Meeting our climate targets requires us to transform how we generate and use energy. The scale of the job ahead, and the partnering required, can’t be overstated.
“A successful energy transition in Ireland necessitates collaboration across a broad spectrum of stakeholders. Key players include government bodies, regulators, system operators, renewable energy and storage developers, large energy users, financial institutions and local communities,” explains James Delahunt, corporate finance partner and head of energy and natural resources at KPMG.
KPMG’s recently published Dublin 2040 report gives some indication of the road ahead for the State as a whole.
According to the report, the capital’s electricity grid is outdated and under capacity, and the extent of the remedial action required still isn’t widely understood, with both Government and business leaders needing to better communicate the scale of investment and likely disruption ahead. Given what it calls the “big dig” type of inconvenience coming our way, “the benefits are not being sufficiently sold to the population”, it warns.
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“To secure Dublin’s energy future, we need a compelling vision of what it will mean to people, their communities, and for jobs,” says Delahunt.
“Many of the themes apply nationally, and so the approach can be adopted across Ireland and tailored for the unique circumstances of each local community. It’s important to persuade residents that the right infrastructure will guarantee our future.”
The upsides of collaboration in making the transition are manifold: “It allows for the sharing of risks and benefits, pooling resources, diversifying expertise and a more cohesive policy framework.”
Public-private partnerships can unlock significant capital for critical infrastructure. “Moreover, engaging with local communities effectively is essential to securing the social license for projects, addressing concerns related to grid infrastructure, and mitigating local impacts,” says Delahunt.
To ensure a smooth energy transition, Ireland can deploy several other risk mitigation measures. For a start, these include developing comprehensive regulatory frameworks and streamlined approval processes to help reduce project delays.
Investing in grid infrastructure upgrades and expansion will help ensure reliable integration of renewable generation and storage, while diversification of energy sources by exploiting our wind, solar and bioenergy natural resources will minimise dependency risks.
“Developing Ireland’s significant offshore resource is key to delivering a successful transition. While the electrification of heat, transport and industry is considered to be the primary means by which the energy transition will be achieved, a smooth transition also requires recognising the role of renewable fuels and gases for applications where renewable electricity is not the best solution,” says Delahunt.
“Political leadership and public engagement campaigns help manage opposition and boost support for initiatives. Upskilling the workforce addresses talent shortages in the renewable sector, while fostering innovation through research reduces technological uncertainties.”
As the recent outages in Spain and Portugal highlight, the risks of getting this wrong are enormous, but so too are the opportunities of getting it right. This includes the transition to a two-way energy system, where consumers routinely generate and feed energy back into the grid, where cities are increasingly electrified and carbon heavy transport reduced.
Unlocking planning delays is vital too, as, according to KPGM, they are now severely impeding the progress of vital renewable energy initiatives.
According to its report, nearly half (46 per cent) of Irish organisations are investing in energy transition assets for energy security and independence, compared to 37 per cent globally.
And while there are concerns about regulatory risk globally, the findings demonstrate a collective view that investment will grow through increased partnerships. The overwhelming majority of respondents (94 per cent) say they plan to prioritise finding partners and taking collaborative approaches to share risks, resources and expertise.
The transition to electric vehicles (EVs) has a huge role to play in this too. Yet according to the Environmental Protection Agency, the State is likely to fall nearly 40 per cent short of its 2030 target of having one million EVs on the road.
But even if you take the revised figure of 640,000 EVs by 2030, that still leaves an enormous deficit in relation to fast-charging points.
“By 2030 the country will require more than 6,300 fast-charging points, significantly more than the 1,722 currently available,” says Gerry Cash, director of regulatory affairs at EasyGo, the country’s largest EV charging network.
In addition to the estimated 6,300 fast-charging points required nationwide by 2030, he believes that more than 28,000 slow chargers will be required, a more than fivefold increase from the number currently in operation. Doing so will put even more pressure on the national grid.
“To achieve this significant scale-up in infrastructure, it is vital that government agencies work closely with us and other private-sector stakeholders. Greater collaboration will ensure that infrastructure deployment strategies are agile, effective and responsive to the real needs of EV users across Ireland,” says Cash.
The company is currently partnering with the Department of Transport to develop a shared charging initiative in residential areas. Pilots are already being run in communities in Kerry and Dublin but much more needs to be done, and faster.
“For this huge ramp-up in infrastructure to be delivered, government agencies should engage with us and other private-sector operators so that initiatives to support infrastructure deployment can be adapted and changed to be more user friendly and effective,” he says.
