Ireland’s Energy Transition – Dublin Castle speech
Good morning ladies and gentlemen and all our distinguished guests, and welcome to Dublin Castle. I want to thank Bernie Gray for chairing today’s proceedings. And I want to thank everyone who participated in the consultation process that has informed our thinking about the forthcoming energy White Paper.
The purpose of today’s event is to set out how our approach has developed, and to hear your responses and insights prior to the conclusion and publication of our definitive policy statement later this year.
Last December I attended the Lima ‘conference of the parties’ in advance of the United Nations Framework Convention on Climate Change, which takes place in Paris later this year.
Indeed 2015 is a most important year for international engagement – and decisions – on sustainable development and climate change. This is because there are in fact three critical discussions taking place at UN level this year. I think it’s worth noting that Ireland is the co-chair of one of these processes – the one concerned with new sustainable development goals.
In Lima, I was struck by the testimonies of the South Pacific island communities, where severe coastal erosion caused by global warming has already forced coastal communities to relocate further and further inland. Their leaders told me and others that, in a short time, the islands would have to be abandoned altogether – along with homes, communities, language and cultures that have survived and thrived for centuries.
Undeniable evidence of the impact of climate change is emerging here in Ireland too in the form of extreme weather events, rising sea levels, and changes to ecosystems. In 2014, Storm Darwin wreaked havoc, causing widespread damage to infrastructure and the landscape as it left over 280,000 homes without electricity.
The impact of global warming demands that we put sustainability at the very centre of our energy policy. The scale of the challenge was starkly outlined in the report of the Intergovernmental Panel on Climate Change, which informed the Lima conference. It is now absolutely clear that the world must replace gas and coal with renewable energy sources within 35 years.
Our vision here must be equally clear and equally ambitious. We must and we will transform Ireland’s energy production and consumption patterns so that, by 2050, our system will be largely decarbonised.
This vision comes with a pledge to all our citizens, our communities, industry, and those who work to provide energy to our homes and workplaces that policy will ensure certainty, stability and affordability, as we make the transition to a low carbon future.
Energy security is one of the key pillars of energy policy, and it is an important dimension of the EU Energy Union. It is also a high priority for Ireland given our high dependence on imported energy sources, mainly oil and gas. There is no single action that, by itself, can achieve energy security. We will rely on a range of measures to ensure that the light continues to come on when we flick the switch.
Many of the initiatives to reach our carbon emission targets, such as increasing energy efficiency and diversifying energy sources, also contribute to our energy security. We fully support EU-level initiatives, like fostering regional cooperation, which complement our already close cooperation with the UK and other jurisdictions.
A range of oil, gas and electricity infrastructure projects could enhance our energy security, in some cases with EU support as Projects of Common Interest (or PCIs). Such projects can help address interconnection, enhanced security of supply, market integration and sustainability. I understand that an application is imminent to An Bord Pleanála for planning permission for the North-South transmission line project. I am fully persuaded that this project is of critical importance to the effective functioning of the electricity market throughout the island, to security of supply in Northern Ireland, and to support the deployment of renewable energy.
The transition to a system based on clean technologies – some of which have yet to be invented – will be a process, not an event. Our extensive consultation over the last year has taught us that it can only be successful if it has the support – the active support – of all its stakeholders. This gives us the added responsibility to include and involve our citizens and communities in a transformation, which will involve profound changes in the ways we generate, transmit, store, conserve, and use our energy.
We will of course face some constraints. These will include the rate of technology developments, and the availability of capital and other resources. Some of our decisions will involve costs as well as benefits. We will be presented with many difficult choices as we juggle the sometimes conflicting priorities of affordability, sustainability and energy security.
We must be informed by the opportunities and responsibilities that come with an interconnected European and global economy and polity. Above all, our transition will depend on human goodwill and ingenuity.
Making the transition
The White Paper will outline in detail how we intend to make the transition. It will build on all the work undertaken since the publication of the 2007 White Paper. Work which includes a range of policies and initiatives including the establishment of the single electricity market, the development of renewable electricity and its integration into our grid, and the roll-out of a range of energy efficiency programmes.
This geographically peripheral nation will continue to rely on imported fossil fuels during the energy transition, although that dependence will diminish over time. This means that improved interconnectivity with other Member States – an integral element of the recently-initiated European Energy Union – must be a high priority. So we will continue to work to unlock EU funding for interconnectivity projects like the recently-approved project to twin a 50 km section of the gas transmission pipe between Ireland and Scotland. We are also cooperating with our partners in the North Seas Countries Offshore Gird Initiative, and we are continuing to work on the Irish-Scottish Links on Energy Study. The Integrated Single Electricity Market project, currently being undertaken by the independent regulators, is also essential.
2030 and beyond
The White Paper will guide and inform our collective approach and actions, particularly in the period to 2030, which is an important staging post on the journey to the decarbonised economy and society of 2050. We stand at a climate crossroads, but we are not alone. Every other nation shares the challenge. As Mary Robinson has commented: “The generations that came before us didn’t know that their actions were causing climate change. The generations who come after us risk inheriting an unsolvable problem. We are the generation that can make the difference.” Our actions will be guided and supported by the frameworks and commitments agreed on the international stage.
In December, the United Nations Paris conference (the Conference of the Parties to the United Nations Framework Convention on Climate Change) must reach agreement on post-2020 targets to limit emissions and ensure that average global temperatures do not increase by more than two degrees centigrade.
Everyone present here will know that 16% of our energy must come from renewables by 2020. We are making good progress: Currently around 8% of our energy comes from renewables, so we are half way there. Within that binding 16% target, we must generate 40% of our electricity consumption through renewables, along with12% in the heat sector and 10% in transport. However, the second half of the journey will be very challenging and we will need to redouble our efforts as we continue along this path.
At the October 2014 European Council, we reached political agreement on headline targets for 2030. Overall, Europe committed to reduce its greenhouse gas emissions by 40%, to increase to 27% the proportion of energy derived from renewables, and to increase Europe’s energy efficiency by 27%. Government departments, including my own, are currently working together to ensure that specific targets for Ireland are technically feasible, cost effective, and fair in terms of burden sharing across all EU member states.
Eliminating waste and the aggressive targeting of improved energy efficiency will be key to our transition to a sustainable energy future. This is one of the few elements of energy policy that is completely in our national control. Indeed, technological developments like smart meters and mobile phone-controlled heating systems will increasingly allow citizens themselves to boost energy efficiency and save money through better control of their energy consumption.
Enhanced energy efficiency delivers real and measurable benefits to the entire economy. It has the potential to boost employment and improve living standards by sustaining jobs based in the communities where efficiency upgrades are delivered. It can enrich the lives of our citizens by improving their health and allowing them to live in comfort at home for longer – thereby reducing the costs of health, housing and social services. It does this while cutting emissions and improving energy security by reducing our fossil fuel imports.
Becoming more energy efficient means changing our behaviour and our habits. Our children have a lot to teach us in this regard. More than three-quarters of our schools have achieved at least one An Taisce Green Flag and the ‘Green Schools’ programme has helped divert 4,700 tonnes of waste from landfill. Over 15 million units of electricity have been saved through reduced energy consumption in schools. The total savings on waste, energy, water and transport will exceed €8 million in 2014 alone. Meanwhile, the National Energy Efficiency Action Plan has led to €700 million in savings from reduced fossil fuel imports. But we need to do more.
We need to increase the funding available under the Better Energy Programme. And we need to complement grants with financing schemes to encourage more householder participation. I want to see substantially reduced barriers to the installation of energy efficiency systems in homes, businesses and the public service.
Onshore wind has so far been at the centre of Ireland’s renewable energy generation. It has served us well, and it will continue to do so. But the next period of energy transition will also see the development of new commercial and late-stage solutions, which are likely to change the mix of renewables as technologies like solar PV, off-shore wind, and carbon capture and storage mature, and become more cost-effective.
My Department is actively engaged in the development and support of renewable energy. The White Paper will outline a number of initiatives that will provide investor certainty and contribute to the achievement of our renewable electricity targets.
• In the electricity sector we will publish a study of the costs and savings that will flow from additional renewable deployment in 2020.
• The Off-Shore Renewable Energy Development Plan will provide a framework for the sustainable development of Ireland’s offshore renewable energy resources, identifying the opportunity for increasing indigenous production of renewable electricity. This will contribute to reductions in our greenhouse gas emissions, improve the security of our energy supply, and create jobs in the green economy.
• We will embark on a consultation about future renewable supports looking at quantum, technologies, and mechanisms.
• In the transport sector, the purchase of electric vehicles will continue to be incentivised through grant schemes.
• We are working with the Department of Transport, Tourism and Sport on railway efficiency and measures to “green” buses and taxis.
• Work is continuing on an Exchequer-funded renewable heat incentive, which will be launched in 2016.
• Our draft Bioenergy Action Plan, which was published in October 2014, will inform policy development in this area, with particular emphasis on heat and transport.
Our energy transition will continue to depend on harnessing technological change, which will also bring wider benefits to our economy. My Department, together with the Department of Jobs, Enterprise and Innovation, has been developing the European Energy Innovation Hub with cross-Government actions to develop technologies and capture their enterprise and employment potential.
As with many of the other challenges faced by mankind in the past, technological change has played a vital role. I fully expect that technologies that have yet to be invented will also play a role in our transition and we must wisely balance the choice between acting and waiting. The Energy Policy White Paper will provide new investors and existing market participants with the certainty and confidence they need. This will enable them to continue to innovate in the technologies that will diminish our carbon footprint, reduce costs, improve energy security, and promote national and regional economic development.
Stakeholders as energy citizens
All the evidence tells us that new energy infrastructure is – and will continue to be – vital to the transition to a carbon-free future. Yet opposition to some of this infrastructure in local communities is a fact of life in the public discourse on energy and energy policy. We will continue to assess the need for new infrastructure, and facility upgrades, with robust, evidence-informed analysis. But I have heard the demand that citizens be involved in the decisions that affect them. And I think we have learned from the often insensitive approach to community concerns that has been seen in the past.
The recent Eirgrid publication Your Grid, Your Views, Your Tomorrow is a welcome sign of change in this regard – and one that can inform others in the sector. The White Paper will declare that the day of unilateral, top down energy policy is over. It will set out a new direction:
• In which we will better listen to citizens, respect their concerns, and give them an ongoing opportunity to input into policy development and implementation.
• Where the onus will be on the State and the industry to demonstrate the need for new projects – and to clearly explain complex technical issues – and to show that we have rigorously studied all the potential alternatives.
• Where we reduce the barriers to viable small-scale renewable energy projects contributing to the grid.
• And where the communities that host energy infrastructure have a genuine stake and receive commensurate benefits.
Our energy transition will respect our people as concerned ‘energy citizens’, determined to combat global warming and its impact on their planet, their communities and their children. It will also have a robust focus on the cost to consumers of the transition to a fully decarbonised energy system. It will respect our citizens’ expectations of affordable bills, and their desire to control their own energy consumption.
As part of the preparation for the White Paper, I launched a public consultation on affordable energy in February. I will publish our Affordable Energy Strategy later in the year. Issues relating to the regulatory framework, and the mandate of the regulator, were raised in many of the submissions in the consultation process. Given the passage of time since the regulatory framework was established, it is clear to me that reviews of both are required.
Ireland’s independent energy regulation continues to perform its essential role in a well-functioning energy market, providing the stability and certainty necessary for continued energy investment. Regulatory accountability is another important issue we have to address in the White Paper. Consumers have to grapple with electricity and gas retail competition to get the best price, product and service offer for their needs.
The issue of prices, costs, affordability and competitiveness was raised by many contributors to the consultation process for this White Paper. Many acknowledged that we have structural issues, related to our scale and peripherality, and that we are a price-taker on international markets. These factors put the market we have established into sharp focus. I am, however, troubled by plain contradictions in perspectives on the functioning of markets. On one hand, industry asserts that the market is functioning properly, citing, for example switching rates by domestic customers. The regulator stated to the Oireachtas Committee that the retail market is working in Ireland, again referencing switching rates as evidence. On the other hand consumers and householders continually express their disappointment and frustration at the prices they are being asked to pay.
This discourse is at a volume that cannot be explained away by the natural adverse tensions that exist between buyers and sellers.There needs to be trust and confidence between consumers and the industry. As I have indicated to them, I welcome any efforts of the industry and its trade association in reinforcing this necessary trust.
The White Paper will be a critical instrument of navigation towards the energy transition that we must make in this country.
All of us – every individual, every household, every Government department, every corporation and organisation – has a responsibility and a part to play in this transition.
All of us want to safeguard our environment for future generations. That means that we must expedite the transition to a low-carbon future. For our own sake and for the sake of our children and grandchildren. For the people and communities in Ireland affected by the 2014 storms, as well as communities in the South Pacific islands and other countries that are so vulnerable to climate change. For the planet itself.
Because of this, I think the most important aspect of the White Paper will be to recognise the role we have as citizens, and to enable each and every one of us to play our part in the energy transition – which is one of the greatest projects of our age.