Celtic Meltdown


Impediments to the development of an Irish 'Green Energy' industry

January 2009

Green Energy is going to be a very big business, because in the years ahead international agreements will make it very costly for countries that don’t measure up to agreed CO2 emission limits.

This is a huge opportunity for Irish business and also for our farmers, as there are a number of technologies internationally about to come out of the laboratory over the next 2 to 3 years which will revolutionise the industry. But Irish entrepreneurs are being prevented from participating in this dynamic new industry because of the actions of the ESB. No matter which sector of renewable energy you are in, wind, hydro or bio-fuels, the economics of it is controlled by 3 things;

  • You must get a connection agreement to feed into the grid from the ESB
  • You must get a Power Purchase Agreement (PPA), from the ESB
  • You must get a Feed-In-Tariff (FIT) rate, from the ESB

The Feed-In-Tariff rate for electricity generated from renewable sources must be set at a level that guarantees profitability, and reflects the costs associated with electricity production from that source. The price-per-unit rate should be guaranteed for a specific period of time after qualifying producers have connected to the grid. This ensures the profitability of production, and the security of investment for producers, manufacturers, investors and suppliers.

A 2009 Irish Farmers Association (IFA) policy document entitled ‘Renewable Electricity – On-farm-micro-generation’ stated;  “A targeted Renewable Energy Feed-in Tariff (REFIT) must be introduced for micro energy of 22c per kWh, to allow for an acceptable return on investment in micro-generation.”

  • The ESB offers a FIT rate of .09c per kWh. and a 5 year contract, making it economically unviable for the private entrepreneur. 
  • The UK FIT rate is .30c per kWh.
  • Turkey offers its solar entrepreneurs .28c kWh and a 20 year contract.
  • Germany, France and Holland’s FIT rate is .40c per kWh.

 A correct FIT rate would reduce CO2 emissions, create jobs, secure future energy supplies and drive technological innovation. But none of this is happening because the ESB is both producer and regulator.

The Irish Wind Energy Association (IWEA) expressed concern at its autumn conference in 2009 that many of its members were waiting 10 years for connection agreements, because the first planning had run out after 5 years and they had to reapply all over again. IWEA chief executive Michael Walsh said; “the capital investments required are very large and infrastructure delays lag way behind market demand.”

Four weeks after the IWEA went public with this situation, the ESB announced that they had got a €300 million loan to invest in WIND ENERGY.

This is totally wrong, supporting the public sector at the expense of our entrepreneurs and our government is doing nothing about it because the ESB is controlled by the public sector unions, the so-called ‘social partners.’

That low-cost finance of €300 million should be going to our Irish entrepreneurs. But it’s not because they have no need for it as the ESB only make grid connection agreements available to certain parties and the same situation exists with Power Purchase Agreements. They also enforce their dominant control of the industry with dismal FIT rates.

This denies our entrepreneurs a level playing field and stunts the growth of a viable renewable energy industry.

This is totally wrong and the fact that it is allowed to happen makes a total mockery of our Taoiseach’s oft repeated mantra that he is committed to building a ‘smart economy,’ there is nothing ‘smart’ about what is happening in the energy sector, an important industry which could help our economy to get back on its feet.

Our current energy policy is now leading to Irish companies, like Gaeletric, investing abroad:

RENEWABLE energy firm Gaelectric is planning to invest more than €2 billion in America over the next six years.  The company has secured further transmission capacity in the US north-west, giving it an opportunity to double existing power capacity in the region.

On the completion of these agreements Gaelectric will have a major stake across the transmission projects planned in Montana to export wind energy out-of-state, it said.
Gaelectric boss Brendan McGrath said: "The key to large scale development of
Montana wind is the ability economically to compete in out-of-state markets. The key to economic wind is economic transmission.
"The identification of these routes and the booking of interconnection and service agreements essentially breaks the Montana Wind blockage and gives an opportunity for early wind farm development or ‘Steel in the Air’ as they say in Montana."

Gaelectric is a group of companies, each active in the different fields of renewable energy. The company recently received planning approval at Carn Hill, Co Antrim, for a 14 megawatt windfarm capable of generating enough energy to power 8,200 homes annually. It has a number of projects in planning in the North, totalling 130MW.

This story appeared in the printed version of the Irish Examiner Monday, March 29, 2010


UPDATE ..........

The ESB has now invested heavily in wind energy IN BRITAIN.

They have purchased the Fullabrook Wind Farm in Devon and the operating West Durham Wind Farm in Co. Durham.

Fullabrook Wind Farm is located between Barnstaple and Ilfracombe in North Devon and has consent for up to 66MW of electricity generation. Construction of the 22 turbine scheme is expected to start early next year.

The 12 turbine, 24MW West Durham wind farm is located near Tow Law in County Durham in the North East of England. The site was developed, financed and constructed by The Banks Group and started generating last May.

Announcing the acquisitions, ESB's Head of Wind Development, Joe O'Mahony, said the deals mark the first step in the Company's strategy to achieve 200 MW of wind generation in Britain by 2012.


Am I the only one who thinks this whole situation is ABSOLUTELY CRAZY?