Business Irish

Monday 14 October 2019

When essential services go down, the costis huge

Sarah McCabe

DISRUPTIONS to essential services such as water, energy and broadband might be annoying – having to fill a bath with spare water, no access to emails – but they also have an impact on our wallets and the economy.

What happens if, for example, Eircom's phone and broadband services suddenly die?

It is the country's biggest telecoms network, so the vast majority of us would feel the impact.

A study published this week estimates that an Eircom outage would directly cost the Irish economy around €70m to €80m a day, or €42 to €50 per household. This doesn't even take into account indirect costs such as a probable drop in retail sales as a result of the disruption to payments services.

Then there are the consequences for the mobile phone operators that use Eircom's network to connect parts of their own networks.

The new research from the Economic and Social Research Institute (ESRI) also says that outages to electricity and gas supplies also pose big problems, because there are few easy substitutes for these power sources.

Vulnerable

If the electricity grid or gas supply system goes down, it would take time for people to switch fuels or buy generators.

Ireland's natural gas supply is particularly vulnerable. ESRI economist Edgar Morgenroth points out that only a single pipe connects one underwater section of the network that supplies Ireland's gas; if this were to fail, the whole country's supply would be cut off.

Since the majority of Ireland's electricity is generated in gas-fired power stations, if one goes, so do the others.

A whole host of variable factors including weather can minimise or exaggerate the costs of services outages.

Energy disruptions tend to be more costly in the winter than in the summer, because of the extra demand for heating.

The estimated cost of a natural gas outage in 2008 ranged from €350m to €640m depending on the season and day of the week.

Even localised disruptions to services can generate big costs if they happen in particular strategic locations, since economic activity and population is so concentrated in some parts of the country.

A recent algae contamination at the water processing plant in Roundwood, Co Wicklow, though a local problem, meant major water stoppages for the greater Dublin area that the reservoir supplies.

It is difficult to predict and thus prevent disruptions to services, but the Government can take certain actions to minimise risks and fallout.

Setting up another underwater pipe at the most vulnerable part of our gas supply would be a step in the right direction.

Irish Independent

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