The electricity industry globally, but most particularly in Europe, is undergoing fundamental transformation in terms of new generation technologies, the re-shaping of customer interactions through the application of information and communication technologies (ICT) and the continued re-consideration and refinement of market regulation.
However, the dominant consideration shaping the current and future energy system is the need to progressively eliminate greenhouse gas emissions. This consideration is shaping a future electricity industry that will be:
- Decarbonised: reducing its own emissions to net zero;
- Decentralised: with localised generation making an increasing contribution to electricity production as technology costs continue to fall;
- Digitalised: taking full advantage of ICT to manage a highly complex system and at the same time delivering value and cost savings for customers; and
- Democratised: leveraging the application of ICT and low cost, small scale generation and energy storage solutions to maximise the participation of customers in the overall energy system.
A decarbonised electricity system will play a crucial role in decarbonising all energy use as it assists other energy end-users to do likewise through the progressive electrification of heating and transport.
To deliver the reductions in greenhouse gas (GHG) emissions necessary will require changes to the patterns of energy use and consumption, some easy and some more difficult.
As a community we are well aware of the resistance to any form of change inherent in society. Consequently, how future change is presented and supported and the fairness with which associated benefits are allocated will ultimately determine the extent of Ireland’s leadership.
I am concerned that there is not sufficient urgency in the consideration of future actions to ensure delivery of Ireland’s 2020 and 2030 commitments. Deferral will result in the need to adopt more robust, costly and higher risk measures in the future.
The investment climate and availability of customer funds remains limited so early clarification of the approach to be adopted to RES-E supports to 2020 and beyond is required to support investment decisions.
A clear picture of overall revenue and breakdown per each auction over the time period of the support (assumed to be 15 years) must be given by government in order to give investors the certainty they require to raise finance for projects. Given the experience in other Member States, ex-post financial or budgetary adjustments affecting projects that have cleared in relevant auctions must be avoided.
Ireland is facing a uniquely challenging set of objectives in the energy sector. There is no precedent to follow and no other country is experiencing similar issues as acutely. I believe that it is probable that a mix of renewable technologies will be necessary to achieve the mix of policy objectives in the medium to long term.
The Irish government proposal for a technology-neutral, coupled with a “wait and see” approach risks delivering a single technology initially that may or may not result in the best long-term solution for the Irish system and customers.
It may be necessary to exclude certain technologies in later auctions for system stability or security of supply reasons, and early sight of such decisions would be beneficial as otherwise developers are unlikely to have sufficiently developed projects for these complementary technologies. At the very least, a route to market needs to be considered for projects that are likely to form part of the transition of the electricity sector. Low cost, large scale storage technologies represent a key future development given the unpredictability of wind relative to other variable renewable resources.
Dara Lynott will be speaking at the Ireland Power conference in Dublin in April