Ireland

Ireland

Signs that government will tackle barriers

Despite a wind resource the envy of Europe, Ireland only managed to install six wind projects last year, adding 87.5 MW to bring the country's wind capacity to 225 MW. Nearly 75% of the new capacity was built by wind energy trader and developer Airtricity in three wind farms. They include Ireland's first offshore plant of GE Wind turbines, which is still being commissioned, and the 25 MW Kingsmountain wind farm, the largest built in 2003. Airtricity developed its projects without any state financial support. Output is bought by the company's green power customers.

The other three projects in 2003 had to complete construction before the end of the year before their five-year consent periods expired. All three have power purchase agreements (PPAs) under the Alternative Energy Requirement (AER). This legislation obliges electricity supplier ESB to buy output from AER projects at prices bid by developers in a competitive tender.

The AER has failed to live up to government expectations for wind development. Ireland's minister in charge of energy, Dermot Ahern, accepted that the terms on offer under AER V were not attractive enough for the country to meet its renewables targets and he allowed AER V contract holders to re-bid their projects into AER VI, under far better terms. Fifteen year contracts are 100% index linked and give developers the option of an income of 135% of their bid price for the first 7.5 years with the remaining 7.5 years at 65%.

The announcement of winners of AER VI contracts was controversial, with the government accused of killing off the Irish wind industry by awarding over 80% of contracted capacity to just two companies -- one of them ESB. Twenty-eight projects for some 330 MW secured AER VI contracts.

The Irish Wind Energy Association predicts more projects will be built in 2004 than last year, but this is not likely to exceed 300 MW at best, says the association's Tim Cowhig. He says the moratorium on new grid connections, imposed by the Commission for Energy Regulation in December, ostensibly on grounds of grid security, will delay a number of projects (Windpower Monthly, February 2004). The moratorium is due to last until this month, but Cowhig expects it to be extended again.

Recent government initiatives, however, lead Cowhig to hope for a change for the better. In December, Ahern launched a consultation about renewables policy, options for support mechanisms, renewables targets for 2010 and 2020, and how to overcome barriers. And last month Ahern unveiled a set of initiatives to boost the market framework for renewables -- including a 1000 MW electricity interconnection project with the UK. "If the government are serious about the initiatives, the future could look a lot brighter," says Cowhig. "We have had initiatives before which didn't deliver, but hopefully this time it will be different."

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