Dieter Helm, Professor of Energy Policy University of Oxford Dublin Economics Workshop 16 th June 2011 Trinity College

 Myths and illusions in energy policy  The renewables directive  Decarbonisation of electricity by 2030  The context – all islands and the EU  Energy market reform  Unbundling, privatisation and competition  Towards a comprehensive, sustainable energy policy

Myth 1 Peak oil and other economic illiteracies Myth 2 Kyoto and climate change: consumption not production Myth 3 Energy efficiency reduces demand and growth decoupled from energy Myth 4 Energy markets can be modelled to 2050

 2020 is 9 years away  Renewables in Europe (wind) make little difference to global warming  Offshore wind is incredibly expensive  Wind may  marginal system energy price = 0  The UK (and others) will fail  Much cheaper strategy = gas-for-coal

 Shale gas  Smart meters  Smart grids  Electric cars  Storage and batteries +  Potential for breakthrough technologies

North European Markets All Islands All Ireland Eire Norway Netherlands France

FRANCE administered nuclear markets Netherlands / German markets ENGLAND WALES SCOTLAND FiTs + Capacity + Floor price + EPS NORTHERN IRELAND Capacity + Pool Eire (4GW) Break-up Non- EUETS Carbon Tax

 4 GW is very small (= Drax)  Legal vs. ownership unbundling  Structure of market and market design  Impact of foreign takeover  Some questions: How will Eire ensure supply? What happens if no investment? What impact will intervention have? What will the price be with lots of wind? Etc etc etc.....

 Coal  gas for CO 2 transition  Flexible renewables (wider definition, onshore wind etc)  LNG + interconnectors  Integrated all islands market  Capacity contracts (long term) And  Look after Eire’s interests in a bigger market

 Helm, D. R. (2011),"Green growth: opportunities, challenges and costs", in: Tsoukalis, L and Emmanouilidis, J. eds. (2010), “The Delphic Oracle on Europe: Leaders and Coalitions, New European Contract and Europe's Global Role”, Oxford University Press  Helm, D. R. (2011), "Look to gas for the future", Prospect Magazine, March 24th.  Helm, D. R. (2011), “What next for EU energy policy?”, Centre for European Reform, forthcoming.  Helm, D. R. (2011),"Peak Oil and Energy Policy – a critique", Forthcoming in Oxford Review of Economic Policy, Vol 26, Issue 4.  Helm, D. R. (2010),“Infrastructure and infrastructure finance: The role of the government and the private sector in the current world", EIB Papers,vol. 15 (2) on Infrastructure and infrastructure finance,  Helm, D. R. (2010),“The Case for a Carbon Tax” in Greener, Cheaper edited by Simon Less, Policy Exchange, July 27th  Helm, D. R. (2009), “Nuclear Power, Climate Change and Energy Policy”, in The Economics and Politics of Climate Change, edited by Helm and Hepburn, OUP. 10