Provisional figures for 2002 show the shares of fuel used for electricity generation were as follows: coal, 28%; peat, 14%; oil, 18%; natural gas, 37%; and renewables, 3%. The question of changing the role of coal in our fuel mix for electricity generation stems primarily from concerns about its environmental impact. The national climate change strategy, NCCS, points out that the closure of Moneypoint and its replacement with combined cycle gas-fired power generation would contribute to 60% of the energy sector's indicative reductions total and 37% of the total NCCS target. Moneypoint, therefore, has the potential to make a large contribution to Ireland's Kyoto commitments.
However, the NCCS also recognises that losing coal from our electricity generation fuel mix would have serious implications for fuel diversity. Replacement with gas would see the electricity sector reliant on gas for 80% of its production capacity by 2010. This level of reliance on a single fuel would contrast unfavourably with the rest of Europe, which, on average, would be 30% reliant on gas in the same timeframe.
Taking account of our peripherality to future gas supplies, it will be necessary for the Government to consider carefully whether the move from a reasonably diverse fuel mix for electricity generation to one of such a high dependence on gas would be prudent. If it is decided to retain coal in the energy mix, this will require major investment to upgrade Moneypoint. These important decisions must be taken within the next six to nine months. In so far as Ireland's commitments under the Kyoto Protocol are concerned, the introduction of emissions trading under the EU scheme from 2005 is recognised as one of the flexibility mechanisms which will enable countries to attain compliance with Kyoto obligations at the least cost.