What is the Commission for Regulation of Utilities (CRU) proposing?
The regulator wants to increase charges for using the electricity network at peak times, from 5pm to 7pm, this winter.
Why?
We are likely to face an electricity shortage, so the CRU wants to encourage homes and businesses to cut consumption during those hours, when the system is under most pressure to try to avoid power cuts.
Why are we facing an electricity shortage?
Demand is rising sharply but we have not been building enough power plants to meet this, so our system depends on wind, which is unpredictable, and older generators that are increasingly unreliable.
What does this mean for homes and businesses?
They will have to pay more for the electricity they use at those times. The CRU calculates that it could add €26 to an average household bill. Homes and small businesses are also most likely to suffer if there are power cuts.
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Are power cuts likely this winter?
Most people in the industry believe there is a high risk of power cuts. The CRU says there are “particular challenges” this winter and in 2023/24.
What is the Government doing about all this?
The Government set out a national energy security framework this year following Russia’s invasion of Ukraine. The CRU’s proposal stems from this. It also set up an emergency group that is discussing how to deal with the problem.
[ Eirgrid questions regulator’s electricity charge hikeOpens in new window ]
What about the proposed windfall tax on energy companies?
Politicians want the tax to penalise energy companies that make big profits on the back of high prices. However, this will not cut prices or deal with the shortage we are facing.
Does this mean that we will have to pay more for peak-time electricity this winter?
The CRU’s proposal is just that. It is consulting with the industry and customers on the plan between now and the end of the month before deciding finally.
So it may not happen?
National grid operator, Eirgrid, which will have to execute the plan, has told the CRU it has misgivings about it and questions whether it will work, but the final decision rests with the regulator.
