Powering the economy
A new energy focus
“The energy sector makes a reliable and significant contribution to growth in the All-Island economy. The fact that we have a world-class system, providing a secure and increasingly sustainable supply to customers, is a result of the decisions and foresight of the industry and policy-makers over many decades. The sector will continue to serve the All-Island economy as it responds to major challenges it faces, not least the need to address the issue of climate change.”
Owen Wilson, Chief Executive at EAI
Energy is fundamental to the economic prosperity of ROI and NI
The energy sector is fundamental to ROI and NI’s economic prosperity and the sustainability of their future growth, according to the EY report, ‘Powering the Economy’, commissioned by the Electricity Association of Ireland (EAI).
The economic significance of the energy sector
The energy sector contributed €5.4bn to the all-island economy in 2013, €2.8bn directly and an additional €2.6bn was generated elsewhere in the economy. ROI energy activity in 2013 contributed approximately €505mn in tax revenue, including €255mn in income tax and social contributions, as well as €80mn in corporation tax. Excise duties and property rates further increased this.
A major job creator
Energy companies supported a total of 47,600 direct and indirect jobs across the Island in 2013. 75% of firms in this sector forecast an increase in staff levels over the next three years. Participants said they will recruit employees with a broad range of skills. Many said they would recruit in engineering and IT.
The upgrade and reinforcement of the electricity transmission and distribution (T&D) infrastructure is crucial to ensuring that the network can cope with both rising electricity demand and the increasing penetration of renewables.
As a priority, the North-South interconnector needs to be delivered. The EirGrid Grid25 strategy has forecast that an additional €3.2bn of new investment in T&D infrastructure will be needed in the period up to 2025.
Energy firms have invested heavily in transforming the sector so it can deliver a lower carbon future. While much has already been done, 80% of companies still intend to increase capital investment over the next 3 years to meet EU 2020 Climate and Energy targets. Attaining these will also need a contribution from many sectors of the economy, such as transport and domestic heating.
While these targets will largely be met through further development of wind energy, there will also be an ongoing need for investment in conventional back-up generation to meet demand when wind output is low, with around €130m invested in 2013. In addition to conventional generation, adopting technical solutions such as storage technology and demand-side response will also play an increasing role in managing the variability of wind.
Quality of supply
The quality of energy supplies is central to attracting foreign direct investment (FDI) and enhancing the All-Island’s economic competitiveness. The report indicates that two-thirds of indigenous and multinational companies see access to a high quality electricity supply as “very important” to their continued operation in Ireland. A further 60% of energy firms emphasised the importance of favourable policy and regulatory factors in encouraging new investment.
Helping customers understand their energy costs
Energy firms are actively engaged on a number of fronts to help customers understand and manage energy costs. For example, the Energy Engage Code increases customer engagement with suppliers through a co-ordinated industry-led programme.
Suppliers will make use of measures in the Code to encourage customers to engage with them when they fall into arrears or become at risk of disconnection, to ensure they remain connected.