Ireland has among the highest rates of dependency on imported sources of energy in Europe, although dependency has declined in recent years.
This is according to a report on energy security from the National Competitiveness and Productivity Council.
The Council has called for an urgent focus on projects to help diversify energy supply sources, as well as investing in upgrading the country's electricity infrastructure.
The report noted that Ireland's import dependency in the area of energy provision stood at just above 70% in 2020, which was the eighth highest in the EU and well above the EU average of 57%.
However, the rate is down from an average of 89% between 2001 and 2015, with the Corrib gas field contributing to domestic energy output, as well as the contribution from renewable energy sources.
"This high import dependency means Ireland is more exposed to external shocks to energy markets, such as the current crisis in Ukraine, which has accelerated energy price inflation, with natural gas and oil prices rising to near record levels," the report concluded.
It is widely acknowledged that security of energy supply is crucial to maintaining the country's attractiveness as a destination for enterprise investment as well as being an important factor in maintaining adequate living conditions.
However, recent energy price increases have put the spotlight on the vulnerability of the sector to price shocks that are outside of the control of industry and consumers.
"Current challenges faced by Ireland's energy system have potentially significant implications for Ireland's operating environment, particularly for energy intensive businesses, and Ireland’s international reputation as a location for Foreign Direct Investment," the report noted.
"Certainty is a huge element in people making major investments," Dr Frances Ruane, Chair of the NCPC told Morning Ireland.
"It's very important to show that we have good security of supply. We need to get the investment in place as soon as possible. If we get any uncertainty in relation to supply, that would damage our reputation and make people very cautious about making investments in Ireland," she cautioned.
Given the expected increase in electricity demand in the decades ahead, the Council concludes that major investment is required to improve the electricity grid.
This, it said, will be driven by the electrification of many sectors, including heat and transport, as well as from large industry and data centre demand.
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"It's important that these investments are made in a very cost-effective way. If we end up engaging in investments that are over-costly, that becomes a huge burden on consumers," Dr Ruane said.
"Speeding up means that we don't have unnecessary planning or administrative delays along the way. We're quite caught for time at this point. We were already stretched in meeting targets for 2030 and this is an additional burden in terms of the resources that might be available for investment in the energy infrastrucutre for the country," she added.