Monday 25 September 2017

Former Bord Gáis chief hits out at ESB over power subsidies

Amarenco boss John Mullins
Amarenco boss John Mullins

John Mulligan and  Michael Cogley

Former Bord Gáis boss John Mullins has lashed out at the ESB, claiming the State-owned energy firm is "anti-solar", and questioned why it doesn't want to see subsidies introduced for solar power in Ireland.

The ESB this week again called on the Government to scrap subsidies for wind and solar energy generation.

The ESB's head of regulation and strategy, Peter O'Shea, told the Irish Independent yesterday that setting a guaranteed price for solar energy, which the Government plans to do from next year, won't benefit consumers and will result in higher electricity prices.

He also claimed that because Ireland is expected to meet a 2020 target of generating 40pc of its electricity from renewable sources, subsidies for wind power should be phased out from then.

But Mr Mullins, who established and heads Irish solar energy firm Amarenco, has blasted the suggestions. "The simple truth is that wind cannot exist without subsidy and current subsidies need to remain in order for Ireland to get anywhere close to the 40pc, a number that ESB Renewable Generation has a vested interest in," he said.

"One has to try and understand why ESB would be anti-solar in the Republic, while at the same time it has a joint-venture in solar in Northern Ireland, where it also enjoys higher subsidies," he added.

"The reality is that solar complements wind and as a result allows a higher capacity of renewables to be connected to the distribution and transmission grid," he claimed.

"High penetrations of solar at the distribution level will reduce the requirement for centralised generators and transmission connection - the common denominator is that ESB does both and profitably."

Amarenco has operational solar farms in France, and plans to build up to 40 in Ireland. It's raising up to €200m to fund further solar farm development in France, and to acquire windfarm assets. Releasing interim results yesterday, the ESB said that its operating profit in the first half of the year slumped €50m, or 15pc, to €287m. Revenue fell almost 5pc to €1.64bn.

It blamed a collapse in sterling in the aftermath of the Brexit vote for hitting its bottom line. Pre-tax profit tumbled 70pc to €70m after it incurred a non-cash, €121m charge against the fair value movements of Northern Ireland inflation-linked interest rate swaps.

Operating profits at Electric Ireland - the ESB's consumer arm - more than doubled to €57m despite the decline in wholesale prices. The ESB said the surge in profits at the unit was partly due to positive movements on hedges, and said it cut electricity prices for residential users by 6pc at the start of June.

At Northern Ireland Electricity - which the ESB also owns - operating profits rose by €2m to €15m. The ESB said the figure benefited from higher regulated tariffs, offset by negative foreign exchange movements.

Irish Independent

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