The owner of two power plants, which have capacity to supply 20% of Ireland's electricity needs, has notified authorities that it is to close both facilities.
Viridian has warned that the closures will impact on the security of power supplies in Dublin.
On Friday, Viridian issued protective notice to its 40 staff in Huntstown in north Dublin.
The decision follows the move by the Commission for Regulation of Utilities to award a contract to one of Viridian's power plants but not the other.
The company has argued that it is unviable for it to run one plant on its own.
The decision will have no impact on Viridian's retail arm, Energia.
Viridian said that its facilities were critical to the supply of 11% of the total number of hours of voltage control and load flow in Dublin last year.
In a statement to RTÉ News, it said the closure of its gas fired plants in Huntstown represents a "material risk to continued security of supply in the Greater Dublin Area".
The regulator said its decision to hold an auction had been expected to result in some generators to take the commercial decision to close particular plants.
It said that while there remained sufficient capacity on the island of Ireland, it did acknowledge "there were some areas of local constraint".
It said the auction process will result in savings for consumers, which would be worth a total of €150m in the Republic of Ireland and €50m in Northern Ireland.
Eirgrid, which manages Ireland's network, said it was working to ensure that if both Viridian plants close, it would done in a manner that does not affect security of electricity supply.
"We have met with Viridian and will be assessing their request for a derogation from the requirement to provide 36 months notice of closure of a generating unit," it said.
EirGrid has assessed there is adequate capacity to meet the security of supply standard in the Dublin area during the projected demand forecast from May 2018 to September 2019.
It said there will be further capacity market auctions this year where companies will have more opportunities to bid for contracts.
Eirgid that the recent capacity auction run reflects the diversity of generation participating in the single electricity market, such as demand side units.
"Crucially, it ensures that enough generation is on the system to meet the security standards determined by the Single Electricity Market Committee. There were 100 bidders in the auction, of which 93 were successful," Eirgrid said in a statement.
"EirGrid is confident that the generators who have been successful in that auction process will provide safe and secure generation at the lowest possible cost," it added.
Eirgrid's Market Operations Director has said he is confident they will be able to maintain systems security of the power plants, despite Viridian's withdrawal from the market.
Rodney Doyle told RTÉ’s News at One that there is a requirement for any plant engaged on the system to give three years notice to withdraw.
Viridian has said it intends to withdraw in May, but Mr Doyle says there is a process in place to protect the system.
"It's our job to maintain systems security and we do that 365 days a year. So, from our perspective there's a process in place. Any generator that is seeking to withdraw from the system, there's a three year requirement for them, they have to give three years notice.
"We're currently working with Viridian, and with the regulatory authorities, to make sure that any withdrawal that does happen, does so in an orderly fashion," he said.
Mr Doyle said more competition was needed in Ireland, to ensure the best outcome was reached for businesses and consumers.
This, he said, was why Viridian took part in a competition for contracts.
