Government to provide gas storage facility to bolster energy reserve

The Government has agreed to provide a gas emergency reserve in a State facility. The move was ratified after a national energy security strategy for coming decades was approved at Cabinet on Tuesday.

It is in the context of 80 per cent of the State’s energy needs currently coming from imported fossil fuels; a continuing energy crisis including price volatility; and periods in recent years when electricity supply over winter was tight at a time of surging demand – exacerbated by two gas-firing power plants being out of action for a year.

Gas Networks Ireland has been asked to recommend options by mid-2024, including the possibility of using a large liquefied natural gas (LNG) storing ship located at a deep water berth with a large jetty, with a view to being in place by 2030 – this approach is the preferred solution of a number of EU states. The Cabinet will then issue a final approval on the form of reserve and location.

It is envisaged the cost will be covered by gas consumers: most likely a small levy based on usage. It will operate in a similar way to the National Oil Reserves Agency (Nora) which was established for the maintenance of Ireland’s strategic oil reserves.

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While gas will continue to be used as the economy transitions to a carbon neutral energy system over the next 15 years, the report concludes natural gas demand in the form of imports will decline and be replaced by cleaner biogas and biomethane.

It concludes future energy supply will be more secure by moving to an electricity-led system. Ireland’s existing plans to grow renewable electricity generation, combined with “demand side flexibility, new rapidly gas-fired generation as backup” and use of electricity interconnectors and storage, “are the right [measures] to secure electricity supply”.

Minister for Energy and Climate Eamon Ryan said the approach ensured “Ireland’s energy future is clear and certain” by enhancing security at an affordable cost.

“By reducing our import dependency through our energy efficiency measures and our investment in a diverse number of renewable energy sources, Ireland will reduce our dependence on imported fossil fuels and dramatically reduce our exposure to energy shocks,” he added.

A range of measures to ensure a resilient, reliable and secure energy system was required, he said. “This strategy sets out how we can power Ireland’s progress, enhancing our energy security with a mix of energy efficiency, a continued shift to electricity from renewable generation, smart grid interconnection to the UK and Europe, better storage as well as flexible, State-led and temporary access to key fossil fuel reserves as we make the switch.”

Mr Ryan said going the commercial route with gas storage was likely to lead to increased demand for the fossil fuel and fail to enhance security.

Asked about risk from private companies, such as the Shannon LNG project developer, bringing judicial review proceedings, he said policy could not be based on who may take a legal action, adding the strategy was devised in the public interest and backed by independent analysis.

Using a temporary LNG facility did not undermine green commitments, Mr Ryan said. He had flagged “the State-led strategic store” to his party and to environmental NGOs and there was no issue about it.

The Minister said the Government was already on a path of divestment away from fossil fuels though it would not revoke existing exploration licences that have gone through an auction process. The odds on an oil or gas find in the Atlantic Ocean off Ireland were very high, he said, yet the potential for cheaper offshore wind there was clearcut.

While gas supplies and infrastructure are adequate to meet demand projections, “there are risks in the event of disruption to infrastructure”, the report warns. Backup reserves and distribution plans in case of an oil emergency are sufficient, it finds, though there is a need to develop “the anticipatory capacity of the energy sector in Ireland”.

Mr Ryan said: “We are already world leaders in onshore wind energy and are actively pursuing our offshore wind, solar, interconnection and other renewable sources. The delivery of this ambition will ensure an energy system that is no longer oil and gas-based but grounded in indigenous renewable electricity.”

The package has been given a cautious welcome by Friends of the Earth (FoE) “on the basis of comprehensive analysis and commitments which can pave the way for decreasing reliance on polluting fossil fuel infrastructure”.

It welcomed the recognition that renewable energy will be the “anchor” of Irish energy security “and that reducing gas demand is central to our climate and security objectives”.

“As the International Energy Agency recently said ‘we are witnessing the beginning of the end of the fossil fuel era and we have to prepare ourselves for the next era’. The Government’s energy security package is central to Ireland’s preparations. It is welcome that finally gone are the days when energy security is misrepresented as amounting to little more than fossil fuel infrastructure, ignorant of the impact on climate and on households,” said FoE head of policy Jerry MacEvilly.

“We welcome that Government is clear that energy security must align with Ireland’s legally-binding climate pollution limits adopted by this Dáil on a cross-party basis, which require a rapid reduction in fossil fuel use,” he added.

The review emphasises decreasing gas demand while increasing energy efficiency and renewables, as central to reducing fossil fuel dependence and reducing exposure to energy shocks, he said.

“In terms of gas supply, the Government does not put forward a polluting expensive commercial LNG terminal as the preferred approach with the review committing to further analysis on temporary state-controlled gas storage, with the existing moratorium on LNG and fracked gas imports remaining in place.”

“This review has had to take account of an energy price crisis stemming from a dependence on dirty, expensive gas, Russia’s invasion of Ukraine, as well as an electricity demand crisis exacerbated by a laissez-faire approach to unprecedented data centre development. Most importantly the review has had to factor Ireland’s climate obligations. The Government’s decisions finally takes account of the fact that the solution to all of these challenges, and the best way to protect communities, is the same: rapidly reduce our dependence on dirty expensive fossil fuels.”

The energy security decision was not without risks for climate action, for this Government and future governments which will have to remain vigilant, Mr MacEvilly said.

“The acceptance of State-controlled floating storage linked to LNG could still pose gas lock-in risks without proper planning, conditions and oversight. Crucially, however, the Government is clear that any new gas storage must be a limited, temporary, insurance measure for emergencies only and used in accordance with our climate obligations.”