Slot Anti Rungkad

Why are your energy bills so high? This is the man to ask - Energy And Water Development Corp

Why are your energy bills so high? This is the man to ask


The perfect storm buffeting your electricity bills is likely to continue for now at least, says Dave Kirwan, managing director of Bord Gáis Energy. As head of a business that supplies 500,000 homes and 50,000 businesses with electricity, gas or both, and that has a substantial trading arm to boot, Kirwan is better placed than most to predict when prices will start falling.

He dubs as “extraordinary” the confluence of events that have added almost a third to the cost of heating your home and cooking your meals. December was the most volatile month he witnessed in almost 30 years working in energy. Natural gas prices topped £5 (€5.93) per therm in London.

“In the previous decade, when gas prices broke £1, it was worth talking about,” he says. “Wholesale pressure still remains very high – and volatile – as we stare into 2022.

Several factors drive this. Europe ended last winter with lower than usual temperatures and less gas than normal in storage. Russian production did not pick up as expected in summer, so stocks were not replenished. “So we entered winter 2021-22 with relatively low storage levels,” he says.

“At the end of September 2021, we were tracking this: of 145 LNG [liquid natural gas] shipments dispatched from North America, South America and various LNG markets, only eight of them came to Europe. Asian demand post-Covid was enormous. So the prices being paid for LNG shipments into Asia were breaking records, but that did not seem to slow down the demand.”

Bord Gáis last raised its charges in October, when it pledged not do so again for the winter – a promise Kirwan stresses it will keep

China connects 15 million extra homes a year to its gas grid. In tandem with this, a post-pandemic revival of manufacturing in the region sent demand soaring. Slightly closer to home, gas should have begun flowing last year through Nord Stream 2, a new gas pipe under the Baltic that ties Russia to Europe’s network. Regulators in Germany, where it makes landfall, are late in approving it.

Nord Stream 2 could yet find itself at the centre of political and diplomatic manoeuvring between the EU and Russia – and even the US – as tensions grow over Moscow’s designs on Ukraine. Fears of a conflict there are putting pressure on prices in their own right. “So that was kind of a perfect storm,” says Kirwan.

Energy suppliers’ hiked prices by an average of 27.4 per cent, according to official figures, in response. Bord Gáis last raised its charges in October, when it pledged not do so again for the winter – a promise Kirwan stresses it will keep.

Price pressure

While pressure built on prices, Bord Gáis ran into an issue of its own. Its Whitegate power plant, which generates 440 megawatts of electricity, was out of action. A problem whose root cause the company and GE, which operates the generator for Bord Gáis, have yet to fully identify damaged the turbine.

“It was a high-impact, low-probability outage. These things happen with that kind of technology,” says Kirwan. They had to replace a rotor and casing, which was harder than it sounds.

“The technology is very similar to an aircraft engine. The tolerances between the blades and the casings are tiny, and they need to be for efficiency purposes. It took a long time to get that replacement rotor repair back into the country and to get the new compressor also. We had to manufacture it in China and get it back on site. And the full assembly of all that works is a pretty precise challenge.”

Whitegate returned in November, but its shutdown, which lasted close to a year, along with that of one of Energia’s power plants in Co Dublin, contributed to a squeeze on electricity. The return of both has eased that for now. However, shortages loom over the next decade if we cannot lure more companies in to build new generators, particularly flexible, gas-fired plants to support the growing weight of renewables on the Irish system.

To tackle this, national grid operator Eirgrid, regulators on both sides of the border and the Single Electricity Market Operator will run a series of auctions to attract companies willing to build new power plants. Kirwan’s organisation won contracts for two plants in a round announced last week, which will bring in a total of 1,440MW, meant to head off shortages, by the middle of this decade.

The squeeze prompted questions about one of the biggest players, State-owned
ESB, which maintains that it behaved properly and commercially throughout the crisis

In coming years, the market operators will seek 2,000MW. Bord Gáis will bid for more. “Twelve months ago it wasn’t on our radar. But it’s clearly needed by customers and the system at this point. We have a capability to do so, we’ve got support from the board to do so and we will participate,” he says.

The squeeze prompted questions about one of the biggest players, State-owned ESB, which maintains that it behaved properly and commercially throughout the crisis. It could also have contributed to last year’s energy price rises.

Kirwan argues that the single electricity market, a complex mechanism uniting power systems on both sides of the Border that is meant to foster competition, has worked up to now. Nevertheless, he acknowledges that a scarcity and “lack of diversity” in generators could have had an impact.

New players

“I think the system operator and Commission for the Regulation of Utilities got it right this time by saying we need to contract to the market for more diverse units that have the ability to respond to the system needs,” he says. Kirwan cautions that it would be best if those auctions brought in new players and led to plants getting built in multiple locations.

Kirwan, who is from Tullow in Co Carlow, studied engineering in UCD before joining the ESB graduate programme. He went abroad “pretty quick”, believing he’d learn more. He went to the US to work with ESB International, and came back for six months. Then he went to Vietnam to work on World Bank-backed power stations in the south of the country.

He joined Bord Gáis in 1999, as his wife was working in Cork, where the company had its headquarters. Kirwan did an MBA in UCC, then went to Northern Ireland to set up a gas business, supplying the fuel to areas outside Belfast that did not have it. He returned to Cork to develop Whitegate, adding a wind power business for good measure. He then ended up running the company when British utility Centrica bought most of it, with the wind energy going to private investor Brookfield.

Kirwan joined Centrica, working in the UK for a while before returning to Ireland last year to retake the helm at his old employer.

Bord Gáis started life as a State company that was intended to exploit natural gas found off the country’s south coast. Climate change means it now faces a shake-up. “This is a whole different game,” says Kirwan. “We’re going to become less reliant on revenues from fossil fuels and we have to grow by offering our customers a route to decarbonise their homes and businesses.”

“We intend to extend the offering to insulation upgrades, to full retrofit, installation of solar PV, heat pumps, whether they be hybrid or electric”

Bord Gáis contractors already visit 60,000 homes a year to service boilers. It plans to double that number while adding new services. “We’ll do a survey, we’ll advise on how you can insulate your home better and use less energy. We’ve already started, through our partnerships, installing EV [electric vehicle] chargers.

“We intend to extend the offering to insulation upgrades, to full retrofit, installation of solar PV, heat pumps, whether they be hybrid or electric. In businesses we’re looking at installation of batteries, installation of demand-side management devices, which allow big industrial businesses to be wired to the national grid so they can adjust their use of energy, without upsetting production.”

It can call on the buying power of fellow Centrica subsidiary British Gas, which services five million homes a year, to support its efforts in the household market. Meanwhile, expertise built up in Centrica Business Solutions, which advises enterprises on managing their energy demand, can aid with industrial customers.

Trebling skills

All this will add jobs. “At the moment we have around 70 skilled engineers. It’s going to be at least double that over the next 18 months to two years. Ireland’s ambitions are to achieve half a million retrofit and subsequent heat pump installations over the next decade, which is phenomenal. I think I’ve seen numbers that suggest that’s going to need almost treble the skills that are available to decarbonise people’s homes.”

Kirwan sees other opportunities, too. For example, in 18 months to two years, it could be possible for someone to charge their electric car on their Bord Gáis tariff anywhere. Centrica has already demonstrated that this can be done using the Hive app developed to manage home energy use remotely.

“If we have the identification of a registered car at the meter point and we recognise the charges being applied, it comes off the same tariff,” he says. “So, traditionally you could only be a customer of ours if you had a meter fixed in your house, but we see no reason why, if you’re a customer of ours with an EV, you can’t use the same tariff if you’re driving to Athlone and you need to charge up.”

Electric cars, transport, home heating – all these things will multiply consumption from a system that is switching from mainly using fossil fuels to drawing 80 per cent of generation from renewables, primarily wind and solar. This will be a “massive transformation”, Kirwan says.

Renewables now contribute 40 per cent of our electricity. Getting to 80 per cent will require more natural gas plants that can be switched on and off quickly to cover for wind’s inconsistency

“If you consider that between 2005 and 2020 Ireland managed to reduce its carbon emissions by 18 per cent – but in the next seven years we have to halve them – that’s the significance of the step change needed here.”

Much of what was achieved in those 15 years came by halving electricity generators’ greenhouse gas output, through switching their source of power from fossil fuel to onshore wind and then integrating that into the national grid.

Renewables now contribute 40 per cent of our electricity. Getting to 80 per cent will require more natural gas plants that can be switched on and off quickly to cover for wind’s inconsistency. They will replace older, less efficient, more expensive fossil fuel generators now used to manage swings in renewable power.

Security of supply

Kirwan stresses that the Government must hit its renewable target while ensuring security of supply. Using natural gas to aid the shift to renewables is logical, he says. “Technically we can’t achieve additional offshore and onshore wind in our system without investing in this technology. So I think it does make sense. It’s unfortunate it becomes polarised, when people say ‘It’s a dirty fuel’.”

In fact, it’s cleaner than the coal on which we relied heavily last year, while the new gas plants will be more efficient, so will emit less carbon than those they replace. But will they have lives once we hit the renewable target? “The future of this technology then may depend on us unlocking hydrogen,” he says.

That is green hydrogen, produced by applying an electrical charge to water, separating the gas from H2O’s other component, oxygen. When it is burned, hydrogen simply recombines with oxygen to produce water, with little or no greenhouse gas. Consequently, it is seen as a likely answer to a lot of problems that tackling climate change creates. According to Kirwan, a recent UK study indicates the gas could replace about a third of the fossil fuels we use.

“We’re talking about hard-to-electrify uses, heavy transport, power systems, even large industrial heating and residential heating. Hydrogen boilers, for instance, are only a few years away. Most boilers can take 20 per cent blended hydrogen today. Our power station can easily be re-engineered to take hydrogen. So technically all this is possible.”

For companies to invest in research and development, they need reassurance that the Government has a strategy for the fuel, which is due in June. If that materialises, businesses such as Bord Gáis will start working to establish what role hydrogen can play.

Energy companies, Kirwan argues, can do the job of getting us to zero carbon better than politicians. He quotes American architect and futurist Buckminster Fuller in support: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”

“That is our job now,” says Kirwan.

CV

Name Dave Kirwan
Post Managing director, Bord Gáis Energy
Why is he in the news? His company is wrestling with soaring prices while planning for a future that will shake up the entire businesses. Meanwhile, Bord Gáis is eyeing new opportunities in power generation and servicing homes and businesses.
Family Married with four children
Interests Sports. He has been coaching Kilmacud Crokes junior hurlers, reading and spending time with family.
Something we might expect He’s an avid reader of business books.
Something that might surprise He spent part of his early career helping to build power plants in Vietnam.


Business Today

Get the latest business news and commentarySIGN UP HERE



Source link

judi slot online jackpot terbesar

Slot Terpercaya