Recalibrating Ireland’s NECP

IIEA2nd July 20194min
On 18 June 2019, the European Commission presented its assessment of all Member States’ draft NECPs collectively, and issued recommendations to each Member State individually.

Author: Luke O Callaghan-White

Introductory Comments

The European Regulation on the Governance of the Energy Union and Climate Action mandates all Member States to produce ten-year National Energy and Climate Plans (NECP). These Plans provide a general overview of the investment and policy measures needed to achieve overarching European Energy and Climate targets. Draft NECPs were submitted by all EU Member States and a final NECP must be submitted by all Member States by the end of December 2019.

On 18 June 2019, the European Commission presented its assessment of all Member States’ draft NECPs collectively, and issued recommendations to each Member State individually. The Commission’s assessment of the Irish draft NECP highlights certain areas in which Ireland has taken a leadership role in energy and climate commitments. It also outlines sectors in which Ireland is falling behind and is set to miss its binding targets. While the Commission has offered a wide range of recommendations on the draft Plan, this blog focuses on its most important aspects.

Renewable Energy

The Irish draft plan is commended by the Commission for providing a comprehensive overview of policies and measures in all renewable energy sectors. Ireland is one of only two Member States to incorporate the renewable energy contributions of particular sectors of the economy in its NECP and to indicate absolute values across these sectors. This methodology helps identify renewable energy potential in the Irish energy mix, in particular with regard to heating and cooling. Considering that heating and cooling account for 50% of the European Union’s annual energy consumption, Ireland’s robust and comprehensive model is an aspect of its NECP which the Commission recommends other Member States should incorporate for their final plan.

Based on its draft NECP, however, Ireland is unlikely to meet its target of 31% share of renewable energy for 2030, and the Commission recommends that action be taken to increase Irish commitments. This transition, to an increased share of renewable energy, should be manageable considering the comprehensive model of potential renewable energy sources outlined in the Irish draft NECP.

Decarbonisation

The Commission’s assessment highlights that Ireland will need to make a greater contribution in Land Use, Land-Use Change, and Forestry (LULUCF), to meet the 2030 Union carbon targets. The production and efficient use of biomass will play a significant role in this regard. The Irish draft NECP stands out as one of the very few to include trajectories for bioengineering demand and biomass supply.

The Irish draft NECP, however, has also been criticised by the Commission for its unambitious decarbonisation targets – shortcomings about which are acknowledged in the draft itself. Ireland is set to miss, by at least 17.5%, its 2030 binding target of a 30% reduction in Greenhouse Gas Emissions from non-Emissions Trading Scheme (ETS) sectors, compared to 2005. To accelerate Ireland’s decarbonisation efforts, the Commission recommends greater investment in retrofitting buildings, the transportation sector, and the establishment of a capital investment plan for the transition to a low-carbon economy.

Energy Efficiency

Ireland’s contribution to the energy efficiency target is characterised by the European Commission as “unambitious”. One of the greatest energy challenges Ireland faces is that energy demand is set to increase by 2030. The Commission highlights that on the basis of further hypothetical scenarios, accounting for international fuel and EU ETS carbon price assumptions, the Irish draft NECP is regressive in its approach to energy efficiency.

Energy Security

The Commission underlines Ireland’s special position regarding energy security challenges stemming from Ireland’s peripheral location, its changing energy mix, and the uncertainty caused by Brexit.  All of Ireland’s gas and electricity interconnections are currently with Great Britain.

Furthermore, Ireland is extremely reliant on natural gas, as 50% of its electricity generation comes from this source. The Commission highlights that, once the Corrib gas field is depleted, Ireland will become nearly 100% reliant on gas imports from the UK to meet the security of supply standard. While the current level of cooperation in the gas market between the UK and Ireland is very good, it is unclear what additional measures may be necessary once the UK leaves the EU, and whether such measures may disrupt the security of the gas supply. While the draft NECP includes the objective of the diversification of Ireland’s gas supply, in its assessment, the Commission expresses concern regarding the cohesion of Irish proposals.

The draft NECP outlines Ireland’s intention to stop using coal for electricity generation by 2025 and to stop harvesting peat by 2030. This will likely lead to an increased reliance placed on energy imports as long as the resulting gap cannot be compensated by renewable energy.

Conclusion

The European Commission has offered a mixed appraisal of Ireland’s draft NECP and made a number of substantial recommendations for the final draft, which must be submitted by Ireland in December 2019. The Commission’s recommendations are important for all Member States, as they are obliged to acknowledge and implement the suggestions in the final NECP or provide a public explanation for choosing to ignore the Commission’s advice. The commitments outlined in the final version of the NECP will demand social and economic change of a transformative nature. The NECP is a legally binding plan for Ireland’s energy and climate obligations and Ireland may be subject to fines if it misses its targets. It is likely to dictate much of Ireland’s climate and energy policy over the next ten years.