Electricity supply companies may be charged more for their customers to use electricity between the hours of 5pm to 7pm. The Commission for Regulation of Utilities (CRU) has launched a two-week consultation asking industry and electricity providers how they intend to reduce energy usage.
Speaking on RTÉ’s Morning Ireland, ESRI economist Dr Muireann Lynch said supply companies have yet to decide how they will recoup the extra charges from their customers. “Obviously the first thing they’re going to want to do is for us to reduce our usage,” Dr Lynch said.
“And then for any remaining charge they face, is essentially a question of how they recoup that charge. “Do they do it through a fixed portion of people’s bills, or do they adjust the tariffs?”
The remaining measures put forward by the CRU on how energy usage can be reduced are aimed at large energy users, Dr Lynch said. The CRU is trying to encourage these users to plan their electricity usage in advance in order to try to target hours for when there is more renewable energy available, she added.
Dr Lynch also said energy users who are using significantly more electricity than they did last year, or whose energy usage is growing over time, will also be targeted. It is thought that they will be offered an incentive for them to delay growth on usage for this winter if possible.
Energy Researcher at University College Cork Dr Paul Deane said the increase in energy demand has come from large energy users like data centres, which are responsible for 70% of the growth in energy usage over the last year.
Speaking on RTÉ’s Today with Claire Byrne, he said the CRU have “pointed the finger” at such energy users, to try to ensure that these companies “shoulder the financial burden” for this growth.
“The CRU document quite rightly points the finger at the major drivers for electricity demand, which is primarily large energy users, such as data centres. “They’re not responsible for 100% of the electricity growth last year, but they’re responsible for about 70% of the overall growth that we saw last year.
“The CRU document that was released yesterday really tries to focus on making sure that large users shoulder the financial burden and economic burden of the responsibility for changing their flexibility.” The CRU said it is “necessary to act quickly” with a view to bringing in the new pricing regime from the beginning of October.
Eirgrid does not “fully support” the plans
Transmission grid operator, Eirgrid, said it could not full support the proposals and it recommended that they be reconsidered. It said the compressed timelines for decision on the proposals means there has been no opportunity carry out the “requisite appropriate analysis” to support or underpin the changes, identify and address unintended consequences or determine if they would have the desired impact.
In its response to the CRU it said the absence of sufficient time to implement the proposed tariff changes will be “hugely problematic for EirGrid, suppliers and all parties impacted by the proposed tariff changes.”
It added that it is essential that any proposed actions are cognisant of separate work in the area that has already been conducted and do not conflict or compete with same. “While EirGrid is supportive of measures that seek to address energy security, we remain very concerned regarding the limited time being afforded for adequate consideration and implementation of that proposed by the CRU,” it said.
“It is essential that any proposed changes either at transmission or distribution level are the subject of meaningful stakeholder engagement and consultation, are cognisant of pre-existing and in train security of supply provisions and initiatives, that there is confidence that any proposed changes do not conflict or compete with the ongoing security of supply provisions and initiatives, and that there is confidence that the proposed changes will have the intended outcome.”
Security of energy supply
Speaking on RTÉ’s News at One, Mark Redmond, Chief Executive of the American Chamber of Commerce Ireland, said that the short consultation period is “kind of unusual.” “Ireland has a great global reputation on really good consultation on key policy matters from industrial relations to tax,” Mr Redmond said.
“Members of the American Chamber of Commerce today and importantly their headquarters in the States will be focusing on two things; security of energy supply and cost competitiveness. “We just want to make sure when we talk to the CRU that now is not the time to do something that could damage Ireland’s reputation globally for inward investment.”
Mr Redmond maintained that multinationals here are “probably ahead of the game because Ireland is already cost uncompetitive” when it comes to energy. “So multi-nationals, particularly in the advanced manufacturing sectors, are really top of the league at energy efficiency although they have still have very high energy bills.
“We recognise the circumstances the country is in but we also recognise the critical importance to our public finances that multinationals contribute”.
Meanwhile, speaking on the same programme, Celine Clarke, Head of Advocacy and Communications with Age Action Ireland, said that the prospect of increased energy costs will hit older people hard. “Older people are going to have a fright because they are already seeing the spending power of the full rate of the state pension reduce significantly this year,” Ms Clarke said.
“We estimate that by the end of 2022 an individual will have lost nearly €600 in spending power and a couple nearly €1,100 (in spending power) in the state pension alone. “Now with an additional rise in energy costs proposed, people just can’t cope.
“There’s no bandwidth there to come up with the money to be able to pay additional fees with the rising cost of living possibly going to get worse for many people.”