Ireland Energy Challenges

While Ireland has made significant advances to transition its electricity sector to low-carbon renewable energy, concerns about energy security have steadily emerged during 2021 as strong demand and unexpected shortages in supply are placing a significant strain on Ireland’s electricity grid.  A reduction in electricity generation, coupled with significant growth in demand, has led to increased concerns regarding the stability of Ireland’s electricity supply, particularly during periods of high demand such as during winter months.  Initially, concern was prompted by the unavailability of several power plants through maintenance work allied to a large increase in demand for electricity driven by the opening of several datacenters.  However, robust demand combined with the pivot to sustainable sources and aging generation facilities is creating a divergence between demand and supply. 

Plans by the Irish government to procure emergency generation technology for Winter 2021 were shelved in mid-summer however the plans are now being revived for Winter 2022.  Industry commentators report that the Commission for Regulation of Utilities (CRU) plans to instruct EirGrid, the national grid operator, to proceed with proposals to procure emergency gas-fired generators for the Winter 2022 period.  It is reported that some 200MW of capacity will be procured at an anticipated cost of euros 130 million (circa $156 million).

These emergency measures may be needed for several years, as Ireland’s power generation sector tries to catch up with the rise in demand being driven by data centers and the electrification of the economy.  EirGrid is also reported to be planning to solicit bids from electricity suppliers to build new power plants to combat a potential shortage of energy in late 2024 and early 2025.  This would likely be through a “capacity auction” in January 2022 that invites power suppliers to submit proposals for new facilities, most likely comprising gas-fired electricity generators.

Interested U.S. vendors can monitor developments around these generation proposals and procurement plans via the Commission for Regulation of Utilities, EirGrid, Department of Energy Climate & Communication, and eTenders Ireland.  

The U.S. Commercial Service in Ireland is available to counsel interested U.S. suppliers on competing for public sector contracts in Ireland.