The recent turbulence in global energy markets has had one distinct upside – it has sharply focused minds in relation to energy independence and the march towards renewables. As geopolitical instability becomes the unfortunate norm, experts say Europe can escape future fossil fuel shocks by accelerating wind, solar and electrification investment but also point out that Europe’s strategic autonomy is reliant on its energy resilience.
Europe’s future prosperity is inextricably linked to the strength and resilience of its energy system and the recent turbulence in global energy markets has once again underscored the danger of the status quo. That’s according to Barry O’Regan, chief financial officer at SSE.
“As a country, and as a continent, we are simply too reliant on imported fossil fuels, and we have to change that urgently,” he says. “The strongest and most affordable energy system is one based on clean, home-grown electricity, and that’s where our focus has to be.”
O’Regan points out that we have seen the benefits of increased renewables capacity play out in real time in recent months; Spain, for instance, has maintained far lower prices than Ireland throughout the latest volatility.
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The European Union, he says, has already set out a positive direction of travel through its AccelerateEU plan, designed to scale up renewable energy deployment and strengthen energy infrastructure across member states.
“However, while the policy frameworks become increasingly well defined, the real challenge lies in delivery,” O’Regan notes. “From an industry perspective, the emphasis must be on tangible outcomes. Having taken on the EU council presidency, Ireland is uniquely placed to drive that agenda and it’s positive to see the Government making the energy transition central to its policy priorities.”
Europe is facing its second energy crisis in the space of five years, revealing our over-reliance on imported fossil fuels and exposure to volatile oil and gas markets, agrees Conor Minogue, Ibec’s energy and climate policy lead.
“Europe’s future resilience and competitiveness is fundamentally tied to a successful energy transition,” he says.
The European Union has several major funding instruments in play for energy and environmental projects – most notably the Connecting Europe energy facility for funding cross-border energy links (€5.8 billion), the EU Innovation Fund (€40 billion), the EU Modernisation Fund (€57 billion) and the EU Life Programme (€5.45 billion). Minogue says Ireland has excelled in accessing funding from the EU Life Programme, which supports environmental protection, biodiversity and community-level climate transitions.
“However, for most businesses, accessing European funding has proved to be incredibly frustrating,” he admits. “Irish projects are competing on a European stage and because these competitive funds are usually awarded on a ‘cost-efficiency’ basis, great innovative Irish projects are frequently boxed out simply because it costs more to build here than in other member states.”
For example, Ireland has a zero-success rate in accessing the EU Innovation Fund.
Minogue says Ireland’s presidency is thus an opportunity to progress policies and funding critical to accelerating energy infrastructure delivery, renewable adoption and electrification. Ireland will play a leading role in finding political agreement on the multiannual financial framework (MFF) and the proposed European competitiveness fund, which aims to allocate 35 per cent of the total budget for climate action. Ireland will also preside over critical files like the review of the European emissions trading system (ETS) for 2030-2040, the Industrial Accelerator Act and the electrification action plan.
“An immediate priority for us is the European grids package, which is needed to speed up grid investment and modernisation and remove physical bottlenecks and costly inefficiencies in the network,” he says.
“Without this, the pace of renewable delivery and electrification will be hindered – putting our emission reduction targets at risk.”
Ireland will also be tasked with securing political consensus ahead of COP31 in Antalya in November. This, he adds, is an opportunity for the EU to show real global leadership on climate action.
The energy efficiency obligation scheme is a great example of a policy that works. Irish energy suppliers are mandated to fund efficiency upgrades, and the last cycle of this scheme delivered more than 5,000 gigawatt-hours in real savings. And while we are making progress decoupling energy and economic growth, absolute energy demand continues to grow. What is needed now is a strong focus on scaling up renewables and fuel switching – especially in our heating and transport sectors.
According to Minogue, the EU must back up its climate ambition with serious financial muscle and policy support though the new MFF and clean industrial deal. “The ETS review is an opportunity to drive emissions reduction in European industry while also protecting the competitiveness of the economy – especially sectors at risk of carbon leakage.”
EU-supported grants for home energy upgrades in Ireland – including insulation, heat pumps, and solar PV – are managed nationally by the Sustainable Energy Authority of Ireland and thousands of Irish homeowners have availed of these, as is evidenced by the proliferation of solar PV panels across the country’s rooftops. These grants for individual upgrades can significantly offset costs, such as up to €12,500 for a heat pump system, up to €8,000 for wall insulation and up to €1,800 for solar PV.
The scale of the renewables opportunity across the continent is obvious, O’Regan says, and Ireland’s untapped offshore wind resource is a prime example.
“Crucially though, that shift to clean electricity can only happen by delivering major grid transformation, accelerating planning and regulatory processes, and fostering cross-border collaboration, both within the EU and with its neighbours,” he says.
“By focusing on those priorities, Ireland can support Europe’s drive for energy independence and economic growth, while ultimately improving affordability and security at home.”
