While uncertainty over energy price shocks and supply continue to dominate the national conversation, there is also an opportunity for Ireland, writes Colm O’Neill
The first documented energy crisis unfolded in the late 16th century when industrialised regions in Europe literally ran out of trees to burn.
This caused enormous political and social upheaval but also generated tremendous opportunities for countries with the natural resources and ingenuity to capitalise on the transition. It was the start of the Industrial Revolution.
Ireland’s green energy advantage
Today, Ireland has everything required to become a global green energy powerhouse. Our position on the northwest corner of Europe offers some of the best available offshore wind resources.
The strength of our skill base and our strong collaborative research community mean we also have the ingenuity to capitalise on it.
Ireland has a large offshore wind generation capacity, so the potential is clear. If we act quickly and with purpose, Ireland could achieve energy independence and become a hub for energy-intensive industries and a net energy exporter.
But ours is not the only country in Europe with this potential. Scotland is investing heavily in its offshore wind resource, as is Portugal, which also has the additional benefit of significant solar capacity.
Time to act
Although the benefits are long-term, decisive action is required now if Ireland is to grasp the opportunity.
However, change is needed in three crucial areas: planning, regulation and gas infrastructure.
Planning
The energy transition will require spending billions of euro on constructing energy infrastructure on a scale never before seen in this State.
However, despite An Bord Pleanála having a statutory timeframe to decide on applications for wind energy projects by June, the average time for a decision is over a year, and some projects have waited for more than two. This slow pace puts Ireland on the back foot when competing for international investment.
The current review of the planning system in Ireland urgently needs to address this critical area.
Regulatory change required
Commission for Regulation of Utilities (CRU) was established in 1999 to support the liberalisation of energy markets in Ireland as part of Europe’s first liberalisation directives.
Implementing this was a challenging task: while there has been active customer participation and switching at the retail level, there has been less investment in new thermal generation capacity.
The CRU’s mandate has expanded over time to include other utilities and energy safety, and the CRU now plays a central role in Ireland’s energy transition.
To reflect the scale and importance of this mandate, the CRU needs investment in resources, a review of governance structures and changes to the agency’s statutory mandate.
These changes are vital if the regulator is to support Ireland’s development as a major European energy powerhouse, with this objective at the centre of their strategic agenda.
Gas reliance
Ironically, transitioning to a modern, low-carbon energy system requires lots of energy. And for many years, the generation of that energy will rely heavily on natural gas.
Despite the undoubted potential of an array of ‘green gases’ from biomethane to hydrogen, the reality is that natural gas will need to be part of our energy system for decades to come. Energy policy must recognise this.
We currently import around 75% of our natural gas demand through a pipeline from the UK. Any realistic strategy for energy independence must have a plan for reliable sourcing of natural gas while at the same time promoting investment in developing ‘green gases’.
This includes building facilities to import liquified natural gas (LNG) and developing storage for natural gas locally.
This can be done while also supporting exciting developments in hydrogen and biomethane that are already happening across Ireland.
Gas of all types will be central to our energy system, and we need a plan and investment that delivers security in both the short and long term.
We need to be pragmatic
The actions outlined above are very straightforward but far from easy.
Progress is often sacrificed to idealism and dogma. We need to be pragmatic; we need to take calculated risks and accept that we may take action that may not deliver the perfect outcome immediately but will help us bridge to a greener energy future.
The benefits of acting now will be reaped in the coming decades, not the immediate months or years.
This is a time for bold visionary decisions on the part of both investors and the government. These are multi-generational initiatives that need to be actioned today.
The unfolding climate catastrophe won’t wait. The window of opportunity for Ireland to become a global energy transformation hub will close. To quote the Chinese proverb, “The best time to plant a tree is 20 years ago. The second best is now.”
Colm O’Neill is Head of Energy, Utilities & Telecoms at KPMG
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