August 17, 2022

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Inflation or “company greed”? Meat costs higher by way of double digits all through pandemic

According to the TikTok memes going viral at the end of January, the fishermen of...

According to the TikTok memes going viral at the end of January, the fishermen of West Cork took on the might of the Russian navy and won.
atrick Murphy, head of the Irish South and West Fish Producers Organisation, had vowed that fishing boats would peacefully disrupt plans for Russian naval exercises in Ireland’s exclusive economic zone. Murphy met with Russian Ambassador to Ireland Yuriy Filatov and the embassy announced last weekend that the exercises would be moved as “a gesture of goodwill” after appeals from the fishermen and the Irish government. Global news outlets reported the story – tongue in cheek – as a David versus Goliath-style saga.

The episode was a rare concession amid the escalating tensions surrounding Russia’s massing of an estimated 140,000 troops near Ukraine’s border and its demands that Nato must promise never to allow Ukraine to join the alliance. Concerns are mounting that a conflict could disrupt gas supplies from Russia to Europe (about a third comes via Ukraine), prompting Western leaders to scramble to find alternative gas supplies.
Even if Russia doesn’t cut off gas, there are concerns Europe could be more exposed to higher, more volatile gas prices in the years ahead during its transition to renewable energy.
Ireland relies heavily on imported gas for heating and generating electricity, including as a back-up for wind energy when the wind doesn’t blow. Ireland doesn’t import gas from Russia; instead, about 53pc comes from the UK, which – in turn – imports natural gas from Norway and the North Sea, as well as some liquefied natural gas (LNG) from Qatar and other LNG producers. The rest of Ireland’s natural gas comes from the Corrib field off Mayo, where supplies are depleting. By 2030, Ireland is expected to rely on imports for 90pc of its gas.
Despite having a domestic supply, Ireland does pay global prices for gas. Any supply interruption from Russia – Europe’s biggest supplier – over a geopolitical incident could exacerbate the energy crisis. Even higher prices in the wholesale markets would feed directly into the cost of generating electricity in Ireland, according to Daragh Cassidy from price-comparison site
“If Russia turns off gas to Germany, Germany will have to look for gas elsewhere, such as from Norway,” he says. “While we don’t import any gas directly from Russia, indirectly there is a connection there. We live in such a globalised, connected world that what happens in one place, like a threat of war, affects the rest of the world. Even if there isn’t a war, there is fear that [Russian President Vladimir] Putin will use gas as a pawn when dealing with Europe.
“When natural gas prices go up, they also have a huge impact on electricity prices. We usually use natural gas for 40pc of our power generation. But Met Éireann figures show that last year was the least windy year in Dublin since 1959. That meant there was less renewable energy fed through the system, so we had to rely more on coal and gas. So power generation from gas was closer to 50pc last year.”
Tight supplies – including reduced flows from Russia – weather patterns and an economic recovery from the pandemic all contributed to natural gas prices skyrocketing in Europe to all-time highs in December, though they did ease at the start of 2022. Higher wholesale prices have been passed onto consumers and businesses, with 35 separate gas and electricity price increases in Ireland in 2021. Rising utility bills have helped drive up inflation to a 20-year high.
Colin Grant, an analyst at Davy, says: “Rising energy prices are bad news for everybody. They have a disproportionate impact on lower-income families because they spend a higher proportion of their income on energy and food.
“It’s not just about the level of prices but the volatility of prices because a lot of utilities trade in the power markets and volatility creates problems in how to hedge (against rising prices). This also exposes our requirement for storage of energy. We can’t store electricity yet, so we need companies that specialise in that so we will be able to store power in a way that is able to produce energy at short order if the wind stops blowing and there’s a deficit of wind power.”
Dr Hannah Daly, a lecturer in sustainable energy at University College Cork, has already seen first-hand the impact of higher gas prices on tenants of poorly insulated rental stock: during an online meeting this winter, she noticed that one of her students was bundled up with a coat and scarf and visibly shivering. The student’s landlord had restricted central heating to two hours a day and mould had formed in the house.
Daly says the Government’s plans to provide a €100 rebate in March for household energy bills (Tánaiste Leo Varadkar is believed to want a more “generous” credit) is just a “sticking plaster” and will not solve the systemic issues behind Ireland’s vulnerability to global energy markets.
Reports about the Russia-Ukraine crisis “make the case that the transition to renewables would be far more cost effective because it demonstrates how vulnerable we are to imported fossil fuels,” Daly says.
“We need to get off gas as quickly as possible – especially for electricity. Gas is the least bad fossil fuel at the moment and it is flexible in that it can complement wind and solar power and we do need an additional gas supply in the short term for electricity supply, but we do need to be reducing its use as much as possible.”
The Department of the Environment, Climate and Communications is carrying out a review of the security of Ireland’s energy supplies up to 2030, when 80pc of power generation is targeted to come from renewable sources. The review is due to be published in the first half of this year.
The National Development Plan and the latest Climate Action Plan set out the need to develop some 2,000 MW of new gas-fired generation in order to ensure security of supply and underpin the transition to renewable energy. But climate campaigners fear additional gas capacity will lock the nation into fossil-fuel use for longer.
The Commission for Regulation of Utilities, the energy watchdog, in October warned TDs and senators that Ireland could become over-reliant on natural gas from the UK for power generation by 2030 due to dwindling domestic sources and argued it would be “prudent” for the Government to examine a future role for LNG.
If Russia turned off its gas to Europe temporarily, it would not just have “profound economic consequences” for the EU and require emergency measures to curb demand but would require the EU to hike imports of LNG, analysis by the Brussels-based think tank Bruegel has shown. A surge in LNG demand would see prices soar, Bruegel predicted, and that capacity may not even materialise, given limited global liquefaction capacity and suppliers’ existing contracts to send LNG shipments to Asia.
Ireland doesn’t have its own LNG terminal but Shannon LNG, a subsidiary of US-based New Fortress Energy, has been planning a terminal and power plant for Kerry. Green Party leader and Environment Minister Eamon Ryan has said it would be inappropriate to permit any LNG plant in Ireland pending the outcome of the energy security review as it would lead to the importation of fracked US gas. But Varadkar said last month that the terminal would not be blocked by the Government, and that it can go ahead if it can secure planning permission, despite being at odds with government policy.
Daly, however, says that “we would need to demonstrate that any additional fossil fuel infrastructure is absolutely essential and I have seen studies showing that (the LNG terminal) is not essential for supply and wouldn’t help with gas price hikes.”
Instead, the state needs to step up measures to reduce energy demand, Daly argues.
“We use three times more gas now than in 1990 and we use more energy in general. It’s about getting demand down and getting away from imported fossil fuels. There is an over-reliance on them from the amount of cars we have to fertiliser used in agriculture. 
“A lot of our climate measures that have been slow to get off the ground can be accelerated to insulate people from price rises. But that requires big, bold action from the State. 
“The State can borrow at a very low interest rate and there’s the European Green Deal. We need to be using that capital to support homes and landlords to retrofit and get away from oil and gas.”

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