Mr. Peter O'Shea:

Given that greenhouse gases cause climate change, it is important that everyone understands how much greenhouse gases Ireland produces annually. In 2016, we produced 61 million tonnes of greenhouse gases, of which agriculture accounted for one third and electricity, transport and heat each accounting for one fifth. The ESB is working on strategies with a dual purpose. On the one hand, we want to decarbonise the electricity system while, on the other, we want to power the heat and transport systems with electricity. By doing this, we will be able to address 60% of Ireland’s total emissions and up to 80% of its energy emissions. As a result, electricity will move from being 20% of the problem to being 60% of the solution.

We were asked to address the issue of targets. The emissions of European Union member states are categorised in two distinct ways. The first group of emissions relates to individual installations such as power stations and large industrial facilities. This group is accounted for through the EU emissions trading scheme, or ETS. The second group are non-ETS emissions, in other words, all other emissions, typically emissions from agriculture, heating homes and transporting people and goods around the country.

For the ETS group, which includes power generation, Ireland does not have an EU target to meet because responsibility rests with the owners of the relevant installations. These installations will progressively decarbonise as the ETS reduces the amount of emissions allowed year on year. Power generation is part of this group and the scheme will ensure power generation across the European Union decarbonises in the period until 2050 as carbon allowances are ratcheted downwards year after year.

The second group of emissions - non-ETS emissions - is more difficult. Ireland is legally responsible for reducing its non-ETS emissions, primarily composed of emissions from agriculture, heat and transport. Our target for 2020 requires us to reduce these emissions by 20% from 2005 levels. Evidence to date shows there has been a shortcoming in this area. As such, this area requires most attention in the national climate strategy.

Ireland also has renewable energy targets. As Mr. Manley stated, we have a renewable energy sources, RES, target of 16% by 2020. We have chosen to address this target by having a 40% target for RES electricity, a 12% renewable heat target and a 10% renewable transport target. Analysis to date indicates we will not meet the 16% RES target and the most recent reports suggest we may achieve a RES of 13%. However, the ESB's analysis indicates we will meet the 40% target set for electricity. We believe that between 3,800 MW and 4,300 MW of wind generated electricity will be needed to meet the 40% target. We currently have 3,300 MW of wind connected on the system and we are projecting that we will have another 1,000 MW on the system by 2020. As such, we are well on the way to achieving the electricity element of the RES target.

While our shortcomings in respect of emissions and renewable targets related to heat, transport and agriculture rather than electricity, we should not be complacent about electricity decarbonisation. We will achieve the 40% target in or around 2020 but we have to do more to increase this figure as we move to 2020 and 2050. The ESB's view of the future is to decarbonise the electricity system to enable the electrification of the heat and transport sectors. This was the subject of a comprehensive report we published in November 2017 entitled, Ireland’s Low Carbon Future - Dimensions of a Solution.

I will briefly address the solar and offshore wind sectors. By 2020, we will produce 40% of our electricity through renewable energies, largely onshore wind and hydro power. In our view, there is limited scope on the island for further onshore wind. We estimate a further 1,000 MW of onshore wind is possible over and above that which is in the pipeline. We must, therefore, look offshore, which offers great potential for wind generation. Ireland has a small amount of offshore wind but there are many consented projects around the island. It is in this area that we envisage further RES growth under the new renewable electricity support scheme.

Solar energy will also have a significant part to play in the future energy mix and there are a large number of applications for grid connections for solar power. Not all of these are consented projects, however, and some will not proceed unless there are attractive supports in place. Solar costs have reduced by as much as 80% since 2009 and we expect them to decrease further. In this context, we must avoid locking in high prices for customers.

On the retrofit of buildings, we will not meet our climate targets unless we can decarbonise the heat sector. It is estimated that 30% of the houses in which people will live in 2050 have yet to be built. This means between 500,000 and 600,000 new houses will be added to the housing stock by 2050. The first step, therefore, is to ensure these houses are built to a standard that reduces their demand for energy and ensures the energy they use is zero carbon-emitting. All the technologies required to achieve these objectives are available and consideration should be given to altering the building regulations to ensure they are met.

While the existing housing base is more difficult to address, the same two principles should apply, namely, we should reduce their demand for energy and switch to zero carbon energy sources. This will ensure we progressively address the existing inventory of carbon based heating over the coming decades.

In Ireland, oil is the major fuel for domestic heating and has a significant carbon footprint. Heat pumps with insulation and air tightness are the leading candidate to replace oil.

The policy focus will increasingly need to shift towards the 2030 targets as a critical milestone on Ireland's journey to a largely decarbonised energy system by 2050. Decarbonising electricity and powering the heat and transport sectors from this offering gives Ireland the best means of addressing its current and future targets and enabling electricity to move from being 20% of the problem to being 60% of the solution.