Siemens warns growth could fall 7.5pc if energy prices rise
ECONOMIC growth here could fall by as much as 7.5pc if there is a sudden rise in oil and gas prices, according to a report published yesterday.
Ireland -- which imports more fossil fuels than almost anywhere else in Europe and which generates less energy from renewable sources -- would suffer more than neighbouring countries if energy prices were to spike, according to the report by the environmental consultants AP EnvEcon.
It was commissioned by engineering giant Siemens.
Oil prices are likely to rise as supplies dwindle and emerging economies consume more, while prices could spike suddenly following natural disasters, political tension or wars, the report notes.
While accepting that predicting oil prices is almost impossible, the authors of the report examine a variety of scenarios to consider the possible impact on Ireland of hikes in oil prices.
While the poor would be worst affected, many other industries, such as the tourism sector, would also suffer disproportionately as people cancelled leisure trips.
The head of Siemens's Irish operations, Werner Kruckow, said Ireland must begin investing in four areas to mitigate the threat of rising oil prices.
Those areas include energy conservation, which includes making buildings and factories more energy efficient; upgrading the national grid and linking it with the European mainland, allowing Ireland to export energy; investment in renewable resources; and maximising the use of electricity in cars, trains and buses.
"Ireland's 80pc dependency on imported oil and gas puts the economy at considerable risk," Dr Kruckow told a meeting of the Dublin Chamber of Commerce yesterday.
He said Ireland was surrounded by an abundance of water renewable resources that could reduce our risk of exposure, while creating jobs.
Irish waves were the biggest in Europe and our winds were the strongest, he added.