Wind Energy - Why aren’t we taking advantage?

At the end of 2004, Ireland had 339 MW installed wind power, including 25 MW offshore at Arklow Bank. With a total Irish electricity capacity approaching 6,000 MW for the same period, this means that wind is supplying approximately 5.5 % of overall generating capacity.

Why Wind Energy in Ireland?
Ireland has one of the best wind energy resources in Europe, and wind energy generated electricity is approaching cost competitiveness. As one of the most fossil fuel dependent countries in Europe at almost 90 %, and with continuing rises in fossil fuel prices, wind power brings the following benefits:

		Security of fuel supply
		Stability of fuel cost
		The use of indigenous resources
		Improvement in the balance of payments
		Environmental benefits
		Contribution to meeting our Kyoto Protocol commitments - which came into force on 16th February 2005

Government and EU Targets
The government has a target of 500 MW of renewable energy electricity to be developed by 2005 - primarily to come from wind energy - with increased targets to be set for 2010. The wind energy industry expects that the 500 MW target can be met in 2005 or early 2006.

In the 2001 EU Renewable Energy Directive, Ireland has an indicative target of 13.2 % renewable energy electricity by 2010. By that time, it could mean that up to 1,000 MW of wind power will be required.

This capacity can be readily met from our onshore wind resource alone. Offshore wind potential offers even greater opportunities. The successful operation of the Arklow Bank Offshore Wind Park by Airtricity and General Electric Wind Energy shows that offshore development is achievable. Arklow Bank alone has permission for 200 turbines when fully complete.

In summary, Ireland’s wind energy industry is currently meeting ambitious targets - but could successfully meet far more ambitious targets in the future. The energy resource is certainly there and the grid is likely to be able to accept significant quantities of it.

Current Wind Energy Challenges
Wind energy is currently being profitably developed in Ireland. The continuation of this situation depends on the government’s choice of policy in the near future with regard to wind energy.

Wind energy in Ireland has been facing and overcoming many hurdles, including, among others -
		planning permission
		grid connection
		finance
		power purchase agreements

Acquiring planning permission is generally difficult for any individual project and can be costly at what is a high risk stage of the development - but hard work on the part of the wind energy industry means that planning permission has been acquired for around 1,200 MW wind energy.

The moratorium on the offering of grid connections to wind farms has received considerable publicity. These difficulties are slowly being overcome, with the establishment of a working group on grid connection issues. The wind energy developers, wind turbine manufacturers, ESB and various government departments have worked very hard on these issues. While problems remain to be resolved, they are primarily technical problems and, without wishing to underestimate the level of work remaining to be done, the wind energy industry has some confidence that these difficulties will be overcome. As such, the first grid connection offers since the moratorium on issuing such offers are expected in April 2005.

Currently, access to finance for wind farms is probably one of the least problematic elements of wind farm development in Ireland. Many of the banks and finance houses are becoming well familiar with the industry and will typically offer finance once certain elements are in place - including planning permission, grid connection offer, approved turbine, operations and maintenance contract and a power purchase agreement (PPA).

One of the issues currently of concern to the industry is the matter of PPAs. The means of selling wind-generated electricity is crucial to the long-term success of the wind energy industry. There are currently, in theory, a number of means of acquiring a PPA -
	through government sponsored schemes such as the Alternative Energy Requirement (AER) competition
	through private PPAs from companies such as Airtricity, Bord Gais, Energia, ESB Independent Energy, and CH Power
The difficulties are as follows:
	the AER scheme has been seen to have significant flaws - having delivered little in terms of generation capacity to date. It is to be replaced and is currently being reviewed;
	the independent electricity utilities are not currently, on the whole, inviting supply from significant levels of wind capacity, for various reasons.
Thus, the industry is currently depending on the government to provide a speedy replacement for AER.

The Way Forward
Many of the matters required for the successful development of the wind energy industry in Ireland are in place - except for the awaited government announcements on the form of provision of PPAs.

It is generally believed that there is a latent goodwill towards wind energy development within the government - given its green credentials, etc. - but that it is simply not taken seriously as a significant potential supplier of cost-effective, dependable electricity. It is also believed that at government level, there is - on the whole - a lack of true, in-depth appreciation of the clear benefits to be brought by wind energy, particularly in terms of security of energy supply, and its decreasing cost.

Peter Bacon’s 2002 report on “Wind Energy - a New Industry for Ireland” states that - “while some initiatives have been put in place to support the development of electricity generation from wind, they remain quite inadequate and continue to see the sector as an alternative, in the sense that Ireland has a choice whether or not to adopt these new forms of generation. This is not the case.”

For wind energy to become the significant participant it could and should be in the energy market, requires active rather than passive support from the government. It requires a full appreciation of the long-term financial benefits of some short to intermediate term support. This will require an interest and appreciation from the Department of Finance as well as from the Department of Communication, Marine, and Natural Resources.

The support and interest of Minister Dempsey and the Department of Communication, Marine and Natural Resources is acknowledged and appreciated - as well as that of other individual TDs. This interest needs to be awakened throughout the broader government and translated, soon, into a realistic form of PPA.