In deciding energy policy, you are confronted with the “trilemma”: the duty to provide an energy supply for your country that is sustainable, competitive and secure. On all three counts, I believe the Government’s recent decision to proceed with a State-owned floating liquefied natural gas (LNG) facility is the wrong one. It is not too late to take a different approach.
The environmental argument is relatively straightforward. While the new facility is designed to provide emergency storage rather than increasing everyday gas use, the extraction, transportation and refuelling process will drive up emissions of this “super pollutant” methane gas. The wider concern is that it lulls our system into an ongoing fossil fuel dependency that does not serve us in any way.
The security issue is more complex and technical. We do have a real risk should someone succeed in taking out the two gas pipelines coming from Scotland, which deliver some 75 per cent of the gas we use. It is a very unlikely event but one we have to protect against, especially because it would put at risk the electricity supply that currently comes from the burning of that gas.
In government, I delivered an energy security strategy which committed to protecting us from this risk. However, the further analysis we commissioned – asking how a floating LNG storage facility would work, how long it would take to deliver and how much it would cost – led me to the conclusion that there was a better way of meeting our security needs. I am convinced that, rather than relying on gas storage, three alternative investments would be better value for money, more effective and cleaner to boot.
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The first would be to build two new electricity interconnectors to Britain, which were sanctioned by the UK regulator only last autumn. Consultants are advising our department to “de-rate” such a solution because they believe it still leaves Ireland reliant on other countries. However, increased interconnection is vital if we are to have a low-carbon and lower-cost electricity system. We are going to have to trust our neighbours in any case. Investing in our grid in this way gives a payback every day of the year, not just in an emergency. It would benefit our country for decades to come.
y using flexible pricing and our nationwide network of smart meters, new battery storage systems can be ramped up and down. This will reduce the curtailment of wind and solar power and we can get into a virtuous circle, where power becomes cheaper, cleaner and more secure
The second solution would be to rely on the likes of Moneypoint and Tarbert power stations and on the secondary distillate fuel stores which gas-fired generators are required to hold as a substitute fuel in the event of any gas disruption. The ESB is already planning to convert Moneypoint to an oil-fired reserve power station, and Tarbert could quickly be restored. Maintaining assets that have already long been paid for so that they can be deployed in an emergency makes better economic sense.
The third and complementary solution would be to build more backup battery storage, which is becoming cheaper and expanding at an exponential pace. In 2022, the same consultants estimated that by 2025 we would have 335MW of such power supplies. Only three years later, we now have three times that amount. The long-duration energy storage system planned for Donegal, outlined in this newspaper last week, shows what is possible and where the better energy future lies.
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Under the third trilemma constraint – which is to make energy affordable – the LNG option again falls far short. The Government recently stated it would cost €300 million, but the bill would likely be a multiple of this. That cost is going to go on our electricity bills and in all likelihood will lead to a continued dependence on gas, which is the main reason why our electricity prices are so high.
We need to get prices down, not just to protect our consumer and industries, but also to accelerate the clean energy transition. Cheaper electricity means lower running costs for electric vehicles and heat pumps, the workhorses of our clean energy future. By using flexible pricing and our nationwide network of smart meters, new battery storage systems can be ramped up and down. This will reduce the curtailment of wind and solar power and we can get into a virtuous circle, where power becomes cheaper, cleaner and more secure.
It will not be easy for the Government to change course, but that is what it must do. And it can do so, because no locations have been chosen, no planning application has been made, no contracts signed. The Government should engage with the environmental movement and ask the Just Transition Commission and the Climate Change Advisory Council to carry out a detailed public consultation which considers all our options and associated costs and reports by the end of the year.
The clean energy revolution is evolving so quickly that even recent energy modelling and assumptions need to be reviewed. Rather than paying for outdated and polluting gas infrastructure, we should invest in cleaner, more affordable and more secure alternatives instead.
