Mr. Peter O'Shea:

I thank the committee for affording us an opportunity to brief members on our views on these matters.

Climate change is one of the biggest challenges that face humanity and globally there is a critical need to reduce greenhouse gas emissions to protect future generations. This need is acknowledged in a range of international agreements and national policy documents that set out ambitious targets to restrict global warming and eliminate greenhouse gases.

The ESB welcomes the work done by the Citizens' Assembly in terms of its consideration of climate change. We greatly welcome the establishment of a dedicated committee to consider climate action. We are particularly encouraged by the fact that the Citizens' Assembly fully accepts that climate change is real and has sought for it to be at the centre of policy-making in Ireland. For this, the organisers of the Citizens' Assembly should be highly commended. The challenge for us in the ESB is to lead that transition where we can but in the most cost-effective manner for the customer and we stand ready to do so.

When considering climate change and how Ireland can adapt and mitigate its impacts, it is very important that we consider actions in terms of greenhouse gas emission reductions. While there is significant discussion of renewables targets, renewables are but one means to decarbonise. To this end, focus must be first and foremost on greenhouse gas emission reductions to ensure a policy focus that delivers the most cost effective solution.

It is instructive to consider the make up of Ireland's greenhouse gas emissions by reference to a CO2 equivalence. In the most recent data for 2016 produced by the Environmental Protection Agency, EPA, it has shown that total greenhouse gas emissions were just over 61.5 million tonnes of CO2 equivalence, that agriculture is responsible for close to a third of those emissions and that electricity generation, transport and heat are responsible for around a fifth each. By 2050, Ireland will need to reduce its greenhouse gas emissions from the energy sectors, which is heat, transport and power generation, by up to 95% to play its part in the global action against climate change.

The key narrative of the decarbonisation journey in Ireland to date has been the increase in renewable electricity. In 2016, renewable electricity accounted for over 27% of electricity demand in Ireland. In our view this number is on a trajectory to hit 40% by 2020, driven primarily by wind generation. Ireland is recognised as being at the cutting edge of integrating intermittent renewables on to a small island system. We should be very proud of that achievement.

More renewable electricity will be required but ESB believes that action is required in other areas. We have given significant consideration to how Ireland might decarbonise. In late 2017, we published a report in conjunction with international consultants, Poyry, entitled Ireland's Low Carbon Future - Dimensions of a Solution. I have a copy of the report if members wish to read it. The report considered broader energy emissions in an holistic manner, namely all of the emissions generated by heat, transport and electricity. The report set out a series of low regret recommendations that were informed by international precedent across the various energy sectors. These recommendations form a key part of ESB's own Brighter Future strategy.

The key tenet of the joint report is the increased electrification of heat and transport that must be underpinned by the decarbonisation of electricity through zero or close to zero carbon technologies. To achieve this we must consider the following three dimensions.

First, we need to get ready now for a transport modal evolution where a significant portion of the vehicle fleet transitions from internal combustion engines, ICE, to electric motor propelled vehicles. To achieve this we need to put in place a comprehensive network of public charging infrastructure. We also need to prioritise the electrification of public transport and increase the use of electrified rail freight. Since the charging infrastructure must be in place to provide public confidence in purchasing an electric vehicle, we believe that State support is required for this infrastructure as has been the case in many other jurisdictions. We will be putting forward our case for support in due course through initiatives like the climate action fund.

Second, we need to decarbonise Ireland's heating requirements through a variety of measures. Existing housing and commercial stock should have an energy efficiency retrofit to significantly reduce energy consumption on the basis that using less energy in the first place reduces the decarbonisation problem. Retrofit programmes represent huge opportunities for new employment right across Ireland and have enormous benefits in terms of Ireland's balance of payments. All of the 500,000 expected new houses in the coming decades should have a heat pump installed rather than a fossil fuel burner, especially as the cost implications for new homes are negligible. The same applies to new commercial buildings. Existing fossil fuel heat sources should be replaced by electric heat pumps where possible. Otherwise, biomass or biogas should be considered. However, we need to note that both fuel source quantities are constrained by the availability of raw material.

Third, in order to underpin the scale of electrification required we need to decarbonise the electricity system. Undoubtedly, renewable technologies like onshore and offshore wind and solar photovoltaic, PV, will play a massive role as will storage and interconnection with other markets. However, even with significant renewables, Ireland will still need a backbone of dispatchable generation to meet the demands of society when its neither windy nor sunny. Unlike many other electricity systems around the world, Ireland does not have significant hydro power potential, biomass is a limited resource for many reasons and we have an outright ban on nuclear generation. ESB is of the view that carbon capture and storage, CCS, technology will be required in Ireland given the lack of alternatives to complement renewables. We believe Ireland needs to act now to consider CCS in a specific Irish context. We would greatly welcome the establishment of a dedicated Government-led working group to fully explore this option.