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Corrib delay could lead to electricity price rise
Ken Griffin



ELECTRICITY prices could rise next year due to a gas shortage caused by delays to the controversial Corrib gas project in Mayo, which is now not due to start supplying gas until late 2009, and flaws in the design of the state's two gas interconnectors with Britain.

According to Commission for Energy Regulation (CER) projections seen by this newspaper, Ireland could, in the absence of Corrib gas, experience a gas shortfall of up to 28 Gigawatt-hours (GW/h) per day - around 7.5% - by Winter 2008.

CER has confirmed that it has already included the costs of emergency remedial work on the interconnector in a bid to achieve minor supply increases to relieve some of the shortage that winter in current gas prices.

Part of the difficulty has been created by the fact that although there are two interconnector pipelines between Ireland and the UK, they are both fed from a single stretch of pipe in Scotland, which places significant capacity restrictions on the system. The same pipe also feeds Northern Ireland's interconnector with Scotland.

However, CER has ruled out doubling this single stretch of pipe so that both interconnectors could be fed separately. "Duplicating sections of pipe occurs when there is a need for additional capacity after a long period of market growth, " said a CER spokesman, adding that short-term remedial work would be more cost effective.

He said that the projections were worst case scenarios based on an exceptionally cold winter and a lack of gas storage capacity. "There is a very small probability that all these worst case assumptions will occur in 2008/9."

However, industry sources said have that, on the basis of the projections, it is likely that the ESB would seek an electricity price for domestic customers in August 2008 as a potential gas shortfall would add significantly to its costs.

In the event of a shortfall, the state's gas-fired power stations, which generated 46.2% of Ireland's electricity in 2006, would be forced to use more expensive back-up supplies and alternative fuels, such as oil, to protect domestic and industrial supplies.

An added difficulty for the ESB is that only three of its gas plants can run on oil so its remaining plants would have to be temporarily replaced with less efficient and more expensive peat or coal-fired stations. Many of the state's independent electricity generators will also be hit by rising costs as the majority of Ireland's privately-owned electricity plants are gas-fired.

A spokeswoman for Bord G�is, which operates the interconnectors, said that it was confident there would be sufficient gas available in Winter 2008 despite the delays to the Corrib project.

She said, however, that at one point last winter, which was relatively mild, the interconnector system was operating at 69% of its capacity. She said, however, that Bord G�is now had access to gas from Northern Ireland through the recently-built South-North gas pipeline from Dublin to Belfast.

Meanwhile, a spokesman for the Department of Natural Resources said that the government was committed to ensuring that "infrastructure reinforcement in the Ireland/Scotland gas interconnection network is undertaken as necessary, on a fully cost-reflective basis".




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