Ireland already has one of the world’s most unstable electricity grids even before a further 3,900MW of wind energy is added to the system.
Davy stockbroker analyst Joseph McGinley said Eirgrid has done an amazing job in keeping the energy grid operating without blackouts due to the huge proportion of Irish energy that is now being generated from wind power.
He says wind energy is unreliable due to the nature in which it is generated. If the Irish grid is relying 75% of its energy from wind power and the wind stops, the grid will struggle to bring enough generation capacity online to maintain supply.
“In December wind achieved a new high (45%) of national demand, from an installed capacity of 2,376MW so it is clear that adding a further 3,000 to 3,900MW, as part of Gate 3, to the existing stock of wind power will test the systems stability,” Mr McGinley said.
Despite the effects that over reliance on wind could have on the Irish grid, European targets and the agricultural nature of the country means that instead of penalising agriculture or transport by mandating electric vehicles, the focus is on energy generation.
The EU fines that the country faces if it fails to meet the EU’s 2020 targets could be up to €300m a year.
“It is in the Government’s interest to reach the 2020 targets as soon as possible, as the country was referred to the European Court of Justice last week for failing to meet intermediate targets, which could result in fines of €25,000 per day initially.
If Ireland missed the 2020 targets it would face fines of €150m/year/1% i.e. If Ireland sourced 14%, instead of the 16% energy target, fines of €300m/year would be applied,” said Mr McGinley.
While the technology for generating electricity in Ireland has been developed, Mr McGinley is less convinced that the economics have been cracked.
Often to maintain the reliability of the Irish grid, wind farms have to be shut down and compensated as there is too much energy being produced.
“As more wind is brought online its marginal utility to the system diminishes rapidly.
“A credible economic solution to utilising excess wind is yet to be found on a large scale, although some storage solutions using hydro historically (ESB’s 292MW Turlough Hill), and potentially now compressed air, are being considered. Until such a solution is found, the system operator needs to remove excess wind from the system to ensure reliability,” he said.