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Biogas
In 2017, Ireland produced 56.3 thousand tonnes of oil equivalent (ktoe) of biogas (Box 4.1). Around 70% of this came from landfill gas and the rest from wastewater sludge and other organic wastes. Irish biogas production remained at a low level due to limits in the feedstock supply chain combined with a lack of biogas processing plants. Ireland has the highest potential for biogas production per capita in Europe according to the European Commission, and could achieve total production of 13 terawatt hours (TWh) per year by 2030 in theory (EC, 2017).
Upstream development
The 2015 White Paper on energy policy (DCENR, 2015) recognises the continued role of gas in securing Ireland’s future energy supply and encourages fully privatised offshore exploration and production through a range of policy measures such as:
provision of cost-effective entry licensing mechanisms by keeping licence application and rental fees at a low level
modernisation of Ireland’s regulatory and fiscal frameworks such as the Petroleum (Exploration and Extraction) Safety Act 2015 and the revised fiscal terms in the Finance Act 2015
promotion of Ireland as an attractive exploration country by representatives attending international trade conferences in Singapore and the United States, and by hosting several data sharing sessions (known as “data rooms”).
The Irish government also supports research projects such as establishment of the new Irish Centre for Research in Applied Geosciences, and encourages seismic data acquisition projects (two and three-dimensional data acquisition surveys), which are key records for exploration activities.
The Irish government has been proactive in engaging the private sector in exploration and production activities, as demonstrated in the Atlantic Margin Licensing Round 2015. Launched in June 2014, it opened all major Atlantic basins for a two-year licensing option. By the end of the licensing round in September 2015, 43 applications had been received from 17 companies, both major and small to medium companies. This was the largest number of applications ever received for an offshore licensing round in Ireland. The first evaluation in February 2015 reported 14 new licensing options awarded; another 14 licensing options were awarded in the second evaluation in June 2016.
Within the authorised two years of the licensing option, companies have to convert their options into an exploration licence, for which there are three categories: 1) standard exploration licence for water depths up to 200 metres (m), 2) deepwater exploration licence for water depths exceeding 200 m and 3) frontier exploration licence for areas specified by the minister of Communication, Climate Action and Environment (DCCAE, 2018). If a commercial discovery has been established, it is possible to register for a petroleum lease. If there has been no commercial discovery but an expectation of one in the foreseeable future, it is possible to apply for an extension of the lease.
There have been few drilling activities in recent years, despite a successful licensing round. Of the 160 wells drilled up to now, over two-thirds took place between 1970 and 1980, with only 18 cases since 2005. The Corrib gas field is the latest project that
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increased gas SoS in Ireland. However, it took more than 20 years to start commercial production since its discovery in 1996, due to strong resistance from local communities (see Box 4.2).
Box 4.1 Causeway Project: Promoting renewable gas in Ireland
Biogas can be used directly in heat and power generation, or it can be purified to biomethane to be injected into the natural gas network. There is no biomethane production in Ireland, but the government is examining its potential.
The Causeway Project is one of the measures to decarbonise the transport sector by promoting renewable gas as an alternative fuel (see the chapter on “Energy and climate”). The GNI will lead the project from February 2016 to December 2020, with EUR 6.5 million (euros) of financial support from the European Union (EU) Connection Europe Facility and EUR 12.8 million from the Commission for Regulations of Utilities (CRU) Innovation Fund. Key objectives of the Causeway Project include: 1) formation of a national compressed natural gas (CNG) network, 2) promotion of a CNG Vehicle Fund and 3) demonstration of the feasibility of renewable gas injection into the grid.
In 2017, the first public fast-fill CNG station was installed in Circle K, Dublin Port. This was a strategic point to roll out a national CNG network. The station opened for public refilling in January 2019. It has a capacity to charge up to 70 heavy goods vehicles in less than 5 minutes per truck. This CNG station marks the first of 70 stations proposed by the GNI to materialise its 10 year vision of having 10% of heavy trucks and buses in Ireland powered by renewable gas. Ireland’s first private CNG station at Clean Ireland Recycling in Shannon was also completed in 2017, with support from the CRU Gas Innovation Fund, a financial support programme used for gas research and demonstration projects.
The GNI launched the CNG Vehicle Fund in February 2017 to promote a range of CNGfuelled commercial vehicles, including trucks and buses, in Ireland. Up to EUR 20 000 worth of subsidy was provided for purchase of a new natural gas vehicle, and the fund made EUR 700 000 available to Irish transport operators. It was supported by the Commission for Energy Regulation and co-financed by the EU Trans-European Transport Network* Programme under the Connecting Europe Facility as part of the Causeway Project (GNI, 2018a).
The Causeway Project also has an objective to demonstrate the feasibility of the country’s first installation to inject renewable gas into the grid. The GNI aims to have at least 20% of renewable gas in the network by 2030, equivalent to around 11.6 TWh of supply. The government is examining upscaling anaerobic digestion in agriculture (grass silage) and the commercial waste industry sector. At its full potential scale, this could provide biogas production of around 1 044 ktoe by 2050, equivalent to 28% of Ireland’s total gas supply in 2015. The GNI designed a network entry facility with an injection capacity of up to 108 gigawatt hours (GWh) per annum (1 200 cubic metres per hour) of renewable gas into the distribution network in co-operation with Green Generation (an Irish company that develops anaerobic digestion facilities). Ireland anticipates the country’s first deployment of renewable gas by a private company in its national gas network in 2019, pending approval from CRU (GNI, 2018a).
* The Trans-European Transport Network is a European Commission policy directed towards the implementation and development of a Europe-wide transport network.
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A potential turning point in Ireland’s future oil and gas exploration is the private members’ bill entitled Petroleum and Other Minerals Development (Amendment) (Climate Emergency Measures) Bill 2018. In addition to the enactment of the Prohibition of Onshore Hydraulic Fracturing Act 2017, this bill aims to prohibit all future licensing of oil and gas exploration in Ireland’s territory and the exclusive economic zone to address climate change. It was introduced into the Irish Parliament and passed the second stage of the 11-stage legislative process in February 2018. The bill passed to pre-legislative scrutiny (policy discussion) by the Committee on Communications, Climate Action and Environment in July 2018. The Irish government opposes the bill and government policies in respect of climate action, energy and offshore exploration, and the application of such policies remains unchanged.
Box 4.2 Corrib gas field: From discovery to commercial production
A deepwater exploration licence covering four blocks in the Slyne Trough was granted in January 1993 for 11 years to Enterprise Oil and its partners. Corrib gas field was discovered in 1996; it was the first reported commercial natural gas discovery in Ireland since discovery of the Kinsale Head gas field in 1971.
The field is a sandstone reservoir, situated approximately 70 kilometres off the Mullet peninsula in the north-west of Ireland. The gas field is at a depth of 350 m of water and 3 500 m below the seabed, and represents approximately 50% of the volume of the Kinsale Head field. The recoverable gas volume is projected to be 0.87 trillion cubic feet (24.6 bcm), which consists of 97% methane and ethane (Dancer et al., 2005). The field does not contain hydrogen sulphide, and carbon dioxide is only 0.3% of the total amount of gas.
In 2002, Shell acquired Enterprise Oil. Shell developed the Corrib field as a subsea production facility with onshore processing, without an offshore production platform. The assets include offshore wells, subsea facilities and a pipeline, an onshore pipeline and a gas terminal at Bellanaboy, in the county of Mayo.
Corrib gas field had its first production in December 2015, and commissioning was completed in June 2016. Corrib field has been running at full capacity since then (35.84 TWh per year in 2017/18), which has significantly lowered Ireland’s reliance on imports.
However, domestic gas supplies from the Kinsale fields (Kinsale Head, Ballycotton, Southwest Kinsale and Seven Heads) and the Corrib field are decreasing. Corrib production is due to reduce by more than half between 2017 and 2026. Southwest Kinsale was converted into a storage facility; it is now in its final production phase and is due to be decommissioned in 2021. The Environmental Protection Agency indicated an option to flatten Corrib production below its maximum capacity, and permit an increase in production if there is a disruption in the interconnector from the United Kingdom (EPA, 2012).
In July 2017, Shell reached an agreement, subject to regulatory approval, with Canada Pension Plan Investment Board to divest its interest in the Corrib joint venture and hand over field operation to Vermilion, which is already a partner in the joint venture.
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Institutions
In the natural gas sector, the Department of Communications, Climate Action and Environment is responsible for transposing EU directives into national law and for corporate governance of state-owned energy companies, except for GNI (see below).
The CRU is the independent regulator of natural gas and electricity. Previously named the Commission for Energy Regulation, its mission is to regulate the gas and electricity markets and gas, electrical and petroleum safety. The CRU also has the authority to take necessary actions in case of power or gas emergency situations.
Ervia is a state-owned multi-utility company responsible for delivery of gas and water infrastructure in Ireland, and was established in 2014. The Department of Planning, Housing and Local Government is responsible for corporate governance of Ervia, which includes the GNI and Irish Water as subsidiaries.
The GNI is Ireland’s TSO. It was created in 2014 as a stand-alone gas network business within Ervia. The GNI holds two licences from the CRU for operation of Ireland’s gas transmission and distribution systems. The GNI builds and develops Ireland’s gas infrastructure, operating over 13 954 kilometres (km) of gas pipelines. The GNI has a wholly owned subsidiary, GNI (UK) Limited, which operates the interconnectors and most of the pipelines in Northern Ireland. The Competition and Consumer Protection Commission is a government body that enforces Irish and European competition law. It co-operates with the CRU on matters related to electricity and natural gas sectors as formalised under their memorandum of understanding.
Market structure
The Irish wholesale market is governed by the EU gas network codes. In February 2005, the CRU approved the implementation of a new code of operations. This governs the rules for the transmission and distribution networks. The latest code (version 5.02) was published in April 2018. The Irish gas market has undergone several changes in recent years. In line with the EU 2009 Gas Directive, as part of the EU Third Energy Package, Bord Gáis Éireann was certified in 2013 under the independent transmission operator model. Bord Gáis Éireann, the vertically integrated utility responsible for the gas networks, and with activities in power generation and in the electricity and gas supply markets, dominated the retail gas market up to 2014.
The government sold Bord Gáis Éireann’s electricity and gas supply and power generation businesses to Centrica in 2014. Ireland’s natural gas transmission and distribution networks are retained in public ownership as strategic national assets and are owned and operated by the GNI. The GNI was certified as a full ownership unbundled entity in 2016, again in accordance with the 2009 Gas Directive.
There were six large companies operating in Ireland’s gas retail market in the first quarter of 2018 according to the Electricity and Gas Retail Markets Report (CRU, 2018a). Bord Gáis Energy was the dominant retail player and had the largest market share of 46% in terms of customer numbers and volume of sales (GWh). Bord Gáis Energy is a private limited company under Centrica Group, a British multinational energy and services company. Electric Ireland held the second-largest number of customers with a 21% market share, followed by Airtricity (14%), Energia (8%), Flogas and PrePayPower (5% each), with small players such as Vayu taking the rest of the shares.
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