Ireland's State of the Environment Report 2024

313 Chapter 12: Environment and Energy 4. Key energy demand drivers Focusing on trends over time, the drivers of energy demand vary across the energy consuming sectors, but economic growth and population growth are key pressures that are difficult to decouple fully from energy demand growth. Energy prices and weather also have a key impact on our demands for energy. Given our current high dependency on imported fossil fuels, we are very exposed to fuel price variations, which in turn are influenced by geopolitical events, as has been very evident in the past few years. Ireland’s climate mitigation policy has a strong supply- side focus on increasing the deployment of renewable electricity together with a focus on electrifying as much energy end use as possible. The most prominent example of the latter is the roll-out of electric vehicles and heat pumps, with the goal of switching transport and heating away from fossil fuel combustion technologies towards renewable electricity-powered technologies. However, it is essential to have a complementary focus on energy demand reduction and energy efficiency measures, which can bring additional emission reductions and also cost savings and improved energy affordability. Understanding the demand drivers for electricity, transport fuels and home heating fuels is essential to inform policy choices. These drivers are briefly explored here and also in Chapter 11. Electricity demand Ireland’s electricity demand doubled over the period 1990-2020. EirGrid projects that this demand will further increase substantially by 2030, based on an increasing demand for electricity from high-demand users, including pharmaceutical plants, high-tech manufacturing and data centres, and the increasing use of electricity for transport and heating (EirGrid, 2024). Data published by the Central Statistics Office (CSO) on metered electricity consumption indicate that there was a 2.5% increase in electricity demand in 2023 relative to 2022, largely driven by a 20% growth in electricity consumption by data centres. Data centres accounted for 21% of metered electricity consumption in 2023, which exceeded the electricity use of urban households (18%) and rural households (10%). Residential heating fuel demand The GHG emissions inventory limits residential emissions to those associated with domestic heating and cooking using solid, liquid or gaseous fossil fuels. The upstream emissions associated with residential electricity usage are recorded in the energy industries sector. The key drivers of residential emissions are therefore the number of households, which is related to both population growth and economic growth, the emissions performance of the energy systems in these households, weather and energy prices. It is particularly notable that, despite the almost doubling of the number of households (from 1 million in 1990 to 1.9 million in 2023), emissions from the sector in 2023 are slightly below 1990 levels. This was achieved by improved insulation and energy efficiency, coupled with switching from carbon-intensive solid fuels to liquid and gaseous fuels over the period. Changes over time to building regulations mean that newer homes have a much-improved energy performance and are heated using electricity and heat pumps. The continued growth in the number of households is therefore not anticipated to result in increased residential emissions in the future. Transport fuel demand Transport GHG emissions have seen the greatest growth in energy-related emissions, having increased by 134% from 1990 to 2023 (EPA, 2024c). This growth can be directly linked to the increased number of passenger car and freight transport activity over that time frame, which is coupled to economic growth. Increasing the share of electric vehicles in the car fleet and growing the use of biofuels have a key role in decoupling transport demand growth from emissions growth in the future. There is also a need to pursue complementary measures that address an overdependence on private car usage for congestion, environmental, health and wellbeing reasons. These include increasing public transport use and more trips undertaken by walking and cycling, i.e. active travel. This is explored in greater detail in Chapter 11.