Renewables ‘need a further €5bn’

Irish wind-farm operators will need to spend another €5bn or so in capital investment and construct an additional 3-3.5 gigawatts of onshore wind power if Ireland is to meet its 2020 EU climate change targets, according to a new report.

Ireland has a current target of sourcing 40% of its total annual energy and electricity needs from renewable sources, such as wind and solar, by 2020.

Recent data from national electricity grid operator, Eirgrid said that renewable sources accounted for 17% of total energy provision on the island of Ireland last year; up by around 3% on the previous year.

However, a new in-depth study by Davy Stockbrokers suggests that significant further investment in onshore wind-farm infrastructure is needed for that percentage to grow to the desired 40% mark within the next eight years.

According to Davy, realisation of that target will not be without its challenges and will likely result in a changed competitive landscape — with traditional operators like the ESB, Bord Gáis Energy, SSE Ireland and Viridian joined by the likes of Bord na Móna, Coillte and, potentially, some of the big British utilities.

In this regard, it suggests that Bord Gáis Energy — which is being sold by the Government — and Viridian might be viewed by some British players as a takeover target and a way of gaining a strategic foothold in the Irish electricity market.

The report warns of the challenges of raising project finance; noting that funding for the large-scale roll-out of renewables is problematic.

“The financing landscape favours larger and more experienced industry players over the short-to-medium term. Larger companies represent bankable counterparties from the perspective of project financing, while experienced developers can bring in-house procurement and/or framework agreements to bear on improving project economics,” it said.

Davy also said that one of the implications of as much as 40% of electricity being generated from renewable sources will be an increased reliance on natural gas — as gas-fired power plants need to be available to provide stand-by capacity if and when wind power is unavailable.

“Given Ireland’s heavy dependence on imported natural gas for power generation, this will add to energy security concerns,” it noted.

© Irish Examiner Ltd. All rights reserved

More in this Section

Billions wiped off value of top UK companies as global markets reaction to Brexit vote

Irish bank shares rocked by 'Leave' result in UK referendum

Sterling nosedives to 31-year low

State has spent €670k defending position in Apple tax case


You might also like

Breaking Stories

Brexit vote throws markets, Tories and Labour into meltdown

Project Scorpio: Why you should be excited about Xbox's upcoming 'monster' console

Lifestyle

Tackling migraines head on is key to dealing with the disorder

We need to wake up to the idea of Fairtrade coffee brands and the good they do

The Leaving Cert does not define who I am

Foals are surfing the wave and love playing the bigger venues

More From The Irish Examiner