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Irish Times
15-06-2025
- Business
- Irish Times
The Irish Times view on the National Economic Dialogue : all sides must focus on delivery
The National Economic Dialogue, which takes place on Monday, is the key public consultation which the Government holds before the October budget. It will be followed shortly after by the Summer Economic Statement, which is the official outline of the general direction of policy, including the room for manoeuvre on budget day itself. It is customary at the dialogue for the government of the day to underline the uncertainties it faces, in part to lower expectations of what can be achieved on budget day. This year, these uncertainties are all too real. To the ongoing war in Ukraine and the unpredictability of the economic policies of the Trump administration can now be added a volatile situation in the Middle East. What does this mean for budget policy? With relatively strong tax figures and a falling national debt burden, the Government is in a strong starting position. Vital investment programmes must continue. But the outlook is clouded and risks in relation to the international economy and corporation tax remain in focus. The Fiscal Advisory Council in its latest assessment suggested that there could even be some more upside to corporation tax revenues, given the increase in the rate on big companies and the running down of tax reliefs. This may well be the case. But this will leave Ireland even more reliant on a few big taxpayers. And Trump's policies also pose a risk to corporate tax receipts, even if the shape of this is not yet clear. READ MORE Against this backdrop, it is essential that the budget remains in surplus and that the State continues to put cash aside in two funds set up to save excess revenues for future use. Better control of day-to-day spending is also required. The dialogue needs to take place in this context, rather than on the assumption that spending overruns can continue, offering more increases across the board in day-to-day spending. Realism is essential in a world where unpredictability and adverse shocks now seem to be the norm. And this must extend to Ministers right across Government too, many of whom will be hoping that further ahead-of-inflation spending increases will be available for their departments and particular priorities. Rather than splashing the cash, the Government needs to identify a few priority areas for additional spending and focus much more on delivery across the board. As Trinity College Dublin economics professor Carol Newman, who chaired last year's dialogue, wrote in her summary of its proceedings: 'The removal of sluggish processes and disjointed systems is important and this can only be achieved with joined up thinking and transparent dialogue.' In the sessions on Monday, the most valuable thing which the delegates could do is to focus on this issue of delivery.
Irish Independent
10-06-2025
- Business
- Irish Independent
The Irish Independent's View: Government must wake up to state watchdog's spending warning
These are the words of American economic historian Thomas Sowell. It might seem as if our Government has gone to some lengths to prove him right on both counts in the eyes of the Fiscal Advisory Council (FAC). The state watchdog is concerned that spending is up almost 6pc already this year. 'At the current pace of growth, overruns of €2bn are likely,' the Fiscal Assessment Report says. The extravagance can once again be traced back to bumper corporation tax receipts. As we know, the incoming billions are the envy of many European leaders; and a source of considerable indignation to Donald Trump. The US president has made it plain that though he 'likes' us, we are causing him a world of pain when he sees what he regards as 'US tax dollars' flowing out of American coffers and into those of the Emerald Isle. He has warned he is 'coming for them' and we have no reason to doubt him. The FAC has been warning for the past few years that over-reliance on such golden windfalls could leave the State dangerously exposed when they come to an end, as they inevitably will. Today's warning is even more shrill. It notes that while phenomenal levels of excess corporation tax are keeping Ireland in surplus, 'without these revenues, there would be a substantial deficit, despite a strong economy'. The report acknowledges that while the tide of good fortune could persist for a while yet, it will turn, so depending on it is 'high risk'. It also notes how just three companies account for most of the excess corporation tax. A particular worry of the council is that the over-runs are not being acknowledged in new forecasts. Every blessing ignored becomes a curse Its chairperson, Seamus Coffey, even raised a concern about the 'plausibility' of the numbers being presented. He said it's hard to know precisely how overstretched government departments are, because monthly figures are not supplied. The projected figures for 2025 expenditure remain unchanged, even though it is likely to rise by €3.7bn. This, the report states, is 'simply not credible'. ADVERTISEMENT Philosopher Paulo Coelho said: 'Every blessing ignored becomes a curse.' Taking a rosy financial future for granted, which is written on such shifting sands, could come at extreme cost. Spending what we can afford really ought not be such a radical concept. There is a sword of Damocles over the world's economy thanks to Trump's tariffs. The potential for wider wars in the Middle East or Ukraine could also wreak global trade havoc. Relying on the comfort of things we have taken for granted tends to come with a rude awakening. How long can we continue to get away with pressing the snooze button on the FAC's alarm calls?
Irish Independent
28-05-2025
- Business
- Irish Independent
Ireland falling further behind in bid to meet climate targets, revised emissions forecast shows
A new assessment published today revises the best-case scenario down, showing that instead of reducing emissions by 51pc by 2030 as legally required, a drop of just 23pc is the most that can be hoped for. That is less than half the reduction needed and significantly less than the already insufficient 29pc cut that was forecast last year and in 2023. The blow comes after government departments handed over the latest data on the progress they have made in their areas of responsibility. It shows they have fallen further behind target in taking fossil fuels out of transport, industry, electricity generation, homes and other buildings and in reducing methane emissions from agriculture. Two government-appointed expert bodies, the Fiscal Advisory Council and Climate Change Advisory Council, warned recently that failure to meet targets could cost Ireland €26bn in EU fines and compliance payments after 2030. The update is from the Environmental Protection Agency (EPA), which is responsible for compiling Ireland's annual greenhouse gas inventory and calculating projections for the years ahead. Laura Burke, the EPA's director general, said the lack of progress was 'concerning'. 'Full delivery of all climate action plans and policies could deliver a 23pc reduction in greenhouse gas emissions,' she said. 'The gaps to our European and national emission reduction targets are now projected to be larger than last year. The focus must shift from policy aspiration to practical implementation.' Momentum is building for Ireland's low-carbon society, but we need to accelerate it and scale up the transition Key areas where efforts are lagging include the development of renewable energy. Latest estimates show there will be 25pc less energy available from wind farms and solar parks than hoped for – 16.1 gigawatts instead of 22GW. In transport, a third fewer electric vehicles are now forecast to be on the road by 2030 – 640,750 instead of 945,000. ADVERTISEMENT Plans to replace some fossil gas with biomethane are also 25pc behind schedule and expected to deliver 4.3 terawatts instead of 5.7TWh. District heating schemes to replace oil and gas heat sources with renewables have barely begun and are now expected to deliver just 8pc of the heat forecast – 0.2TWh instead of 2.7TWh. The EPA warned that for even the revised-down figures to be achieved, it would take 'full implementation of a wide range of policies and plans across all sectors and for these to deliver the anticipated carbon savings'. Wind industry representatives are warning that the targets for their sector look doubtful because of hold-ups in planning and support infrastructure for new turbines. The revised figure for electric vehicles also appears optimistic because there are currently just 148,000 on the road and only 82,500 are fully electric while the rest are hybrid. Uncertainty surrounds how agriculture will perform, and it is feared emissions could even rise slightly in this sector by 2030. The muted forecasts come despite some reductions in national greenhouse gas emissions, which fell by 6.8pc in 2023, with a similar drop expected to be confirmed for 2024 when figures are finalised in the coming months. Ms Burke said the trends were 'going in the right direction' but nowhere near fast enough. 'Momentum is building for Ireland's low-carbon society, but we need to accelerate it and scale up the transition,' she said. Each sector of the economy and society has its own emission reduction target for 2030, and the EPA assessment shows revised cuts they are now expected to achieve. Agriculture has a 25pc target, but it is expected to be cut by 16pc at best and it could actually increase emissions by 1pc. Transport emissions are required to fall by 50pc, but the best-case scenario is 21pc if all feasibly deliverable promised plans and policies are implemented. If not, the reduction could be as small as 9pc. Electricity generation has a target cut of 75pc, but a 68pc cut is expected at best and possibly just 59pc. Industry is headed for a 12pc emissions cut, well below the sector's 35pc target. Residential buildings are expected to achieve a 22pc cut, but the target is 40pc. Agriculture has a 25pc target, but it is expected to be cut by 16pc at best and it could actually increase emissions by 1pc. The only sector where emissions are certain to increase is what is termed 'land use, land use change and forestry' (LULUCF) where the rise is expected to be between 39pc and 95pc. That is due to ageing forests and intensive use of land that stops plants soaking up carbon and releases it instead. Another reason the EPA has had to scale back its projections is that the original 51pc reduction target included some 'unallocated cuts' that it was hoped could be made through technologies not identified at the time. The EPA said ways to make those cuts had still not been specified. Environment Minister Darragh O'Brien defended the Government's record and said it was 'fully aware of the scale of the climate challenge'. He added: 'EPA projections are not absolute forecasts.'
RTÉ News
29-04-2025
- Business
- RTÉ News
How feasible are the Govt's offshore wind ambitions?
Ireland currently has the fourth most ambitious offshore wind expansion programme in the European Union. The target is to build enough new wind farms offshore to generate five gigawatts of electricity by 2030. This would be enough electricity for about 2 million homes, which would come from new wind turbines located in the Irish Sea. It is a greater amount of new offshore wind capacity than bigger European countries - including France, Spain, Portugal and Belgium - are planning to build by 2030. Only Germany, the Netherlands and Denmark say they will build more. But those three countries have larger electricity markets and well-established offshore wind sectors already. So, it is easier for them to grow. The Government's plan, after 2030, is to deliver 20 gigawatts of offshore wind energy by 2040 and at least 37 gigawatts in total by 2050. Initially, that means an immediate quadrupling of the country's offshore wind energy ambition. It also means that 15 years from now, Ireland should have enough capacity in its offshore wind farms to supply electricity for 8 million homes. Ten years later in 2050, the target is enough electricity for 15 million homes. The targets could be considered outrageously ambitious, especially since the Government is relying on private sector energy companies to invest billions of their own money to build them. Offshore wind is delivering only a very tiny amount of electricity right now. The 25-megawatt Arklow Bank Wind Park, the only offshore wind farm in the country, is 21 years old and scheduled for dismantling in the months ahead. At its peak, Arklow was only ever capable of supplying electricity for about 10,000 homes, a minuscule amount compared to the scale of the new targets. In effect, the development of Ireland's offshore wind sector is starting from zero right now. This is why the targets are so enormously ambitious and such a major challenge to deliver. Yet, it is essential that the national plan succeeds and the offshore wind energy is delivered on schedule. Failure to do so would make it impossible for Ireland to meet its legally binding greenhouse gas reduction targets. The Fiscal Advisory Council and the Climate Change Advisory Council recently both analysed the cost of such a failure. . Ireland's offshore wind prospects are among the best in the world. Although that potential has not been exploited to date, the country has a well established reputation for doing wind energy well. Already, 35% of the country's electricity comes from wind farms - the highest proportion in Europe. On some days, Irish wind farms supply as much as 75% of the country's electricity needs - the highest in the world. But that is only from the wind farms positioned on land like onshore on hills and bogs and rural locations around the country. The prize, however, for fully tapping into Ireland's offshore wind resources and achieving the associated renewable energy targets is huge. It is not only about living up to the nation's climate obligations or enabling an essential transformation to a carbon neutral economy. It is also about energy security and not having to fork out billions of euros of hard-earned cash every year to foreign fossil fuel producers and petrostates, whose values and aims we do not share. Russia's invasion of Ukraine showed everyone that relying on imported fossil fuels can cause nations and their economies to be very highly exposed and vulnerable. It underscored too, how a nation's independence and security is stronger when it develops its own native energy resources, which in Ireland's case includes offshore wind. Yet it is jobs, the rejuvenation of communities and the prospect of transformational economic development that many find most appealing about offshore wind. The industry is promising tens of thousands of new jobs and billions of euros worth of new investment opportunities. That could mean transformational local and community development in many coastal regions by 2030 and for many years beyond. "Offshore wind is a new opportunity for us to capitalise on what we already do well" The Managing Director of ASL, a safety and training company based in Arklow Co Wicklow that provides offshore skills training certified by the Global Wind Organisation, said the need for people to work in the industry will be huge. Mark Corcoran added that there is going to be a shortage of skilled operators. "The key will be to make sure we can transition people from other industries, to get them on board, people like electricians, people that work with a mechanical background to work as technicians" he said. The head of faculty of Engineering and the Built Environment at SETU in Co Carlow said the college is in a prime position to leverage the training it is doing already. SETU is a college with a long history of training aircraft mechanics, aerospace and flight test engineers - the kind of skills that will be in big demand when the offshore wind industry gets up and running. Dr Francis Hardiman said the institution is "not coming from a low base", adding "we pump out the best of engineers, technicians, apprentices, and planners". She said: "We are one of the most innovative countries in the world and that's across all the universities. "Offshore wind is a new opportunity for us to capitalise on what we already do well." It is estimated that offshore wind could bring 60,000 additional full-time equivalent years of employment by 2040, equating to about 8,600 full-time jobs in an average year. Many of these additional jobs will come in the construction phase, including tower and substructure foundation, manufacturing and other related areas. There will also be a lot of workers employed in the ongoing operation and maintenance of offshore wind farms. A Skills Assessment Report for Green Tech Skillnet and Wind Energy Ireland said meeting Ireland's offshore wind energy target would provide work for 42 different job roles, including work for thousands of engineers and technicians, planners, ecologists, builders, designers, accountants and lawyers. That report highlighted many parallel industries, such as marine and engineering, in which workers already have skillsets that are easily transferable to offshore wind energy development. It also estimated offshore wind opportunities could be worth €38 billion to the Irish economy by 2050. For all this to happen, the development and expansion of Ireland's ports and harbours is vital and urgent. As matters currently stand, Ireland's ports are not equipped to facilitate the construction, operation, maintenance and servicing of the offshore wind farms. Rosslare Europort is leading the national efforts to establish an offshore renewable energy hub, with the potential to create up to 2,000 jobs. A redevelopment plan for Rosslare Europort to facilitate offshore wind farm construction, and associated operations and maintenance services is currently being progressed. The port also recently signed an agreement with Norway's offshore developers, Source Galileo, to explore opportunities for the further development of its facilities. The Port of Cork is a deepwater port and it is also determined offshore wind will be part of its future and is preparing fast. A new €90 million port expansion is under way at the port to facilitate the assembly of offshore wind turbine component parts, including a new 200-metre-long quay wall which will be finished this year as well as a 35-acre assembly and storage area for turbines. Cork Port Chief Executive Anne Doherty said it is important that the offshore wind industry has full confidence that the infrastructure will be in place with the capability and capacity to service the industry when it commences. Waterford Port is also keen to play a part, particularly in relation to the construction support for the windfarm developers. However, Chief Executive David Sinnot, said the port is not ready yet. "We're practicing. We're developing skills within the port. We're getting all our employees here used to dealing with energy components, onshore wind generators, transformers, and all types of equipment," he said. "We are expecting to get consent shortly to develop another 250 meters of quay and we will dedicate that to the offshore renewables business," he added. Further up the east coast in Co Louth, Doyle Shipping Group owns and operates Greenore Port, which is the only privately owned port in the country. Their closest offshore wind farm will be just 10km away and the furthest will be 34km away. They have detailed plans now to invest €30 million to build three 17,000 square foot buildings on site that will serve as head offices, as well as command and control centers for offshore wind farm operators. They are also going to build a 12-birth pontoon arrangement for 12 crew transfer vessels that will go out every single day with 25 engineers on board to maintain the wind farms. Their calculations suggest the jobs this will bring will deliver about half a billion euro in payroll to their region over the lifespan of the facility.
