TODAY’S STUDY: IRELAND’S NEW ENERGY PLANS

Renewable Energy in Ireland…

Martin Howley, Mary Holland and Kevin O’Rourke, February 2014 (Sustainable Energy Authority of Ireland)

Highlights

Progress towards Overall Renewable Energy Directive Target

• The contribution of renewable energy to overall energy demand rose from 2.3% to 7.1% between 1990 and 2012. Ireland’s target is to achieve 16% by 2020 under EU Directive 2009/28/EC.

• In absolute terms the total use of renewables more than trebled between 2003 and 2012 (15% annual average growth) to 838 ktoe, largely due to the increasing contribution from wind energy.

• Renewable electricity contributed 4.1% to the overall energy demand in 2012. Renewable transport energy contributed 0.8% and renewable heat contribution was 2.1%.

• Of the 838 ktoe of renewables used in 2012, most was from wind energy (41%). Renewable electricity was responsible for 63% of the total renewable contribution. Biofuels contributed 10% and renewable heat contributed 28%.

• There was a 0.6% increase in the renewable energy contribution in 2012.

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Energy Security

• In absolute terms, the contribution by renewable energy to meeting Ireland’s energy needs grew by a factor of five between 1990 and 2012.

• Renewable energy accounted for 58% of indigenous energy production in 2012.

Renewable Electricity (RES-E)

• The share of electricity generated from renewable energy sources (RES-E) has increased fourfold between 1990 and 2012, from 4.9% to 19.6%.

• Wind energy (normalised) accounted for over 15.3% of all electricity generation in 2012, hydro (normalised) accounted for 2.7% and the remaining 1.6% was from bioenergy sources (mainly biomass co-firing and landfill gas).

• Wind power installed generating capacity reached 1,763 MW in 2012.

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Renewable Heat Energy (RES-H)

• Renewable heat (RES-H) accounted for 5.2% of all thermal energy in 2012.

• RES-H grew from 2.6% in 1990 to 4.4% in 2010. However 2010 was an exceptionally cold year. In 2011 RES-H reached 5%. Industrial biomass energy use (mostly in the wood, food and cement sectors) accounted for 66% of all thermal renewable energy used in 2012, which corresponds to 3.4% of all thermal energy use in Ireland.

• Industrial biomass energy use increased by 167% (6% average annual growth) between 1990 and 2006. There was a fall of 17% in industrial biomass use between 2006 and 2009. Since then there has been an increase of 10%, with use growing by 2.5% in 2012.

• Residential renewable energy use grew by 18% between 1990 and 2012 (0.8% average annual growth).

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Renewable Transport Energy (RES-T)

• Renewable transport energy (biofuels) accounted for 3.8% of road and rail transport (RES-T) in 2012, when calculated according to the definition in EU Directive 2009/28/EC.

• The Government target of 3% RES-T by 2010 was not reached, but the 2010 target was exceeded in 2011.

• The dominant biofuel is biodiesel, representing 61% of biofuel usage in 2012, followed by bioethanol (38%) and pure plant oil (0.5%).

• Indigenous production accounted for 21% of biofuels used or stockpiled in 2012, compared to a peak of 55% in 2007.

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Avoided Fuel Imports and CO2 Emissions

• In 2012 displacement of fossil fuel by renewable energy for electricity generation resulted in an avoidance of between €250 million and €280 million in fossil fuel imports.

• CO2 avoided through renewable energy use in all sectors totalled 3.2 Mt CO2 in 2012, with wind energy accounting for 61% of this saving.

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Introduction

Developing renewable energy is an integral part of Ireland’s sustainable energy objectives and climate change strategy. Renewable energy contributes to meeting all three energy policy goals, namely: energy security, cost competitiveness and protection of the environment through the reduction of greenhouse gas (GHG) emissions. With lower or no net emissions from renewable energy sources compared to fossil fuels, renewable energy sources contribute to the decarbonisation of energy supply and reduction in GHG emissions. They also contribute to energy security, being, for the most part, indigenous energy sources. In a period of increasing and volatile energy costs renewables can also contribute to cost competitiveness by reducing dependence on imported fossil fuels and hedging against further fossil fuel price volatility. There is the potential in the case of some renewable sources for Ireland to become a net exporter of renewable energy and technology.

Further to the European Renewable Energy Directive 2009/28/EC, Ireland’s National Renewable Energy Action Plan (NREAP) sets a mandatory target of 16% renewables, comprising 40%, 12% and 10% contributions to electricity, heat and transport respectively. It also sets a national target of 500 MW of ocean energy capacity by 2020.

This report examines the contribution made by renewables to Ireland’s energy requirements for the period 1990 to 2012, with a particular focus on production data in 2012. Installed capacity data are available for 2012 and early 2013. This is the sixth in an ongoing series of renewable energy reports and follows the Renewable Energy in Ireland 2011 Report1. This report also contains data in relation to energy from waste, drawing on the submission to the IEA/Eurostat annual survey on renewables and waste and the growing contribution of wastes to Ireland’s energy supply. The energy from wastes currently used in Ireland (landfill gas, sewage sludge gas, wood wastes, tallow, meat and bone meal and waste oils used for biodiesel) are all classified as renewable sources of energy. Energy from municipal waste, low carbon fuels, tyre derived waste and solid recovered fuel are considered to be partially renewable.

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The report discusses the progress towards national and EU renewable targets and provides an overview of the status of all renewables currently used in Ireland. In particular the actual renewable energy used in 2012 is compared to the national targets.

The report is structured as follows:

• Section 2 summarises salient policy measures pertaining to renewable energy in Ireland.

• Section 3 explains the methodologies used to calculate progress towards national and international renewable energy targets.

• Section 4 provides the context for renewable energy deployment, examining the recent trends in primary energy usage.

• Sections 5 to 8 analyse the progress towards the various renewable energy targets.

• Section 9 estimates the extent of avoided carbon dioxide emissions arising from the use of renewables.

• Finally, section 10 looks at the future of renewable energy in Ireland through energy forecasts and the National Renewable Energy Action Plan.

The national energy balance data presented in this report are the most up-to-date at the time of writing. Balance data are updated whenever more accurate information is known. The most up-to-date balance figures are available in the statistics publications section of the Sustainable Energy Authority of Ireland’s website. An energy data service is available at http://www.seai.ie/statistics; follow the links for Energy Statistics Databank. This service is hosted by the Central Statistics Office (CSO) with data provided by SEAI. The 2012 national energy balance data used were published on 8th October 2013.

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The Future of Renewables in Ireland

In order to inform policy formulation, the SEAI Energy Modelling Group (EMG), in conjunction with ESRI, produced forecasts which examine energy usage scenarios for 2020. Three sets of forecast scenarios were prepared in 2012.

The first, the Baseline scenario, is not intended to represent a realistic outcome, but is useful in presenting a base case against which other forecasts may be compared. The second, the National Energy Efficiency Action Plan (NEEAP) and National Renewable Energy Action Plan (NREAP) scenario, builds on the Baseline forecast, with additional assumptions introduced to incorporate the details published in both the NEEAP and NREAP. The third scenario, Risk, looks at alternative outcomes in 2020 when some of the key assumptions in the forecasts are changed.

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Forecasts for Renewable Electricity (RES-E)

The national 2020 target for RES-E is 40% of gross electricity consumption. Forecasts estimate an overall electricity demand of 31,104 GWh in 2020 according to the NEEAP/NREAP scenario. To reach 40%, equating to 11,193 GWh of renewable electricity in 2020, an average annual growth rate of 7.2% is required. Renewable electricity had an average growth rate of over 19% per annum between 2010 and 2012.

Assuming an installed capacity of 25 MW for ocean energy, 285 MW for biomass and 234 MW for hydro energy by 2020, an installed wind energy capacity of 3,628 MW would be required in order to achieve the 2020 RES-E target, requiring an average annual growth rate of 10.3% per annum. The increase in wind capacity has been approximately 20% per annum since 2005. The 40% RES-E target requires 4,172 MWe of installed renewable energy capacity, more than double the current capacity.

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Forecasts for Renewable Energy in Transport (RES-T)

The transport demand in 2020 under the NEEAP/ NREAP scenario is projected to be 5,380 ktoe (46% of the projected total final demand). The target for 2020 is to achieve a 10% contribution of road and rail transport. Projected demand from road and rail transport is estimated to be 4,499 ktoe. A mixture of biofuels and a renewable electricity contribution from electric vehicles is projected to meet the renewable requirements for RES-T.

It is projected that the target of 10% electric vehicles share of the vehicle stock by 2020 will contribute 33 ktoe of renewable electricity towards the 10% RES-T target in 2020. It is also projected that the balance of renewable contribution (406 ktoe) to RES-T will come from biofuels.

If all of the biofuels are produced from wastes, residues, non-food cellulosic material and ligno-cellulosic material, then the contribution can be doubled. This would require only 203 ktoe to come from biofuels. However, as the multiplication factor cannot be applied for the overall target, the overall renewable share of gross final consumption may not be met in that case.

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Forecasts for Renewable Thermal Energy (RES-H)

Forecasts to 2020 estimate a total thermal consumption of 3,762 ktoe in 2020 in the NEEAP/NREAP scenario, requiring 457 ktoe of renewable energy in order to meet the RES-H target of 12% by 2020. This corresponds to an average annual growth rate of 8.9% over the period 2012 to 2020, against the background of growth at 3.4% per annum on average between 1990 and 2010 and 2.9% between 2010 and 2012. This indicates the scale of the challenge in the thermal energy sector to meet the renewables target.

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Overall Renewable Energy Forecasts to 2020

Figure 25 presents the 2012 forecast of the renewable energy contribution to GFC48 (according to the definitions in the Directive) for the NEEAP/NREAP scenario, indicating separately the contribution to electricity (RES-E), transport (RES-T) and thermal energy (RES-H).

As part of Ireland’s NREAP, the least-cost trajectory toward achieving overall renewable energy targets which will be achieved from indigenous resources needs to be identified. Energy efficiency savings are accounted for within the forecasts. Since the renewable energy targets are expressed as percentages of energy consumption, any decrease in energy efficiency savings, or increase in energy demand due to other factors, will increase the amount of renewable energy production required to meet the renewable energy targets.

The combined effect of the three modal targets, coupled with Ireland’s energy efficiency targets, are projected (according to the 2012 Energy Forecasts for Ireland to 202049) to deliver a 16% renewable energy contribution to GFC, i.e. to deliver the proposed EU Directive target for Ireland, as detailed in Table 15.

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