Energy security – even the big guys worry about it! But what is energy security and how do you achieve it? Engineers Ireland Energy Environment and Climate Action Division recently had an event on this specific topic and it was stark. Our oil reserves are set at 90 days storage and managed by the National Oil Reserve Agency (NORA), our indigenous gas supply is restricted to Corrib with a limited lifespan and our gas storage, Kinsale, has been closed for several years. But is energy security down to the assets you have in the ground or is it more relevant to determine what you can do with these assets via what you can trade. I would argue that it is the latter. 

A fleet of CCGTs is of little use if you don’t have the gas to fuel them.

Having gas storage has reduced impact if you are the last customer at the end of a pipeline.

Oil reserves if they cannot be transformed into useful end product may not give you the security you desire. 

Don’t get me wrong, these assets are imperative. They are the bedrock of your security, but if you cant trade, if you cant bring something to the table the security can be blunted. In the same way that trade deficits can be remedied by increasing your exports we should assess our energy security by having something to export. Renewables give us in Ireland this ability to trade, and this ability to trade gives us a seat at the table. 

An example of this thesis can be seen with Russia and its Nordstream strategy. Russia is the second largest producer of gas and the third largest producer of oil in the world with Nordstream seen as a means to increase their energy security by circumventing the Ukraine [1]. Nordstream 1 was beset by sanctions to delay its construction but finally flowed gas between Vyborg in Russia to Lubmin in Germany [2]. Nordstream 2 was a means to underpin Germany and Russian gas security but in the wake of the war in the Ukraine it highlights having assets is of little use if the other entity doesn’t want your product. Oil and gas still flows from Russia to Europe but having an unreliable trading partner does not give you security. 

Qatar faced similar dilemmas when embarking on their development of their LNG capabilities. When faced with the risk of looking west or east in terms of their customer base they decided “lets do both” and now have an export capacity of 80 MTpa which can service markets in the west and east [3]. Two customers are better than one. 

Figure 1 Qatar North Gas field that started their LNG industry

And this idea of your trading capability being at the forefront of energy security can be seen in the way Saudi Arabia market base developed. In the famous Cater Doctrine whereby any issues in the Persian gulf that undermined US interests in terms of access to oil secured the markets to which Saudi Arabian oil flowed. Having all the oil in the world without a route to market does not boost your energy security. 

Ireland Position

The current energy shock being felt around the world is comparable to the 1973 oil embargo, and while this was an event focused on oil the current shock is impacting all commodities. Ireland was in a different position then. It was a recent member of the European Communities in 1972. It had an enviable position with a big brother in the US and benefitted from a growingly friendly neighbour in Britain. But in energy terms we had little negotiation leverage with the exception of the Kinsale gas field which was discovered in 1971 and operational by 1978 [4]. 

Since that discovery Ireland has not made further progress with the exception of Corrib, and now faced with an energy shock and a more insular UK and an internally divided US we have to determine how best to fend for ourselves in terms of energy. Luckily, this time we have alternatives. The shocks from the 70’s paved the way for new innovative technologies. France famously developed its nuclear capabilities but this time period also set the seed for renewables, slowly growing into the next century but exploding in terms of cost reductions and deployments from the 2010’s onwards.

And this is where Irelands greatest chance lies. Previously we had little or nothing to bring to the table in terms of energy security, now we have the potential of renewables with a 30 GW feasible off the coast with the onset of offshore wind.

In much the same way that currency markets and trade deficits are determined by one country buying more from another we should consider energy in the same way. We have an export potential with renewables which we should avail of to distinguish ourselves. Any system developed should be resilient and robust. Michael Liebreich has an excellent podcast where he highlights what infrastructure needs to manage our risks [5]:

• Robustness
• Resilience
• Recovery
• Ability to adapt

This should not be lost in any future energy system we build from a security perspective.

Growing potential- offshore leading the way

The growth of offshore renewables has been phenomenal. A decade ago there was less than 0.5 GW installed whereas by 2021 Europe could boast of close to 28 GW installed [6]. 

Figure 2 Offshore build out in Europe

At the same time the Levelised Cost of Energy (LCOE) has fallen dramatically. Starting the decade at ~€200/MWh, but finishing it at closer to €60/MWh the learning curve has been significant. And, if as predicted it continues to fall and floating offshore benefits from these reductions, we could see prices in the €60’s/MWh by 2030 [7]. 

Ireland has to be ready for this opportunity!

Figure 3 LCOE costs for Fixed & Floating Offshore Wind

Ireland Trading Capability

But what is the opportunity for Ireland, and how can trading help deliver it. Currently we are the one of the largest importers of fossil fuels in Europe. We import 70% of our energy needs. 

Figure 4 Irelands energy system 2019

But, we have hope. We have the opportunity to reduce this dependence from 70% to 5%. At the same time our energy system can be decarbonised and we can actually be an exporter of power. The research by WEI and MAREI in their report “Our Climate Neutral Future – Zero by 50” highlights that we can export 1.6 TWh, as well as the products we create on the island with clean renewable exports [8]. This analysis was done assuming 9.3 GW of wind installed and with the offshore potential far in excess of this we have a tremendous export capability in terms of power.

Figure 5 Ireland potential energy system 2050

The diagram above shows a potential energy system in 2050. 

It shows almost no dependence on oil. 

No requirement for gas and no reliance on coal.

 It can be done and if we have something to trade, we have a route to energy security which renewables will help us achieve. 

Works Cited

[1]	IEA, “Why does Russian oil and gas matter?,” [Online]. Available: https://www.iea.org/articles/energy-fact-sheet-why-does-russian-oil-and-gas-matter.
[2]	D. Yergin, The New Map, Pg 84.
[3]	D. Yergin, The Quest, Pg 322.
[4]	Wikipedia, “Kinsale Head Gas Field,” [Online]. Available: https://en.wikipedia.org/wiki/Kinsale_Head_gas_field. [Accessed 21 April 2022].
[5]	M. Liebriech, “Resilience, Ukraine and Net Zero- What could possiblly go wrong?,” https://www.cleaningup.live/cleaning-up-audioblog-episode-6-resilience-ukraine-and-net-zero-what-could-possibly-go-wrong/.
[6]	Wind Europe, “Offshore wind energy statistics 2021,” 2022.
[7]	WEI, “Building Offshore Wind Report,” [Online]. Available: https://windenergyireland.com/images/files/20201203-final-iwea-building-offshore-wind-report.pdf.
[8]	WEI, “Endgame- A zero-carbon electricity plan for Ireland,” https://windenergyireland.com/images/files/20210629-baringa-endgame-final-version.pdf, 2021.