Good morning and thank you for inviting me here today to speak at Fully Charged 2012 about the coming importance of electric vehicles in the Irish energy landscape. I am pleased to welcome the many distinguished international participants in the conference and in particular to welcome the Executive Director of the International Energy Agency, Maria van der Hoeven.
The current economic backdrop, together with EU and international energy developments, requires us to take stock of energy policy directions and ensure that we set the best course for the short, medium and long term.
Although some of the key drivers for energy policy have changed in the last 5 years, the overriding policy objectives remain the same - security of supply, competitiveness and sustainability will continue to be the pillars of energy policy.
We remain all too heavily reliant on fossil fuels for our energy needs and we currently import approximately 6 billion euro worth of fossil fuels per annum. Fossil fuels used in transport account for around one third of this requirement.
The ongoing economic turmoil and geo-political uncertainty only further underline the enormous exposure Ireland has to price shocks associated with such reliance on imported petroleum.
This dependency underlines the immediate and long term imperatives of enhancing energy security, reducing price volatility and ensuring energy sustainability at competitive prices for both individuals and businesses.
The manner in which we face up to these challenges will be a critical determinant of our future economic prosperity and wellbeing. The de-carbonising of Ireland’s energy system is critical for the de-carbonising of the economy and will support growth and jobs.
Allied to these macro-economic imperatives for developing the renewable sector, Ireland as a committed member of the EU also supports Europe’s ambition to radically increase the share of renewable energy in the energy system as articulated and legislated for in the 2009 Renewable Energy Directive.
The Directive has set very ambitious renewable energy targets with the objective of achieving 20% of all energy in the EU to be from renewable sources by 2020. Ireland’s target was set at 16% of all energy consumption to be from renewable sources by 2020 and 10% of the energy in the Transport sector must be from renewable sources.
Renewable energy is playing a key role in shaping Ireland’s long term energy future and is critical to delivering the policy goals of secure, clean and affordable energy supplies.
The Government is fully committed to delivering national energy efficiency and renewable energy objectives which are aimed at mitigating the economy’s reliance on imported, carbon intensive fossil fuels.
We have made some significant progress to date in increasing the levels of renewables on the system almost tripling their use between 2003 and 2011 – in large part due to the increasing contribution from wind energy.
This increase in renewables has also enhanced our security of supply.
There is still significant work to be done to achieve our obligations under the Directive particularly in the context of heat and transport.
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The target for the transport sector will be a significant challenge for all countries but is one from which we cannot shy away.
It is clear that there is no single solution – there is no silver bullet to deal with our reliance on oil. In fact, the solutions are highly diverse. Better spatial planning has a role to play, as does greater energy efficiency in transport, along with biofuels to some degree. It has become increasingly clear, however, that a major opportunity exists for Ireland around the electrification of transport, not just in helping to reduce our reliance on oil, but also in terms of generating economic growth.
Ireland, will meet its transport obligations primarily through the deployment of biofuels – the obligation scheme is now in its third year – but these cannot meet the whole target and there is a critically important role that electric and other ultra low emissions vehicles will play in meeting our target.
Therefore the Government intends to meet our 10% target through a combination of biofuels and electric vehicles. We have set an ambitious initial target of 10% of the car fleet or 230,000 cars to be electrified by 2020.
The simple benefits are well known by now and the role they can play in contributing to all of Ireland’s 20:20:20 targets; EVs have zero tailpipe emissions, they reduce noise pollution and are far more efficient in terms of their energy use when compared with conventional vehicles. However, in an Irish situation, we have an added benefit in that their use displaces imported oil products with electricity which can be produced from a much broader range of indigenous commodities, including gas and renewable electricity.
Achieving this goal could reduce national CO2 emissions by a 3.3 million tonnes annually and help towards reducing Ireland’s dependence on imported fossil fuels by an estimated Euro 700m.
You may ask why we have set such an ambitious target or why we don’t wait for the market to mature.
Electric vehicles present real opportunities for Ireland and we want to be at the vanguard of the sector’s development.
Ireland’s small geographical scale and temperate climate as well as a developed information communications technology sector represent competitive advantages in this arena. My Department and the Sustainable Energy Authority of Ireland together with ESB Networks are working in positioning Ireland as an early mover in electric vehicles with all stakeholders.
Some of the significant benefits accrue outside of the immediate transport sector. Chief among these is the ability they provide to use cheap grid-sourced electricity, an increasing amount of electricity which will be sourced from renewable sources over the coming years.
Ireland has a key unique resource in wind. But one of the challenges for optimising the utilisation of wind for electricity has been matching demand with wind power availability. There is now approximately 2,000 MW of renewable power on Ireland’s system. There are already periods where wind meets more than 50% of system demand. The concentration of wind is going to increase. The latest estimate by the Sustainable Energy Authority of Ireland is that 4,000MegaWatts of renewable generation needs to be in place to meet Ireland’s 2020 target of 40% renewable electricity. On this basis some 200MegaWatts per annum of new onshore wind projects need to be connected to the grid between now and 2020 in order to meet the target.
This is where I believe electrification of transport will have a key role. There can be a symbiotic relationship developed between the sectors
Exploiting and developing this relationship will have obvious benefits in terms of reducing Ireland’s dependence on imported fossil fuels, increasing the concentration of wind on our electricity system and reducing the cost of electricity to consumers.
Electric Vehicles are a new and rapidly developing technology, and while it is unlikely that we will have a role in the manufacture of the vehicles themselves, there are real, tangible opportunities for Irish companies around the infrastructure required to support the deployment of electric vehicles. Early involvement in the sector also provides additional enterprise opportunities for Irish based companies and in particular in the ICT sector.
There are five such Irish companies involved in the development of EV products and services which are on display here today.
There are of course significant potential benefits consumers. Currently EVs offer consumers savings of up to 80% on their transport fuel bill, this saving would grow substantially in the event of further oil price rises.
Oil Price inflation has been over 100% since 2006. Electricity price increases have been one quarter of this. It makes sense to displace petroleum products with electricity.
Based on current forecasts and without incentives EVs would be expected to become self sustaining on price in the period 2018 to 2025 depending on oil price and rate of sales worldwide.
But the sector is still at its nascent stage. It will not develop without assistance. In order to ensure the progressive uptake of these vehicles in Ireland to deliver on these private and public good benefits, creative thinking and support is required. It demands a new way of doing things with new stakeholders and new relationships central to developing the electric vehicle sector. It requires a coalition of partners and stakeholders from Government, energy, automotive, ICT industry, academia.
This cross-sectoral interest in the sector is clear from the broad spectrum of expertise and backgrounds of the delegates attending this Fully Charged conference.
The Government is fully committed to the introduction of EVs to Ireland and is very seized of the benefits of the electrification of transport.
Government has already introduced a series of supports to kick start the
industry. Last year I launched the two year grant support scheme, which is administered by the Sustainable Energy Authority of Ireland to incentivise the purchase of Battery Electric Vehicles and Plug-in Hybrid Electric Vehicles.
There are also accelerated capital allowances available to businesses purchasing EVs. EVs also enjoy the lowest road tax band of all vehicles and benefit from some relief from vehicle registration tax.
In the past 18 months, Electric Vehicles have become more evident on Irish roads. The Government alone will not ensure the success of electric vehicles. The uptake will rely to a large part on the competitive offerings of the car industries and the building of consumer confidence in the products so that purchasing of electric vehicles becomes mainstreamed. As more models are introduced into the market at competitive prices, the penetration of electric vehicles will increase.
Indeed, although progress towards electric vehicles take-up is inevitably at a very early stage it is now showing signs here and elsewhere of picking up. There are eight leading car manufacturers displaying electric cars here today (Nissan, Renault, Volkswagen, Toyota, Opel, Mitusbishi, Tesla, Volvo) – testament to the transformation underway in the industry.
I would like to acknowledge the role played to date by the ESB eCars leadership which has been instrumental in positioning Ireland at the forefront of EVs and for providing a platform for enterprise generally and for this international gathering.
Critical to the support is the national rollout of public smart charging infrastructure beginning on a pilot basis. This will instill confidence in the driving community, create awareness in EVs and will, provide critical user data to assist in planning future charging infrastructure to 2020 and beyond. Ireland is also that involved in a number of EU research projects relating to EVs interoperable networks, standardisation of charging, smart charging and customer behaviour. We have also been consistently pushing at EU level for the EU Commission to progress the standardisation agenda to ensure that Europe as a whole is leading, not following, industry and technology developments.
In this regard, I am delighted to note that Ireland will be the first country to trial an electric vehicle IT platform that will facilitate international roaming and seamless charging across Europe.
Whilst ultimately electric vehicles will possibly represent only a relatively modest contribution to Ireland’s 2020 targets the importance of electrifying transport is becoming evermore attractive and viable and I am confident that technological developments will accelerate.
While much of the focus to date has been on achieving our EU 2020 targets, the international agenda is very much moving out to 2030 and 2050. Renewable energy will play an even bigger role over the coming decades in the context of EU energy policy. The recent communication from the European Commission identifies a number of options for a framework to reduce the cost of renewables, improve opportunities for innovation and investment in the sector. It has also reaffirmed its position that a strong growth in renewables is the “no regrets” option in the context of 2050.
The EU is committed to reducing greenhouse gas emissions to 80-95% below 1990 levels by 2050. In the Roadmap, the Commission explores the challenges posed by delivering the EU's decarbonisation objective while at the same time ensuring security of energy, supply and competitiveness. I agree with the Commission assessment on the growing important role for electric. EVs could constitute 60% of the passenger car market by 2050. This, as invaluable research by the International Energy Agency has shown, will not happen without the strong foundations that need to be put in place now.
I firmly believe that the deployment of electric vehicles will have a critical role to play not only in the transport sector but also as an integral part of Ireland’s integrated strategic approach to energy and innovation in support of growth, job creation and the green economy.