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Fierce bidding again for another round of wind power contracts
1 August 2001
Despite "huge dissatisfaction" among Ireland's wind industry with the country's system of support for renewable energy, bidding into the fifth round of the Alternative Energy Requirement could be fiercely competitive, claims Inge Buckley from the Irish Wind Energy Association (IWEA). More than 300 MW of projects will be eligible to bid for the 200 MW of contracts on offer, she says. The Irish government is opening the competition to tenders from August 23-30 to fast-track projects with planning consents already in place. It has set a ceiling on bid prices of IR£0.0379/kWh for large projects and IR£0.0417/kWh for small projects. But Buckley fears a repeat of the pattern of the previous round of AER when prices bid for most of the contracted capacity were too low for wind projects to be built. "Only six projects out of 17 with contracts got built then. And now we have ended up exactly where we were with AER 3. People will be lowering their bids to get contracts and they will be so low that again people will not be able to build at those prices," she says. Many developers will not be able to raise the finance, she warns. Compounding the effects of the competition is the indexing of a mere 10% of the bid price over the 15 year life of the contract. "We saw 6% inflation last year and there is 5% plus inflation this year. Bankers are saying they do not see how it can stack up. Competition has been proven not to work. We are the only country left in the European Union with competitive bidding."
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