Dáil Éireann Debate, Tuesday - 6 May 2014
288. Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the extent to which energy costs here are likely to be affected by events in Ukraine; the extent to which preparations are in hand to address any such situation arising; and if he will make a statement on the matter. [20368/14]
View answer289. Deputy Bernard J. Durkan asked the Minister for Communications, Energy and Natural Resources the degree to which he and his EU colleagues have examined the situation in relation to energy supply with particular reference to the ongoing situation in Ukraine; the likely impact of the situation there on the supply and cost of oil and gas throughout Europe; the extent to which any provisions have been made or are likely to be made to address the situation; and if he will make a statement on the matter. [20369/14]
View answerI propose to take Questions Nos. 288 and 289 together.
Ireland is critically dependent on imported fossil fuels, particularly oil and natural gas to meet its energy needs. This dependency underlines the immediate and long term imperatives of enhancing energy security, reducing price volatility and ensuring energy sustainability. National energy policy objectives are in line with overall EU policy objectives and are informed by the critical work of the International Energy Agency (IEA) on all aspects of energy security. Electricity and gas costs in Ireland are influenced by various drivers, including wholesale gas prices, the cost of capital, exchange rate fluctuations, the small size of the Irish market, geographical location and low population density. Wholesale gas prices are by far the most significant factor with prices rising since 2009 driven by events in the Middle East, North Africa and Japan and the significant growth in demand from China and India.
Currently, almost all of Ireland’s gas comes from the UK. Figures published by the Sustainable Energy Authority of Ireland (SEAI) in February 2014, show that around 49% of our electricity was generated using gas in 2012. While the UK is not heavily reliant on Russian gas, a shortfall in the supply of Russian gas could potentially result in an increase in the wholesale price of gas on the continent, including in Ireland. However, in Europe generally there are supplies of storage gas and liquefied natural gas (LNG) available and there is lower gas demand over the summer period. Gas flows consequential on any such supply disruptions and wholesale price rises are difficult to predict. My Department is continuing to monitor the Ukraine situation in close co-operation with other EU Member States.
Detailed operational plans are in place to deal with any unexpected short term disruption to gas supplies. In the unlikely event of a major gas disruption, EirGrid and Gaslink would implement their respective emergency plans to deal with the situation. In terms of oil imports from Russia, in 2013 Ireland imported only a very small quantity of gasoil and no other petroleum products or crude oil. As such, the crisis in Ukraine would not have a direct impact on Irish oil supply. There are a number of EU Member States that directly import oil from Russia by pipeline and these Member States would stand to be directly impacted in the event of a reduction in oil supplies.
Ireland is a founding member of the IEA which was established to improve international oil security. The IEA continues to keep the situation in the Ukraine under review, as does the EU. In terms of prices, Ireland is a price taker in the global fossil fuel market. In the event of reduced international oil supply, it is likely that international oil prices would rise which could ultimately impact on consumer prices.
In terms of long term plans for energy security, Ireland’s approach is to diversify fuels and supply sources. The use of indigenous gas and access to Liquefied Natural Gas storage would enhance diversity. Continuing to develop indigenous renewable electricity is also a key strategy in ensuring supply diversity. Currently over 20% of electricity is generated from renewable sources and supports are in place to ensure we attain our target of increasing this to 40% by 2020. In addition, the Sustainable Energy Authority of Ireland, funded and assisted by my Department has, over the past decade, been proactive in maximising energy efficiency. Several successful initiatives have been undertaken while new initiatives are also being considered which will further improve the efficiency of energy consumption, thus reducing our consumption (including consumption of imported energy) and contributing to security of supply.
