The Republic of Ireland and Northern Ireland share an ambitious 40% target for electricity from renewables by 2020, consistent with Ireland’s EU obligation to generate 16% of its energy use from renewables by that date. Between 4GW and 5GW of renewables capacity is expected to be needed — although some green proponents are striving for 11GW by 2020.
The review has been examining the effect that around 4.6GW of variable wind will have on system operation. As well as looking at how generation should be scheduled and dispatched, the review is also studying rules for constraining generation off the system at times of congestion.
Its findings are due to be published in the first quarter of 2011 as the last grid-connection offers are issued under Ireland’s lengthy Gate 3 process dealing with 3.9GW of applications from generators wanting to connect to the network.
New direction needed
Developers that have received Gate 3 offers will be examining the implications of the review very carefully, says Michael Walsh, chief executive of the Irish Wind Energy Association (IWEA) . "It’s a very significant milestone in the whole development of the industry in Ireland," he says. "People will be making decisions as to whether to accept those offers or not."
Following Ireland’s general election late last month, IWEA will be urging the new government to take a joined-up approach to formulating policy.
"There are too many different things happening on the policy front — maybe ten or 11 items up for review at any one time," explains Walsh. "We should be looking at how all the different issues interact, rather than looking at them one by one and coming up with different answers that don’t gel together — which is what is happening at the moment."
The dire state of the Irish economy affected the rate of new wind installation, with just 153MW completed in 2010, down from 221MW installed in 2009 (see table). But the pace is expected to pick up this year. Some 340MW is currently under construction, the majority due for completion by the end of 2011.
Total wind capacity in Ireland now amounts to 1.43GW, enough to meet some 15% of total Irish electricity demand. Most of the new capacity last
year was built by large, mainly utility companies better able to weather the economic storm raging in the country. Leading the pack were two of the biggest market players: ESB with 48MW followed by Ireland’s market leader, SSE Renewables, with 40MW. The latter company boosted its share of total Irish wind capacity to around 33%.
John Ward, director of small independent generator Redwind Energy, says the banking crisis has caused huge problems for the wind sector, making it difficult for smaller players with consents and grid-connection offers in place to proceed to the construction stage. If they are lending at all, banks are only lending to people with a strong track record, he suggests, adding that raising equity is also hard
But Ward believes that "the fundamental economics of wind have not deteriorated" and notes that civil engineering and turbine supply costs have fallen, making projects cheaper to build. "If you look at any other asset class, wind is probably the best," says Ward.
Michael Walsh says that some financing is still available for wind farms. "But it’s taking a lot longer to bring them across the line and get all the due diligence done," he says. "Others are finding it much more of a challenge than maybe it was even two years ago."
Yet, Walsh is optimistic that this year will see up to 300MW of projects completed. And there are a lot of projects in the pipeline, he adds, despite the permitting, grid and financing challenges wind power faces in Ireland.