This paper examines peat power production in Ireland under the three pillars of energy policy-security, competitiveness and environment. Peat contributes to energy security-as an indigenous fuel, it reduces dependency on imports. During a period of low capacity margins, the operation of the peat plants is useful from a system security perspective. Peat generation is being financially supported by consumers through an electricity levy. The fuel also has high carbon intensity. It is not politically viable to consider peat on equal economic criteria to other plant types because of history and location. This paper reviews electricity generation through combustion of peat in Ireland, and quantifies the costs of supporting peat utilising economic dispatch tools, finding the subsidy is not insignificant from a cost or carbon perspective. It shows that while peat is beneficial for one pillar of energy policy (security), the cut-rent usage of peat is not optimal from a competitiveness or environmental perspective. By switching from the current 'must-run' mode of operation for peat to the 'dispatched' mode used for the other generation, significant societal savings (in the range (sic)21 m per annum) can be achieved, as well as reducing system emissions by approximately 5% per year. (C) 2009 Elsevier Ltd. All rights reserved.