Wind energy subsidies are so lucrative that Bord na Mona’s new €115m wind farm will be paid off in seven to eight years.
Launching the country’s largest ever wind farm this week, on isolated bogland at Mountlucas in Kildare, the head of the company’s energy generation division said he expected returns “in the high teens”.
“This project is looking at double digit returns over the course of its lifetime… by year seven or eight it should have paid for itself,” John Reilly said.
Unlike solar energy, wind energy projects are subsidised by taxpayers to encourage a move to renewable sources of energy. This includes privately generated wind energy as well as wind energy produced by semi-state companies like Bord na Mona.
The new windfarm at Mountlucas, Co Kildare – not far from convicted drug trafficker John Gilligan’s former equestrian centre – cost €115m to build.
The 84-megawatt wind farm should produce enough energy to power 45,000 homes.
Though it has not yet got board approval, Bord na Mona plans to open one wind farm every year for the next seven across its entire landbank, including the midlands, Roscommon, Galway and Longford.
It is also in talks with Coillte about building wind farms at Laois and Roscommon.
“I am relatively new to the job, this is my eight week, but when I joined the first thing that struck me was the whole scale of Bord na Mona and the size of the landbank that we have” said the company’s new chief executive Mike Quinn.
“The opportunity to develop renewable energy infrastructure on our sites is second to none in the country because of the remoteness of our sites, they are far away from the general population” said Mr Quinn.
The Mountlucas project was financed by US capital markets. The majority of the set-up costs, about €70m, went to turbine manufacturer Siemens.
“It is a standard commercial relationship. Bord na Mona is a commercial semi-state, it does not receive any handouts” said Mr Reilly.
Bord na Mona pays a dividend to the state, he confirmed. Some 95pc of it is owned by the State while 5pc is owned by employees.
The company is trying to reinvent itself as a major producer of renewable energy through wind and solar farms and utilising the gas produced from landfills. Its directors say that they will meet in the coming months to plan a “major rethink” of strategy orientated towards renewables.
The change of direction has been met with some opposition.
Anti-wind farm groups argue that windmills disturb landscapes and the environment and that subsidies unnecessarily raise the cost of energy bills for everyone.
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