IEA commends Irish government for its energy policy reforms; outlines significant challenges on market reform and transport energy efficiency

(Dubin) — 3 July 2007

“Ireland has seen tremendous economic growth in the last 15 years, and its energy supply system has significantly contributed to enabling this growth,” Claude Mandil, Executive Director of the International Energy Agency (IEA), said today in Dublin. During the presentation of the publication Energy Policies of IEA Countries – Ireland 2007 Review, Mr. Mandil also praised the government’s Energy White Paper as the first comprehensive energy package in more than 30 years. He singled out the decision to develop the all-Ireland energy market as vitally important. Mr. Mandil emphasised that “implementation of the proposed reforms in the White Paper will be critical to ensuring the development of a really competitive market for energy in Ireland”.

Improvements to Irish energy policy are possible. “Dramatic increases in energy efficiency in power generation during the last 15 years have not been able to counteract the increasing emissions of greenhouse gases in Ireland,” Mr. Mandil explained, “and the government will have to focus very strongly on addressing the rise of these emissions through further increases in efficiency.”

Market reform
Ireland has been in a very long transition phase regarding market reform since the establishment of the independent regulator, the Commission for Energy Regulation, in 1999. The end of this period has now been heralded by the publication in March of this year of the Energy White Paper 2007: Delivering a Sustainable Energy Future for Ireland and will finally be marked by the start of the all-island market for electricity this autumn. The market reform measures proposed in the White Paper will move the development of competition forward. Combined with the plans for further interconnection with the United Kingdom, these measures will ensure that the dominance of the incumbent supplier is broken. “International interconnection in a market-based framework is the best guarantee for continued security of energy supply in Ireland,” Mr. Mandil observed. The next challenge for the government will be the reform of the gas market in Ireland.

Transport Energy Demand and Infrastructure Improvements
As a consequence of the significant economic growth, transport energy demand is expected to more than triple by 2010. Congestion and the lack of sufficient public transport, particularly in the Dublin area, is now becoming an impediment to continued growth. It will take time to complete large infrastructure projects to relieve this situation. At the same time, fuel taxation in Ireland is comparatively low, reducing the incentive for the purchase of more energy-efficient vehicles. Mr. Mandil added: “The government needs to give full attention to the implementation of key transport projects planned in the Dublin area and elsewhere in Ireland, but should also consider whether the price signal for fuel is the right one.”