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Chapter 1: What are the current electricity prices in Ireland compared to Europe?
First, we've been hearing this morning that Irish electricity prices were the eighth most expensive in Europe in 2024, according to research from the ESRI. While over in the UK, a scheme has been launched today that will reward homes and businesses who use more electricity at times of oversupply, for instance at night and weekends. What could Ireland learn from a scheme like that?
And does anyone remember this?
Only natural gas central heating has something to make I'm joined now by Professor Aoife Foley, Chair of Net Zero Infrastructure at the University of Manchester.
Aoife, good morning to you. You reminded us of that ad earlier this morning and that earworm of a tune that's going to be in my head for the rest of the day, so thanks very much. It's a board gosh energy ad from the 90s and you think we could learn something from it. Can you explain?
Chapter 2: What electricity schemes are being implemented in the UK?
Well, I suppose at that stage it was the dash for gas and they wanted everybody to switch from coal and oil because of the large upfront costs. to natural gas. But at the same time, ESB was introducing night-time rate tariffs and storage heating tariffs to shift away from electricity use at peak times. So this was sort of coming out of the last energy crisis because it was in the 80s and the 90s.
So the system in the UK is going through the same transition that we're going through here in terms of
are changing our energy mix so whereas we had coal then we have gas now we have wind in the uk it's wind nuclear and we still have gas it's how do we know optimize a new system but we have the added problem then of a liberalized market we don't have just esp and just board gosh anymore yeah so we've other companies that operate and that's really now where we need to change the system and that's what niso
is doing um and actually this system this flexibility it's demand side management it um integrates um or optimizes the the transmission system and the distribution system for localized grid constraints where you dump energy at night and in this case it's wind, but it could be solar as well if it was Spain and Portugal.
In Ireland, it would be wind also, but in the UK, it will be also nuclear as Hinkley and the other plants as they get to generate larger and more nuclear comes online.
Okay, so basically what they're saying in Britain is they can give cheap electricity or perhaps free electricity at times when there's surplus production.
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Chapter 3: What lessons can Ireland learn from the UK's energy schemes?
No. Now, I suppose, David, what we need to be careful of here is that the free line is, I suppose, is a bit sensationalist in the journalism. You know, it's all about targeted interventions and that's what the tariffs do. So these flexible tariffs...
They get people to use their electricity and their energy consumption because it can be across gas as well and it can be across heating and cooling. So it's about better energy consumption. So what that system does or what that approach does is it sort of inverts the wholesale in the retail market.
And rather than, say, in the case of Octopus Energy, where he wanted locational marginal pricing, which means that basically it facilitates him and his market model in his energy company to make more money. He'd be like the Ryanair of the energy world, is the better way to put it.
But then the large sort of former semi-state energy companies where they get their payment for gas, then their constraints, then their ancillary service payments, which cost, say, for example, now in Ireland, curtailment, already no cost.
Chapter 4: How is the energy mix changing in Ireland and the UK?
about, well, in the UK, Ā£940 million for the first three months of this year. So every time that happens, he can make more money. In Ireland, it's been 350 gigawatt hours, which would be about two point, that's enough electricity now to give 150 kilowatt hours per home in Ireland for 2.1 million households. So that's the electricity we're dumping.
So that's effectively been... Sorry to cut across you, Aoife, just so I properly understand this. So that effectively is electricity that's just been wasted.
Just wasted. So it's not that we want to... What I propose is we don't give it to people for free. And, like, I mean, you know, Aoife Hearn was in The Independent. Paul Dean was in The Independent about targeted measures. What I'd like to do is the reverse of that.
We manage the system so the energy companies don't get the price for the free gas that they have or the gas that they're importing that actually benefits nobody in the economy. Then they get the constraints payments. And then also they get the ancillary services payments for bringing on peaking plants to maintain system operations. So and then what happens in these companies?
So if you look at EDF and Uniper, then they're bailed out every few years and backed up. Because in essence, we can set up a huge retail electricity system.
What we can do, our market, we can codify the tariffs so that we give very specific targeted interventions to different income groups, commercial entities, so that we can use our electricity in a better way using the technology that we produce here. So smart controls. PSA controls in Cork, Glen Dimplex and storage heaters.
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Chapter 5: What is demand side management in energy systems?
All of these, each is a kit that we manufacture across the UK and Ireland that create real jobs. It's about making an intelligent electricity system.
Okay, sounds good.
That's what I'm talking about. So if we, the different targets, then, you know, people who were defaulting, people who were being disconnected, people who were going into arrears, they would be supported through those tariffs so that they don't get a bad credit rating. What happens at the moment is,
Everybody is affected by this, even businesses and companies, whereas the tariffs, they use and operate the system in a better way.
OK, I want to bring in Alan Wiley, CEO of Energy Cloud Ireland, who joins me on the line. Alan, good morning to you. We were talking there with Aoife about wasted energy, wasted electricity. How much surplus are we talking about?
Hi, David, and thanks for having us on this morning. Yeah, I mean, the numbers are huge in Ireland, David, and we just use the air grid and SEAI numbers. So last year, it was about 520 million euros. In the last week, which is unusually high, it was about 32 million euros just in one week. But in the last year, David, since the government actually
committed in the programme for government to use the surplus renewable energy to help those in energy poverty. In the last year, it's been about a million and a half euros a day. So it's very significant.
OK, and obviously there's, what, 550,000 households living in energy poverty.
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Chapter 6: How is surplus electricity being wasted in Ireland?
Hearing those figures must be very upsetting for them.
I'd imagine so. I mean, we would have made the point to the minister and various different politicians that there's a lot of people suffering needlessly because, as Aoife said, if we can do targeted interventions to the people who are most in need, we could use this waste and we could reduce their energy bills. And we find it kind of striking, David, that
In the last week, with all the fuel protests and all the extra measures being put in place, nobody has been talking about using the available waste to help as part of the solution to this problem.
OK, so, I mean, is this predictable? Can you say the wind is going to be very strong tonight in Donegal, so therefore there'll be surplus electricity in Donegal that could be given to people?
That's a great question. You can, you know, reasonably short term. So we would always know in the afternoon that there's going to be waste tonight. And then we, because in Energy Cloud, we provide free hot water and free heating to people when there's waste in the system. So we're able to send them a text and an email in the afternoon saying, you know, there's going to be waste tonight.
You're going to get free hot water. We're going to heat your home for free. So, you know, don't be turning on your immersion or whatever in the meantime. So you certainly know in the afternoon. Of course, wind by its nature is not totally predictable, but you do know in advance and you can inform people in advance of the likelihood of there being waste.
But as I understand it, the grid is pretty complex. It's not all connected. So it would have to be used locally in that example.
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Chapter 7: What are the implications of energy poverty in Ireland?
It couldn't be distributed nationwide. Is that it?
Not entirely so. I mean, of course, in some areas of the grid, it's a bit like the roads network. There are motorways and regional roads and borines and so on. So in some parts of the country where the wind farms are, yeah, you'd have to use it locally.
But in other parts of the country, if you kept the wind farms on, like, for example, in Offaly, you could almost certainly use that waste in Galway, Cork, Limerick and so on. So for sure, there's the ability to do both actually, David, it's not an either or.
Okay, I suppose the answer to there being too much energy generated by wind farms at certain parts of the day when there isn't the demand, the answer long term is batteries, is it?
It's part of the solution but it still doesn't help you with the fact that you can't always move the energy where you want it to be. So batteries are certainly a part of the solution and we're doing pilots with batteries and smart storage heaters that Aoife mentioned there a moment ago as well.
But I think the real thing and what's wonderful about what the UK have done today is the announcement shows you that if you make that announcement then everybody can work out the exact how, David. And this is the point we made to the Minister when we met him recently.
which is if you never make the announcement to use the waste, in other words, if you say it's OK for this waste to happen, which is what the government is currently saying, we don't agree, obviously. But if that's what they're saying, nothing ever changes.
But when you make an announcement that you want to use the waste, then ourselves, the department officials, Airgrid, ESB and so on can come together and work out the how. And under that, batteries is part of it, David, but it's not the only part of it.
Okay, I want to bring Aoife in for a final word. Aoife, the regulator presumably has a role here as well.
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Chapter 8: How can targeted interventions help reduce energy waste?
If we look, people mention data centres having them getting cheaper energy from wind farmers. The reason why they do that is because it's codified through the dispatch signal to the offtaker who's the data centre. If we do this with tariffs and the regulator does it, which is what NISO did and is doing, then we can do the same thing and have different tariffs for different income groups.
One thing I want to point out is it's not going to be free energy and we can't have free energy. We won't be able to run the system. OK, but it's about a social cost that's managed at source rather than taking money out of the cash flow in the economy.
in our balances, which is everybody's giving out about that, you know, if we take it from Peter, you know, if we take it from Paul, then Peter won't get it. We have to manage that. The other item is the location and marginal pricing and batteries in different parts of the system in different issues. By using this tariffing system and the codifying of it, you overcome that hurdle.
We see the impacts of locational marginal pricing in the US, where different states and different even districts within states can have different energy prices, which can be prohibitive for development and local economies. We can't do that. That's the challenge with LNP.
Okay, Professor Aoife Foley, Chair of Net Zero Infrastructure at the University of Manchester and Alan Wiley, CEO of Energy Cloud Ireland. Thank you both very much indeed for that.
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