Investment in electricity infrastructure in a small isolated market: the case of Ireland

Seán Diffney, John Fitz Gerald, Sean Lyons and Laura Malaguzzi Valeri
Authors registered in the RePEc Author Service: John D. Fitzgerald ()

Oxford Review of Economic Policy, 2009, vol. 25, issue 3, 469-487

Abstract: Climate policy is driving an extensive deployment of wind generation in the Irish electricity market. This study evaluates the cost of increasing wind generation both to the system as a whole and to consumers for 2020. We consider different scenarios on fuel and carbon-dioxide permit prices and the extent of electricity interconnection with Great Britain. For a small and isolated electricity system such as Ireland, a high penetration of wind is economically sound only with increased interconnection to Great Britain, since wind generation would otherwise be curtailed. Not surprisingly, for low fuel prices the least-cost scenario contains low levels of wind generation whereas the opposite is true for high fuel prices. The findings highlight the importance of interconnection and its operation and governance. Copyright 2009, Oxford University Press.

Date: 2009
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