February 27, 2012
Ireland

Wind energy limit sees ESB put €40m project on hold

BARRY O'HALLORAN, The Irish Times, www.irishtimes.com 27 February 2012

Rules limiting the amount of wind energy on the Irish electricity system prompted State energy company ESB to put a €40 million development on hold.

The committee responsible for overseeing the single electricity market in Ireland introduced new rules curtailing or limiting the amount of wind-generated electricity allowed on the grid when there is more power than is needed. The rules favour established farms over new developments and have resulted in some projects being stalled.

The ESB confirmed at the weekend that it has postponed development of Woodhouse wind farm in Co Waterford.

The wind farm will have the capacity to generate about 20 mega watts of electricity, which would represent an investment of around €40 million.

Green energy trade publication Renews recently reported that the State company put the development on hold because of the regime. The ESB said the curtailment system was one of a number of factors that led to the decision to stall the project.

The curtailment rules mean that when there is too much energy available, some wind farms will effectively be told that their electricity is not needed by the grid and to shut down.

A change to the curtailment rules introduced towards the end of last year means that instead of all wind generators being asked to reduce their electricity production, newer wind farms will have to bear the burden of curtailment, which in turn will affect their ability to generate revenues.

The Single Electricity Market committee decision was unexpected and has sparked controversy in the wind energy industry.

Its representatives have warned that it could slow development to the point where the Republic could fail to reach an agreed target to generate 20 per cent of its electricity from renewable sources by 2020. The rules could hit other State companies, such as Bord Gáis, Bord na Móna and Coillte, all of whom are involved in wind energy development.

Meanwhile, it was reported yesterday that the Government intends seeking a larger share of the ESB’s profits in the future.

As part of the decision not to sell a minority stake in the company, the cabinet has asked that New Era examine ESB’s capacity to pay a higher dividend to its shareholder, the State.

Economist Colm McCarthy, who chaired a committee which assessed all State assets and last year reported its findings to Government, criticised all State companies’ dividend policies in his report.