A Review of Irish Energy Policy

Last April the ESRI published a Research Paper by me entitled “A Review of Irish Energy Policy”. For those who have not seen it is available for download here.

24 replies on “A Review of Irish Energy Policy”

In Ireland its all about the settlement pattern stupid………….

The ESB was a fine organisation but its rural electrification scheme in the more remote areas has been a economic disaster – I am thinking of the final Black valley connection and perhaps various Donegal adventures.

Rural peasants exist frugally when they live a peasant self sufficient lifestyle but are a anachronism as long as we live in a industrial society.

To my mind the only mechanism to break free from this folly is to engage in a pact with the Irish people – we will write off your mortgage but tax especially on private cars will rise to extreme levels to curb the inevitable inflation that would otherwise ensue.
This will drive massive efficiency gains in the Irish economy – off course spending fiscal money to revive the Edwardian rail infrastructure will help to keep our market towns connected.
Because the states coffers would no longer be tied to houses it will not cost a penny for the state to see one off houses depreciate back into the Irish landscape – they would become 21rst century famine houses – a landscape memory to folly but no one needs to die in this social & monetory experiment.

‘Caveat lector’ applies here. Readers should take account of the footnote on the cover page:
“This paper has benefited greatly from the support and advice of the Energy Institute, colleagues in the Economic and Social Research Institute (ESRI), the Department of Communications Energy and Natural Resources and other members of the Energy Policy Research Centre in the ESRI.”

I have been advised that “[T]here are a significant number of industry stakeholders, private and public, who are members of the [Energy Policy Research Centre] EPRC. Slightly more than half of the revenue comes from stakeholders.”

Readers should bear this in mind when considering the policy issues that have been selected and the way they are treated.

In the final anylasis its all about debt farming – the situation is hopeless.

People somehow think contractual debt contracts is the physical economy – the final act will be 2 people holding a paper obligation shivering in a damp cave discussing whether they should burn the last bit of civilisation so that they can remain warm & dry for just a little bit longer.

Irish Energy Policy. Burn, burn, burn. Sounds good. 8)

Think the 1970s for the level of energy we need to be consuming. We have a long way to go. We need to drive a conservation programme, and give house builders a real kick in the ‘John Healy’s’ and mandate the best Nordic building standards. Retro-fitting existing houses is not an easy task, but it can be done.

AND: not a single euro cent in any shape or form by way of ‘incentives’. A few winters of massive energy bills will focus minds. If you are paying out of your own resources you tend to be a tad careful.

Hi Paul! Nice to see you around again. Note your ‘caveat’. Thanks.

Brian Snr.

@Brian Woods
You cannot freeze people out withen a few winters – the location of Houses is the low hanging fruit, not their insulation.
Wood gas stoves are great for rural homes though.

PS – Duncan Stewart always seemed to insulate massive isolated rural dwellings for some reason……….. I was always slightly bemused by the experience.
Fire up that Chariot greenies.

Hi Dork!. I spent some winters in Westmeath in a farmhome with zero level of, what we understand as modern insulation: a sepulchre would have been warmer! When I got possession I did the ‘business’, including that wood burning stove. Lovely and cozy now! That was 16 years ago, so the amortized cost is approx 4,000 p/a. My heating costs are my labour time in cutting logs and keeping the chainsaw working.

Urban dwellings are another matter. District heating could be used, but it is probably a non-option for us. So that leaves each one to look to themselves (after they have beseeched their local TD for a handout, that is). Energy prices can only escalate upwards. Mind you the cost of those insulation materials wil rise pari-passu. Sheep wool? Perhaps we should just wear suitable clothing and live in the ‘kitchen’. Been there.

I would prefer to see any ‘Gov stimulus’ spent on upgrading our main-line rail and water piping networks.

As for DS: Well, it is just entertainment, and the countryside always looks good as well. A semi- in Crumlin or a terraced on North Circular? Location unsuitable.

Brian Snr.

@Brian Woods,

Thank you. Rather than commenting – and boring myself and anyone else who might pay some attention to distraction, I’m just keeping an eye on how the public debate on policy issues where I might have some insight is being channelled and managed – and, eventually, closed down.

This ‘energy policy review’ provides a classic example. I’m certainly not alleging any conspiracy or skulduggery, but this review was published just prior to the Easter holidays. It finally appears here – on what is, perhaps, the premier blog for the discussion of Irish economic policy issues – almost 6 months later in the middle of the summer vacation period for many people – accompanied by posts on some very useful and interesting research, but which are almost entirely unrelated to energy policy. The result, unfortunately and presumably unwittingly, is to foreclose debate.

And then we come to how the document is structured and populated to channel any ensuing discussion. The ‘Edit-Search’ function can be very enlightening. The foreground is populated by bloodless, generic entities such as ‘generators’, ‘suppliers’, ‘operators’, ‘producers’ and ‘investors’. The ESB is mentioned just twice (but only in the context that the staff might be milking the system); BGE isn’t mentioned once; the DCENR surfaces once in the acknowledgement of support and advice; and the CER gets 5 mentions (but mainly in relation to renewable energy). ‘Government’ scores over 20, but some of these refer to the UK and French Governments. However, the EU gets 119 mentions.

The Irish ‘powers-that-be’ are quite right to be concerned about the EU’s energy and climate change agenda. Dieter Helm, in a chapter in “The Delphic Oracle: Is there a future for the EU?”, puts it well:

“The European Commission has set out its stall on climate change: it has argued that it is a route out of the current economic difficulties through investment, and that green investment will give the EU a competitive advantage in the new global low carbon energy markets. The costs, it is claimed, will be low, and the benefits high.

This apparently wonderful economic prospect has the additional merit that it provides the Commission with a new project – following on from Completing the Internal Market, Monetary Union, and Enlargement after the collapse of the Soviet Union. Its citizens can find common cause in the new green agenda. The acrimony over the Lisbon Treaty and the referenda can be put behind it.

This neat coincidence of an economic and a political rationale looks too good to be true—and it is.”

In addition to the fundamental flaws in the EU’s energy and climate change agenda and the detrimental impacts they will have, the Irish ‘power-that-be’ have an additional reason to be concerned. When transposing primary EU legislation into national law they have have subverted the policy and regulatory process to favour the energy semi-states. The ‘optical illusion’ of compliance with EU legislation has been maintained (similar to the way our bank supervision and financial regulation was in line with ‘best international practice’), but the underlying – and well-concealed – reality is totally at variance with this.

In this, successive governments have behaved in precisely the same way as other EU national governments in protecting and advancing their ‘national champions’. It is perhaps ironic that the electricity market arrangements developed – though flawed and inappropriate – are far superior to those in Britain – and are now vulnerable in the context of increased EU electricity market integration.

So, we’re getting close to the stage where we’ll have to put on the ‘green jerseys’ and fight to protect our interests in the face of this big, beastly EU. The problem is that the ‘power-that-be’ want us to be prepared to support a battle to continue to protect the interests of the energy semi-states (and other market participants who have secured comfortable and profitable niches) at the expense of consumers and the economy, but they can’t, at any costs, reveal this reality.

This policy review is serving the interests of the ‘power-that-be’ very well, but at the expense of consumers and the economy.


Thank you for making this overview of Irish energy policy open for comment. When it was initially published, the media presentation concentrated on its perceived most newsworthy angles – the need to bring Corrib gas onshore as soon as possible and subsidising onshore wind over other renewables. All very well and understandable, but missing the more obvious points from your overall description, namely that Irish energy policy decisions are characterised by incrementalism and that the EU policy framework is both incoherent in many aspects in its own right and inappropriate in its application to a small energy market like Ireland’s.

One criticism of your analysis is that you pull your punches on energy politics. I appreciate that in a document that is aimed primarily at elite opinion formers and decision makers it may be best to let the likely economic consequences of their current policy, or lack of it, speak for itself in the expectation that such elites are capable of joining the dots. But too much politeness lets them off the hook and may result in errors of interpretation. For example, I think it’s pretty clear to most observers of this saga that the Corrib impasse has not resulted from regulatory failure. It’s a consequence of massive political failure for which all factions bear some degree of responsibility.

Your critique of EU environmental/energy policy is eloquent as are your various conclusions of its many elements as lacking credibility. I take your statement that climate change is “taken especially seriously in the EU and Ireland” to refer to the propensity among the Irish political class to seek to position Ireland as a ‘world leader’ in the climate change policy stakes, not to Irish public opinion in general, of which successive eurobarometer polls, since the onset of the economic crisis, suggest climate change is fallen far down the rankings of public concerns. Like people elsewhere, Irish citizens presently are more concerned about jobs, the state of the economy and rising food and fuel prices than any environmental risks contingent on climate change. And while you make the point that a carbon tax that substitutes for labour taxes may have a positive impact on the economy, that hardly applies in the current economic environment in which carbon taxes are just another revenue raising mechanism for the government and are generally perceived as such.

Overall, the main point I take from your paper is that energy policy requires certainty because of the long-term nature of energy investment. Unfortunately, it appears that our elite policy makers are more inclined to follow short-term fashion rather than opt for long term, hardheaded decisions in this area.

@ Paul,

Though many points you make on the issues strike a chord, I think you’re being a bit harsh on John FitzGerald and the ESRI. This is a very good time to put this document up for comment. The whole ‘natural resources’ issue is likely to become a hot topic of public debate over the coming months – Fintan O’Toole has another article in today’s IT for example – and the ESRI Review provides a context for that debate.

If the dollar is destroyed – its ability to chase & drive yield on commodities will vanish , who knows we might experience a big drop in Oil for a least a few years.
Congratulations on refitting your Hobbit hole – I am a urban dwarf & cannot justify such expenditure.
Thinking of getting something a bit more mobile however.



I have enormous respect for John FitzGerald and his colleagues who do research in this area, but there can be no doubt that the scope and outputs of their energy policy research are constrained by the nature of its funding – and the identity of those providing the funds. (Indeed, while you might criticise me for being ‘harsh’, I think your criticism of the ‘politeness’ may be unfounded. A close reading of the text – and some understanding of the sensitivities of the pay-masters – would suggest that John pushed the critique as far as he possibly could.)

My principal point is that it would be far better to declare up-front the sources of funding and the proportions and the extent to which constrains the scope and approach. The impression is conveyed that this is a comprehensive, objective, independent review of energy policy. It isn’t and it couldn’t be. But that’s how it’s treated – and it suits the paymasters to have it treated in this manner.

It’s the same old story. There is no funding for the genuinely independent competently resourced policy research that is required; nor is the parliamentary system either willing or able to commission such research and to use it to scrutinise government and its agencies and to hold them to account. It doesn’t matter what research or analysis I (or any others) conduct and present based on our own resources and knowledge – I’m not a ‘person of standing’ (in David Begg’s parlance).

Ireland is just too darned small, too incestuous and everybody knows everyone else. It could be severely career-limiting – or career-ending – if one were to make a habit of pointing out inconvenient truths.

In today’s UK Guardian:
Prof. Michael Lipton, of Sussex University’s Poverty Research Unit came up with a good suggestion to describe those who do the opposite of ‘whistle-blowing’. Ireland is full of ’em.

@Dork: “Hobbit Hole”!!!!! Most apt description. 2 No. 20′ x 30′.
“Hey! Are you really watching me with that Spy Sat?” “Or are you just familiar with the quaint dwellings of rural WH?” 8)

Seriously, I took a long-term strategic view (given its good farming land) that my grand kids might welcome the opportunity to grow their own food and use the timber for fuel. I am experimenting with a small raised bed to see what sort of vegetables I can grow. I managed to get a modest crop of spuds on the first attempt. Smallish, but quite tasty! Any suggestions for winter vegs?

Oil price drop. Very likely. Things be very volatile at present. Big known unknown: will domestic consumption of oil products in produced states continue to expand, even as western economies cut back. This is key to likely price change.

That was one real kool wood stove! My offering. Medium depth metal container (min 12″ x 12″) with grid on top + sand + petrol => very effective way to heat kettle or pot of water (North Africa campaign trick). Do not use indoors!

Brian Snr.

Apart from the points Paul Hunt makes I have to say I’m not that impressed with the quality of the report. No effort to investigate the relevance if any, risks, likely pricing and timing od shale gas which is posited as a potential game changer. Silly speculative comments about the politicisation of UK government’s planning processes in relation to pipeline repair. No useful commentary on initiatives in our more professionally-planned and managed neighbour about combatting fuel poverty, the Renewable Heat Incentive etc. A general lack of factual matter concerning infrastructural engineering options to provide context about past and pending investment decisions. This looks to me like an economics solo run in a complex and critical field where multidisciplinary input is essential. Sorry to be so negative but this standard of reporting is not up to the mark

Don’t you know ? – almost all Dorks all employed by The Company…….
Great idea for a non hi – tech cupa Brian.

Irish Energy Policy is a non-energy policy: its pure, unadulterated, parish-pump, pork-barrel, protect special interest group, political claptrap.

A real energy policy would start with a frank admission that the century and a half long Oil Era (inexpensive, easily accessible energy source) is slowly, slowly, plateauing off and will inevitably, decline. There is absolutely no escape from this predicament. None.

Green Energy, alt. energy, sustainability: are all pious claptrap, devoid of real scientific, engineering, and God help us, mathematical realities. As for the Global Warming issue. May be it is occurring (I personally believe it is), or maybe not. What we actually have is a long-term climate cycle. Whatever, or whichever is irrelevant. If GW is happening we are in s****ville. If not, we face a future of lower energy anyway: s****ville II.

We must attempt to conserve and keep our total energy use flat. Much easier said than done. Each of our major economic sectors: manufacturing, transport, agriculture, services would have their own specific problems in respect of a policy which mandates no further nett increase in energy use- overall. This is a very challenging issue, one which our legislators cannot, and will not address.

There are three specific areas that need immediate (like about a decade ago!) attention. Rail infractructure, electrical transmission networks and agriculture. There are others. I triaged, and these three came out on top.

The real predicament with a flat-use energy policy, and especially with a slow, long-term, annual decrease in energy use, is that it has a deeply negative impact on our economy and financial well-being. No one, most particularly our legislators want to go into this foggy, toxic swamp. Do you? I do not, but I believe in the immutable laws of chemistry and physics, and the iron rules of maths. Nature 1:Humans 0.

What we have, in respect of Irish Energy Policy (in common with many other controversial issues) is that the debate (if you could call it that) is framed between two unrealistic and impractical extremes with little attempt to engage in a meaningful intellectual manner with the substantive causes and processes which have led us to our current position.

Brian Snr.

No mention of contemplating energy storage, nothing! And heaps of wind energy that nobody will buy. Poor!

@ Brian Senior

How do you think England is going to fare out in the breakdown ? 383 people per square km versus 73 for Ireland. I often wonder about London.

@ seafoid: Not good, would be the short answer.

The expansion of modest urbanizations (late medieval) was possible due to shift from carbohydrate (wood) to solid hydrocarbon (coal) as primary energy source. The next shift was from solid hydrocarbon to liquid (oil). This permitted vast expansions in technology and populations, hence even larger urbanizations. Closest thing to simulate this would be bacterial growth in a closed container. Eventually the growth will inflect from log to non-log, peak, then inflect downwards. High population centres and states will exhibit significant and increasing stress, then ‘die-off’. Time-frame – 100 yr.

The predicament for all advanced economies is the slow, inexorable, declining availability of easily accessible, relatively inexpensive (in energy and monetary costs), high density, easily manageable liquid fossil fuel. The transition to any alternative will be highly problematical for advanced, developed economies.

Brian Snr.

The caravan has moved on and I sense we have another good example of how debate on public policy issues is managed, channelled and closed down. Apart from the Dork and Brian, bless them, heading off to a planet, of which, I suspect, few of us have any ken, we had a handful of us critiquing the scope, approach, content and outputs – with not even a hint of a response.

In any event, it’s all a bit of a sideshow in the context of the energy policy issues that are being thrashed out furiously behind the scenes. Proposals on semi-state privatisation – with a particular focus on the energy semi-states – and the detailed assessment of the electricity and gas sectors required by the Troika are the source of much angst and conflict for the ‘powers-that-be’, but it’s not for the eyes and ears of ordinary citizens who’ll end up paying through the nose for whatever they cobble together.

The ESB is one-up already:
The Minister is hoping to use a derogation inserted late in the day by the Brits to avoid transferring the transmission assets to Eirgrid. The approach used by the Department – and the report by Frontier Economics (also linked) – to arrive at this decision are ‘interesting’ to say the least. A post on this by our energy economics experts would be useful, but all we got is silence. I wonder why.

BGE is battling furiously to avoid going one-down. When Corrib comes on stream much of the gas interconnector (IC) capacity will be unused and useless. If Shannon LNG comes on even more will be unused and useless. The CER is in a bind and has had two gos at consultation:
It first thought of recovering the costs of these stranded assets from the prospective new suppliers, but the predictable reaction from the latter has compelled them to think again. There is no question, of course, of writing down these stranded assets down over time. The CER is veering towards moving these costs onshore so that final consumers will get hosed – again. And again not a word from our esteemed energy economics experts.

One thing we can be sure of is that the ESB will not lose out (with BGE in its slipstream) and the other is that consumers will continue to lose out. As one former high-ranking semi-stater put it: ” The ESB decides energy policy; the Department implements it.” (He didn’t last long.) All governments live in abject dread of the ESB Group of Unions; and the ESB management is adept at exploiting this fear.

shows that, despite considerable considerable progress, the price level of household consumption was more than 13% higher than the EZ average in 2010. The tradable and less sheltered sectors have been forced to adapt – the gap was 25% in 2008, but the private sheltered, semi-state and public sectors nurture monopoly profit-gouging and glorious inefficiencies that contribute much to the remaining gap.

Squashing this profit-gouging and rooting out these inefficiencies would do much to increase disposable incomes – in particular of those at lower incomes. The Troika wants some action, but the Government cowers in dread as the vested interests bare their teeth.

But sure, none of this is worthy of any comment or analysis.


@PH: “But sure, none of this is worthy of any comment or analysis. ”

I would if I had the knowledge and experience to do so. Sadly, I am a biological scientist, and I approach the issues of energy from the ‘energetics’ and engineering angles.

The issues you raise are highly political – that is where the decision making power lies. Regretabbly, the decision-makers, their sychophantic advisors and the hoi-poli of the Invested Ones ensure that they can make mutually beneficial decisions using the processes that they have fashioned for that particular purpose. But their days are numbered, make no mistake about this. Their lever of control is financial – “Pass out the Brown Envelopes, there’s a good chap!” But the finance is running full-tilt toward a granite cliff. Going to be a very unseemly scrum shortly. There is a growing cohort of very angry folk. At the moment they are muttering among themselves. But give it time.

The general public, and that includes myself, are almost completely ignorant of the political chicanery that is going on. We suspect, quite rightly, that we are being shafted. But what can I, as one individual do? Well, I pay heed to what you, and other semi-contrarian commentators write and I pass on your wisdom to family and friends (the ones still willing to listen to me, that is!). Its like running through a bog with lead boots. 8)

Keep going! By the way, that planet: its Galafrei. 🙂

Brian Snr.

There will always be politics and there will always be empire building.
But even if one accepts that, I believe a professional audience is entitled to receive publications on policy matters that are informed with proper desk research and if appropriate depth discussions with expert opinion on controversies. In this report, a number of controversies were included and commented on, such as shale gas potential, wind power intermittency, network redundancy etc. but there appears to be little evidence of any research or understanding of any of these controversies. Where important issues with both a technological and an economic angle (most issue?) need to be commented on, then there should be evidence that expert consultation has been obtained. Speculative opinions e.g. how rapidly UK utilities would respond to gas network failures should be backed by evidence. And finally, balanced reporting should include important policy options beyond those currently favoured e.g. microgeneration in particular where there is apparent conflict between favoured and less favoured options.
Where available budget and time resources make work of this standard impossible then it should not be commissioned due to the risk of quality issues and resulting reputational damage.

@Tony Owens,

“Where available budget and time resources make work of this standard impossible then it should not be commissioned due to the risk of quality issues and resulting reputational damage.”

You’ve hit some nails on the head, but not all of them. When, in addition to the usual ‘motherhood and apple pie’ bumph about ‘competitiveness, security and sustainability’, key policy objectives include ‘Ensuring a sustainable future for Semi-State Energy Enterprises’ and ‘Creating jobs, growth and innovation in the energy sector’, there is a requirement for a clear-sighted, objective assessment of policy and its implementation. (We should all be able to see by now how policy objectives of this nature undermined and subverted bank supervision and financial regulation, but nobody wants to acknowledge that the same damaging nonsense is being purveyed in the energy sector – and in other sectors.)

Governments have long ago lost control of the ESB, the beast they have created and nurtured, and of BGE. Successive governments have all but given up discharging their ownership responsibilities in the public interest. The management and staff of these enterprises have more or less free rein to pursue their interests – and these inevitability conflict with the interests of citizens and consumers. Governments’ dereliction of duty and this conflict of interests need to be addressed and resolved. But the ESRI is not the body to prepare the clear-sighted, objective assessment required.

How can it, when we can reasonably safely assume that these enterprises are contributing to the funding of this policy research and exercising some direction over the research agenda and the scope of work?

By attempting to do so the ESRI is exposing itself to far more reputational damage than you have outlined. In my view the ESRI has lost any credibility it might have had to pronounce on these matters. I am not alleging that there is any intent to deceive or to be dishonest – these things just develop over a long period of time and become ‘custom and practice’, but the inevitable outcome is deceit and dishonesty.

It is deceitful to present a policy review as being objective and comprehensive when it quite clearly is not and it is dishonest to the ordinary citizen who, ultimately, pays for much of this research and who relies on bodies such as the ESRI to tell it as it is.

On other threads Karl Whelan and Richard Tol have been bemoaning the rise of the ‘celebrity economist’, but there are a lot of people out there who trusted priests, politicians and bankers, respectively, to provide moral guidance, govern in the public interest and manage their finances responsibly, that trust has been destroyed and they want people with knowledge and competence to explain what went worng and what needs to be done. Most economists are conflicted, compromised or in some way tainted by association with the previous failed regime – and much of their analysis isn’t fit for purpose as many had become useful idiots for the Neocon hegemony. So there should be no surprise that there is a rush to fill the gap in the market.

If ever there was a time for the ESRI to tell it as it is, this is it, but, sadly, it is fatally compromised. It is time for it to be disbanded and reconstituted with 100% public funding authorised by the Oireachtas.

@Pat Swords,

I can only only admire your resolution and determination and wish you good luck. However, I fear you will have to be prepared to reconcile yourself to having your case brushed aside. You are tackling the rational basis, if any, of what are articles of faith for the EU – its energy and climate change policy objectives. There is an absolute determination by the EU institutions to exclude any consideration of the lack of democratic accountability that has permitted the emergence of these policy objectives and their implementation. What is demanded is belief – or, at least, a suspension of disbelief.

You are directing your lance, quite rightly, at the cancer that is destroying the EU, but, unfortunately, its defences will not be breached by a solitary assault. The damaging dysfunction of these policies will not be exposed until the unnecessary and unjustified costs of these policies start hitting the pockets of enough EU citizens. It may happen sooner than you think.

Again, good luck.

@Pat Swords,

Many thanks for your response. I have no intent or desire to take the wind out of your sails; on the basis of bitter experience I’m merely advising of the prudence of tempered optimism. The case you are presenting should be open and shut, but there is far too much at stake here for such an outcome to be contemplated by the ‘power-that-be’.

The questions I have is what sanctions may this Compliance Cttee impose in the event of a breach being established? What remedies may it impose and enforce? It is highly likely that, rather than a clear and unequivocal breach being established, some ‘procedural failings’ will be identified. The Commission will then take its own good time to contemplate this finding and respond with some vague and imprecise commitment to take steps to investigate these failings and to ensure that lessons are learned to avoid these failings arising in the future. I fear the whole thing will get swallowed up in the legalistic, bureaucratic morass.

I remain convinced that the dysfunctionality of the EU’s energy and climate change agenda will only be fully revealed when the resulting excessive and unjustified costs begin to hit the pockets and wallets of EU citizens and their anger is aroused. Unfortunately, I fear this will only stand to benefit populist, nationalistic, xenophobic factions which are gaining politcial traction. The extent of state ownership and unionisation is fatally compromising the left; and the conventional right and centre appear to be either in awe or in fear of the Neocons or are too much in love with their vertically integrated (and expanding) ‘national champions’.

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