On Inis Mean in the Aran Islands off Ireland's west coast, three 225 kW turbines were built by the Inis Mean Community Co-operative under a contract from Ireland's Alternative Energy Requirement (AER) support mechanism. Output from the Vestas turbines is also used to desalinate water, producing 12,500 gallons of drinking water for the islanders each day.
The year started more promisingly for the Irish wind community with the government's announcement in February that it was to award contracts for over 350 MW of wind energy in the latest round of AER. According to Sheila Leyden of the Irish Wind Energy Association (IWEA), a combination of lack of adequate financial incentives, grid connection problems and delays in drafting the legal order to enable AER contracts to become effective are to blame for the slow rate of progress of wind energy deployment.
AER 5 contracts did not become valid until December 2002 when changes to the Public Service Obligation (PSO), requiring the Electricity Supply Board (ESB) to buy the output from AER projects, were signed off by natural resources minister Dermot Ahern. The PSO is a concept enshrined in EU energy market rules. Meantime, for many wind power projects, grid connection is still an unresolved issue, Leyden explains. Up to 18 proposed wind farms with planning consent saw their projects delayed when the government withdrew funding for a revolving grid upgrade program due to its recent "budgetary constraints." Now the regulator is consulting on alternative methods of funding the program.
One of the biggest blows during the year came in the government's December budget when finance minister Charlie McCreevy closed the door on a tax break that had encouraged investment in renewable energy projects. IWEA is fighting the decision and argues that the government should balance the EUR 10 million saving from the budget change against the penalties for failure to reach Kyoto targets, which are likely to exceed EUR 600 million. "There is no evidence of consistency or economic sense in the government's policy to date," says IWEA. "It would appear that investment is being discouraged away from areas where targets have been set and where Kyoto penalises failure to achieve these targets."
With the budget change, at best the country will reach only 15% of its 500 MW target for renewables, the association warns. "The Irish wind industry has been nipped in the bud at the very time that it is required to deliver renewable energy targets."
According to Aidan Forde from Tralee-based Saorgus Energy, the current unattractiveness of the Irish wind market is exemplified by the exit from Ireland in 2002 of wind developer and operator PowerGen Renewables. PowerGen sold its Irish wind interests to Saorgus for EUR 1.4 million. These include the company's stake in the 15 MW Tursillagh wind farm and development interests in the Kish Bank offshore wind farm project. PowerGen says its priorities have changed since the introduction of Britain's renewables obligation and the move allows the company to concentrate on its core UK market. Forde points out that with PowerGen's departure, there are scarcely any internationally owned developers still active in Ireland.