Ms Siobh?n McHugh:

The electric power system in Ireland is undergoing an unprecedented transformation as we seek to meet stretching targets for decarbonisation, climate action and electrification. Grid operators have acknowledged the technical challenges our power system will face in increasing the penetration of renewable energy. As the system transforms, flexibility across the grid will need to dramatically increase to deliver a safe and reliable service to all consumers. The Climate Action Plan 2021 sets a target that 20% to 30% of system demand is flexible by 2030. Demand response is, therefore, key to providing services to grid operators to rapidly adjust output, balance the system, maintain a secure power supply, and quickly respond to events.

Commercial and industrial electricity customers continue to be the richest source of demand response in Ireland, but greater incentives are required to stimulate increased participation by this evermore environment, social and governance focused sector, including energy payments and carbon credits to recognise the positive impact their local actions have on our national decarbonisation objectives.

The electrification of transport and heat will present new opportunities for demand response in the residential sector in the coming decade. These are opportunities to not only mitigate their impact on the local distribution system, but also to support the broader operation of Ireland’s electricity grid. It is imperative that the future roles of these energy uses are considered now so we incentivise the integration of the right types of technologies as we approach 2030, so they return the maximum benefit to our energy system.

Market rules and policy have traditionally been designed for customers to flip a switch and pay for electricity used, but customers can play an active role in decarbonisation of the power system and supporting renewable generation through providing demand response and flexibility. National policy, regulation and system operation remain wedded to mimicking the model of traditional power generation, but need to move from the paradigm of how we have always done things to thinking about how electricity customers can become part of the solution. We need to first look towards what is already there and can be harnessed rather than what needs to be added.

To fully exploit demand response as a solution for our power system we need to: remove barriers that exist in current markets and system operation; develop robust markets for energy, capacity, system services and local flexibility that are technology inclusive; incentivise and empower the customer, provide carbon credits, correct levels of remuneration, and prioritise grid access for committed demand response participants to reward service provision; and most importantly, we need to deliver at speed. Ireland’s climate action plan contains excellent initiatives to achieve this ambition, but we need to put the resources and co-ordination in place to deliver. The ambition of making 30% of demand flexible by 2030 can be achieved, if we put the right policy, incentives and operational capability in place to do so.