The ESRI has warned that Irish consumers should not bear the brunt of the cost of promoting renewable energy.
The Economic and Social Research Institute has published its Review of Irish Energy Policy today. In it, it says that the current financial support for onshore wind farms is “probably too generous” and that incentives for offshore wind, wave and tidal generation “are not appropriate as it is premature to incentivise substantial investment in such technologies”.
The review, authored by the ESRI’s research professor John FitzGerald, also recommended that the Corrib gas field be “brought to production as rapidly as possible”, claiming that the supply of energy for the Irish market would be at risk without it.
The Marine Renewables Industry Association (MRIA) claims that the ESRI report is underestimating Ireland’s potential as a generator of wind and wave power. MRIA Chairman Peter Coyle said:
We have the capacity to generate multiples of our national need, which leaves us with the potential to export.
A Mayo Associations Worldwide convention in Westport on 27, 28 and 29 May will discuss the county’s potential as a generator of wind and wave power.
FitzGerald’s report also finds that:
There are “two major economic obstacles” to adopting nuclear energy generation – the large size of ‘standard’ plants are uneconomic for a country Ireland’s size, and the fact that onshore wind generation will be providing enough energy by 2020 to “make investment in new nuclear uneconomic”. Public concerns about nuclear generation also makes the ESRI believe that any plans to build a nuclear plant would “generate major opposition”.
Offshore wind technology “needs substantial further development to bring down cost”. The ESRI concludes that “it will not be economic in Ireland to develop offshore wind for domestic use because of its extremely high cost”.
Tidal energy generation is “unlikely to be economic in the foreseeable future”, because of its “high level of intermittency”.
The rise of the electric car in Ireland, while “developing rapidly”, will not have an impact on Ireland’s energy use until at least the decade after 2020.
However, the demand for energy has fallen and while growth in demand will return in the medium term, “the energy needs of the economy will be permanently affected by the current economic crisis”. The ESRI envisages that this will mean a “lower level of renewable generation will be required to meet current targets”.
It is predicted that global factors – the demand of newly industrialised countries on fossil fuels etc. – will have more of an impact on where Ireland gets its fuel in future and how much it pays for it than any domestic factors.
The majority of Irish energy is provided by imported fuels at the moment, coal, oil and gas. While Ireland will get a substantial amount of its natural gas from the Corrib gas field when it comes on stream, “the size of the field is such that, without new gas finds, Ireland’s dependence on imported gas can be expected to rise again by 2020″.
It will “be very difficult” for Ireland to meet its targets on carbon dioxide emissions, therefore it will have to purchase permits from other countries.
The ESRI is concerned that the Single Electricity Market (SEM) on the island of Ireland will not “figure highly on the EU radar” and that any Europe-wide change to that market structure (for example, introducing rules on cross-border trade in electricity) will result in major costs for the Irish consumer. It finds that at the moment the wholesale electricity market on the island of Ireland is “working well”.
While the public ownership of energy networks “has the advantage of increased flexibility” over private ownership, the ESRI notes that public ownership can lead to “some of the monopoly rents inherent in the networks through excessive staffing or renumeration”, for example in the case of the ESB.
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