The taxpayer could face a bill of over â‚¬2bn for the country’s excess emissions of greenhouse gas – ten times the official estimate – the head of the country’s biggest wind energy firm has claimed.
Eddie O’Connor, managing director of Airtricity, said the minimum realistic figure for the cost of being able to emit the greenhouse gases was â‚¬675m, more than double the figure given by Energy Minister Dick Roche.
Because Ireland is emitting more carbon dioxide than allowed under the Kyoto agreement, Mr Roche plans to buy allowances to emit 3.5m tonnes of carbon a year from 2008-12, from countries which are under the Kyoto limits.
His plan assumes that power stations and industry will cut their emissions by a million tonnes a year in the period, and that the carbon permits will cost â‚¬15 a tonne.
Mr O’Connor claimed both these assumptions are unrealistic. “Why should the polluters cut their emissions? There is no onus on them to stop polluting, so presumably they will continue to do just that.”
He also believes that â‚¬30 a tonne is a more likely cost for carbon permits. If there is no reduction in emissions, at that price the cost could rise to almost â‚¬700m.
The Department of the Environment says there will be reductions in emissions over the period, and the price is based on the consultants’ estimates. But it compares with original estimates of â‚¬185m two years ago.
Mr Roche has said that over 100 of the country’s largest energy users now have carbon reduction targets, as well as taking part in the permit trading scheme.
But so far Ireland is ranked fourth worst in the EU for actually reducing greenhouse gases. Mr O’Connor warned the cost could be even higher. “The EU Commission has put a reserve price of â‚¬100 per tonne on future carbon trades.
“If this turns out to be true, then the cost the Government is subjecting the taxpayer to rises to â‚¬2.23bn over the five-year period.”
Critics of the Government say it should be doing more to cut the actual emissions from Irish power stations and heavy industry, rather than buying permits abroad with taxpayers’ money.
Both the Labour Party and the Green Party have claimed the â‚¬270m figure is too low – although no-one has gone as high as Mr O’Connor’s estimate – but Mr Roche has rejected their estimates of â‚¬500m.
Mr O’Connor wants a major expansion of wind energy in Ireland to reduce carbon emissions. The Energy Regulator is reluctant to allow a major expansion of volatile wind supplies into Ireland’s strained electricity network.
A recent ESRI report revealed that even the small Irish wind sector is now required to avoid blackouts after a shutdown in a major power station – provided the wind is blowing.
“Instead of paying others to do what we should be doing ourselves, the Government should be investing heavily at home in clean energy.
“One billion euro spent on wind energy would save 5.2m tonnes of carbon, even operating at a third of total capacity because of wind variation,” Mr O’Connor said.
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