A Siemens Ireland report predicts that Ireland’s GDP could fall by as much as 7.5pc if the world was to experience a sudden oil or gas price rise, but says we need to capitalise on our natural resources to achieve a low-carbon future.
The impacts of an oil and gas price hike would have a greater impact on Ireland than on other economies, such as the UK and the US, that’s according to a report commissioned by Siemens called ‘The Economic Impacts for Ireland of High Oil & Gas Prices; Pathways to risk mitigation and a low carbon future’.
The report, which was carried out by environmental consultants AP EnvEcon, suggests that Ireland’s high dependency on imported fossil fuels would also further exacerbate the effects of any shock.
“Ireland is particularly sensitive to this type of shock particularly the knock-on effects in global markets and trade. Results from the study show Ireland suffering more pronounced economic impacts and a slower recovery as compared with other countries,” said Dr Werner Kruckow, CEO, Siemens Ireland.
One of the report’s authors, Dr Andrew Kelly, AP EnvEcon, said: “These are scenarios, not predictions, but you only need look back to the summer of 2008 to see how quickly the price of oil can rise and fall.”
Capitalising on natural resources
While Kruckow said Ireland’s 80pc dependency on imported oil and gas does put the economy at considerable risk, he pointed to how Ireland’s abundance of renewable resources could reduce our risk of exposure, create employment opportunities and reduce emissions.
“Irish waters have the biggest wave heights, greatest tidal flows and strongest winds in Europe, giving us the potential advantage over other European countries to generate and export energy across the continent.”
The report recommends that Ireland must act in four key areas to develop a plan for a sustainable integrated energy system. These include:
– Maximising electricity generation from renewable sources
– Grid upgrade and integration into the European grid
– Promoting energy efficiency and conservation
– Maximising electricity usage in end-use applications
In the coming weeks, Siemens also plans to make recommendations of policies and measures to Government to build a sustainable energy system in Ireland.
Its ‘wishlist’ for policy makers is to:
– Develop a high-level 2050 strategy plan with a measurable roadmap for the energy system in Ireland, covering the four pillars outlined above.
– Develop a ‘Carrot & Stick’ approach for business and public sector on energy savings and green house gas emissions. Support investment with tax incentives and favourable financing models.
– Electrifying the Transport Sector – Deliver rail related projects in Transport 21, run hybrid buses in Dublin, speed up implementation of electric cars and related infrastructure. Electrify the national rail network.
– Position Ireland as an attractive test-bed for sustainable pilot projects and encourage industry to participate and lead.
– Modify the public procurement process to take into account life cycle costs and support quick rollout of projects in the sustainability area.
For further information read the Siemens report in full.