Ruth Young, Senior Consultant at Cornwall Insight Ireland and Robert Buckley, Head of Relationship Development, recently participated in a session at the British-Ireland Parliamentary Assembly to address recent energy trends.
They prepared a sample of the briefing notes with answers to:
What are the main challenges governments in the BIPA jurisdictions face in meeting demand for energy?
- We are back to the Trilemma of affordable, secure and low carbon energy sources.
- The most material risk across the board is loss of investment – the macroeconomy is driving up costs of investments, compounded by risk of near-term interventions and political uncertainty all against the backdrop of radical market reforms.
- Energy margin risks associated with ageing assets.
- In Great Britain there is a risk of nuclear plants reaching the end of their lifespan early or facing running issues.
- In Ireland we are seeing some fossil fuel plant obliged to close due to EU legislation whilst others are reaching the end of their life where it is uneconomic or impossible to keep running.
- In the Republic of Ireland we have also recently seen that the capacity market is failing to deliver and the government has had to intervene through the delivery of generation via emergency routes.
- There is a need for diversification of technologies to meet demand whilst achieving decarbonisation targets. The current investment environment is not conducive to all technologies. There is also a need to provide system flexibility to match the widespread roll out of renewables.
- There is a lack of public consent and understanding – both need to make both the risks and benefits of the net zero transition clear.
- There is a lack of long-term infrastructure investment
In the UK and Ireland we have seen that funding very high consumer bills at short notice is very expensive. Consider the cost of implementing domestic energy efficiency measures versus the cost of the UK’s Energy Price Guarantee.
Do the governments in the BIPA jurisdictions have effective strategies for meeting demand for energy in the future?
- The outline is in place, but it is lacking policy detail to provide certainty on some big assumptions that preferred technologies work and turn up on time (Historically large dependable units, now moving to a world of intermittency that the system is not designed for).
- The increase of intermittent generation increases the need for flexibility to ensure security of supply. There is little in the way of strategy relating to flexibility in both the short and long term.
- Not all low carbon flexibility options lend themselves to the BIPA jurisdictions but a review of possible solutions would provide some focus. For example, the UK is looking at CCS due to heavy industry and natural storage, but this solution doesn’t lend itself to Ireland’s system as well.
- The lack of policy on flexibility is causing hesitance in investment as there is no indication from gov on how to support a renewables led system causing. In Ireland this is resulting in the continued build out of gas.
- Cannot just consider generation, there is a case for increased integration of demand side participation and storage.
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