When Ireland’s legacy peat-fired power stations, some almost fifty years old, finally expired in the 1990s, the decision was taken to build three new ones. The Lanesboro and Shannonbridge stations were commissioned as recently as 2004 and 2005. They closed for good in 2020 after less than half a normal operating life.

The third new station at Edenderry was commissioned in 2000 and remains open, partly fuelled by burning timber as well as turf (and money). The three units had a combined capacity of 370 MW, equivalent to a single CCGT (combined cycle) gas station which in Ireland are mostly around 400 megawatts. CCGTs are base-load stations, designed for high availability, as are peat and coal units. In continuous operation CCGTs have carbon emissions per kilowatt-hour less than half the emissions from the peat units. The big coal station at Moneypoint, more than double the size of the typical Irish CCGT, will also have to close as soon as circumstances permit: emissions per unit are double the CCGTs and just too high.

But Moneypoint was commissioned in 1985 and the limit of its normal life span is approaching anyway. Moneypoint, so to speak, does not owe us any money and was planned in the 1970s, before the alarm had been raised about climate impacts. Two of the three peat stations have already closed very early in life and Edenderry will close too. Ireland signed up to the Kyoto accord back in the 1990s and then built itself some stranded assets. The combined capital cost was around €650 million, not counting annual operating subsidies running to further hundreds of millions and collected as a surcharge on consumer bills.

In June 2014, returning from a trip to Asia, Barack Obama summarised his foreign policy philosophy to the press corps on Air Force One: ‘Don’t do stupid stuff’ is the polite version. Since the Kyoto accord was negotiated in 1995, the world’s governments have done lots of stupid stuff. The costs of the delayed emissions reduction have been needlessly increased.

The stupid stuff consists mainly of the wanton construction of stranded assets. The world now has too many coal-fired power stations, too many road vehicles and space-heating systems, plus distribution infrastructure, reliant on fossil fuels. They will have to be replaced before their useful lives are done. Coal stations are still being built, and on a substantial scale outside Europe and north America, which could produce excess emissions for another forty years or more. Space-heating systems last just as long and retrofits are costly.

The advice of economists in the 1990s was to avoid territorial emission ceilings, country-by-country, and negotiate instead a universal system of carbon taxes at the consumption end. Demand for carbon-intensive goods and services would decline and supply would follow. International trade could proceed undistorted, production could take place wherever costs, including carbon costs, were lowest, and developing countries could have been given time to catch up.

The Earth has just one atmosphere and it does not matter where emissions occur. Supply equals demand for the planet, fix demand and you have fixed supply. With a carbon tax at the right levels, low initially but scheduled to rise in real terms for decades ahead, emission reductions could have been attained in a manner which minimised the costs of adjustment.

A carbon tax along these lines was proposed thirty years ago by Yale University’s Bill Nordhaus, winner of the 2018 Nobel prize for economics. One of its virtues would have been the signal to developers of low-carbon technologies that they would enjoy a permanent and growing edge over fossil fuels, without any need for opaque subsidies to renewables. A major bonus would have been the clear investment signal, a warning of inevitable losses for builders of stranded assets.

Unfortunately, the world has 200 governments and all they could agree at Kyoto and subsequently was a system of arbitrary and unenforceable country-by-country quantitative emission targets, broken down further by economic sector. The European Union has followed the same path and it has failed. Had it proved a workable framework, the Soviet Union would have been a success.

Potential stranded assets in Climate Action Plan

Some European countries, including Ireland, have implemented domestic carbon taxes and the European Union is finally considering a uniform tax on jet fuel. European policy, to be fair, has included elements of carbon charging since 2005 but for now, Ireland must operate within the EU-mandated 2030 national emission ceiling for most sectors, as interpreted by the government’s Climate Action Plan. The plan contains the potential to create more stranded assets, especially in electricity and transport, on a scale that will dwarf the self-inflicted economic penalty of the three midlands turf stations.

Given the urgent timetable, the new 80 per cent renewables target for electricity generation must rely on technologies already proven, mainly on wind. The Irish Academy of Engineering, in a series of reports over the last few years, has highlighted the substantial grid costs involved, even at the earlier but nonetheless ambitious target of 70 per cent renewables.

There will be further costs for OCGTs, open-cycle gas turbines, which have the cheapest build costs, to provide back-up power for intermittent renewables but OCGTs are costly to run. The wind companies are vocal in demanding to be spared their grid connection costs – even offshore and for export capacity. But grid connections for expanded and dispersed windfarms will add tens of billions to system costs, raising electricity prices already amongst the EU’s highest. Interruptible wind, supplemented with open-cycle gas turbines, to be used rarely and uneconomic without capacity payments, will require a further addition to customer bills. No estimates of the plan’s ultimate impact on electricity prices have been released.

There is a low-carbon alternative on the horizon which could see these assets stranded on a scale far beyond the peat-fired debacle. Modular nuclear reactors in a unit size suited to the Irish system, and at affordable capital costs, may become commercially available early in the next decade. Development projects have attracted billions in private and government investment in the USA, Canada, the UK, France, China, Japan, and Russia.

There would be limited extra grid costs with nuclear, since these units would be few and could be located where grid infrastructure, for example at decommissioned fossil stations, is already available. This is not yet a proven and available technology but has attracted no discussion, never mind official support, in Ireland, in contrast to long shots like wave-power and unscalable biomethane.

Ireland already imports nuclear power through the UK interconnectors and plans to import more through the interconnector from France. The time for a debate on nuclear is now, before capital is irrevocably sunk in elaborate and un-costed commitments to intermittent renewables.

People are unable to ‘review and assess’ the project until the business case has been made available.

Rail investments could produce another harvest of stranded assets. The government has declined to cancel Metro North, despite a reported and undenied capital cost of €10 billion. This would deliver a single new underground suburban rail line from Dublin city centre to Swords. Approval for a Railway Order, triggering a protracted and costly process at An Bord Pleanala commencing early next year, with appeals and judicial review likely to follow, has been granted by the government without release of the business case justifying further expenditure.

No less than €259 million has been spent, pre-commencement, on engineering studies, public consultations, and public relations by the National Transport Authority on the various iterations of Metro North, more than enough to double the entire Dublin Bus fleet. Approval has just been given to apply for another Railway Order, this time for a €1 billion electrification scheme to Maynooth, a suburban line which already exists. Again, the Department of Transport has declined to publish the preliminary business case, required under the Public Spending Code. The department’s press office has furnished the following explanation:

‘On Tuesday 7th December, the Dart+ West project was given government approval to enter the planning system. This is a crucial milestone on expanding and transforming the rail network in the Greater Dublin Area. In line with the requirements of the Public Spending Code, and reflective of the programmatic nature of the DART+ Programme, it is intended to publish appropriate details of the Preliminary Business Case in due course.’

But ‘in due course’ is not what it says on the website of the Department’s agency, and promoters of the Dart+ West project, the National Transport Authority. On their Metrolink pages, the NTA has posted a document outlining their approach to cost forecasting and project approval:

‘Major projects require comprehensive business cases to be developed and approved before the plans proceed to implementation. For a major project in Ireland, there are two significant milestones in the business case process. The first is when we submit a Business Case to Government for its consideration, prior to making the application for a Railway Order. The second stage occurs subsequent to the planning process, when the final scheme details are fully known. Each of these business cases will be published so that people will be able to review and assess the implications of the project.’

People are unable to ‘review and assess’ the project until the business case has been made available. In this diagram on the NTA website outlining the process as the agency envisages it, the first Stop/Go traffic light is clearly inserted prior to the application for a Railway Order.

Three further electrification schemes for existing lines in the Dublin area are under consideration, each comparable in scale to the €1 billion Maynooth project. Business cases will again be required and approval for Railway Orders will entail substantial public cost, whether the projects are ever implemented or get stopped at the second traffic light. Is it the intention to collapse the two traffic lights into one, and is this a breach of the Public Spending Code?

The electrification of existing railway lines in Dublin may be solid projects with benefits exceeding costs, although there are sceptics. The declared intention of government is to transition car commuters into electric vehicles and the bus fleet is also to be electrified. If power generation is substantially decarbonised, also a government intention, electrifying the suburban railway will deliver little by way of emission savings. The sceptics cannot be dissuaded by the business case since it has not been published.

There is no protection against the construction of new stranded assets unless the Public Spending Code is taken seriously by government departments.