THE wind energy sector has warned that Ireland is looking increasingly unlikely to meet its target of providing 40% of its energy needs from renewable sources by 2020 unless greater price stability is provided to operators.
Statistics from the European Wind Energy Agency released yesterday showed that Ireland is not capitalising on its natural resources, laying claim to just 2.3% of Europe’s wind farms, despite having some of the fastest winds in the continent.
Irish Wind Energy Association (IWEA) chief executive, Michael Walsh, said that barriers in terms of grid connection and fluctuating pricing continue to slow development here.
The group have claimed that up to 10,000 jobs could be created by 2020 if greater transparency was brought to the pricing structure.
Just 233 megawatts of wind power was installed here last year and minimal amounts are expected to come on stream up to 2012, due to the delay in bringing wind plants on line.
“The will is there amongst the sector but acquiring finance is a huge issue and these projects require huge capital investment. The problem is that the banks are wary of the projects as the potential costs can fluctuate year on year.
“Rules and regulations around charges, such as charges for using the transmission and distribution systems, have not been pinned down and they can rise or fall year on year. Many banks are unwilling to take the risk that they could go higher; they are wary of the projects,” he said.
According to the association, up to 17% of a typical wind farm’s costs are subject to fluctuating annual charges that make it difficult for banks to estimate the long-term financial viability of investment.
“For instance, charges for using the transmission network in Cork were low a few years ago as there wasn’t a lot of plant generation in the area. However, with the development of two new plants at Aghada and Moneypoint, they have increased the price and are now quite high.
“It’s hard to know what’s ahead. It’s like rent when the demand is high, they increase it. The banks don’t like that.”
The association says that the Department of Energy, Communications and Natural Resources urgently needs to bring cost stability to projects so that they can ensure the investment to get planned projects on track.
“We urgently need to move from strategy to implementation. We have a good strategy in place but the implementation process is still not finalised.
“At present, it can take up to six years to get a plant from concept to operation. That’s too long.”
The wind energy association also fear that Eirgrid’s investment in the electricity grid is not taking place fast enough.
A spokesman for the Department of Energy said that the National Renewable Energy Action Plan is due to be published this year and will provide a blueprint for the expansion of the sector.
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