€30bn plan for energy dismissed as outdated
Report casts doubts on wind power and urges consideration of nuclear options
The review says wind power targets set by the Government have not been costed properly. Photo: Getty Images
THE Government needs to freeze a proposed €30bn investment in the Irish energy sector in light of the collapse in demand or the costs will fall on the consumer, a report from the Academy of Engineers concludes.
The Academy's 'Review of Ireland's Energy Policy' also states that we need to closely study the nuclear power option and says wind power targets set by the Government have not been costed properly.
The Irish energy industry is making investments to meet demand that is no longer there and spending on new investments such as wind power and smart metering needs to be frozen to prevent a further escalation in electricity costs, the authors of the report stated yesterday.
Launching the report, Irish Academy of Engineers president Michael Hayden warned that energy prices here are among the highest in the world and impose a heavy cost on industry, contributing significantly to a general lack of competitiveness.
Policies adopted to meet our commitments on carbon emissions, prices and energy security were developed at a time of high growth and must now be changed radically to meet the new economic reality.
Needless
If we continue to spend on needless increases in capacity, the result will be higher electricity prices, he said.
The authors point out that most major energy projects have been undertaken with no proper techno-economic study and called for an introduction of the US system where every new project is subjected to rigorous assessment to judge its impact on the price of electricity to the end user.
And they question the rationale behind the proposed east-west interconnector running between Ireland and Wales.
This €500m project was given the green light in 2006 with no visible cost analysis being performed and is based on an electricity market which has shrunk by 30pc in the past year, meaning the demand assumptions used to justify its construction are no longer valid.
If the project proceeds and remains underutilised, then the cost will inevitably fall back on the consumer, the authors warn.
Mr Hayden also pointed out that the British energy regulator is making no financial contribution to the east-west link, indicating that they see no benefit flowing from the project.
The report states it is unlikely we will get back to the level of demand seen in 2007 by either 2013 or 2014. This decline in demand for power is reflected in the usage of the existing cross-border Moyle interconnector, where capacity usage last year was just 14pc, leaving it idle 86pc of the time.
The cost of investing in wind power also needs to be examined more closely, the authors stated. But even if this happens, the plans may be unworkable, as no other country has adopted a target involving almost 40pc of power coming from wind. The International Energy Agency (IEA) says no more than 25pc of the electricity on any network should come from wind generation.
Instead we need to focus on reducing carbon output through energy efficiency -- IEA data suggests this can deliver 54pc of the required reduction.
Capital should be diverted from energy projects to conservation programmes as part of a major new energy efficiency programme. This would also produce a significant jobs stimulus to the economy, the report advises.
The report says we need to re-open the debate on nuclear power, the most effective carbon free power source, and this requires the removal of a legislative ban on nuclear energy dating from 1999.
- Pat Boyle
