Lower energy bills predicted as ageing power plants to be shut down
Ageing and inefficient power plants are set to be shut down in a boost for Irish consumers' pockets, energy researchers said.
It is part of a shake-up in the Single Electricity Market which covers Northern Ireland and the Republic.
Irish consumers should save on their energy bills as a result, Aurora Energy Research said.
Hugo Batten, a senior project manager at the firm, said: "The introduction of the competitive procurement of capacity in the Single Electricity Market should see the electricity system operate in a more efficient manner, both environmentally and economically, as ageing and inefficient plants leave the market.
"Continued efforts to make the market more competitive will ultimately be reflected in lower consumer energy bills."
Many older plants face "mothballing" or closure as part of the change, Aurora said.
Since the integration of the Ireland and Northern Ireland electricity systems in 2007, capacity payments have been made to all power plants in a bid to ensure security of supply.
Payments were determined centrally and paid to all power plants based on their available capacity, regardless of how much they actually operated.
The market has been undergoing significant reforms as part of integration measures across the EU.
Aurora added: "The introduction of a competitive process for setting capacity payments forms a key part of the liberalisation of the market."
It said most old, inefficient plants will now be braced to lose out on revenues, which may lead to some mothballing or closing outright.
Following the competitive process and the procurement of a lower, more precise amount of capacity, system-wide capacity payment expenditure is expected to drop from 546 million euro in 2018 to a maximum of 281 million euro in 2019.
Aurora added: "Although some of these savings will be absorbed by other reforms, households will ultimately pay less for the promise of secure electricity supply."