Opinion: we've little control over our energy supply or prices as we're so reliant on imports due to our fossil fuel dependency - Dr. Paul Deane, Senior Research Fellow, Energy Policy and Modeling Group, MaREI Centre/ERI/UCC

The Irish Government have little control over energy prices, but it doesn't stop them from trying to intervene. Since 2021, the Government paid out over €2 billion in emergency electricity credits to households to dampen the impact of soaring electricity prices. It also set aside a further €1.2 billion euro in revenue through reductions in excise rates to alleviate increases in petrol and diesel costs

The reason why the Government have little control over energy prices is because Ireland produces very little of its own energy, and we rely on others to produce it. When you rely heavily on others for a product, you pay the price they demand, rather than the price you want to pay.

We think of Ireland as being clean and green but we are one of the most fossil fuel dependent economies in Europe. Despite progress on renewable electricity, mainly from wind power, Ireland remains highly dependent on imported fossil fuels to satisfy our needs for heating our homes, fuelling our cars and trucks, and powering our homes.

Last year 83% of Ireland’s energy requirement was met by fossil fuels, most of this in the form of imported oil from the UK, the US and Azerbaijan and imported natural gas from the UK and Norway. This energy comes at a high cost; we spend about €1 million an hour on energy in Ireland and most of this money leaves the state.

Our energy prices are also highly volatile and influenced by global geopolitics, regional weather and wars, all of these happen beyond our borders and are beyond the control of the government. Volatility in energy prices makes it much harder for companies and families to plan for energy expenditure.

The invasion of Ukraine by Russia sparked a fossil fuel crisis which sent European natural gas prices soaring. Because Ireland’s power system is heavily dependent on natural gas, our electricity bills doubled as companies paid more for natural gas on international markets. Earlier this year, the prospect of conflict between Israel and Iran combined with Houthi attacks in the Red Sea led to a rally in oil prices which again increased the price of petrol, diesel and home heating oil in Ireland.

As we look to the future, the energy landscape on which Ireland relies so heavily is looking increasingly more fragile, less secure and volatile. To protect our economy against this volatility we must produce more energy here in Ireland

For example, we use huge amount of fossil fuels in Ireland, but we don’t have a rich fossil fuel resource. Over the past 40 years, we have drilled 161 wells in Irish offshore waters looking for oil and gas. There have been four commercial gas discoveries and no commercial discoveries of oil. There are better odds in playing roulette than striking commercial hydrocarbons in Ireland.

But we don’t have commercially available fuel under the ground, we have it in abundance over the ground in terms of wind and solar which can be used to make electricity, which can also be used to replace the traditional uses of oil and gas for transport and heating.

However, it is not correct to think that a transition away from fossil fuels will be cheap or easy. It will take both time (at least two decades) and significant investment but, if managed correctly, it can be affordable and worthwhile.

Investment is required to build infrastructure like bus and cycle lanes and energy saving projects such as insulating homes and offices. Investment is also required to generate more electricity and move this electricity around the country through a bigger electricity network to replace the oil trucks that currently move oil and the gas pipelines that move gas.

The context for this investment is important because it is the additional cost over and above what we are spending already that matters. Maintaining our current fossil fuel reliance costs about €10 billion per annum. If this money is redirected to clean energy, the additional investment required to move away from fossil fuels is between 1-2% of gross domestic product per year. This is significant, but manageable. There are also benefits such as more employment, better health from less pollution and social benefits from healthier transport options.

While such a transition is possible with existing technologies and know-how today, it's important to be honest about the challenges. Increased energy production in Ireland means more energy infrastructure in terms of wind farms, solar farms and electricity pylons to move power around. This infrastructure will be considered ugly and unwelcome in many places and it will not always be easy to deliver. The challenge is to work with communities to deliver infrastructure in an acceptable and agile manner to ensure more secure energy for all.

In a world that is more geopolitically fragile and less energy secure, our reliance on fossil fuel leaves Ireland exposed to the actions of other nations. When we consider the abundant secure alternatives we have in Ireland, such reliance is starting to look increasingly reckless.