Wind farms may lead to hike in bills

The economy may get a boost from the introduction of windfarms but consumers could also see a rise in electricity bills.

That is according to a report commissioned ahead of the Irish Wind Energy Association’s annual conference.

Entitled ‘The value of wind energy to Ireland’, the report examines three potential scenarios. The first envisioned no further development of wind energy here; the second scenario saw further domestic development; and the third scenario foresaw Ireland becoming a major generator of renewable power for the UK market.

It is estimated that wind energy could improve Ireland’s GDP by between €350m and €490m a year until 2020, rising to between €646m and €769m up until 2030.

Despite the massive improvements in GDP and the fall in wholesale price of power due to savings on importation of raw materials for gas-fired power stations, consumer prices might actually rise.

Prices could increase due to the costs of upgrading and reinforcing the networks.

“The additional costs are related to grid reinforcement and DS3 costs. It is not transparently clear what proportion of EirGrid’s planned investment in the electricity network is required solely for the development of wind capacity,” the report states.

“Nor has it been determined how the system services outlined under the DS3 programme will be paid for. But if all of these are passed through to consumers, they offset the wholesale price benefit, meaning household and industrial electricity prices rise slightly.”

The report stresses that due to the employment benefits and increased GDP overall, the cost will not be bourne by consumers.

“While consumer bills may not fall as a result of meeting our 2020 target, the net benefits of wind development to GDP and economy-wide employment levels result in an increase in household incomes; suggesting that investment in a domestic Irish wind industry will not be carried by consumers,” the report states.

The majority of employment gains in the renewable sector are in the construction of projects, where the report estimates it could support more than 12,000 jobs.

Kenneth Matthews, chief executive of the Irish Wind Energy Association, said security of energy supply would be a great benefit.

“At a time when energy supply and security is at the top of the international agenda, this report clearly demonstrates the very considerable economic, environmental, social, and security of supply benefits the continued transition towards wind energy will bring to Ireland,” he said.