Irish households are in for “two tough winters” as a result of the energy crisis the Oireachtas committee on European Union Affairs has heard.
Cillian O’Donoghue, director of policy at Eurelectric which is the European electricity association and Paul Deane, SFI Research Centre for Energy, addressed TDs and senators today.
Mr O’Donoghue said the “root cause” of the energy crisis is “a shortage of gas in the system” which has seen prices ‘explode’ because of market manipulation and geopolitics.
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As a result, wholesale energy prices are up 532% at EU level with retail prices rising 84%.
To address the situation, Mr O’Donoghue says we need to reduce gas demand by 15% and electricity demand by 10% through educating consumers and incentivising businesses, while “we need a big increase in renewables”.
“The Commission has said this is the smart way to go,” he added.
He said LNG from the USA will not make any real difference in the next two years.
Politicians were told how Europe has agreed on a solidarity tax from the oil and gas sector where 33% of their profits should be taxed and redistributed, prices caps and transferring money from companies to the most vulnerable consumers.
While the EU’s reserves are full of Russian gas, he said that will not be an option next year.
“This is a big crisis and this is a crisis which we expect to last, not just this winter but next winter,” he added.
“We have our gas reserves full at 91% at European level but these reserves were filled with Russian gas.
“Next winter we will not have this option so we do expect two tough winters with high prices.
“In the medium term the outlook is much better... if we can have a big build up of renewables that the Commission is pushing for that will make a massive difference.”
Dr Paul Deane from the Environmental Research Institute at University College Cork says the country ‘can’t continue its reliance on fossil fuels’.
He added: “Ireland is one of the most fossil fuel reliant countries in Europe - meeting just over 86% of our energy supply while in 2021 77% of all this was imported.
“We are currently spending over €1 million every hour importing fossil fuels like oil and gas.”
Dr Deane said the cost of this reliance is now reflected in the prices we are paying “to heat our homes, fuel our cars and power our appliances”.
He described the fact we still need gas while trying to phase it out for climate reasons as “a new paradigm for policy makers”, adding: “Renewables from wind and solar are by far the best way for Ireland to reduce our emissions and our reliance on fossil fuels.”
But he also raised concerns about how the “pace of energy infrastructure delivery” and planning delays in Ireland is at odds with the climate emergency, war in Ukraine and its associated energy crisis.
“We must take ownership and responsibility for our energy in Ireland while being mindful of our European obligations.”
To do that, he suggested Ireland play to its strengths on our “large renewable potential” while ensuring present security through gas storage and demand conservation.
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