LAST UPDATE | 19 Sep 2022
A “FLOATING” LIQUEFIED natural gas (LNG) terminal that would serve as a back-up facility is among the options listed to secure Ireland’s energy supply into the future.
A report compiled by consultancy firm CEPA and published today has advised against a fixed or commercial LNG terminal.
The technical report looks at ways to secure Ireland’s energy supply between now and 2030.
It looks at the possible risks to Ireland’s energy supply, lists the policy mitigation options and analyses the merits of those options.
The report, which will be published later today, will go out public consultation. The closing date for stakeholders to provide feedback on the options in 28 October.
Feedback will be analysed in November with a view to having recommendations go to the minister before the end of the year. Implementation will not be carried out until next year, it is believed.
The report comes amid soaring energy prices and an energy crisis that has been caused by Russia’s invasion of Ukraine.
Minister for the Environment Eamon Ryan said he was open to either having an onshore gas storage facility, or a “floating” LNG terminal as a back-up facility, which were among the options long-listed in the report.
“I believe particularly the onshore facility has a number of key advantages,” the Green Party leader said on RTÉ Radio.
“Firstly, we could draw down the gas from the existing network and it would give us a real strategic flexibility and capability,” Ryan said.
“Secondly, it will be possible for it to be future-proofed, so that we do know we’re going to need these sort of investment facilities, these sort of storage facilities into the future, when we will be developing our own hydrogen gas,” he said.
“And so we can design it and develop it in a way that that is a strategic safety reserve which gives us flexibility into the future.”
Although the report recommends an LNG terminal as a floating, back-up facility, it recommends against three other LNG terminal possibilities.
Of a commercial, fixed LNG terminal – such as the Shannon LNG project that has been proposed – it said that “commercial operation is likely to result in the importation of fracked gas to Ireland”.
It also notes that this option would not necessarily ensure security of supply for Ireland: “As storage stocks would be driven by market fundamentals, there would be no guarantee that stored gas volumes would be sufficient to cover a security-of-supply shock.”
The report longlists several other policy options, including a 450MW biomass plant; an additional electricity interconnector with France; and a 360MW pumped hydro storage capacity, which could “alleviate relatively small but sustained electricity supply shocks”.
The Government has already aimed to develop 5GW of offshore wind by 2030, while further electricity interconnectors with Great Britain and France are expected to come on stream in the coming years.
An analysis of the shocks that could pose a threat to security of supply included weather conditions, technical failures, and geopolitical disruptions such as Russia cutting off gas supplies to Europe.
It also said that electricity demand in Ireland is expected to increase “substantially” over the next decade, particularly due to the expansion of data centres.
The report says: “This will mainly be driven by the expansion of large energy users, particularly data centres, in addition to demand growth resulting from the electrification of heat and transport.”
Shocks modelled
In one of the five shock scenarios modelled as part of the report, in the event of gas imports from Britain being unavailable for seven days, gas prices would increase “significantly” and electricity prices would increase “materially”.
But if gas imports from Britain were to be interrupted for 30 days, the report said Ireland would see “significant wholesale electricity and gas price rises in the presence of unserved demand”.
Ireland is increasingly reliant on importing natural gas from the UK to boost its supplies.
In 2019, 53% of Ireland’s natural gas use was imported from the UK, but it currently relies on Britain for 70% of its gas supplies, with the remaining 30% coming from the Corrib gas field.
By the mid-2020s, Ireland is expected to import more than 80% of its gas from Britain and more than 90% by 2030.
However, it is understood that the relationship between the UK and Ireland in terms of energy supply remains good, with meetings taking place twice yearly to renew the “strong arrangement” between the two countries. The next meeting takes place in October.
The report did not review expected tight margins in electricity supply in the short-term.
These are being addressed by the Commission for Regulation of Utilities, with the support of Eirgrid; the Department of the Environment, Climate and Communications; and industry.
The review also recommends that regular reviews be carried out by the department in term of energy security, with a technical analysis taking place every two years and a full department review every four years.
Currently the Commission for Regulation of Utilities (CRU) and grid operators such as Eirgrid, are responsible for carrying out analysis as part of their regulatory framework, into energy capacity and generation that is required into the future
There have been a number of criticisms levelled at the regulators and operators over the current handling of the energy crisis.
The review now recommends that the department take more of a hands on approach when it comes to longer term energy predictions.
As renewables ramp up in the coming years, the expectation is that Ireland’s electricity system will include a lot more solar and wind energy, with gas storage as a backup.
Fossil fuels such as coal and oil will gradually be removed, with the review finding that a more consolidated approach to energy planning that doesn’t just look at energy electricity on the one side and gas on the other side, is needed.
With reporting by Diarmuid Pepper and Christina Finn
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