ESB aims for 33pc renewable output with €22bn investment
Wind power: domestic-sized windmills, as opposed to the commercial giants we see on the coast, are becoming more popular
The ESB unveiled a major €22bn investment programme yesterday in a bid that the State-owned body would produce 33pc of its total electricity output from renewable sources such as wind and wave power by 2020. It also plans to be carbon-neutral by 2035.
Announcing the strategic framework, ESB chief executive Padraig McManus described the plans as "unprecedented" and claimed the scheme would be as transformational for a new generation of Irish people as the rural electrification project embarked upon almost 80 years ago had been for the country.
"This is a new era for the ESB," he said.
The ESB plans to spend €11bn on upgrading its network infrastructure in order to cope with the expected surge in wind energy generation that will come on stream in the country over the next 12 years.
The company anticipates having 1,400MW of its own wind generation capacity in place by 2020, as well as a substantial footprint in wave, tidal and biomass schemes. About 150MW of electricity is expected to be generated by the ESB from wave and tidal energy sources by that date.
While Mr McManus said that would involve investing in new projects and technology, he did not rule out making acquisitions in the wave, tidal and other alternative energy sectors. ESB International recently invested €4m in a Northern Ireland firm developing a tidal project at Strangford Lough.
The ESB aims to spend €4bn directly investing in renewable energy projects, where it currently only has a small presence. A further €6.5bn will be spent on facilitating renewables, such as the installation of smart metering in homes nationwide.
Mr McManus added that the ESB currently emits about 15 million tonnes of carbon per annum out of a total 70 million tonnes generated by the country.
By 2035, the ESB expects to be producing just 2 million tonnes per annum, but the company will have to purchase carbon offsets to be completely carbon neutral. Buying those credits at today's prices would cost €40m per annum.
The ESB's group finance director, Bernard Byrne, said that the investment programme would be financed from existing cash flows, but that core ESB debt is likely to rise to €6bn, with an additional €1bn in debt pencilled in as a result of joint venture projects. He described the debt levels as "sustainable".
A major cash injection is also on the cards for ESB's international arm. It will receive an investment of €4bn to help it capitalise on the construction of two electricity interconnectors between Ireland and the UK.
The first of those is due to be completed by 2012 and the second by 2020. ESB International is currently constructing a second power plant in Spain, while it has also partnered with Scottish and Southern Energy to build an 800MW electricity plant in Southampton.
- John Mulligan
