In the latest NERI Report Series No. 23, NERI economist Paul Goldrick-Kelly and NERI intern Jonas Poulsen examine the potential transition risk factors in the electricity sector on the island of Ireland.
Climate change represents a key challenge facing societies around the world. Where formerly, its risks and the efforts needed to curb them appeared remote, we are increasingly faced with the immediate effects of climate change. Ever worsening effects, and policy response timelines are now much more immediate.
A key element of transition efforts on the island of Ireland will relate to a transition on the existing shared grid between Northern Ireland and the Republic. Electricity represents a key strategic sector, both as renewable technologies are increasingly feasible to abate emissions in a sector which is a major emitter itself and as a key means to reduce emissions by “electrifying everything”.
In contrast to renewable generation, which is often more diffuse, fossil fuel generation sites generating emissions are relatively concentrated in specific regions. This relative concentration and spatial distribution of sites, which will have to undergo some form of change if we’re to meet our emissions reductions goals, raises issues of spatial capacity and justice in relation to transition. If transition must occur at these sites, which may imply closure, are these areas equipped to deal with the economic and social effects?
This report seeks to offer some evidence in relation to this question. Using the generation capacity statement for the all-island grid, we identify key fossil fuel generation sites on the island. The analysis proceeds with an examination of the significance of the sector in employment and pay terms. We find that the sector offers unusually well paid employment relative to other sectors, and that these advantages are concentrated at lower skills levels in both jurisdictions on the island.
Our analysis proceeds with an examination of the regional significance of electricity employment and finds sites of regional concentration. We further examine regional risk factors relating to sites of labour market weakness and social risk in the form of poverty measures. The report ends with a risk matrix summarising these findings identifying key sites which may represent sites of high risk in the context of transition efforts.