Dublin, 23 January 2025
IEA: Ireland Energy Policy Review 2024
Government action plays a pivotal role in ensuring secure and sustainable energy transitions and combatting the climate crisis. Energy policy is critical not just for the energy sector but also for meeting environmental, economic and social goals. Governments need to respond to their country’s specific needs, adapt to regional contexts and help address global challenges. In this context, the International Energy Agency (IEA) conducts Energy Policy Reviews to support governments in developing more impactful energy and climate policies.
This Energy Policy Review was prepared in partnership between the Government of Ireland and the IEA. It draws on the IEA’s extensive knowledge and the inputs of expert peers from IEA member countries to assess Ireland’s most pressing energy sector challenges and provide recommendations on how to address them, backed by international best practices. The report also highlights areas where Ireland’s leadership can serve as an example in promoting secure clean energy transitions. It also promotes the exchange of best practices among countries to foster learning, build consensus and strengthen political will for a sustainable and affordable clean energy future.
Published January 2025
Online table of contents
Executive summary
The IEA energy policy review of Ireland took place from 18 to 22 April 2023. It came at an opportune time for Ireland, which published a comprehensive package of energy security measures to 2030 in November 2023. The package sets out permanent measures to guarantee long-term security of supply to ensure net zero emissions in 2050 and short-term, transitional measures to 2030. Given Ireland’s location and its current reliance on electricity and natural gas imports from a single supply source, the commitment to supply 80% of electricity from renewable sources by 2030 has important climate and energy security benefits. The 2021 Climate Act requires the implementation of a carbon budget to reach an emissions reduction target of 51% by 2030 compared to 2018. Ireland is currently not on track to meet this target.
Implementation must accelerate to reach 2030 targets
The IEA commends the Irish government for its comprehensive list of targets, policies and strategies to support the achievement of its energy and climate ambitions. The annual climate action plans are a useful means of tracking progress and proposing remedial actions. They should, however, be short and succinct, and focus on accelerating implementation. Furthermore, there is evidence that some of the infrastructure needed to deliver Ireland’s ambitious targets is being delayed or not built. Ireland now needs to firmly move from the policy-setting phase towards the implementation phase and ensure that necessary investments are unlocked.
Long permitting processes threaten the transition
The lack of a speedy and predictable planning and consenting regime is a major bottleneck for Ireland’s energy transition. This impacts the entire energy sector value chain, including much-needed electricity interconnections. The IEA welcomes ongoing work to revise the National Planning Framework and encourages the government to bring this to an early conclusion and speedy implementation. Streamlining processes may require comprehensive changes to the legal and regulatory framework as evidence from other IEA countries suggests. In this regard, the publication in November 2023 of a new Planning and Development Bill is welcome. Proposed reforms such as improved consistency and alignment along the planning chain, the reform of An Bord Pleanála, and the introduction of statutory timelines for decision making have the potential to make a positive contribution to energy developments.
Planning authorities need more resources to ensure they have sufficient and appropriately trained staff to process applications promptly. Skills and workforce shortages are another impediment to the energy transition. The regional retrofit centres of excellence and the mobile training initiative to inform students about green careers are helpful initiatives. Ireland may wish to explore initiatives in other IEA countries that work closely with industry in this sector and consider integrating topics relevant to the transition into all curricula.
Offshore renewables will drive the transition beyond 2030 but natural gas will be needed until then
Ireland’s relatively untapped renewable energy potential, notably offshore wind, can not only support the decarbonisation of the power sector but also other parts of the economy through sector coupling and the production of renewable hydrogen. For this to happen, an enabling hydrogen development framework must be put in place.
In 2023, variable renewable power generation accounted for 36% of total electricity output, one of the highest shares globally. Ireland plans to have 22 gigawatts (GW) of installed renewable capacity by 2030, including 8 GW of solar and at least 5 GW of offshore wind. Spatial planning must take a holistic approach and the IEA welcomes Ireland’s policy of complementing the national Renewable Electricity Spatial Planning Framework with regional spatial, economic and renewable electricity strategies.
Ireland is putting in place a new framework to ensure a plan-led approach for the exploration of its maritime resources, including the creation of a new and independent maritime area regulatory authority. This new authority needs to be resourced with the staff and skills commensurate to its growing responsibilities. Ireland’s first offshore wind auction in 2023 was successful owing to its design, which allowed for inflation and compensation in case of curtailment.
Ireland will continue to rely on natural gas, which in 2022 accounted for one-third of total energy supply and almost half of electricity production. The government plans to install at least 2 GW of flexible gas-fired capacity to 2030 replacing oil, peat and coal generation to ensure being able to meet peak electricity demand in a generation mix increasingly dominated by variable renewables. This capacity is also needed to meet growing electricity demand from heating, transport and data centres, the latter being a key economic sector. This implies temporarily increasing import dependency before renewable indigenous gas and renewable gas-compatible storage becomes available. Ireland currently does not have a gas storage facility.
The government is assessing potential sites for hydrogen and future renewable gas storage as long-term security of supply solutions, as well as the creation of a transitional state-led strategic gas emergency reserve to deliver greater resilience in the event of a disruption of the country’s natural gas supplies.
Ireland’s inclusive energy transition offers important lessons
A key feature of the renewable electricity support schemes is the requirement for project promoters to establish a community benefit fund into which they must pay EUR 2 per megawatt hour (MWh) to ensure that local hosting communities benefit directly. Communities are fully involved in decision making related to how the fund’s proceeds are spent and will be assisted by professional fund administrators. The IEA welcomes this policy as it will realise wider societal benefits of the energy transition and improve public acceptance of new infrastructure.
Ireland is also implementing an enabling framework for active community participation targeting farms, schools, communities and small businesses under its support scheme. It created a dedicated Small-scale Renewable Electricity Support Scheme to support small and medium-sized enterprises and community projects and a micro-generation support scheme for smaller installations. These schemes target small farms, businesses, schools and communities. What makes them unique, however, is the provision of technical and financial support through a one-stop facility to enable interested communities to overcome typical barriers.
Further emissions reductions from buildings are essential
Despite having a relatively new building stock, Ireland has the highest share of oil in space heating among IEA countries owing to a dispersed population and limited gas infrastructure. Space heating accounts for 60% of energy demand in residential buildings and buildings are the single largest sector in final energy consumption. Since 2021, all new buildings need to comply with a zero energy buildings standard.
Ireland offers various support programmes targeting different types of renovation and households at the risk of energy poverty, which receive fully funded upgrades. Ireland applies the fabric-first principle, which requires first an improvement of the building envelope before supporting the installation of heat pumps. While this prevents the installation of oversized heating systems, it also slows down the shift to more efficient and clean heating systems. There is a need to strike a balance, as deep retrofits can make projects financially unattractive in some cases.
In 2022, the government introduced the one-stop shop service offering start-to-finish project management service, including access to financing, for multiple energy upgrades to achieve a set minimum final energy efficiency performance. The scheme has been successful to date, with 18 such services across Ireland and more expected in the future. Making retrofitting as easy as possible for homeowners is an important element in its success and the IEA encourages the government to continue its efforts in this area.
Smart meters are key components of a grid-interactive efficient building that facilitate more demand-side flexibility. Ireland should require the installation of smart communication-enabled equipment when providing funding for heat pumps and electric vehicle charging equipment.