Risks to Ireland’s energy supply could have a ‘chilling effect’ on foreign investment, warns Ibec – The Irish Times

Flaws in the Irish system to ensure an adequate supply of electricity and problems with planning and the electricity network could have a “chilling effect” on foreign investment if they are not “quickly resolved”, warned Ibec.

The business lobby group’s remarks come as part of its contribution to the government’s ongoing review of energy security which is taking place against a backdrop of pressure on the Irish electricity system and an energy crisis triggered by the war of Russia versus Ukraine.

Hundreds of submissions were made during the public consultation phase of the energy supply security review of Ireland’s electricity and natural gas systems.

A report compiled by independent experts from Cambridge Economic Policy Associates (Cepa) has selected a range of mitigation options in response to potential shocks to Irish energy supply by 2030.

Options include onshore non-commercial gas storage facilities and floating liquefied natural gas (LNG) terminals.

A public consultation phase of the review concluded last week and ultimately Environment Minister Eamon Ryan will make recommendations to Cabinet on how Ireland’s energy needs can be met in coming years.

Ibec’s bid raised concerns about the risk of delays to major energy infrastructure projects, saying there is a “heavy planning system”. He also said that a “major obstacle” to the development of energy projects was the uncertainty of when they would have access to the grid.

He said: “These planning, licensing and network issues are compounded by flaws in the capacity market system [the mechanism for ensuring future electricity supply] which saw the planned capacity removed.

“If these issues are not addressed quickly, they could act as a deterrent to foreign investment for years to come.”

Ibec said it supports national climate goals of reducing greenhouse gas emissions and achieving carbon neutrality by 2050.

However, regarding the mitigation options presented in the Cepa report, Ibec noted the “omission” of further developing Ireland’s own indigenous gas supplies.

He said this “indicates a continued national political preference for other countries to carry out the exploration, development and production necessary to meet our medium-term domestic gas demand.”

Ibec said gas transported internationally and LNG have a higher carbon footprint than gas produced locally.

He said of the shortlisted options “Ibec believes that LNG, gas storage for emergency use, gas decarbonization through biomethane and hydrogen, and gas demand reduction incentives could all play a role in a secure energy transition. [to renewables].”

The use of LNG has been a contentious issue within the government.

The Green Party has resisted its use based on the continued reliance on fossil fuels and the likely use of fractured gas.

In contrast, some Fine Gael and Fianna Fáil TDs strongly supported a plan to permanently install commercial LNG for the Shannon Estuary.

Ibec argued that there may be controls in place to address concerns about the import of frac gas.

A separate submission from the American Chamber of Commerce in Ireland (AmCham) – which represents US multinationals here – said it had raised the “lack of energy capacity” for many years.

He said the current energy crisis must be tackled with “urgency and thoroughness” while keeping in mind the need to reduce emissions.

AmCham also said: “It is important that Ireland maintains its reputation as a destination that encourages and facilitates foreign investment.

“This reputation has been maintained by Ireland’s ability to effectively secure sufficient power generation for these FDI [foreign direct investment] projects and this is necessary for the future.

AmCham said that before offshore wind and hydrogen energy come on stream, the development of transitional energy sources was needed, including gas infrastructure that could switch to the green hydrogen in the future.