Farm Ireland

Friday 23 March 2018

Grab yourself a jumper because ongoing high price of electricity is enough to chill your bones

John Shirley

Energy is a small word but it has a big impact. Depending on the context, energy has multiple roles around the farm and home. A neighbour had an energy-less home-helper that would "lift everything around the house except her feet".

When feeding livestock, energy is the food fraction that puts oomph into the animal to deliver weight gain and milk.

Energy propels our cars, heats our homes, cooks our food, lights up the night darkness. It drives our farms and our factories. It's everywhere. Availability and affordability of energy is vital to our wellbeing as individuals and as a nation.

The cost of energy is crucial to economic survival and prosperity. And now, because some energy sources, such as oil, are being exhausted, the issue of energy is becoming highly political as well.

Eleven years ago in 1999, the then Government set up the Commission for Energy Regulation (CER) to oversee and deliver the optimum electrical and gas energy package for Ireland.

Accepting that energy is so crucial to our economy, how are we faring pricewise?

Not so well when you look at the price we are paying for electricity. Eurostat figures for a range of EU countries for 1999 and 2009 are shown in the table (pictured). These show that Ireland has slipped from having the third cheapest in 1999, to having the most expensive electricity in 2009.

Over the decade our electricity price jumped by 125pc whereas average price across the EU increased by less than 20pc. In our nearest neighbour, the UK, prices went up 45pc.

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The upshot of this is that we have gone from 76pc to 146pc of the EU average electricity price in a relatively short period.

This is another sign of where our economy has gone askew since the turn of the decade. Maybe, with all of the other vicissitudes, such as bank collapses on our doorstep, the cost of energy has slipped under the radar. No wonder the IMF pinpointed our energy costs as a priority that must be addressed.

Allied to this, from the viewpoint of farming and industry, our supply network is woefully inadequate. Three-phase supply, which is standard across mainland Europe, is prohibitively dear in Ireland. Then, when it is installed at the customer's expense, the ESB assumes ownership and control of any equipment, including the substation. Wind farms, trying to get access to the national grid, are forced to wait from five to six years.

And in the middle of all this we have the ESB, the main provider of electricity in Ireland, operating on huge margins and paying the fattest salaries in the land, including the €720,000 2009 package to CEO Padraig McManus.

From the time that Bertie Ahern caved in and stopped the deregulation of Irish electricity, which would have allowed in foreign competition, the ESB has exerted monstrous influence.

The System Marginal Price policy adopted by the Commission for Energy Regulation, ostensibly to bring competition into the market, has actually pushed up the cost of electricity and swelled the ESB balance sheet.

Green Party Energy and Communications Minister Eamonn Ryan, probably a decent man, has added to our energy cost with his carbon taxes and his weak management of the ESB. On top of these problems came the delays in the REFIT package for biofuels.

The problem now is that a change of Government will likely bring in another greenhorn minister and the power of the ESB and permanent services will live on for another spell. Maybe the IMF can do something, but don't hold your breath.

When it comes to national policies all we can do is complain and try to keep the pressure on our Government and energy providers. But we can all take steps to reduce costs and save energy in our day-to-day personal activities.

We can now get grants for upgrading the insulation of our homes but I feel that the cost benefit of insulation is often overrated in that it assumes that you are already spending a fortune on your energy source. Also, houses can get very stuffy and if you open the window for fresh air, much of your insulating is undone.

My friends and relations that have installed stoves instead of open fires speak of major fuel saving and enhanced room heat. This seems to be a win/win move.

During the whack of cold of the past couple of weeks the cheapest and healthiest response was to don an extra layer of clothes.

People are getting reacquainted with the special qualities of wool and its wonderful insulation ability. Wool can absorb up to 30pc of its weight in moisture without feeling wet.

Be it domestic or global, the energy issue will not go away. Of late, we are seeing jumps of €50 to €100 a tonne in fertiliser quotes, oil is predicted to head above €100 a barrel in the coming year. Hold on to the woolly socks and jumper.

Irish Independent