Winds of fortune are beginning to blow in favour of green energy
More joined-up thinking from government is needed if industry is to build upon recent successes
Published 09/09/2010 | 05:00
FEW industries have promised as much and disappointed so consistently as the wind farm industry in Ireland. A trawl through the clippings provides dozens of promises typical of the Celtic Tiger era.
Back in the early part of the decade, the then Marine and Natural Resources Minister Frank Fahey said a wind farm off Arklow would be three times as big as all the world's existing wind farms put together and boasted of a 'Celtic Ring' of wind farms linking Scotland, Wales and Ireland.
Today, that wind farm has just seven turbines with a combined capacity of a measly 25MW.
Such exaggerated claims and broken promises have left many disillusioned with wind energy, but the fact is that some companies are quietly making money out of wind energy and there is a lot more money to be made in the years ahead.
The broken promises also hide a success story of sorts which has seen wind energy's importance soar. Wind energy accounted for over 10pc of all electricity generation in 2009, placing Ireland on track to meet a government target to produce 40pc of all electricity from renewable energy sources by 2020.
This is an astonishing success for a diversified business that must compete with a powerful and entrenched state-owned generator, the credit crunch and unhelpful planning laws.
Readers living in Dublin or the midlands may have missed the expansion of wind farms in Ireland since 1997 when the first farm was built; although most counties on the island are home to at least one wind farm. The biggest tend to be clustered far from the eastern seaboard, in Donegal and Kerry where the winds are strongest.
A quick survey of activity in the wind sector over the past fortnight shows just how vibrant the sector is and why so many stockbrokers, legal firms and banks are assigning staff to work in this field.
Among the deals announced in the last two weeks were state forestry company Coillte's final agreement to develop one of Ireland's largest wind projects in Cloosh Valley, near Moycullen, Co Galway.
The project on Coillte-owned lands will see Scottish and Southern Energy take a stake, along with Coillte and Canadian firm Finavera Renewables, and build a farm with 22 turbines generating enough power to meet the electricity needs of more than 60,000 homes.
Over in Gortahile in Co Laois, Paris-based BNP Paribas has bought another wind farm from German-based ABO Wind Ireland which, in turn, bought the farm from a Danish rival for €42m a year earlier.
BNP said last week that the deal "represents the cornerstone of a larger portfolio that we intend to build in Ireland" and added Ireland "is a very attractive renewables market for financial investors because of its strong wind regime" -- a financier's way of saying the country is a windy place.
A week earlier, Chinese group XEMC Group announced it was looking at Northern Ireland, the Republic and Holland as possible locations for a £95m (€114m) production base to assemble turbines and blades for local markets and the US.
The company, which can make 1,000 turbines per year at its Chinese facilities, will make a decision by the end of November and aims to make 200 turbines a year and create 600 jobs by 2016.
Belfast shipbuilder Harland and Wolff, which is fast transforming itself into a wind energy specialist, announced that it had won a £20m (€24m) contract from Siemens to design and build two sub-station platforms for an offshore wind farm off the coast of north Wales.
The alternative energy sector offers enormous opportunities to the ailing Irish construction sector, according to Michael Walsh, the head of the Irish Wind Energy Association, a lobby group for wind farm owners. Perhaps the biggest opportunity comes from the UK where government policy is relentlessly pushing wind energy.
Mr Walsh believes Irish companies could benefit from orders for construction-related skills and products as up to €50bn is invested in the Irish Sea over the next two decades as Britain builds off-shore wind farms.
While wind farms offer formidable opportunities, anybody considering a move into the industry also faces challenges. One of the biggest problems is the length of time it takes to get a farm connected to the grid.
At present, applications for grid connection can easily take 10 years to process; a delay that is a constant irritant to those wanting to invest. While 10-year delays may sound absurd, the problem for Eirgrid, which owns and operates the national grid, is that electricity generated from wind, waves and other sources does not flow in a constant stream like energy from gas turbines.
This means that electricity from alternative sources requires a new grid that is being slowly built at present, at an enormous cost. Until this grid has been created, a project akin to the creation of the nation's new motorway network, alternative energy will always require a complex system of supports and long waiting lists.
An added problem is that most wind farms tend to be located in remote areas, far from conventional power stations and high tension power lines.
A further problem for those patient enough to wait a decade for connection to the grid is that the planning permission usually lapses after around five years, making it difficult for would-be investors to get planning permission and grid connections at the same time.
"We need some joined up thinking here," pleads Mr Walsh with more than a hint of exasperation in his voice.
While critical of government, Mr Walsh is also critical of those living on the western seaboard who oppose the construction of wind farms and the grid needed to carry the power from often remote farms to the rest of the country.
Both the wind farms themselves and the grid will serve to secure the west's energy supplies, he says.
"We seem to believe that electricity will just keep coming out of the wall but that's not the case. We are getting near to the end of what we can produce," he says. Without sources of energy in the west, the region will be unable to attract multi-nationals and other companies that depend on reliable electricity sources, he adds.
The other big attraction is jobs. A report on opportunities for new jobs in the green economy launched yesterday by the Comhar Sustainable Development Council, says the construction and energy sectors have the potential to create thousands of jobs here, while also warning that those jobs may also go overseas if state agencies; education institutions; businesses and trades people do not teach or learn green trades.
Among the recommendations proposed are: enhancement of apprenticeship programmes which marry traditional trades with green technologies; modification of horticultural and agricultural training programmes to include an emphasis on biodiversity; and increased emphasis within the third-level sector on producing graduates who are equipped to deliver a major shift to the use of renewable energy.
While the report emphasises that many jobs will be created by retro-fitting and other energy-saving measures, it emphasises that there is a particular opportunity for wind energy to create jobs between now and 2018 as wind farm operators scramble to meet government targets.
After this, the number employed in the sector will probably level off, with most jobs going to those who know how to fix and maintain the giant turbines used in onshore and offshore wind farms.
The main specialist requirement will be for people with technician-level skills, it adds.
The findings echo those of a separate report last year by Deloitte which identified the construction and development of wind energy projects across Ireland as the main driver of employment in the sector.
The Deloitte report calculates that we will see €14.75bn of investment over the next eight years, with around €5.1bn retained in the Irish economy.
Most turbines and other hi-tech equipment will continue to be exported to Ireland from overseas but the investment will still create around 5,000 jobs over the next decade.
So far these predictions are just that; predictions in an industry that has been blighted by overly optimistic forecasts in the past but which is now facing the future with some record of success and proven technologies which have government backing. This time round, it may really be different.