September 23, 2022

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The country is facing into “a very, very challenging situation,” this winter and beyond with regard to power supplies but Eamon Ryan says he is confident that the Government “will keep the lights on”.

Speaking on RTÉ Radio’s News at One the Minister for Environment, Climate and Communications said that gas supplies were under threat across Europe as Russia used energy as “a weapon of war” and that that “has a knock on consequence in terms of the price of electricity because half of our electricity comes from using gas so it is a huge concern”.

He said that he believes cost rather than supply is the greatest challenge and that action would have to be taken in the Budget on prices to help businesses and households.

He suggested that a windfall tax on the increased profits being earned by companies in the sector could be one way of recouping some of the cost involved.

“We’re going to have to do a lot more [for] householders and businesses,” he said.

“It will have to be set out in the Budget. It will have to consider issues such as windfall charges to help fund supports for households in very difficult times. To make sure we have the funds available to get through what is an unprecedented time in terms of the price shock that we and every other country is undergoing — that is the biggest challenge this winter. As well as keeping the lights on, we have to make sure that people can afford the power coming through.”

Mr Ryan acknowledged that there were other factors feeding into the supply equation and said that there were being addressed but that in the meantime there were shortfalls to be dealt with.

“There is a challenge. In energy policy you’re always looking to achieve three objectives:, you want secure power; you want affordable power and you want clean power.

“I think, in getting the balance right and in retrieving all three objectives we will keep the lights on and we will get our country through what is a very difficult and challenging period,” he said.

The scale of that challenge was made greater by the fact that an increase in capacity targeted in 2019 had not been achieved, he said. Covid-related maintenance issues had also affected the availability of some existing fossil plants while the increased demands of data centres also have the potential to further squeeze supply.

Significant capacity increases are in the pipeline, he said, with the most immediate challenge being to maintain supplies until they come on stream.

“The additional capacity won’t be in place until next year but there is significant new generation capacity coming in the renewable side … this Government has contracted more renewables than the previous 10 years put together.

“That is coming online, solar power and wind power, onshore and offshore starting now, which is the fundamental solution to our problems.”

The balance, he said, would be met by supplies which will have to be bought in what is a very competitive open market.

“We need something like two gigawatts of additional flexible gas plant which will use less gas but which will be there to complement the cheaper wind resources. The emergency process will provide about 650 [megawatts] of that, the remaining is being provided through auctions schemes that will deliver.

“It will take two to three years, that’s the reality, but it’s those next two to three years that we have a supply tightness and we can get through,” he said.

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