With Ireland facing the “most challenging energy transition in history”, the Irish Academy of Engineering has said it has a number of concerns for the country.
These concerns are: the slow pace at which policy change is being implemented; the lack of a coherent financial and economic analysis; and the failure to efficiently manage reliability risk.
The government’s new Climate Action and Low Carbon Development (Amendment) Bill 2021 sets out a number of targets for achieving a climate-neutral economy by no later than 2050, and a total reduction of 51% emissions over the period to 2030, to which renewable energy is expected to contribute greatly to.
A recent report by the academy notes that preliminary estimates of the cost to 2030 of the Irish energy transition range from €60 billion (MaREI) to €200 billion (International Monetary Fund).
Financial analysis of energy transition
The academy is calling for policymakers to publish a comprehensive financial analysis of the proposed changes “which will quantify the likely electricity price increases and tax arrangements necessary to fund the required investment and retain current reliability standards”.
It has also posed the question as to why it is taking the government two-and-a-half years to complete a review of Ireland’s energy security, which commenced in 2019 and is now scheduled for completion in 2022.
The academy’s report addresses the issue of arrangements being needed for ensuring the long-term availability of natural gas for the country “given that Irish natural gas reserves will be entirely depleted by 2030”.
While, at the same time, “the UK will import 75% of its natural gas while Ireland will have to continue to rely on gas-fired generation as a backup for intermittent renewable power for the foreseeable future”.
There has been a “rapid rise in the number of ‘amber alerts’ issued by Eirgrid in the last six months”. Because of the energy transition, “the risk of system outages has significantly increased”, as confirmed by the Commission for Regulation of Utilities (CRU).
In June, authorities announced that 200MW of ’emergency generation’ would be leased for six months in order to meet the upcoming peak winter demand, for system security and avoiding outages. A few weeks later this plan was abandoned.
The academy said “the fact that a developed economy like Ireland, which historically has had an exceptionally reliable power system, suddenly had to propose leasing hundreds of MWs of generation on a temporary basis to meet peak demand will certainly be perceived negatively by energy-intensive industries considering investment in Ireland”.
In 2019, the academy published a paper drawing attention to “the likely future problems arising from the rapidly increasing electricity demand from data centres”.
In its most recent report, the academy stated that major data centre expansion in Dublin “would require a level of new transmission investment and construction that is no longer socially acceptable”.
“Such expansion should not be permitted,” the academy added.
It also suggests that pricing arrangements for electricity supplies to data centres should be adjusted “so as not to involve any subsidies which might ultimately be paid for by the general electricity consumer”.
Also, all new data centres “should be required to enter into Corporate Power Purchase Agreements [PPAs] with newly developed Irish based renewable energy facilities”.