Over-reliance on oil ‘a threat’ to our economy

IRELAND’S overdependence on dwindling supplies of oil poses a significant burden to the economy and a threat to future energy security, a leading international report published yesterday revealed.
The International Energy Agency’s (IEA) Irish review analysed the energy challenges facing the country and outlined a number of alternatives to improve efficiency, including the importance of developing an all-Ireland energy market, due to come into force in November.
Though praising the Government’s White Paper on Energy, the report called for an end to the country’s over-reliance on oil and more use of renewable energy sources.
It also found improvements in energy efficiency were possible, but the Government needed to focus its efforts to reduce greenhouse gas emissions and traffic congestion.
The publication has been widely welcomed, with business chiefs insisting the Government must address high energy costs.
Energy Minister Eamon Ryan said the country must act with urgency to ensure it is placed on a sustainable energy path.
The report coincides with the announcement that the transition to the cross-border all-Ireland electricity market has begun.
“Ireland has seen tremendous economic growth in the last 15 years and its energy supply system has significantly contributed to enabling this growth,” said IEA director Claude Mandil. “Dramatic increases in energy efficiency in power generation during the last 15 years have not been able to counteract the increasing emissions of greenhouse gases in Ireland and the Government will have to focus very strongly on addressing the rise of these emissions through further increases in efficiency.”
Energy Policies of IEA Countries — Ireland 2007 Review praised the Government’s Energy White Paper as the first comprehensive energy package in over 30 years.
A key component of the paper is the establishment of an-Ireland market for electricity, which will be launched in the autumn. It is expected testing over the summer will lead to active trading of over €2 billion to €3bn in the new single market from November 1.
Dr Mandil said inter-market connection was the best way to ensure a future energy supply. “The next challenge for the Government will be the reform of the gas market in Ireland,” he said.
The report also pointed out the Government’s need to tackle congestion problems. “The Government needs to give full attention to the implementation of key transport projects, but should also consider whether the price signal for fuel is the right one,” Dr Mandil said.
The Irish Business and Employers’ Confederation (IBEC) said the report highlighted the insufficient progress made by the State in addressing energy costs.
“Despite the recommendations of the IEA’s last review in 2003, few short-term practical solutions have been delivered,” IBEC’s David Manning said.
“The gap between Irish energy prices and those of our competitors continues to widen. The Government and the regulator must together set out a plan outlining how competitive prices will be delivered within the next three years.”

Colm Kelpie
© Irish Examiner