As we embark on a new year, the energy landscape is evolving at an unprecedented pace, driven by a confluence of geopolitical unrest, technological advancements, policy shifts, and global imperatives. Colm O''Neill and our Sustainable Futures team explain what could be done to hit Ireland''s energy targets.
Ireland has set very ambitious targets and while we have made some progress, now is the time to take action in the Energy Sector. 2024 needs to be a year for delivery and a year for getting back on track in terms of achieving our targets.
Investors and developers are ready and willing to invest in Ireland but need government agencies to enable the delivery of key projects at a quicker rate.
Our comprehensive outlook explores key trends that will shape the energy sector in 2024 and beyond. This year is shaping up to be another record year for renewables and opportunities for renewables growth will need to be consolidated.
We have developed a vibrant energy sector teeming with talent, but the numbers unequivocally show that we have a way to go before our targets are in reach. Secure access to large amounts of clean energy will be the key to unlocking Ireland''s economic potential, and it is critical to clearly understand the gap we need to bridge.
The linkage between GDP and energy consumption is evident both historically and on national scales. World GDP and energy consumption has grown in close concert for as long as we have recorded energy statistics, and the same relationship figures without exception on national scale across the globe, as shown in the figures below.
Ireland''s relationship between energy consumption and GDP growth is no exception to the trend. While there are examples of certain economies starting to decouple parts of their economies from energy consumption, it remains a compelling argument that growing our ability to generate large amounts of clean energy will precipitate significant prosperity.
This could have several implications for the 2024 energy year in Ireland. Opportunities for renewables growth will need to be consolidated with issues like mandates for energy efficiency and accommodating for large energy users. We need to ensure that short-term challenges do not restrict opportunities for long-term growth.
As a country, Ireland has come a long way in developing renewable energy but is still the one of the worst-performing EU country in terms of overall renewable energy.
Oil dominates our energy consumption profile. Due to its importance for transport and heat, oil demand is inflexible and therefore hard to reduce. Technical solutions to reduce oil demand like Electric Vehicles and home upgrades have made good initial process but may face headwinds in 2024 as we must convince demographics beyond just enthusiastic early adopters.
The EV outlook has dimmed due to slow growth and rising prices: Globally CEOs now expect a c. 30% market share in 2030 down from up to 80% only a year ago. Moreover, retrofitting faces challenges with labour supply already under shortage.
For the energy transition to be successful, it is critical that government engage and support citizens to make sustainable choice. Today, a significant part of the Irish populace remains reluctant to change their energy behaviour as revealed in ourrecent "Powering tomorrow" report.
For example, only 1 in 5 express an interest in switching to an electric vehicle over the next 5 years with 50% naming price as the main barrier. It is crucial that the Government makes electric vehicles, housing retrofitting investments, and other sustainable choices more attractive for consumers with new and improved incentives. The incentives we implement today will shape our future and consumer behaviour for several decades to come.
After oil, gas is Ireland''s second most prominent energy source. Gas makes up almost half of our electricity generation and will be required for many years to supply flexibility as renewable generation grows. We are highly dependent on imported gas, which leaves us exposed to growing geopolitical tensions and shifts in the global power balance.
To build our resilience and independence in 2024 and beyond, Ireland must focus on developing renewables and associated infrastructure. Pragmatism is key and we need to consider all practical options for our energy systems ranging from storage to alternative supply.
Reaching the 2030 renewables goals will require a step-change in the rate of renewables deployment. The efforts will be of unprecedented scale with massive engineering projects all requiring planning, permitting, supply chain, and more. We need to cover an area the size of Co. Dublin with solar panels and an area like Co. Monaghan with wind farms. The question is: Will people let us do this?
The industry is gearing up to face the increased volume of renewables with several encouraging developments in recent times:
The move from centralised to distributed electricity generation is a key theme of the energy transition. Rather than relying on a handful of thermal generation stations our electricity is increasingly generated in every corner of the country.
This has large impacts on the transmission grid, which now must accommodate a range of remote and intermittent generation sites often located far from demand centres like cities and industrial parks.
To date, the investment in grid has not increased in line with renewable generation in assets. Significant grid reinforcements and upgrades are needed to support continuous renewables deployment, which calls for large capital investments by EirGrid.
Grid infrastructure also requires support of the public and local communities due to their scale and visible nature. However, KPMG analysis shows that only 34% support the required grid infrastructure (HV overhead powerlines) while 76% of people support renewable energy projects, such as wind farms and solar farms.
Increased community engagement from grid operators ESB Networks and EirGrid have recently yielded positive results, though continued efforts are needed to cement public support.
The energy transition will not succeed without the backing of the Irish consumers as currently highlighted by widespread reticence to electric vehicles and grid development. We need the support of citizens to make personal investments, change behaviours, and support disruptive construction projects in their localities.
This will only happen if consumers trust that these choices will not only benefit the environment, but also themselves directly. For example, our analysis shows that over 7 in 10 are more likely to support
disruptive infrastructure projects if they create local jobs and support local businesses. Understanding consumers'' attitudes and motivations is crucial to developing the public support required to accelerate the energy transition.
This is addressed in our recent "Powering Tomorrow" report, which surveyed consumer attitudes to all elements of the energy transition. The first-ever of its kind, this report highlights a range of actionable insights that policymakers, energy suppliers, landowners, businesses, and consumers can consider.
Continued focus on grid development and policy
Ireland''s grid requires significant capital investment to ensure we can connect more renewables and utilise more of our renewable resource.
Growing development of biomethane and early hydrogen projects
Carbon Capture and Storage
Carbon Capture and Storage (CCS) developments in Ireland following inclusion in CAP24. CCS will be critical to decarbonising cement manufacturing and incinerators in Ireland.
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