Roughly a quarter of Ireland’s energy-related emissions are due directly to the combustion of fossil fuels in electricity generation.

With the steady expansion of renewable power in recent decades, and improved efficiency of appliances, the sector has done its bit in emissions containment, but the electricity share is set to rise in the years ahead.

The road transport fleet is to be transitioned to electric traction and home heating is to be moved away from gas and solid fuels.

De-carbonising power generation is central to this strategy: if the carbon-intensity of power generation does not decline, a greater burden of adjustment will be shifted onto other sectors, including agriculture, since the country is committed to an overall national target for emissions.

The task of climate policy is twofold

Every sector has an interest in what happens with electricity.

The task of climate policy is twofold: to reduce emissions and to do so at the lowest economic cost. The second task, keeping down the cost of adjustment, attracts too little attention in Ireland and the country is not starting from a good place when it comes to electricity costs.

Data from Eurostat shows that electricity in Ireland is among the most expensive in Europe, whether measured pre- or post-tax. It is important not to worsen the emissions profile of the power sector but also to address the sources of extra cost.

Emissions in Europe fell sharply in 2020, including a decline of almost 4% in Ireland. It is likely that the official figures will show a 2021 reversal as economies recovered.

Output from renewables is rising almost everywhere but wind is replacing low-emissions nuclear rather than high-emissions coal

In the electricity sector, poor wind output and the closure of some nuclear units saw an increase in the utilisation of coal-fired generation plants, notably in Germany and Poland.

Output from renewables is rising almost everywhere but wind is replacing low-emissions nuclear rather than high-emissions coal.

According to Gas Networks Ireland, wind’s share in Irish power generation fell from 35% to just 29% in 2021, while coal more than doubled from 5% to 11%.

The system remains heavily reliant on gas, delivering 46% last year, only a small decline despite the temporary non-availability of several large stations.

The Government announced last week that it had finalised another round of capacity auctions with generators

The shortfall in wind, a weather-related feature and bound to happen from time to time, had to be made up through intensive use of Moneypoint, the large coal station in Co Clare.

The Government announced last week that it had finalised another round of capacity auctions with generators.

These offer payments, over and above the wholesale price in the market, to those willing to commit capacity for occasional use in future years when renewables output falters.

Without capacity payments, nobody would build new generating stations knowing that they would be used very rarely. New stations are needed to back up intermittent renewables, to cater for expanding demand (all those electric cars) and to replace capacity which must be retired.

Moneypoint should close in the next few years and two of the three peat stations rashly constructed just 20 years ago have already closed.

The third, at Edenderry, will also go at some stage along with the oil station at Tarbert. Some of the older gas units are becoming less efficient as they age.

Intermittent usage of combustion plant, used only when renewables output is inadequate, reduces conversion efficiency, increases maintenance costs and shortens their useful lives.

By 2030, one-third of Ireland’s combined-cycle gas stations, the baseload plants, will reach 30 years from the date of commissioning, around the age when retirement needs to be contemplated.

They will not be directly replaced by the type of plant envisaged by those successful in the capacity auction. These will be mainly open cycle gas turbines, cheaper (and quicker) to build but with reduced efficiency and, hence, higher emissions per unit of electricity produced.

Emissions

The emissions are less of a concern provided the plants are used only rarely. Should they be required regularly the market price could be affected by the marginal cost at these plants, another unwelcome propellant for electricity prices.

The payments to the auction winners, about €1.5m per MW of capacity over 10 years, will also be recovered from customers.

There is also the simple issue of gas supplies

Resort to rapid building of open cycle gas units is evidence of a failure of foresight somewhere along the way. It might have helped contain costs if more efficient gas technology had been incentivised.

There is also the simple issue of gas supplies. Ireland’s domestic output from the Corrib field is dwindling and the operators have been discouraged from exploring for any nearby gas-fields that could use the Corrib infrastructure when the main field is exhausted, as was possible when the Kinsale Head field off Cork became depleted.

The Government is also set against the development of a liquefied natural gas terminal in Co Kerry. Where is all the extra gas supposed to come from?