Special Report: Wind power in Ireland 

It’s a little like the old line about the tree falling in the woods. If a wind turbine falls in a part of Co Donegal and no-one is there to hear it, does it still make a sound?

Yes, and the debris is pretty obvious as well, as was the case when a 75m turbine fell over in high winds at a windfarm at Loughderryduff near Portnoo nearly two years ago.

The incident came at a time when local opposition to another windfarm proposal for nearby Glenties was awaiting the outcome of an An Bord Pleanála oral hearing.

Inge Buckley, a co-director of North West Wind Ltd, the developer of the felled turbine at Loughderryduff, now attributes the incident to “human error”.

A Dane with a longstanding interest in wind power here, she says while it was an ill wind that damaged the turbine that day, in general the gusts which blow across our island represents a large chunk of future energy production.

“We are at the end of a very long pipeline,” she observes of Ireland’s place in the European gas supply chain. “When the wind blows, it pushes the wholesale electricity price down.”

According to Catriona Diviney of the Irish Wind Energy Association (IWEA), a recent IPSOS/MRBI poll showed widespread support for wind energy. She stresses that engagement with communities is central to any proposed development and it is right that people are “empowered to use their voice”.

Admitting there is a “challenging landscape to development in Ireland”, she says: “We have only got those small pockets of opposition in recent times for different reasons in each case.”

Yet there are many groups around the country that have an issue with turbines and pylons. Among them is Rethink Pylons. Its main man, Paddy Massey, used to live and work in Cornwall. He remembers the large pylon near his house where he grew up in Cork, and says he now sees Cornwall “covered” in turbines. He is adamant he does not want the same thing to happen here.

“We are definitely in a situation where we are cutting off our nose to spite our face,” he says, stressing that retrofitting of houses and use of biomass where possible – including converting Moneypoint Power Station in Co Clare – would achieve as much or more for less money. He maintains any potential financial benefits from exporting our wind energy is limited due to it being a “forced market”— would-be buyers know we have to sell it there and then, as it is more difficult to store.

“Peak demand is 5,000MW but we have capacity for 9,000MW,” he says. “Why are we trying to put so much wind onto the grid? It is basically a gold rush.”

Mr Massey also forecasts issues with the existing turbine stock which, in most cases, have a lifespan of 25 years but which he claims may actually not last that long. Replacing them will cost money, he says, while even if some turbines are removed you have the clean-up operation linked to the concrete bases.

It is a subsidised industry, he argues, which has attracted an artificial level of interest from investors and developers. And while every development requires an Environmental Impact Study, he queries whether or not the aggregate effect of turbines dotted around a county is fully taken into account.

“We will live in a country in 25 years time that will look like the back of a hedgehog,” he says.

Arguably, wind has had something of an image problem in this country, and it has generally nothing to do with the uncommon crashing to earth of turbines or blades.

Some people feel they destroy the landscape. Others believe their environmental impact is overstated, and for larger projects point to the added eyesore of huge pylons required to ferry the electricity across the country.

Still others query the economic benefits of wind, making the argument that despite it being a natural resource which Ireland has in abundant supply, it is not necessarily blowing money our way.

While much of the debate surrounding the future role of wind is by its very nature speculative, there are some clear facts at play. Presented by Dr Paul Deane of the Environmental Research Institute at University College Cork, they are as follows:

Ireland is one of the most energy-dependant countries in Europe, spending €6.9bn on fuel in 2013 (source: CSO) importing over 89% of our energy (SEAI). Ireland is the third highest emitter of Green House Gases per capita in Europe (source: EPA).

Ireland has an ambitious mandatory target for renewable energy arising from the EU Renewable Energy Directive (2009/28/EC), and by 2020, we must increase the renewable energy contribution of overall energy use to at least 16%.

It is up to us how we achieve this, and Ireland’s EU target of 16% in Renewable Energy by 2020 breaks out into 10% of energy in transport, 12% of energy in heating and 40% of energy in electricity must be renewable. Then there is the scale of the challenge.

In 2013, renewable energy in Ireland represented 7% of energy use, so we need to more than double our share in seven years.

As of last December, the 26 counties currently has 2,211 MW of installed wind capacity (and 7,383 MW of other power plant mainly thermal capacity) and will need to install approximately a further 1,600MW to meet the target.

Electricity generated from renewable energy (mainly wind energy,) reached 20.9% of electricity consumption in 2013. This was the second largest source of electricity in 2013 after natural gas generation.

Ireland’s target of 40% of electricity consumed to be from renewables was informed by a detailed technical study undertaken in 2008, called the All Island Grid Study, jointly commissioned by the governments of the Republic of Ireland and Northern Ireland which examined the technical and economic feasibility of this amount of wind generation in the Irish Power System.

Moreover, while people opposed to wind energy might not necessarily make the distinction, there is a Premiership vs First Division aspect to wind. There are the smaller, cottage industry turbines that deal in KW; and then there are the large, utility-scale wind farms that deal in MW.

They are two different tiers, in which the larger developments are the ones pumping energy into the grid, and the smaller ones are typically powering their immediate domestic/agricultural settings.

ESB Networks deal with the smaller operators, Eirgrid with the larger ones. And it is the larger developments that are the focus of Ireland’s attempts to get close to its 2020 targets. And while sole trader-type turbine operators argue that there are insufficient grants and tariffs available to them, large-scale wind energy is subsidized through the REFIT mechanism (Renewable Energy Feed-in-Tariff).

It provides a guaranteed floor price (approximately 6.9c per KW hour) for the supplier and appears on all of our electricity bills as the PSO (Public Service Obligation) – a number of subsidy schemes designed by the Government to support its electricity policy objectives for renewable electricity (mostly wind power), indigenous fuels (peat) and security of supply.

More of the overall subsidy fund goes to peat, rather than wind, but it means if the price of electricity in the wholesale market goes below the floor price, wind operators still get the guaranteed price.

The Commission for Energy Regulation says: “While wind power contributes to the PSO levy, wind power also tends to reduce the wholesale price of electricity. This is because wind energy is essentially free when the wind blows and it runs instead of fossil fuel plants such as gas or coal.

It especially reduces the wholesale price of electricity when fossil prices are high and associated fossil fuel plants are expensive to run. The CER has carried out analysis which suggests that wind can in fact reduce customer bills overall (even allowing for the PSO cost) when fossil fuel prices are at high levels.”

The CER is also keen any future target for renewable energy should be at least total cost to the consumer, but says on some days more than a third of Ireland’s electricity production comes from renewable generation.

However, not everyone believes that wind is an economic boon. Last autumn, economist Colm McCarthy delivered his sharply titled paper, ‘Time to Tilt at Windmills’, at the Dublin Economics Workshop, in which he addressed the fluctuating issues of demand and supply.

Peak demand required just over 5000MW in 2008, he said, and this level of peak demand will not be reached again until about 2019, yet construction of new capacity has continued at a rapid pace since the downturn, at a time when there was also three new CCGTs (Combined Cycle Gas Turbines), or modern gas units.

“Power systems need a capacity margin,” he says. Dispatchable capacity is now 54% ahead of peak – allowing a small capacity credit for renewables, of maybe 60%. “This happened by accident,” he said. “Nobody ever planned for capacity so far ahead of peak.”

Prior to McCarthy’s critique, Prof Richard Tol, formerly of the ESRI and now of the Department of Economics of the University of Sussex, had raised concerns. His views, expressed back in 2013, do not seem to have altered much in the interim.

“Wind energy is still more expensive than coal and gas,” he tells this paper. “The cost of wind energy has been falling slowly. The cost of coal and gas has been falling rapidly. So it is simply not a wise investment at the moment. That may change in the future, of course.

“Ireland has a fantastic wind resource, but it is also far from the major electricity markets and transport is expensive. England lost its appetite for subsidizing Irish wind. There are jobs in manufacturing wind turbines, but setting up a big factory in Ireland is not economic: The demand for turbines in Ireland is too small, and shipping is expensive.”

According to Dr Paul Deane, both Richard Tol and Colm McCarthy make valid points, but that is not the whole story. “Gas and coal and carbon emission are cheap today and this gives a strong competitive advantage over wind,” he says. “However, if gas prices and coal prices go up (mainly gas) then wind becomes competitive again. I think most analysis would agree that the likelihood is that gas prices will increase over the next five to 10 years.

“From an environmental perspective wind does not create CO2 whereas gas and coal do, therefore carbon prices also have an impact. The economics, ignoring environmental benefits, of wind therefore can distilled down simply: If gas is cheap, wind is not cost-competitive and if gas is expensive then wind is cost-competitive.

“Colm McCarthy is correct, we have adequate capacity at the moment. Increased wind capacity will reduce the running of existing thermal plant; however, building extra thermal plant will not help us meet our EU targets or help us reduce our emissions.”

There are challenges, including ensuring the system frequency stays stable, voltage is maintained and the benefits from wind are maximised at least cost at times when the wind is blowing. Some of these issues are due in part to the small size of the Irish system relative to the volume of wind generation due to be connected in the next few years in order to meet Ireland’s 2020 renewables target. Countries such as Denmark, while having a larger volume of wind generation, are electrically part of the continental European system and so do not face the same technical difficulties.

The all-Ireland project is looking into how best to meet these challenges and as the CER puts it, “facilitating as much wind on the system at least cost”.

Today, there is a system operational limit of 50% of demand being met by wind generation at any time to maintain system security, but the target is to increase this limit from 50% up to 75%. This would mean that during windy periods, up to 75% of electricity demand could be supplied by wind generation, says the CER.

“Because the marginal cost of wind generation is effectively zero, the more its electricity can be used when the wind is blowing, the greater the benefits to the consumer in terms of lower wholesale electricity prices. Maximising the use of wind also lowers carbon emissions and will help Ireland meet its 2020 renewables target.”

Ultimately, Ireland has been set a target and while it is likely to achieve what it needs to from wind, falling short in transport and heat mean we are, ultimately, likely to fail to meet it. It is uncertain whether that will mean a penalty, in the form of a ‘cost of compliance’ sanction, but, irrespective of that, Dr Paul Deane believes that ultimately, wind is going to play a central role in our future energy provision.

“In terms of prices, gas is low now but we need to plan for the future rather than reacting to what the prices are today,” he says. So, while everyone having a fully insulated attic and shining heat-retaining home is the ideal, in practice it is very hard to achieve – much like some of the other obstacles to utilising alternatives to wind.

“We need to make decisions in advance of perfect knowledge,” Dr Deane adds.

Ms Diviney does not feel 2020 marks the end, with a fresh target for 2030 in the offing. “People will see life after 2020,” she says, although as ever, its size and shape is a little indistinct. Bob Dylan might have had it right all along: “The answer, my friends, is blowin’ in the wind.”

Or maybe not? Ireland is not exactly the sunshine state, but, says Ms Buckley: “Solar is gaining a lot – it is technically getting better and cheaper. It probably is where wind was in 1990 in Denmark and other states.”