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Ireland

Ireland

CAPITAL SUBSIDIES SHUNNED BY WIND DEVELOPERS WITH SUCCESSFUL BIDS

Ten wind projects in Ireland have been selected for power purchase contracts under the country's Alternative Energy Requirement (AER). The ministry of energy in Ireland expects to have 8% from renewables by the year 2005. The selected bids were the most cost effective and not one had taken advantage of the capital grant subsidy on offer from government. The delay in the announcement of the successful AER projects means that for many developers it will be a race against time to get wind turbines installed and running, with planning permission still a major hurdle. Much needed guidelines for planning authorities are underway.

Ten wind projects in Ireland -- for over 70 MW of installed capacity -- have been selected for power purchase contracts under the country's Alternative Energy Requirement (AER). Announcement of the total of 34 AER projects, which as well as wind power include hydro, landfill gas and combined heat and power, was made by energy minister Emmet Stagg at a quiet press briefing on March 7.

The Irish government is clearly surprised at the low cost of the bids submitted. Stagg said the top 30 projects across the range were selected based on their cost efficiency. Not one of them had proposed using the government capital grant subsidy on offer. As a result, said Stagg, the IEP 15 million earmarked for the scheme could now be put to other uses. He suggested that he would be keen to see more work done on research connected with biomass.

The ten wind projects, for 73.4 MW, are proposed by eight companies, from England, Northern Ireland, the US and Scotland, as well as three from Ireland (see table). Currently there is just one 6.5 MW wind farm in Ireland, made up of Danish Nordtank turbines at Belacorick. It appears that the electricity utility, the Electricity Supply Board (ESB) will now only be accepting power from renewable sources through AER contracts.

The response to the competition engendered by the AER was very good, according to Stagg. There were 101 proposals for wind power, combined heat and power, biomass/waste and small scale hydro schemes. Information about unsuccessful projects is not being released by the Department of Transport, Energy and Communications in Dublin. Given the total number of applications, there are more than a few who are disappointed. The investment in research for the competition on sites throughout the country has been estimated at close to IEP 1 million since the AER was announced last year. The press briefing held by Stagg was a surprisingly low key affair considering the huge investments at stake. The minister was clearly not prepared to meet unsuccessful bidders, especially because of the political nature of the Irish economy.

The wind element of the competition was well over subscribed, according to department sources. This was why, despite the original intention for just 30 MW of wind, over 70 MW was chosen. "The wind proposals won because they were the most efficient and cost effective," Stagg said. "The cut off point was between those that required a capital grant or not," he added. "We plan to have 8% of our total energy requirement from renewable sources by the year 2005, and this is just the start of developments in this direction."

The original AER target was to secure 75 MW of additional renewables capacity by 1997. "The combined capacity of the applications for this competition represented a total installed capacity of 367 MW, which was four times more than the target," he said. "What was surprising about this competition was the high number of projects that did not seek grant support at all." Stagg added: "It has been possible to surpass the target set by government on the basis of price support alone. My decision has been to offer power purchase agreements to those competitors who did not seek grant support."

Capital subsidies superfluous

The AER and the competition for power purchase agreements was administered by Ireland's Electricity Supply Board (ESB). The power procurement division of the ESB analysed the proposals, which were then independently evaluated by the UK's Energy Technology Support Unit, part of the UK Department of Trade and Industry. Once this process was complete, proposals were ranked in order of efficiency against the parameters of capital grant aid or not. The scheme provided an initial price of up to IEP 0.04/kWh and an option to bid for grant aid.

The grant was on offer because of arguments put forward by the wind industry that a minimum of IEP 0.05/kWh was needed to make a return on investment in wind energy in Ireland. Meanwhile, though, NFFO and the SRO seem to have successfully driven costs down (Windpower Monthly, February 1995), as reflected in the Irish bids. Bids as low as £0.037/kWh were submitted in Scotland and the wind industry seems to believe it can make a go of it in Ireland at these prices, too.

The race against time

The delay in the announcement of the successful AER projects means that for many developers it will be a race against time to get wind turbines installed and running. It is estimated that over 160 turbines will be erected before the end of 1997 to comply with the requirements of the scheme.

Planning permission is still outstanding on most projects, but Stagg said that "Guidelines for Planning Authorities" were almost in place at the environment department to help ease the way. Even so, more wind measurements have to be done on many of the sites, requiring permission for monitoring masts of 30 to 40 metres before full planning permission for wind farms can be granted. The guidelines are sorely needed. Obtaining planning permission for a wind farm at Mount Eagle in Kerry cost the developer, South West Farming Development, a considerable and expensive delay, which may well have put them outside the scope of the AER. With several of the new projects planned for areas deemed by some as having a high scenic value, the path through the planning process is not likely to have become any easier.

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