The electricity system will face a shortfall of supply over demand for the next decade, according to grid operator EirGrid.
Its annual Generation Capacity Statement, published today, describes the situation as "stark" and "serious" and warns the number of system alerts will increase.
Eirgrid's chief executive said there will be a 'tight' winter ahead and he can not guarantee that there will not be blackouts.
But Mark Foley said it would take "an extraordinary confluence of events for the lights to go out."
The latest report on the country's demand for and supply of electricity highlights how in the short term, the shortfall in the supply of electricity has worsened.
There are several reasons why.
The report notes the performance of existing power plants is "poor" and that some plants which had been due to remain in operation until September next year have been shut down due to technical issues. This has taken 590 megawatts (MW) out of the system.
The report notes that in recent years an average of 25% of existing generation capacity has been hit by unexpected outages.
Added to that, 630MW of power which had been contracted to come from new plants has failed to materialise as the developers have pulled out.
EirGrid also says it believes not all projects awarded under a recent auction will be delivered by their due date because of technical and planning difficulties.
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It also notes that power demand from data centres already contracted to the grid is now expected to be higher than previously forecast.
Overall, EirGrid expects demand for electricity to increase by 37% by 2031 with 28% of demand by then coming from data centres and other large users. In 2021, data centres and other large users accounted for 17% of demand.
It also forecasts the share taken by electric vehicles (EVs) and heat pumps will increase from 2% in 2021 to 13% in 2031. This is based on the Government's targets for pumps and EVs under the Climate Action Plan being fulfilled.
The report also noted, however, that in recent months demand has moderated in response to higher prices and is currently trending between medium and low scenarios.
EirGrid's plan to tackle the shortfall in supply has been developed alongside the sector’s regulator, the Commission for the Regulation of Utilities. It includes the procurement of 700MW of temporary generators and a reduction in the use of electricity at peak times through higher tariffs.
Auctions are also to take place to secure additional modern gas-fired plants and the life of existing plants is to be extended.
'Tight' winter ahead
The chief executive of Eirgrid says there will be a 'tight' winter ahead and he cannot guarantee that there will not be blackouts.
However, speaking on Morning Ireland, Mark Foley said it would take "an extraordinary confluence of events for the lights to go out."
"For example. A very, very cold winter. No wind on a very, very cold January evening," he explained.
Mr Foley said there has been very good engagement with large energy users such as big industrial users and data centres.
"I can say with confidence that they are available, at a call, to make their back up generation available to use in order to keep the system stable", he said.
"This is a very positive part of this contingency. 'They're ready if we need them and we can count on their support," he added.
Mr Foley said the peak demand growth in Ireland for electricity over the five years has been 9%.
This was a relatively small increase in demand, he said, but Ireland has had problems accommodating this because of a failure to deliver new generation.
Growth over the next decade is forecast to be 30%, he said.
Mr Foley said he believed developers will put money into the Irish market because it is a growing, prosperous economy.
He said the incentive mechanism should be changed so more certainty can be given to developers to build new plants.
Mark Foley said the continuing gap between energy demand and generation is because new generations of gas generation capacity have not been delivered to the market and older plants are becoming less reliable.
But he said that he believes the situation will be better next year.
Govt is 'concerned'
Tánaiste Leo Varadkar said this morning that the Government is concerned.
"I do think the risk of blackouts affecting homes, small businesses and farms is very low.
"Nobody wants to rule it out but the likelihood of it is very low, I do want to give people that assurance," he said.
"But the truth is we have had a very big increase in demand for electricity for lots of different reasons in the past couple of years and the contracted generators didn't deliver so now we need to catch up," said Mr Varadkar.
"We need a lot of investment in both gas-fired plants and renewables over the next few years and we have a plan to do exactly that."