Oireachtas Joint and Select Committees

Tuesday, 14 February 2017

Committee on Budgetary Oversight

Competitiveness and Economic Growth: National Competitiveness Council

4:00 pm

Professor Peter Clinch:

Our principal starting point would be that we have to acknowledge our extraordinary dependence on imported fuels. We also have to note how heavily we rely upon oil and that 76% of those oil imports come from the UK. That shows one possible implication of Brexit. In electricity generation, 46% comes from gas and 96% of our gas is imported from the UK. These are rather dramatic figures when we think what implications Brexit might have for the single energy market. Fortunately, it appears that energy generally has been exempt from border taxes and tariffs in terms of trading, but it would be important that the Government has that close to the top of its list in terms of its advocacy around Brexit negotiations. It is important to ensure the UK and the European Commission also have it close to the top of their lists to ensure we retain the Single Market and it does not somehow get caught up in heated negotiations as something that is worthy of negotiation. The optimal functioning of the integrated all-island energy market is crucial, but if there were to be a threat to that, we would have to examine interconnectors into continental Europe, which is a very expensive challenge but is something that is an obvious implication if there were to be a problem.

In terms of matching the electricity supply and demand by locations, there is a link to infrastructure which is ensuring that, in our National Planning Framework, for example, we take advantage of where there are areas with an excess supply of electricity compared with other areas. In terms of improving supports for electricity generation, the potential for generating electricity at a micro level or in a person's own home, feeding that back into the grid and the relationship with electric cars, there is a challenge there in that we have not been meeting our targets for electric cars.

What is important from a competitiveness point of view is that we deliver that infrastructure at the least cost. The council is very pleased to see that competitiveness is highlighted alongside security of supply and other issues in the energy White Paper. A big job of the council is to make sure competitiveness gets considered in all these policy areas. A big challenge is how to deliver infrastructure at least cost and how to trade off any extra costs that might be put into the system in terms of energy prices and that are required to have the type of infrastructure that would ensure we have a sustainable and well-priced infrastructure thereafter. The energy White Paper sets out better than we can what those challenges are and what needs to be done. We will be looking for a timely implementation plan for that.