Commenting on the recently announced selection of projects under the new Alternative Energy Requirement (AER), he reiterated that the successful bidders had all been chosen from applications which waived the option for subsidy. However, even though subsidies will no longer be granted under this year's AER, there will be "an additional cost associated with the initiative and in fact this is likely to be of the order of IR£70 million." The sum will be met by consumers over a 15 year period and is based on average actual price differentials, added Stagg. This was a controversial statement to the assembled delegates, but Stagg did concede that there were "various methods of calculating this cost and there is a healthy ongoing debate on the matter."
Many lessons had been learned from the first round of the AER, added Stagg. A full review was now underway and a broad selection of opinions had been invited through advertisements in national newspapers. As a result, details of future strategies would probably be announced by the end of the year. With a clear message as to how he would like to see the industry develop, the socialist Labour Party minister added: "My overall aim is to see our strategy contributing to job maximisation in Ireland, not just in maintenance but in manufacturing and supply."
Projects outside the AER
The AER might not be the only instrument by which wind projects can be awarded power purchase contracts in Ireland. In remarks clearly directed at unsuccessful bidders, Stagg said discussions were being held in connection with the restructuring of Ireland's national utility, the Electricity Supply Board, for the acceptance of unsolicited bids from developers. "These arrangements are expected to be finalised within the next couple of months," he said.
Irish Wind Energy Association chairman, Joe O Mahony, responded by saying that the development of the wind industry needs a vision that the Irish people can understand and which makes it possible for them to appreciate the benefits of wind. "We must not allow ourselves to miss out on the employment opportunities in the worldwide development of the wind industry," he said. "Ireland should have as much manufacturing as possible for our own wind power development." Stop-start schemes such as the AER will not allow the industry to develop, O Mahony told conference delegates, because they only encourage activity for short periods. Long term targets should be set, he said, to allow developers, investors and manufacturers to plan ahead for a number of years. There should be three annual allocations of contracts for new capacity and there must be scope to allow the installation of small wind turbines or small groups of turbines which could be grid connected.
His views were supported by Jan Kristiansen of Denmark's utility research group, Elsam Projekt, who imparted to delegates some words of advice from a country which has been a world leader in wind development for over a decade. Kristiansen said that it is essential to secure a stable and continuous agreement for payment of power produced by privately owned wind turbines.
Summing up the Irish Wind Energy Association's forthcoming submission to the energy minister's review, O Mahony called for realistic prices, tax incentives for clean energy investments and improvement of the grid where it is weak, without which future wind power development would be hampered.
European Wind Energy Association President, Ian Mays from British company Renewable Energy Systems (RES), told delegates that the UK and Ireland together have just under half of Western Europe's wind energy resource. "The extent to which this can be realised will depend largely on our ability to integrate wind farms into the countryside and with local communities in an acceptable way," he said. The environmental issues are important in terms of visual impact, noise, electromagnetic interference, affects on fauna and flora as well as local areas of historical interest in many counties. For those entering the Irish wind market, good community relations were essential, he warned. Local people should be kept informed at all stages of a project. RES won two contracts under the AER.
Liam O Donnell of the power procurement division of the ESB told the conference that the cost of electricity from new high efficiency gas fired combined cycle power stations was likely to be the benchmark against which the cost of base load electricity from alternative energy projects will be judged. He outlined the prices being paid under the AER 1994-1996 scheme (see table next page), which do not include sales tax. This would be indexed annually, beginning in January 1996, on the basis of charges in the Irish consumer price index of the previous year.
Looking at the AER results, he said that even though there were far more bids than could be accommodated in the scheme, it can confidently be expected that a minimum of 75 MW of wind capacity will be installed.
From neighbouring Northern Ireland, James McEldowney of the energy policy branch of the Department of Economic Planning in Belfast, said up to 8% of Northern Ireland's electricity could be produced by renewables. Northern Ireland is one year ahead with its market stimulation programme for renewables, the Non-Fossil Fuel Obligation (NFFO). Following the first round of NFFO last year, six wind power schemes are now underway and three are currently on line. Experience to date indicates the need, he said, for a proper time scale to be incorporated into the development of wind farm projects. Project management and technical skills are very important, he added, especially during the early stages.
Attention to environmental matters is vital, he said. All of the wind farms in Northern Ireland have been the subject of environmental assessments which have influenced the siting and location of the wind farms in a number of cases. More "before and after" studies are needed to assess public perception among wind farm neighbours. A potentially new investment path is also being explored by his department, added McEldowney. It is assisting a private wind energy operator to replace power it would have bought elsewhere for an industrial project. Combined with community led schemes, he felt this kind of project would help win public acceptance of wind.