Winter is coming – and both consumers and businesses are understandably very worried.
hroughout the year, we have seen price increase after price increase from conventional energy companies. Every provider in the Irish market, bar one, has already announced double-digit hikes in electricity and gas prices this year.
And the worst is yet to come. Brokers are warning of ‘carnage’ in the market, with price hikes of up to 50pc on the way for commercial customers. And all this is before we consider the very real possibility of energy blackouts and the economic toll this could take on businesses and consumers alike.
We have an environmentally and financially unfriendly model that is on its last legs.
How did we get to this?
For starters, there is far too much pressure on our outdated national grid. Covid delayed much-needed power station maintenance in Ireland, while two gas powered generation facilities in Cork and Dublin (which comprised 15pc of our energy generation) are temporarily closed. Added to that, the generation of renewable energy is so low as to be almost farcical – and all the while, customer demand is soaring.
We are simply not helping ourselves. Take the grid, for example. The bureaucratic red tape around the sale of energy to the grid is such that many customers have up to this point been unable to export unwanted solar energy to the grid, even if they are willing to give it away for free.
That is a savage indictment on a system that should be embracing energy generation of any kind – particularly low-cost, environmentally friendly energy like solar.
For some time, the Government has been talking about introducing a feed-in tariff (through which incentives are offered to those willing to invest in renewable energy and sell it back to the grid). Again, this promising plan has been put on the back-burner by politicians who are unwilling or unable to see the bigger picture.
Furthermore, we have had several Government-backed renewable energy supply auctions whereby renewable providers (primarily solar operators) bid for the right to sell renewable energy to the grid on long-term supply agreements – but only one of the winning bids is actually operational today and providing the energy they agreed to supply.
Planning permission is also a huge headache in the market. It adds cost and impacts hugely on the timely delivery of projects. In the UK, for example, a solar installation of up to 1MW (enough to power about 200 homes) can be done without planning permission.
We have heard a lot of talk about how multinationals can save the environment through the use of renewables, but the only way to really turn the dial in this country is to promote widespread adoption of new sources of energy among SMEs. In many respects, these are the lifeblood of the Irish economy and should be treated as such by the Government.
For example, solar energy could mean price reductions of up to 30pc for customers compared with conventional energy providers. Installations are quick and simple, the supply cost can be fixed for 20 or 30 years.
Think about the difference this kind of saving and this kind of environmentally conscious move could mean for a business already struggling in the aftermath of the pandemic – trying to attract new customers and facing massive energy cost increases on top of it all.
If the model is broken (and we are of the firm belief that it is), then it is time to rip up the script and start again. Businesses now must take the lead and cut ties with conventional utility companies, who are more concerned with maximising the productivity of their existing coal and gas-powered assets, than in doing anything meaningful about the environment.
Let’s face it, turkeys are never going to vote for Christmas.
To be frank, the green energy initiatives in the Budget are largely underpinned by the shaky foundations of our conventional energy suppliers – and the politicians did not even mention solar power once.
If the Government wants to make meaningful, swift strides towards a greener, better future, it must incorporate renewable energy into a realistic, well thought out plan for the future.
Renewables cannot be viewed as alternate sources of energy; they must be seen as indispensable – with a view to making them our primary source of energy.
Businesses want to do the right thing by the environment; their customers and clients demand it of them. And as Covid starts to recede and our energy crisis intensifies, they need a helping hand. The answer is staring us in the face. There really is no question as to what our next steps need to be.
Kevin Maughan is CEO of clean energy provider UrbanVolt