Ireland’s transition to a clean energy economy risks heading into “strategic fog” in the power sector, with a lack of clarity and certainty about the future reliability of the country’s energy supply, the National Economic and Social Council (Nesc) has warned.
Its analysis of the country’s planned move away from fossil fuels while scaling up renewables reveals “a lack of clarity and certainty about the future reliability of energy supply”.
Published on Friday, the think tank concludes “the transition may result in higher, not lower, electricity prices, challenging national competitiveness and the transition narrative”.
The report details strategic gaps and an absence of actions to reinforce “both the energy transition and economic resilience”.
“The scale of resources needed to deliver a secure and stable green energy system means that we must accelerate investment, both public and private,” said Taoiseach Micheál Martin in response to the Nesc report.
The findings would be used to inform ongoing work of Government to deliver the transition, he said. In tandem with this a new “climate investment clearing house” is being established by the Government to accelerate progress.
“It will be important to work with all stakeholders to ensure we have the conditions in place to achieve this energy transformation in an effective, timely and sustainable manner, while ensuring the ongoing competitiveness of the Irish economy,” Mr Martin added.
In advance of establishing the clearing house, he said he would host a joint Government-industry forum on offshore renewable energy in coming weeks, “to scope out the role of the clearing house and how we can best progress delivery of Ireland’s offshore renewable energy objectives”.
Nesc sets out concerted actions to deliver on Ireland’s near-term targets of decarbonising the power system and increasing renewables used, but also highlights risks associated with the Government’s current approach.
“Ireland aims to transform our power system over the next 25 years by reducing fossil fuel use and ramping up the use of solar and wind energy. This is key to addressing climate change,” said Nesc senior analyst Dr Cathal FitzGerald.
“However, Nesc’s research reveals uncertainty about the impact on our economic resilience in terms of energy reliability, price, jobs and exports. These in turn highlight broader issues to be resolved and a strong imperative for action,” he added.
The report identifies four primary risks to policymaking in the transition.
On electricity supply, it warns “reliability may worsen over periods of the transition, if not addressed, and there is also no clear visibility of the power system’s reliability beyond 2032”.
On electricity prices, challenging national competitiveness and the transition narrative, it says “clarity is needed regarding the total system cost of transition in the power sector and the distribution of those costs”.
It concludes “key questions about renewable energy capacity requirements, the rationale for surplus power generation, its optimal use, price competitiveness, and the method of energy export remain unanswered”.
On enterprise opportunities, it says “there is no single, comprehensive estimate available to policymakers of the sales, exports, and jobs etc. that can be expected from delivering transition targets”.
Dr FitzGerald added: “It is important that these findings do not lead to paralysis. Our work finds that much of Ireland’s policy action for transition in the power sector is headed into fog.”
“Visibility and certainty are low, and key actors are not on the same page from a strategic standpoint. But the energy transition is of paramount importance and must be progressed despite all the complexities involved. The cost of inaction would be enormous and devastating,” he said.
The report recommends a phased approach with action to be taken now, next, and later to drive progress.
Immediate actions include “improving conditions for clean energy infrastructure (planning, skills, financing, grid and supply chains) and establishing new institutional arrangements for better co-ordination”.
Next should be moves “to address key knowledge gaps, to demonstrate sustainable renewable power demand, and to ensure economic benefits are realised domestically”
In the longer term, it says there is a need “to produce competitively priced energy for export, to develop export methods, and to manage associated challenges, if proven practical and viable”.
Ireland’s decarbonisation potential includes the ability to meet all, or almost all, of our power demand from renewable energy sources - to reach domestic net zero emissions, Nesc concludes.
There is also the prospect of producing surplus clean energy, it says, to power enterprise and spur new opportunities, and even the possibility of exporting surplus clean energy, if proven practical and viable.
“The council believes there is an urgent need to address the strategic gaps identified in this report in a way that reinforces both the energy transition and economic resilience, while moving Ireland forward,” its director Dr Larry O’Connell said.
“Nesc’s recommended actions represent an agenda for the policy system to work through immediately to make transition in Ireland’s power sector more likely, and more likely to be successful,” he added.
