bills heavily, but also electricity bills as most of Ireland’s electricity is produced by burning gas.

Gas and electricity suppliers have already pushed through several price increases over the past year, but the warning is that more are to come.

The chair of the national energy regulator, Aoife MacEvilly, echoed the warnings.

She said her office would support the government in introducing measures to support customers, but added: “As Secretary Ryan outlined, the scale of this challenge is enormous. It surpasses anything we have seen before.”

Support to cope with the cost increases is promised in next month’s budget.

Mr. Ryan would not elaborate, saying that a windfall levy on energy company profits is still being considered.

On the underlying issue of energy security, the regulator and Eirgrid, which operates the electricity grid, gave only lukewarm reassurances that blackouts would be avoided.

“Neither I nor anyone else here before you can give a cast-iron guarantee this winter,” said Eirgrid Managing Director Mark Foley.

Social Democrat TD Jennifer Whitmore urged that the risk of defaults be clearly quantified as low, medium or high.

Eirgrid officials resisted but said it was “slightly increased” compared to last winter when supplies were very tight but no outages.

A deficit of 260-280 megawatts (MW) of electricity was expected when demand was highest and winds were lowest, they said.

In this case, the situation would be managed by resorting to battery storage and asking large energy consumers such as data centers to turn on their backup generators.

In theory, 500MW of capacity is available through the Demand Side Unit program, where flexible industries agree to temporarily reduce activity when the system is under stress.

“We have 500MW connected but only about 130MW available,” Mr Foley said.

“We have to get them to 80-90 percent or tear up their contracts. You’ve gotten away with it for too long.”

Mr Foley and Ms MacEvilly disagreed on the role of data centers in straining the supply. “Demand growth is not the core issue,” Mr Foley said.

Ms MacEvilly disagreed, saying Eirgrid herself reported to CRU about the problems data centers were causing, but appeared to have a problem with accurately forecasting their demand.

“I probably wouldn’t accept that we had a consistent forecast of the magnitude of the challenge we’re facing right now,” she said.

https://www.independent.ie/news/environment/worst-of-energy-bills-ahead-as-no-end-to-crisis-in-sight-eamon-ryan-41948390.html Worst energy bills ahead as ‘no end to crisis in sight’ – Eamon Ryan

Fry Electronics Team

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