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Ireland

Ireland

Waiting for better market conditions -- Irish wind one big queue

" Of significant concern" is how the Irish Wind Energy Association (IWEA) describes the slow-down in new build in Ireland. Only five projects totalling 59 MW were completed in 2007. This brings installed capacity in the republic to 806 MW rather than the 1 GW the energy regulator had been confidently predicting towards the end of last year.

"Of significant concern" is how the Irish Wind Energy Association (IWEA) describes the slow-down in new build in Ireland. Only five projects totalling 59 MW were completed in 2007. This brings installed capacity in the republic to 806 MW rather than the 1 GW the energy regulator had been confidently predicting towards the end of last year.

Michael Walsh, new chief executive at IWEA, puts the poor performance down to the lower purchase price being offered under the country's new standard offer contract program and problems gaining both planning permission and access to the grid. Walsh fears these factors will continue to slow progress in the current year. "Our concern would be that while there is significant interest in development there is a lot of work required to create a policy environment where this interest can be realised," he says.

The indexed linked purchase price, introduced in May 2006, is around EUR 60/MWh, making wind development barely viable. "We have seen a significant increase in the price of wind turbines and a significant rise in grid connection costs," says IWEA chairman Tim Cowhig. Any substantial roll-out of wind will be delayed until there is an improvement in the pricing, he says. That may well happen. Last month the price for offshore wind was significantly increased (page 104). "Onshore we can do it for just a bit more than half the price of offshore, so it makes economic sense for the government to support onshore," believes Cowhig.

There is no shortage of wind projects waiting in the wings. To deal with the large volume of capacity wishing to connect to the electricity network, the Commission for Energy Regulation (CER) and transmission and distribution system operators Eirgrid and ESB Networks have since 2004 adopted a group processing approach, lining up chunks of capacity geographically to pass through "gates" to the network. So far there have been two rounds of processing, Gates 1 and 2.

Last year saw some 1300 MW of wind projects receive connection offers in Gate 2, bringing contracted capacity to 1742 MW. Much of this has to gain planning permission. A further 5500 MW of projects are currently waiting in the queue for connection offers, far exceeding the 4400 MW that is required to meet Ireland's new renewables target, according to CER. A year ago, the Irish government announced a goal of 33% of electricity from renewables by 2020, with wind expected to make up the lion's share.

In December CER launched a consultation seeking views on how big Gate 3 should be and the best option for awarding connection offers. But without better prices and a better permitting system, IWEA fears that much of that effort could go to waste.

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