Northern Ireland’s energy sector is at a turning point. Quite simply, we cannot use energy in the future as we have in the past. Our dependence on fossil fuels will increasingly be replaced by an emphasis on sustainable sources and energy efficiency.
While this sounds scary, it is also very exciting. Replacing old practices and historic infrastructure requires high levels of investment, but also creates major business opportunities – which some companies in Northern Ireland are grasping.
A consultation document published last year by the Department of Enterprise, Trade and Investment spelt out the very challenging operating environment for the energy sector in Northern Ireland, indicating, too, what needs to happen to ensure sustainable and secure energy supplies.
The issue of security is crucial for Northern Ireland. We are over-dependent on fossil fuels, the supply of which can be at risk from politics, conflicts and severe geological events. There are particular energy security issues regarding the supply of natural gas. Two of Northern Ireland power stations – Ballylumford and Coolkeeragh – use gas piped from Scotland. (The third, Kilroot, is dual coal and oil fired.)
As 80% of the UK’s gas will be imported by the end of the decade, this raises questions about the security and sustainability of supplies. It also suggests the need to increase gas storage capacity to protect supplies from short-term threats. There are also concerns about the lack of oil storage capacity.
To make matters worse, our geographical marginalisation and shortage of indigenous energy supplies also means high energy costs for both business and domestic customers. With predictions for further and possibly substantial increases in fossil fuel prices, DETI recognises that major investment in the infrastructure to develop and distribute renewable energy sources is essential. Energy efficient combined heat and power, energy from waste, geothermal and bio-energy schemes are all becoming more attractive as alternatives to using fossil fuels as heating sources.
But the EU’s objective of reducing energy consumption by 20% by 2020 will be a tough challenge if our economy expands as hoped. At present, there are around 200 companies in the energy sector in Northern Ireland, employing about 4,500 people and generating an annual turnover of £300m. However, a Carbon Trust report published in 2008 predicted this could expand exponentially if opportunities for renewable energy generation were properly exploited, leading to the creation of over 33,000 additional jobs.
On-shore and off-shore wind energy is the most realistic source of additional renewable energy capacity, reducing dependence on fossil fuels and creating more stable prices. But other renewable sources are also proving viable, including geothermal, solar, wave and tidal.
The SeaGen tidal energy convertor in Strangford Lough is one indicator of the future. It was installed two years ago and is based on technology used successfully in Devon. Other facilities could follow, with studies reporting significant opportunities for tidal energy capacity at Rathlin Island, off the Antrim coast. While wave energy resources are also substantial in Ireland, the most promising sites are off the West Coast of the Republic.
Harland and Wolff is one of the long established companies best adapting to new circumstances and is firmly established as a provider of equipment for renewable energy supplies, using its pedigree of engagement in the offshore oil and gas equipment market place. The company recently assembled 60 wind turbines for use offshore in the Irish Sea near Scotland and it has won another contracted to manufacture a prototype tidal turbine for use in the Orkneys.
The use of biomass is also making progress here. The Balcas plant at Enniskillen is recognised as a world leader in the conversion of wood pellets to energy. Changes just announced by energy minister Arlene Foster to the Northern Ireland Renewables Obligation are intended to further encourage the use of non-fossil fuels, including anaerobic digestion.
There is also good news from increased competition in the supply market for commercial and residential customers. Scottish and Southern Energy Group has just entered the residential market through its Airtricity division, promising customers cost savings on electricity bills of up to 14%. It already supplies over 10,000 business customers in Northern Ireland and 200,000 customers in the Republic of Ireland. Airtricity operates six wind farms in Northern Ireland.
There is also more competition in the gas supply market, backed by new pipelines. Phoenix Gas and Firmus Gas both supply piped gas to domestic consumers in parts of Northern Ireland, while Airtricity, Energia and Yayu also supply piped gas to business customers in some places. Businesses can source electricity from a choice of five suppliers: Airtricity, Energia, ESB, NIE and Firmus.
Increased co-operation North and South has helped increase competition and improve energy security. One electricity interconnector operates North-South and a second is planned. It is intended to extend cross-border energy co-operation to gas supplies. But it is in the renewable sector where the most exciting opportunities stand out.
Former sustainable development commissioner for Northern Ireland John Gilliland is now proprietor of Rural Generation, supplying sustainable energy systems and fuels. He believes that the moment has arrived for renewable to demonstrate their worth.
“I have three concerns about energy in Northern Ireland,” says Gilliland. “The first one is around energy cost and the consequence of that on fuel poverty. The second is about energy security. The third is the dragging of feet in recognising that green electricity production can drive the innovation agenda that can lift Northern Ireland out of recession. They are interconnected issues.”
Yet Gilliland emphasises that most of his business earnings are from exports, both from his firm’s sale of integrated systems – providing boilers plus continuing renewable fuel supplies – and its sale of consultancy services to the United States, Canada and elsewhere. Gilliland says: “It is with considerable frustration that I report that 70% to 80% of my business is outside Northern Ireland, yet the best natural environment for renewables is sitting outside my door.”