IRELAND RELIES more on oil for its energy needs than any other EU country, save Luxembourg. In July crude oil prices peaked at $140 per barrel. But by yesterday Brent crude had tumbled to $53, its lowest price in nearly two years.
Declining oil prices mean lower inflation and the October consumer price index has reflected that change. Last month the annual inflation rate dropped to 4 per cent, helped by the sharp fall in oil prices. Nevertheless, this welcome news should not distract from a continuing concern: Ireland's excessive dependence on fossil fuels to meet its energy needs.
Sustainable Energy Ireland (SEI), a Government funded agency concerned with promoting and developing sustainable energy, notes in its latest analysis that electricity prices for industrial and commercial customers in Ireland were higher than the EU average in 2007. The simplest explanation is over-reliance on oil and gas in electricity generation. Some 88 per cent of our electricity needs are generated using non-renewable fossil fuels, the highest proportion in Europe. The most encouraging aspect of SEI's assessment was the rapid increase in Ireland's use of renewable energy. This has doubled between 2003 and 2007, thanks largely to a much greater contribution from wind energy.
Ireland now has the greatest wind power penetration in the world. The benefits of renewable energy are twofold: less dependence on imported energy, which accounted for 91 per cent of our energy requirements in 2006, and lower CO2 emissions. By 2010, Ireland should be well placed to meet its target of producing 15 per cent of electricity from renewable sources. By 2020, the aim is to generate 40 per cent of electricity from renewables. Whether this target can be achieved will depend greatly on the contribution that wind power makes. In the last two years the pace of wind farm development has slowed, as public opposition has increased.
That, however, is regarded as a temporary and short-term reversal. As SEI's Brian Motherway noted: "Increasing the contribution of renewable resources to energy supply is critical - it will help address costs, support our security of supply, and ensure we deliver on all our national and EU targets in energy and climate change".
Development of renewable energy resources remains within our control. Ireland's current excessive dependence on energy imports leaves the country a hostage to fortune, reliant on factors - such as a volatile oil price - we cannot control. Greater reliance on renewables is the only way of rectifying our energy imbalance.