Cliff Taylor: Will the EU now start to move away from Russian gas?

Relations between Dublin and London have been strained over the past few years in the fallout from Brexit and the ongoing tensions over the Northern Ireland protocol. It might be time to mend some bridges, because Ireland's energy security is crucially dependent on gas coming from – or through – the UK. And if supplies run short because of Russia's invasion of Ukraine, we need the gas to keep coming through the UK to Ireland.

The UK system, from which Ireland gets about 70 per cent of its current gas supplies, takes very little supply directly from Russia – it is mostly from the North Sea and Norway. But if Russian supplies are disrupted, the whole market will be affected.

The dangers are obvious. Pipelines bringing Russian gas through Ukraine could be damaged or destroyed, or Moscow could decide to limit supply further. Sources say EU leaders do not believe Russian president Vladimir Putin will turn off the taps, given the importance of the revenue to the Russian economy. But we just don't know what he might do.

Already higher wholesale gas prices are reflecting these risks. And supply concerns were addressed during the week in a carefully worded statement from the Department of the Environment. It said that in the “ very unlikely” event of any gas supply emergency “ there is excellent co-operation between Irish and UK gas system operators to maintain security of supplies from the UK”. It added that this includes regular tests of emergency plans by operators, “including load-shedding protocols”.

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These protocols are jargon for how gas would be rationed in the event of a shortage of supply. The implication is that there are agreed procedures for what happens if there is an interruption, with the burden shared. The EU, via the single energy market, would also have a role here, but how this works post-Brexit with the UK is far from clear.

Energy reliance

Let’s hope we don’t have to find out. But either way, this underlines Ireland’s energy reliance on the UK, which will increase as the Corrib field runs down and with further drilling banned. In a statement to the Oireachtas Committee on Climate Action last year, Aoife MacEvilly, chairwoman of the Commission for Regulation of Utilities (CRU), said that on current trends Ireland would rely on the UK for 90 per cent of gas needs by 2030, meaning we will not meet the EU’s energy security standard, which relates to the ability to deal with supply disruptions.

The CRU recommended that the review of energy security under way in the Department of the Environment look into the use of liquefied natural gas (LNG). Proposals for a terminal in Shannon to import LNG are on hold, pending this review, but Minister for the Environment Eamon Ryan has said that the proposed facility goes against government policy, as it would involve importing fracked gas from the US.

Ireland is also linked to the UK’s electricity system via interconnection and will not have a direct link to the EU market again until the Celtic Interconnector with Brittany is completed in 2025. Brexit has severed us from the EU system, leaving energy security in a bit of a limbo.

So Ryan’s review will be closely awaited, particularly as natural gas has such a vital role in our energy transition. Even before the invasion, things looked tight, with energy markets under pressure from the previous cold winter, the economic bounce-back from shutdowns, and the move away of longer-term investment from fossil fuels.

In Ireland the electricity system – very reliant on gas – is already running on very tight margins. Moneypoint, burning mainly Russian coal, has been brought back on stream and there are plans for new emergency power capacity for next winter to bridge a “ generation gap” – and for new longer-term gas plants.

Reduce reliance

The Russian invasion has made Ireland’s – and Europe’s – energy transition more challenging and risky. Apart altogether from the unpredictable short-term outlook, there is now a political and security imperative for Europe to move away from Russian oil and gas, which is being weaponised by Putin. By moving away from nuclear energy, Germany in particular greatly increased its economic reliance on Russia – whatever route it now takes, reducing this reliance will be an imperative. A second giant gas pipeline from Russia to Germany – Nord Stream 2 – now looks unlikely to ever operate. A new EU energy strategy, due next week, will reportedly seek to plan to reduce reliance on Russia.

Of course, this all fits with the green agenda and the need to deliver on the plans to decarbonise the production of energy. The climate crisis should be more than enough to encourage Europe to move away from fossil fuels, but this week’s events give another incentive via a sharp reminder of the geopolitical risks of relying on a dictator to keep the lights on.

While Ryan has the unenviable task of planning the energy transition and the juggling of supplies over the next few years, the job of attracting investment into offshore wind energy has just got a lot easier. If the Government can get the legislative and procedural building blocks right, it will not be short of offers of cash, with overseas interest already apparent, particularly in longer-term investment off the west coast.

The goal of clean energy will be complex and expensive – but absolutely vital to meet climate targets and to present the kind of green economy that will be attractive to investment in the long run. The Ukraine invasion underlines another argument for doing this – energy security in what looks likely to be an uncertain world. Just as Opec-induced oil shortages of the 1970s were a catalyst for a move away from reliance on Middle Eastern oil, the West now has another powerful reason to invest in renewable power. Not that one should have been needed.