Ireland's Energy Projections - Progress to targets, challenges and impacts - SEAI
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Ireland’s Energy Projections
Progress to targets, challenges and impacts
Sustainable Energy Authority of Ireland
Wilton Park House
Wilton Place
Dublin 2
Ireland
D02 T228
t +353 1 808 2100 e info@seai.ie
f +353 1 808 2002 w www.seai.ie
@seai_ie
2017
The Sustainable Energy
Authority of Ireland
The Sustainable Energy Authority of Ireland’s (SEAI) mission is to bring about a low carbon economy
through measures and activities focused on the transition to a smarter and more sustainable energy
future. To fulfil this mission SEAI aims to provide well-timed and informed advice to Government, and
deliver a range of programmes efficiently and effectively, while engaging and motivating a wide range
of stakeholders, and showing continuing flexibility and innovation in all activities. SEAI’s actions will help
advance Ireland to the vanguard of the global green technology movement, so that Ireland is recognised
as a pioneer in the move to decarbonised energy systems.
National Energy Modelling Group Given the link between these energy projections and macro-
economic trends, using the most up-to-date data sources remains
The National Energy Modelling Group (EMG), hosted by SEAI as a focus of this exercise. The data presented in this report are
part of our statutory mandate, provides high-quality analysis and based on the most up-to-date assumptions available at the time
policy advice on a range of energy and climate issues at national
of modelling. These include projections for a range of macro-
and European level.
economic indicators, from the Economic and Social Research
Institute (ESRI)1, that have an impact on Ireland’s energy demand,
SEAI supports evidence-based policy formation in the areas
together with recent fuel and carbon price assumptions from the
of energy efficiency, renewable energy and a mature transition
European Commission. In addition to estimating these variables,
away from fossil fuels. One example is the annual National Energy
Projections, produced by SEAI. This involves modelling a range of much work goes into estimating the impacts of current energy
short-term and medium-term scenarios for energy demand and policy on the projected trends.
supply growth and combining those results with an assessment
of the impact of policy measures. A common goal of the ongoing work undertaken by SEAI is to
improve the availability of disaggregated data to underpin its
Projecting future energy demand is a challenging process. modelling capability and energy projections. This report can be
Projections for economic growth and fuel price changes, the read in conjunction with SEAI’s Energy in Ireland 1990–2015 (2016
key drivers behind Ireland’s energy demand, are re-estimated as Report)2, which provides the context of historical trends in energy
economic events unfold globally and within the EU. Interpretation supply and energy use. The data behind both reports are available
of the results, therefore, is focused on medium and longer-term to download in the SEAI Energy Data Portal.3
trends, rather than on any specific events that might occur in the
short term. SEAI welcomes any comments on the contents of this report.
Feedback can be sent directly to the group by emailing:
emg@seai.ie
1 Ireland’s Economic Outlook: Perspectives and 2 Available at http://www.seai.ie/resources/ 3 Available at http://www.seai.ie/resources/energy-
Policy Challenges, ESRI (December 2016). publications/Energy-in-Ireland-1990-2015.pdf data/
Ireland’s Energy Projections
Executive summary 01
Executive summary
SEAI projections anticipate that Ireland could fall short of the 2020 16% renewable energy target in all three
scenarios4 modelled. In the Current Trajectory scenario the 2020 energy efficiency target will also be missed.
This highlights the need for ongoing strong policy action to incentivise sustainable energy technologies
and practices.
This report presents projections of Ireland’s energy supply and As post-2020 energy policies are currently under development
use to 2035. These are based on the Economic and Social Research and not yet fully defined (at the time of writing), the post-2020
Institute’s (ESRI) latest economic outlook. The projections anticipate projections do not include any modelled impact of energy
strong growth in energy demand, in line with the return to efficiency or renewable energy policies. Therefore the post-2020
economic growth in the Irish economy. trends represent a hypothetical base case to illustrate what future
projections might look like without ongoing policy activity to 2035.
A continuing low oil price, reflecting low oil prices globally,
and new sources of energy demand such as data centres also In the Current Trajectory scenario, the overall renewable energy
contribute to the expected increase in energy demand. In addition contribution falls from 13% in 2020 to around 12% in 2030, due
to increased energy demand, low energy prices provide a more to energy demand growth over the period and an assumption
challenging environment for the increase of energy efficiency and of no policy impacts post-2020.
growth of renewable energy sources, as the monetary incentive
to diversify away from fossil fuels is weaker than at times of Key conclusions are:
high prices. • If the 2020 electricity target is missed by the amount
anticipated in the Current Trajectory, a growth rate of 3%
The EPA derive energy related emissions from the SEAI National per annum would be required.
Energy Projections for electricity, heat and transport. These are • Renewable electricity must grow by over 11% every year to
combined with agricultural and waste sector emissions to produce meet the 2020 target. Once achieved, it must continue to
their annual greenhouse gas emissions projections. The 2017 grow by 2% a year to maintain that share to 2030.
emissions projections indicate that on the Current Trajectory, in the • Renewable heat must double from the 2015 level to meet
absence of additional emissions reduction measures, Ireland will the 2020 target. To maintain this 12% contribution, it must
not meet the 2020 emissions reduction target required under the continue growing by 1% annually to 2030. The required growth
EU’s Effort Sharing Decision.5 rate increases to 4% per year in the Current Trajectory scenario.
• Biofuels in transport must also double to 2020, a growth rate
Under the Current Trajectory scenario (which underpins the EPA’s of 13% per year, and the total renewable transport contribution
With Additional Measures), an overall renewable energy share of including electric vehicles and other alternative fuels must grow
just over 13% by 2020 is projected meaning Ireland potentially by 5% per year post-2020 to maintain the renewable transport
missing its 2020 cumulative emissions reduction target by around share to 2030, or twice that in the Current Trajectory scenario.
12 Mt CO2eq. Failure to comply with energy and emissions targets • Energy efficiency can contribute to meeting emissions and
in 2020 will result in EU fines and could lead to a more arduous renewable energy targets and must grow by 5% per year to
trajectory in the context of post-2020 targets – both in terms of meet the 2020 targets and by at least 1% per year to 2030.
future deployment and potential compliance costs.
Any shortfall to the 2020 targets would make Ireland’s role in
contributing to longer-term targets significantly more difficult
and costly.
4 A Baseline, Current Trajectory and NEEAP and 5 Decision No 406/2009/EC of the European
NREAP (Policies) scenario. Parliament and of the Council of 23 April 2009
on the effort of Member States to reduce
their greenhouse gas emissions to meet the
Community’s greenhouse gas emission reduction
commitments up to 2020.02 Ireland’s Energy Projections
Contents
Contents
Executive summary 01
1 Introduction to Ireland’s energy projections 03
1.1 Model inputs and assumptions 03
1.2 Scenario summary 04
1.3 Progress to targets, challenges and impacts 05
1.4 Post-2020 outlook 07
2 Ireland’s energy use and targets 09
2.1 Target interactions and dependencies 10
2.2 Electrification and non-Emissions Trading Scheme (ETS) target 11
2.3 Energy efficiency target progress and ambition 11
2.4 Renewable energy targets progress and ambition 13
2.5 Trend in energy demand and fuel use 18
3 Non-ETS emissions targets 21
3.1 Total EU ETS and non-ETS energy-related emissions only 2005–2020 22
4 Post-2020 25
4.1 Policy context – post 2020 25
4.2 Post-2020 projections 26
5 Conclusion 29
References 30
List of figures 32
List of tables 32
Acronyms and abbreviations 32
Annex A: Modelling process and description 33
Annex B: Summary of model input assumptions by scenario 35Ireland’s Energy Projections
Introduction to Ireland's energy projections 03
1 Introduction to Ireland’s
energy projections
The projections are based on the relationships between energy use, economic growth, energy prices and
energy policies – as embodied in past energy use trends. The results provide insights into the energy mix
and technology deployment effort required to meet Ireland’s national and EU targets on energy efficiency
and renewable energy for 2020.
This report presents projections of Ireland’s energy use to 2035. The The projected low energy prices contribute to an increase in the
results presented update previous energy projections published in demand projections presented in this year’s energy results. In
April 20166. Using macroeconomic modelling techniques, we have addition to increased energy demand, low energy prices provide a
projected how future energy use may develop following changes more challenging environment for the growth of energy efficiency
in fossil fuel prices, economic growth and energy policy. The and renewable energy sources as the monetary incentive to diversify
impact of energy policies and measures other than ongoing away from fossil fuels is weaker than at times of high prices.
regulations are not incorporated post-2020.
In parallel with the projected low energy prices, Ireland’s
These trends will be updated as the post-2020 policy package is economic outlook has changed since the last SEAI National Energy
defined at national level in the context of EU energy targets for 2030. Projections. According to the ESRI9, strong growth in the economy
The analysis is developed in collaboration with the Economic and is now anticipated to continue to 2020 and beyond. This increasing
Social Research Institute (ESRI). The projection data contained in economic activity further raises the future energy demand.
this report are used by the Environmental Protection Agency (EPA) Given that the renewable energy targets are based on a
to prepare energy-related projections of greenhouse and percentage of total energy demand, this increases the level
transboundary gas emissions. of deployment of renewable energy technologies required to
reach targets. A third driver of additional demand in the scenarios
modelled is anticipated growth from new demand sources such
1.1 Model inputs and assumptions as data centres.10
There are significant changes to the energy price assumptions
and other macroeconomic drivers underpinning the scenarios of
the projections presented in this report compared with previous
The return of strong
SEAI projections. A low oil price projection is modelled reflecting
the recent protracted period of low oil prices globally. The input
growth to the Irish
assumptions used are taken from the latest projections by two key
sources: the Department of Energy and Climate Change (DECC)
economy, anticipated
in the UK7 and the European Commission, using data from their
Energy Reference Scenario (2016)8. These were the most relevant
continuing low oil price and
and up to date sources available at the time of modelling and are
similar to the assumptions underpinning the International Energy
new energy demand sources
Agency World Energy Outlook (2015) low oil price scenario. such as data centres lead to
Despite the possibility of decoupling between oil and natural gas increasing energy demand
prices with the growth of shale oil earlier this decade, a significant
split has not been realised, therefore projections for all fossil fuels trends to 2020 and beyond.
remain lower than in previous projections.
6 https://www.seai.ie/resources/publications/ 7 Note the UK Department of Energy and Climate 9 Ireland’s Economic Outlook; Perspectives and
Ireland___s-Energy-Targets-Progress-Ambition- Change (DECC) became part of the Department for Policy Challenges, ESRI (December 2016)
and-Impacts.pdf Business, Energy and Industrial Strategy in July 2016. 10 Based on data and analysis sourced from EirGrid
8 European Commissions EU Reference Scenario Generation Capacity Statement 2016.
2016 https://ec.europa.eu/energy/en/news/
reference-scenario-energy04 Ireland’s Energy Projections
Introduction to Ireland's energy projections
A description of the modelling methodology is provided in Table 1: Summary table of scenario results for 2020
Appendix A. The scenario philosophies and input assumptions are
detailed in Appendix B. % 2015 Baseline NEEAP and Current
NREAP Trajectory
Energy 11.7 11.7 20.0 16.0
1.2 Scenario summary Efficiency
To illustrate a range of possible futures for energy efficiency and Renewable 25.3 22.7 40.0 37.3
renewable energy deployment to 2020, a number of scenarios electricity
have been developed.
Renewable 6.5 5.8 12.0 9.0
• The Baseline scenario includes all policy measures legislated for
heat
up to the end of the 2015 and represents a hypothetical worst
case scenario in which no further policy actions or measures Renewable 3.3 3.23 5.4 4.6
are taken post 2015. This provides a basis for comparison with transport (5.7) (5.5) (10.0) (8.0)
other scenarios in which the expected additional effects of (regulation)
government policy are modelled.
Overall RES 9.1 8.3 15.4 13.2
• The NEEAP and NREAP scenario assumes meeting all
obligations captured in the National Energy Efficiency Action
Plan (NEEAP) and in the National Renewable Energy Action Plan
(NREAP) by 202011. As is evident from the projection scenario results, despite the
• The Current Trajectory scenario reflects the most recent trends significant progress made and given the increased demand
in energy efficiency and renewable energy deployment. projected, in the Current Trajectory it is anticipated that Ireland
It recognises that the current rates of energy efficiency could fall short of all targets. Further, given the anticipated demand
improvements and deployment of renewable energy increases, the NEEAP and NREAP scenario results project that
technologies are not sufficient to reach the 2020 targets. reaching the national renewable energy targets for electricity, heat
and transport, together with the 2020 energy efficiency target, is
Table 1 summarises the results of the analysis in terms of not sufficient to reach the overall 16% renewable energy target.
percentage reductions made towards the 20% energy efficiency These results highlight the need for ongoing policy action to
target, the 40% target for renewable electricity (RES-E), the 12% incentivise sustainable energy technologies and practices.
target for renewable heat (RES-H), the 10% target for the renewable
transport (RES-T) Directive and the overall renewable energy The return of strong growth to the Irish economy and the anticipated
Directive12 target of 16% for 2020. continuing low oil price leads to a projection of increased energy
demand to 2020 and beyond in all scenarios. This makes the task
of meeting energy efficiency and renewable energy targets more
These results highlight challenging. Ongoing action on energy efficiency can help to
offset some energy demand growth – but it won’t be enough
the need for ongoing to fully counter the strong energy demand driven by economic
growth. In addition, renewable energy technology deployment
policy action to incentivise must be accelerated. The low fossil fuel price environment provides
a more limited incentive for consumers to shift to sustainable
sustainable energy energy compared to high price trajectories, highlighting the
importance of ongoing energy policy to stimulate deployment of
technologies and practices. energy efficiency and renewable energy technologies and services.
11 The National Energy Efficiency Action Plan 12 RES is the acronym for renewable energy source,
(NEEAP) and National Renewable Energy Action and is the terminology used in the EU Renewable
Plan (NREAP) are available on the Department of Energy Directive (Directive 2009/28/EU) to
Communication, Climate Action and Environment describe the level of renewable penetration
website. http://www.dccae.gov.ie required in each of the end-use sectors.Ireland’s Energy Projections
Introduction to Ireland's energy projections 05
1.3 Progress to targets, challenges and impacts Renewable transport
Achievements to date: At the end of 2015, 5.7%, against a 2020
While substantial progress has been made towards achieving 10% renewable energy in transport target16, had been achieved. In
Ireland’s energy efficiency and renewable energy targets, a 2015 the total biofuels supply was 173 million litres and passenger
continuous broader effort is needed. cars traveled an average of 590 kilometres using biofuel that has
been blended with regular petrol and diesel. Battery electric
Energy efficiency vehicles and plug-in hybrid electric vehicles together accounted
Achievements to date: Ireland achieved energy efficiency for 0.5% of new car sales in 2015, comprising a total of 562
savings which equated to about 60% of the country’s 2020 vehicles sold that year with over 1,370 electric vehicles in
energy efficiency target by the end of 2015. Over 350,000 homes, total in circulation.17
3,500 businesses and public sector bodies have implemented
energy efficiency measures with government support, saving Current Trajectory scenario: A modest increase in the annual
approximately €1 billion annually to the end of 2015.13 growth rate of the biofuels blending share from its historical rate
of 0.2% to 0.3% per year to 2020 was modelled in the Current
Current Trajectory scenario: In 2016, grant schemes supported Trajectory scenario, to give a total biofuels supply of 272 million
energy efficiency upgrades in 22,000 homes. A further 2,000 litres by 2020. The expected 2020 electric vehicle18 (EV) stock
homes and 383 community buildings were upgraded via has been revised downward for this modelling exercise to
community-based projects, and 667 businesses and 80 public approximately 10,000 EVs, reflecting slower than anticipated
sector entities interacted with SEAI programmes. Programmes for take up of the technology. The combination of these measures is
energy efficiency were expanded in 2017, however in the absence anticipated to bring the share of renewables in transport to 8%
of further expansion and development of new policy measures, a (compared to the 10% target when calculated as per Directive
shortfall of 6–7 TWh in 2020 is projected resulting in an efficiency guidelines).
improvement that equates to 16% rather than the 20% target.14
NEEAP and NREAP (target achievement) scenario: In order to
NEEAP and NREAP (target achievement) scenario: A significantly meet the 10% RES-T target by 2020, supply of approximately 320
increased number of both homes and businesses (80,000–100,000 million litres of biofuels (double the 2015 supply) must be secured
annually) will need to be upgraded for improved energy efficiency for blending with fossil fuels for transport. In addition, 50,000 EVs
every year between 2017 and 2020, if Ireland is to achieve the would need to be present19 in the private car stock. To assist in
2020 energy efficiency target. Further savings will be required from meeting the target, the Department of Communications, Climate
transport and cross-sectoral measures.15 Action and Environment (DCCAE) have signalled their intention to
increase the mandated Biofuels Obligation20 blending rate beyond
Renewable energy (transport, heat and electricity) the existing share of 8.7% by volume at least once before the end
At the end of 2015 Ireland was, on average, over half way of 2020.
towards meeting its 2020 EU renewable energy target, with 9.1%
of gross final consumption derived from renewables. A shortfall Renewable heat
of 3 percentage points is anticipated in the Current Trajectory Achievements to date: Just over half (6.5%) of the national 12%
scenario, giving a renewable energy share of approximately heat target had been achieved by the end of 2015. Most of this
13%, rather than the target of 16% in 2020. Further, meeting the renewable heat is in the form of traditional solid biomass, especially
individual NEEAP and NREAP energy sector targets does not residues in the wood and wood products and food sub-sectors
guarantee overall renewable energy target achievement. of industry. Recent growth of modern renewable heat21 in the
residential and services sectors is attributed to the support of
SEAI grant schemes and revisions to building regulations that
require a share of energy demand in new buildings to come
13 Based on latest SEAI programme and fuel-cost 16 When calculated as per the 2009 Renewable 18 Future projections include battery electric vehicles
comparison data. Energy Directive (Directive 2009/28/EU) guidelines, only as data are currently not available to model
14 As detailed in Ireland’s 4th National Energy where a multiplier of two is applied to sustainable plug-in hybrid vehicle consumption. Given that
Efficiency Action Plan. biofuels and a multiplier of five is applied to the EVs in Ireland are dominated by battery EVs the
15 Efforts are underway to increase uptake rates renewable portion of electricity used in transport hybrid EV contribution is considered negligible
across all sectors. See details in Ireland’s Transition (road and rail). The renewable electricity share is for the volumes included in the projections.
to a Low Carbon Energy Future 2015-2030 (DCENR, taken from two years prior to the year for which 19 As per the 3rd National Energy Efficiency
2015). However only measures included in the the target is being calculated. Action Plan.
NEEAP were included in the NEEAP and NREAP 17 Data for 31 December 2015 available in the 20 Statutory Instrument no. 225 of 2016, National
scenario. International Energy Agency (IEA) IA-HEV Annual Oil Reserves Agency Act 2007 (Biofuel Obligation
Report (2016). Total vehicles at the end of 2016 Rate) 2016.
over 2,050 (source: IEA upcoming annual report 21 Modern renewable heat technologies include
update). Include both battery and plug-in hybrid efficient bioenergy technologies, solar thermal
electric vehicles. and geothermal/heat pumps.06 Ireland’s Energy Projections
Introduction to Ireland's energy projections
Figure 1: Accelerated effort required to 2020
Strong economic growth projected, resulting in
associated increased energy demand growth
Accelerated action
required to meet targets
Significant progress to date
• About two thirds of the • 2020 efficiency target is
energy efficiency target 20% demand reduction.
has been met. • Renewable energy target is
• Renewable energy is over 16% of final consumption.
9% of final energy demand.
from renewable sources. electricity target by 2020. In 2015, approximately 270 MW of wind
Current Trajectory scenario: While there is an anticipated policy capacity was installed, an increase on the average installed capacity
measure in the form of a Renewable Heat Incentive (RHI)22, given over the five-year period 2011–2015 of 200 MW.
the level of progress to date on renewable heat there is still a risk
of falling short of the renewable heat target. The extent of this Current Trajectory scenario: There is anticipated growth of wind,
shortfall will depend on the timing of implementation of the RHI solar PV and biomass CHP to 2020, with the majority of renewable
and the number of projects delivered by 2020. Policy impact in this electricity in 2020 coming from onshore wind. If all of the wind
scenario is anticipated to bring RES-H to 9% (compared to the 12% energy capacity within the Gate 3 grid connection process was
target), or 1.5 times the amount of renewable heat in 2015. installed by 2020, this would give a total installed capacity of 4.2
GW. This translates into 37.3% renewable electricity (RES-E) and
NEEAP and NREAP (target achievement) scenario: To achieve compares with 40% RES-E 2020 target.
the RES-H target of 12%, the amount of renewable heat must
double by 2020. This would require a combination of strong NEEAP and NREAP (target achievement) scenario: The NEEAP
growth in renewables, especially in the services sector, in and NREAP scenario assumes a more diverse source of renewable
conjunction with deep energy efficiency measures. electricity generation relative to the Current Trajectory, in line with
Government ambition. Given the increased demand projection,
Renewable electricity overall renewable electricity generation needs to grow at a rate of
Achievements to date: Wind energy, generated from 2.44 GW over 11% per year to meet the RES-E target of 40% by 2020. The
of installed capacity23 at the end of 2015, accounted for 21% of annual growth rate between 2011 and 2015 was 8% per year. If
total electricity generated in that year. Hydro and other renewable that growth were to come from onshore wind only, between 300
electricity sources had a combined share of 4% of total electricity MW and 350 MW of additional capacity would need to be installed
generation. This resulted in an overall renewable electricity share every year to 2020, which compares with an average installed
of 25% at the end of 2015, building towards the 40% renewable capacity of 200 MW over the five-year period 2011–2015.
22 A Renewable Heat Incentive (RHI) policy was 23 ESB Networks https://www.esbnetworks.ie/new-
recommended as part of the Draft Bioenergy connections/generator-connections/generator-
Action Plan available here: http://www.dccae.gov. connection-statistics; EirGrid http://www.
ie/en-ie/energy/topics/Renewable-Energy/bio- eirgridgroup.com/customer-and-industry/general-
energy/Pages/Bio-Energy.aspx. Public consultation customer-information/gate-3/ and SEAI annual
on the RHI closed in February 2017. Details renewable energy questionnaire to self-generating
available here: http://www.dccae.gov.ie/en-ie/ installations.
news-and-media/press-releases/Pages/Public-
Consultation-On-Design-and-Implementation-of-
RHI-scheme.aspxIreland’s Energy Projections
Introduction to Ireland's energy projections 07
1.4 Post-2020 outlook • T he renewable electricity contribution from the renewable
energy capacity in situ by the end of 2020 would quickly
A full suite of energy policies across energy efficiency and fall due to strong growth in electricity demand. By 2030 the
renewable energy are under ongoing development by DCCAE. renewable electricity share would drop by 10 percentage
The range of existing polices and measures in place to 2020 points in the absence of capacity building post-2020.
modelled in these projections are detailed in Ireland’s National
Energy Efficiency and Renewable Energy Action Plans published by Post-2020 scenario results highlight the crucial role of energy
DCCAE24. Given the post-2020 policy package is not yet defined, no policy in continuing to drive investment in energy efficiency and
assumptions have been made of the impact of energy policy post- renewable energy technologies and services post-2020, as Ireland
2020 in this modelling exercise. As a result, the post-2020 scenarios transitions to a low-carbon economy.
presented illustrate a worst-case scenario where there is no impact • Renewable transport energy from biofuels, electric vehicles
of future energy policy on future energy demand. and other alternative fuels must grow by 5% per year post-
2020 to maintain the 2020 renewable transport target to 2030.
Ongoing energy policy effort to 2030 will be further defined • Growth in renewable heat of 1 % per year is necessary to
within the National Energy and Climate Plan, required to satisfy maintain the 2020 RES-H share to 2030, but in the Current
the requirements of the recent Clean Energy for All Europeans Trajectory scenario, where the 2020 target is not met, a growth
package (Brussels, 30.11.2016 COM(2016) 860 final) published by rate of 4% per year is needed to meet 12 % RES-H by 2030.
the European Union. At the core of this will sit the National Energy • Renewable electricity generation would need to grow by more
Modelling Framework, which will be administered by SEAI and will than 3.6 % per year just to maintain the same share as achieved
facilitate more accurate post-2020 forecasting, which will take into by 2020. If met predominantly through wind energy a total
account future energy policy on the pathway towards 2030. installed capacity of 5.7–6 GW, an additional capacity of 1.5 GW
beyond the 2020 level, would be required to maintain the 40 %
The results presented in this report highlight the importance RES-E share.
of ongoing government action to support sustainable energy
deployment to meet our longer-term commitments. Scenarios Failing to achieve the 2020 targets will make Ireland’s role in
indicate that in the absence of further policy action post-2020: contributing to longer-term targets significantly more difficult
• Energy demand, particularly for electricity and transport, will and costly.
continue to rise in line with projections for low fuel prices and
renewed economic growth in Ireland.
• The overall renewable energy contribution would fall by
3–4 percentage points below the overall renewable energy
2020 target of 16% by 2030 due to anticipated growth in
energy demand.
Post-2020 scenario results highlight the
crucial role of energy policy in continuing to
drive investment in energy efficiency and renewable
energy technologies and services post-2020, as
Ireland transitions to a low-carbon economy.
24 T he National Energy Efficiency Action Plan
(NEEAP) and National Renewable Energy Action
Plan (NREAP) are available on the Department of
Communication, Climate Action and Environment
website. http://www.dccae.gov.ie.8 Ireland’s Energy Projections
Progress, challenges and impactsIreland’s Energy Projections
Ireland's energy use and targets 09
2 Ireland’s energy use
and targets
Ireland has a number of energy and emissions targets mandated at EU and national level. For improved
energy efficiency, a target has been set to reduce energy demand by 20% of the historic average energy
use during the period 2000–2005 through energy efficiency measures by 2020. For renewable energy,
binding EU targets of 16% of final energy use (all sectors) and 10% of energy use in the transport sector
must be derived from renewable sources by 2020.
The current suite of energy efficiency measures is described in detail With respect to greenhouse gas (GHG) emissions reduction, Ireland,
in Ireland’s National Energy Efficiency Action Plan (NEEAP) and along with Denmark and Luxembourg, has the most challenging
annual reports.25 Data from the latest NEEAP (NEEAP#4, 2017–2020) target for GHG reductions in the EU27; namely a 20% reduction on
have been used in these projections. In order to achieve Ireland’s 2005 greenhouse gas emissions levels by 2020.28 Emissions targets
overall renewable energy target, national sub-targets have also include emissions from energy use (such as transport, households,
been set in the end-use sectors of heat (12%) and electricity (40%). services) and also non-energy related emissions including from
The pathways to achieving these targets have been set out in the
16%
National Renewable Energy Action Plan (NREAP).26 Renewable
40% 12%
for 61%
10%
agriculture and waste disposal. Energy-related emissions account
of total national emissions
Renewable Renewable(Figure 3). Therefore, activity
electricity heat transport
Figure 2: Headline energy and emissions targets
Energy 20% energy savings
Efficiency 20%
16% 40%
by 2020 (31,925 GWh)
Renewable
12%
Renewable
10%
Renewable
electricity heat transport
Renewable 20%
16% 40%
Overall 16%
16%
RES of national
12%
40% 12%
10% 10%
Energy 20% Renewable
consumption electricity
Renewable
Renewable
electricity
heat
Renewable
Renewable
transport
heat
Renewable
transport
Three sub-targets
EU Effort Sharing Decision (2013–2020)
Emissions 20%
20% •
•
20%
20% reduction non-ETS emissions relative to 2005
Annual limits
25 Ireland’s
20%
National Energy Efficiency Action Plan #4
20%
National Renewable Energy Action Plan, Ireland.
26 28 For the non-ETS (Emissions Trading Scheme)
(NEEAP #4, (DCCAE, 2017) Available here: http:// Submitted to the European Commission under sectors which includes transport, buildings
www.dccae.gov.ie/en-ie/energy/topics/Energy- Article 4 of Directive 2009/28/EC. Department (excluding electricity) and small business in terms
Efficiency/national-energy-efficiency-action-plan of Communications, Energy and Natural of energy use but it also relates to agriculture and
(neeap)/Pages/National-Energy-Efficiency-Action Resources, 2010 wastes. The remainder of total national emissions
Plan-(NEEAP).aspx 27 Effort Sharing Decision (Decision No 406/2009/EC) are in the ETS and subject to a cap and trade
scheme.10 Ireland’s Energy Projections
Ireland's energy use and targets
Figure 3: Greenhouse Gas emissions in Ireland (2015)
Waste 2%
5%
Energy
61% 24%
Agriculture
ETS Emissions
Industrial process
Energy
represents
61%
of Ireland’s total
37%
Non-ETS Emissions
32% GHG emissions
Source: EPA
contributing to achievement of our energy targets will help to 2.1 Target interactions and dependencies
meet the binding EU 2020 greenhouse gas (GHG) emissions
target, but does not guarantee it. While Ireland has quite a large Energy end-use demand can be broadly categorised into three
proportion of agricultural emissions relative to other European distinct modes of energy use, namely; electricity, transport and
countries, it is clear that GHG emissions cannot be reduced without heat. Renewable energy targets are based on a percentage of
tackling energy emissions. end-use demand. In addition to directly contributing to lowering
emissions, this means that energy efficiency actions can contribute
Meeting Ireland’s 2020 renewable energy and energy efficiency towards meeting renewable energy targets. Conversely, a shortfall
targets will put Ireland on a low-carbon pathway and trajectory in in energy efficiency would mean that greater deployment of
terms of meeting future targets in 2030 and 2050. The EU, along renewable energy technologies will be needed in order to meet
with several other Member States, has set out ambitions to reduce the 2020 renewable targets. As the majority of energy efficiency
greenhouse gas emissions by 80% to 95% by 2050, compared with measures relate to energy use for heat, this mode in particular is
1990 levels, with an EU-wide reduction of 40% by 2030 already likely to be impacted by any shortfall in energy efficiency targets.
agreed by Member States.29 Negotiations on targets for individual
Member States for 2030 are ongoing. The Paris Agreement forged
at COP21 provides further impetus for strong action on climate
change mitigation in Ireland and internationally.
29 For details refer to the EU 2030 climate and energy 30 Directive 2003/87/EC establishing a scheme for 31 Information on the EU ETS is available from https://
framework. Available at: https://ec.europa.eu/ greenhouse gas emission allowance trading within ec.europa.eu/clima/policies/ets_en
clima/policies/strategies/2030_en the Community and amending Council Directive
96/61/ECIreland’s Energy Projections
Ireland's energy use and targets 11
2.2 Electrification and non-Emissions Trading 2.3 Energy efficiency target progress and ambition
Scheme (ETS) target
By the end of 2015, almost 60% of the energy efficiency target
One of the main means of addressing climate change at an EU level had been achieved i.e. energy demand has been reduced by 12%
is through the Directive establishing a scheme for greenhouse gas relative to a 20% reduction target to be achieved by 2020. These
emissions trading within the Community (2003/87/EC)30, also referred savings were the results of tried and tested solutions across all
to as the Emissions Trading Directive. The EU emissions trading energy-using sectors of the economy – for example, improved
system (EU ETS)31, which came into effect in 2005, is a market-based building regulations, energy management in large industrial
system to reduce the emissions of climate-damaging greenhouse installations, electricity system efficiencies, the retrofitting of
gases. It is based on the principle of a ‘Cap and Trade’ system. The existing buildings and more efficient vehicles on Ireland’s roads.
cap makes sure that CO2 becomes a commodity and, thus, CO2 is The latter may not have as big an impact as originally expected
valued at a price, which is determined by the supply and demand due to discrepancies between vehicle manufacturers’ performance
at the (trading) market. The ETS sector comprises of electricity labels and ‘real world’ performance.32
generating power stations, large-scale industrial plants and the
aviation sector (since 2012). All remaining emissions are termed The savings achieved at end of 2016 (18,654 GWh) represent
'non-ETS emissions'. These comprise emissions resulting from over €1 billion33 in reduced energy bills for businesses and
energy consumption in the residential, transport, agriculture and householders. In other words, had the upgrades delivered
waste sectors, as well as small businesses/industry. It also comprises across the residential, business and transport sectors not been
non-energy related agriculture and waste disposal emissions. undertaken, energy bills would have been over €1 billion higher
Ireland must achieve a 20% reduction in non-ETS emissions by 2020 in 2016. In addition, approximately 4.4 million tonnes of CO2 have
under the EU Effort Sharing Decision (Decision No 406/2009/EC). been saved through actions taken to improve energy efficiency
to date.34 Further details are available from the latest NEEAP
Shifting demand between electricity, transport and heat can alter report, which highlights the challenges of meeting the target and
the levels of effort required in each mode to meet the overall 2020 notes that without expansion to existing policy, the 2020 energy
renewable energy target. For example, transferring demand from efficiency target is unlikely to be met.35 The latest government
the heat and transport sectors to electricity increases the effort policy statement on sustainable energy, Ireland’s Transition to a
required to meet the electricity component of the renewable target, Low Carbon Energy Future (DCENR, 2015) highlights a proposed
but has the effect of reducing the effort required to meet the heat range of actions and policy priorities that will contribute towards
and transport renewable goals. In addition, electrification of the the energy efficiency target. Many of these are also described in
heat and transport sectors could also assist Ireland in complying the recently published National Mitigation Plan36.
with its challenging non-ETS emissions reduction target by shifting
emissions into the ETS sector.
Figure 4: Annual energy savings and potential savings
Energy savings worth
over €1 billion have been
achieved through improved
€2.4
energy efficiency but €2.4 billion
billion is possible €1billion potential
achieved
32 An aspect that will be considered further in future 35 http://www.dccae.gov.ie/en-ie/energy/topics/ 36 http://www.dccae.gov.ie/en-ie/climate-
impact modelling. Energy-Efficiency/national-energy-efficiency- action/topics/mitigation-reducing-ireland's-
33 €2013 as estimated for the NEEAP 4 update action-plan-(neeap)/Pages/National-Energy- greenhousegas-emissions/national-mitigation-
(DCCAE, 2017). Efficiency-Action-Plan-(NEEAP).aspx plan/Pages/default.aspx
34 As per measures reported in Ireland’s latest
National Energy Efficiency Action Plan (NEEAP)12 Ireland’s Energy Projections
Ireland's energy use and targets
Figure 5: Energy efficiency progress and target and selected actions
2020 Current Trajectory 2020 NEEAP / NREAP
2020 Current Trajectory 2020 NEEAP / NREAP
2016 Savings Achieved Current Trajectory
2020 Current Trajectory Target Achievement
2020 NEEAP / NREAP
(NEEAP and NREAP scenario)
2016
2016
2016 2020
2020 2020 20202020
2020 target target
target
18,654
18,654
18,654 25,904
25,904
25,904 31,925
31,92531,925
GWh
GWh
GWh PEE
PEE
PEE GWh
GWhGWh PEE
PEE PEE GWh
GWh PEE GWh
PEEPEE
NEW BUILDINGS BUSINESS ENERGY SUPPLY
•
All new homes to be built to significantly • L arge industry Energy Network, tax •
Ongoing investment in efficient
enhanced building standards incentives (ACA), SME Programme electricity supply network and
• Scale up retrofit of existing dwellings • Estimated investment €80 million p.a. generation plant
CROSS SECTORAL PUBLIC SECTOR TRANSPORT
• E nhanced supplier obligations • 3 3% savings via the Public Sector • romote technology change to
P
• Full impact of carbon tax Action Plan electric vehicles
• Modal shift, eco-driving, land-use
planning
Full achievement of the 2020 energy efficiency target of 31,925 account.38 Furthermore, government balance sheets could be
GWh would deliver total annual emissions reductions of 7.6 million improved by around €1.5 billion by 2020.39
tonnes of CO2 every year from 2020.25 The value of achieving the
target could amount to over €2.4 billion in reduced energy bills As highlighted by the International Energy Agency (IEA)40 and
every year. The current target trajectory (as detailed in Ireland’s others, energy efficiency provides a range of benefits beyond
National Energy Efficiency Action Plan #4) is likely to lead to savings energy and financial savings. These include health and comfort
of 5.9 million tonnes of CO2 and just over half of the possible improvements to householders, increased asset values following
economic saving or €1.5 billion annually from reduced energy bills. efficiency upgrades, improved business competitiveness,
macroeconomic and employment benefits and emissions
Notably, research shows that the costs of energy efficiency reductions – thus enhancing the net benefit to society. In addition,
investments are significantly outweighed by the benefits provided as already noted, achievement of the energy efficiency target
over the lifetime of the investment made. It is estimated that the would contribute to the parallel requirement to achieve Ireland’s
gap to the energy savings target can be achieved at a net benefit renewable energy targets, particularly renewable heat.
to society of €8 billion37, after the costs of upgrades are taken into
37 €2013 Based on SEAI fuel cost comparison data 38 Net present value (NPV) Capturing the Multiple Benefits of Energy
40
and mix of fuel saved as described in NEEAP 4 39 Unlocking the Energy Efficiency Opportunity, Efficiency, IEA (2014)
SEAI (2015) http://www.iea.org/topics/
energyefficiency/energyefficiencyiea/
multiplebenefitsofenergyefficiency/Ireland’s Energy Projections
Ireland's energy use and targets 13
Ongoing action 2.4 Renewable energy targets progress
A range of actions are currently being pursued in the interest of and ambition
accelerating the rate of uptake of energy efficiency in Ireland. The
development of alternative finance mechanisms to enhance rates Ireland must achieve a mandatory target of 16% renewable
of energy efficiency retrofitting of homes and businesses, together contribution in overall consumption and a 10% share of renewable
with the ongoing implementation of an Energy Efficiency Obligation energy in transport consumption as set out in the Renewable
(EEO) on energy suppliers41, will be crucial to meeting the target. Energy Directive (2009/28/EC). Up to end 2015, 9.1% of overall
Innovative solutions will also be needed in the transport sector, energy demand was derived from renewable sources through a
including continuing to incentivise the uptake of energy-efficient range of actions.
vehicles, promote eco-driving, increase the use of public transport,
and reduce the number and length of journeys where possible. In addition to avoiding greenhouse gas emissions, renewable
energy deployment reduces Ireland’s reliance on imported fossil
Maximising the impact of actions such as auditing, mandated in fuels, lowers the potential impact of future energy price shocks,
the EU Energy Efficiency Directive42, as well as a renewed focus on and delivers economic and enterprise benefits to Ireland.43
the role of behavioural science and economics, will be important.
As we get closer to 2020, an increased role for regulation requiring Figure 6 shows the proportion of overall energy demand provided
action on energy efficiency may be appropriate in order to achieve by renewables in 2010 and 2015, and the Current Trajectory
savings from various sub-sectors. projections in 2020 for RES-E, RES-H and RES-T sub-targets.
SEAI has recently launched initiatives including a Deep Retrofit The figure highlights the relative contribution of each sub-target
Pilot and a range of innovative finance pilots that will inform future to overall renewable energy supply. Electricity is the smallest
programme development. These actions are aimed at scaling up sector in terms of demand, accounting for a 20% share, and
the number of homes and businesses undertaking an energy therefore the 40% electricity target contributes less to the overall
efficiency renovation each year, and to drive each renovation renewable energy target. It is evident that the significant progress
deeper, leading to greater energy savings per home or building. in renewable electricity deployment will need to continue but
with further contributions required from the heat and transport
In addition, SEAI’s Behavioural Economics Unit will seek to sectors also.
better understand the context in which people make decisions
around sustainable energy investments and everyday decisions The level of effort required to meet the renewables targets for
that impact on energy use. SEAI will use the latest research in transport, heat and electricity is described in the following
behavioural science to design and test interventions with the aim sections on the individual targets.
of increasing uptake across energy efficiency grant programmes.
Using rigorous and evidence based methodologies, the
effectiveness of potential interventions will be measured
before they are scaled.
Electricity is the smallest sector in terms of demand,
accounting for a 20% share, and therefore the 40%
electricity target contributes less to the overall renewable energy
target. It is evident that the significant progress in renewable
electricity deployment will need to continue but with further
contributions required from the heat and transport sectors also.
41 More information at: http://www.dccae.gov.ie/ 42 Directive 2012/27/EU
en-ie/energy/topics/Energy-Efficiency/business/ 43 See, for example: Macroeconomic and Net
Pages/EU-obligations-under-Energy-Efficiency. Employment Impacts of Ireland’s Renewable Heat
aspx and Electricity Targets in 2020, SEAI (2015).14 Ireland’s Energy Projections
Ireland's energy use and targets
Figure 6: Renewable energy share – overall progress and Current Trajectory (2020)
2010
2010
2010
2010
2010 2015
2015
2015
2015
2015 2020
2020
202020202020
5.6%
5.6%
5.6%
5.6%
5.6% 9.1%
9.1%
9.1%
9.1%
9.1% 13.2%
13.2%
13.2%
13.2%
13.2%
Renewable Renewable Renewable
Renewable
electricity: 3% Renewable
electricity: 5.5% Renewable
electricity: 7.6%
Renewable
Renewable
Renewable
electricity: 3% Renewable
Renewable
Renewable
electricity: 5.5% Renewable
Renewable
Renewable
electricity: 7.6%
Renewable
electricity:
electricity:
electricity:
3%3% 3% Renewable
electricity:
electricity:
electricity:
5.5%5.5%5.5% Renewableelectricity:
electricity:
electricity:
7.6%
7.6%7.6%
heat: 1.8%
Renewable heat: 2.5%
Renewable heat: 3.6%
Renewable
heat:
Renewable
Renewable 1.8%
Renewable heat:
Renewable 2.5%
Renewable
Renewable heat: 3.6%
Renewable
Renewable
Renewable
Renewable Renewable Renewable
heat:
heat:
heat:
1.8%1.8%1.8%0.8%
transport:
Renewable heat:
heat:
2.5%
heat:
transport:2.5%2.5%
1.1%
Renewable heat:
transport: heat:
2.0%3.6%
Renewableheat:
3.6%
3.6%
transport: 0.8% transport: 1.1% transport: 2.0%
Renewable
Renewable
Renewable Renewable
Renewable
Renewable Renewable
Renewable
Renewable
transport:
transport:
transport:
0.8%
0.8%0.8% transport:
transport:
transport:
1.1%
1.1%1.1% transport:
transport:
transport:
2.0%
2.0%2.0%
Renewable energy source – Transport (RES-T) Concerns have been raised globally about possible adverse
Figure 7 indicates Ireland’s progress towards the 10% RES-T target land-use impacts arising from demand for biofuels derived
– a mandatory target agreed under the EU Renewable Energy from food and feed crops. There is a risk that increased demand
Directive (2009/28/EC) to be achieved by 2020. Most of the for these feedstocks for biofuel can lead to a phenomenon
renewable transport contribution comes from biofuel. Currently, all known as Indirect Land Use Change (ILUC). To address ILUC
transport fuel contains on average around 3.2% (by energy content concerns the European Commission published a Directive in
or 3.6% by volume) biofuel blended with fossil-based petrol or September 2015, containing amendments to the Renewable
diesel. This means that the average passenger car travels 590 Energy Directive. The new Directive proposed revised calculation
kilometres per year on biofuel. Biofuel uptake in Ireland is driven rules for the individual RES-T target, including additional weighting
primarily through the Biofuel Obligation Scheme, an obligation for advanced biofuels (which count double towards the RES-T
on fuel suppliers to blend an increasing percentage of biofuel target) and for the renewable proportion of the electricity
with their fuel. Biofuels are important in helping Ireland to meet its used in electric vehicles (which count five times towards the
greenhouse gas reduction targets. Most biofuels deliver significant RES-T target).
greenhouse gas (GHG) savings over their fossil fuel equivalents.
All biofuels supplied in Ireland are required under the EU Directive These weightings do not apply however in the calculation of the
2015/1513 to deliver at least 60% GHG savings relative to fossil transport contribution to the overall 2020 16% renewable energy
fuel alternatives and in 2016 the average litre of biofuel in the Irish target. This means that while it is now easier to meet the 10%
market delivered almost 80% savings (NORA, 2016 ).44 RES-T target with some contribution from EVs and double-counted
44 NORA (2016) The Biofuels Obligation Scheme –
Annual Report 2016 [Available online] http://www.
nora.ie/_fileupload/457-X0174%20-%20BOS%20
Annual%20Report%202016.pdfIreland’s Energy Projections
Ireland's energy use and targets 15
Figure 7: Renewable transport (RES-T) progress and target
10% 2%
8%
8%
90% 10% 90%
2%
8%
6.1%
8%
5.1%
90%
6.1%
5.1%
2.4% 2
2.4%
0.03% 0.03%
0.03%
2005 2010 2015 2017 2010 2020 TARGET 2005 2
2005 2015 2017 2020 TARGET
Renewable electricity RE Dir)Biofuel (weighted RE Dir)
Biofuel (weighted Renewable electricity Biofue
ctricity
biofuels, the transport contribution to the overall renewable RES-T 2020 target. Nonetheless, they play an important role in the
energy target is less than previously anticipated. diversification and decarbonisation of the transport fleet as well as
improving air quality and noise reduction in urban areas.
Most biofuel produced in Ireland is derived from wastes and residues
such as used cooking oil and tallow. Biofuels derived from these Existing supports for EVs are Vehicle Registration Tax (VRT) relief,
feedstocks typically deliver large GHG savings and do not result in low motor tax rates, price reductions via grants and demonstration
adverse land-use impacts. It is estimated that approximately 320 million projects. There is a comprehensive network of 1,200 public charge
litres of biofuel will be required in order to meet the 10% RES-T target.45 points across the island of Ireland. These have been deployed
by ESB ecars since 2010, with the support of the Commission
In 2008, the Irish Government set a target of 10% of all vehicles in for Energy Regulation, the European Union, Northern Ireland’s
the transport fleet to be powered by electricity by 2020. This has Department for Infrastructure and Government Departments.
since been revised to a target of 20,000 EVs in the transport fleet
by 202046, however as part of this exercise the Current Trajectory Growth in EVs has been slower than anticipated47 and at the end of
projects an EV fleet of 10,000 by 2020. Despite their high efficiency, 2016 the number of battery only EVs in Ireland was approximately
EVs will only make a relatively small contribution to the overall 2,000, accounting for 0.3%48 of new car sales. To achieve the
45 This is lower than previous estimates as it is 47 During the recession consumers were not making 48 Battery electric vehicles only – excludes hybrid
assumed that 95% of biodiesel will be eligible for purchasing decisions at the same frequency they electric vehicles.
double counting under the new ILUC rules by would previously have made them, thus there
2020. was not a turnover of purchases that could be
46 Department of Transport, Tourism and Sport, influenced to choose EVs. In addition there was a
2017, National Policy Framework: Alternative lack of choice of vehicles in the market. Since the
Fuels Infrastructure for Transport in Ireland 2017- Government grants programme commenced in
2030. http://www.dttas.ie/sites/default/files/ 2011 the share of EVs as a percentage of new car
publications/public-transport/english/alternative- sales has grown from 0.05% in 2011 to 0.3% in
fuels-framework/6186npfalternative-fuels300517. 2016. There has also been growth in second-hand
pdf EV imports from the UK.16 Ireland’s Energy Projections
Ireland's energy use and targets
Figure 8: Renewable heat (RES-H) progress and target
3%
12% 9%
9% 88%
88% 12%
%
9%
6.9%
88% 6.5%
6.9%
6.5%
1
1.5%
1.9%
1.5%
1.9%
1.5%
2005 2
2005
2005 2010 201520152017
2010 2017
2020 2020
TARGET TARGET
Indus
Industry Household Services Other
Industry Household Services Other
stock number of 10,000 battery EVs, modelled in the Current requirement for renewable energy supply for new residential
Trajectory scenario, it would be necessary for EVs to account for buildings that can be met via renewable heat technologies.
approximately 2% of all new cars sold in Ireland by 2020. A similar requirement has recently been applied to buildings
other than dwellings in the 2017 revision to non-domestic
Renewable energy source – Heat (RES-H) building regulations.51
To date the most significant contribution towards the 12% RES-H
target has come from the industrial sector, with more modest The following policies and measures will contribute towards
contributions from the household and services sectors (Figure 8).49 achievement of the 2020 RES-H target:
Industry sub-sectors such as wood and wood products and food and • The introduction of a Renewable Heat Incentive (RHI), currently
beverage use production residues as renewable sources of energy. under development.
Deployment of modern renewable heat such as efficient biomass • Deployment of biomass use for heat (e.g. efficient biomass boilers).
boilers and solar thermal systems has been supported by grants in • Additional biomass CHP installations deployed with the
the past (e.g. the ReHeat Scheme 2009–2011 targeted at commercial support of the existing Renewable Energy Feed-In Tariff (REFIT)
and industrial applications and the Greener Homes Schemes scheme for biomass CHP.
2008–201150 for the residential sector). In addition, since 2011 the • Additional RES-H contribution from new homes built to more
Residential Building Regulations include a minimum threshold stringent building regulations from 2011 onwards.
49 The RES-H target is reported on a sectoral basis 50 At the time of publication of this report, a grant for 51 2017 Building regulations: Conservation of Fuel
given the complexity of modelling technology use solar heating is included under the Better Energy and Energy – Buildings other than Dwellings.
in the sector. Homes grant scheme, whereas biomass boilers are
not currently supported.You can also read
