Energy Institute

Is there a way to avoid paying such high prices to electricity generators at peak times?

One of the ways of avoiding the high payments to generators that go with meeting peak demand is to reduce the spike in the amount of electricity we need at the peak times.

The Commission for Energy Regulation (CER) has put in place a payment system where customers who reduce their demand at such times will be compensated. The smart-metering programme that could enable households to be rewarded for reducing demand at peak times is currently undergoing a cost-benefit analysis following a case study in previous years.

Time of use (TOU) tariffs can help consumers save money by using less electricity at the most expensive times by making those tariffs visible and cost-reflective. This in turn reduces the overall cost of providing electricity.  Limited TOU tariffs are currently available for some electricity customers, generally those with storage heating, e.g. night saver tariffs offered by Bord Gais Energy and Electric Ireland 1.

Because an electricity supplier has to buy expensive power at times of peak demand it has an incentive to get its customers to reduce their demand or need for electricity at that time. Some electricity suppliers have introduced incentives for their large customers (mainly industrial) to switch off large loads at times of peak demand to the benefit of both parties.

This is feasible for example with refrigeration loads that only operate at full power when a company is filling cold stores for example. A simple decision to schedule filling of the refrigerators in an off-peak period allows the refrigeration plant to shut down at periods of peak demand so it does not use expensive electricity. Because the supplier needs to buy less high priced electricity at that time he also makes a saving which he is prepared to share with his customer.