Utility Week

Policy & Regulation UTILITY WEEK | 16TH - 22ND MARCH 2018 | 7 Ireland is facing unique challenges A mix of renewable technologies will probably be necessary to achieve a mix of policy objectives. Chief executive's view Dara Lynott, Electricity Association of Ireland T he electricity industry glob- ally, but most particularly in Europe, is undergoing fundamental transformation in terms of new generation technol- ogies, the reshaping of customer interactions through the appli- cation of information and com- munication technologies (ICT) and the continued re-consider- ation and refinement of market regulation. However, the dominant con- sideration shaping the current and future energy system is the need to progressively elimi- nate greenhouse gas emissions. This consideration is shaping a future electricity industry that will be: l Decarbonised, reducing its own emissions to net zero; l Decentralised, with local- ised generation making an increasing contribution to electricity production as technology costs continue to fall; l Digitalised, taking full advantage of ICT to manage a highly complex system and at the same time delivering value and cost savings for customers; and l Democratised, leveraging the application of ICT and low-cost, small-scale gen- eration and energy storage solutions to maximise the participation of customers in the overall energy system. A decarbonised electricity system will play a crucial role in decarbonising all energy use because it assists other energy end-users to do likewise through the progressive electrification of heating and transport. To deliver the reductions in greenhouse gas (GHG) emissions necessary will require changes in the patterns of energy use and consumption, some easy and some more difficult. As a community we are well aware of the resistance to any form of change inherent in society. Consequently, the way in which future change is pre- sented and supported – and the fairness with which associated benefits are allocated – will ulti- mately determine the extent of Ireland's leadership. Pace I am concerned that there is not sufficient urgency in the con- sideration of future actions to ensure delivery of Ireland's 2020 and 2030 commitments. Deferral will result in the need to adopt more robust, costly and higher- risk measures in the future. The investment climate and availability of customer funds remains limited, so early clari- fication of the approach to be adopted to electricity from renewable energy sources sup- ports to 2020 and beyond is required to support investment decisions. A clear picture of overall revenue and breakdown per each auction over the time period of the support (assumed to be 15 years) must be given by government in order to give investors the certainty they require to raise finance for pro- jects. Given the experience in other member states, ex-post financial or budgetary adjust- ments affecting projects that have cleared in relevant auctions must be avoided. Diversity Ireland is facing a uniquely chal- lenging set of objectives in the energy sector. There is no prec- edent to follow and no other country is experiencing simi- lar issues as acutely. I believe that it is probable that a mix of renewable technologies will be necessary to achieve the mix of policy objectives in the medium to long term. The Irish Government pro- posal for a technology-neutral, coupled with a "wait and see" approach risks delivering a sin- gle technology initially that may or may not result in the best long-term solution for the Irish system and customers. It may be necessary to exclude certain technologies in later auctions for system stabil- ity or security of supply reasons, and early sight of such decisions would be beneficial as other- wise developers are unlikely to have sufficiently developed pro- jects for these complementary technologies. At the very least, a route to market needs to be considered for projects that are likely to form part of the transition of the electricity sector. Low-cost, large-scale storage technologies represent a key future develop- ment given the unpredictability of wind relative to other variable renewable resources. Dara Lynott will speak at the Ireland Power conference on 24 April in Dublin. For more information: event.utilityweek.co.uk/ireland/

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