Irish wind farms confident they'll achieve deal for exports to the UK
IRELAND'S wind-farm developers counting on a trade deal that would allow them to benefit from UK power subsidies said they are confident an agreement will be reached.
Talks to enable Irish renewable generators to sell power to UK customers have already dragged on for 14 months. Taoiseach Enda Kenny said last week after a meeting with his UK counterpart, David Cameron, that the countries may miss a target to begin trading by 2020.
At stake are billions of euro of planned investments in Irish wind farms. Offshore developers, including Oriel Windfarm, can only proceed if exports are possible, because the Irish Government won't subsidise power from turbines at sea.
"I'm confident the agreement will happen some time in the next 12 months," Brian Britton, Oriel's managing director, said by phone. "If it takes the rest of the year and is finalised in 2015, we can be delivering energy in 2018."
Imports would help the UK get 30 per cent of electricity from renewables by 2020 from about 12 per cent in 2013 as part of a European Union target on clean energy. Ireland is on track to meet its own target, and doesn't need to subsidise offshore wind farms, among the most expensive sources of energy.
Mainstream Renewable Power, Bord Na Mona and Element Power plan to develop 10 gigawatts of onshore wind projects – provided they can export the electricity.
It's "probably not possible" to finish a deal within the original timeframe, Kenny said after last week's meeting with Cameron in remarks reported in the press and then confirmed by a government spokesman.
Officials from both sides have been given three months to discuss such issues as electricity prices and connections between the countries, he said.
With three months of further talks, an agreement could be reached in "September or October," says Element CEO Mike O'Neill. It's feasible for Ireland's onshore wind developers to build a combined three gigawatts by 2020 to export power to the UK, with additional capacity being built thereafter. "These projects have been developed with an export market in mind," O'Neill says. "We have to have policy clarity in order to meet the 2020 timescale."
Element, set up in 2008 by Teaneck, New Jersey-based private equity company Hudson Clean Energy Partners, plans an €8bn three-gigawatt onshore wind project.
Assuming similar costs as Element, Mainstream's planned five-gigawatt Energy Bridge project, and Bord Na Mona's two gigawatts of plans would bring spending to more than €26bn.
Oriel has a €900m plan to erect 330 megawatts of offshore wind turbines in the Irish sea between Ireland and the UK The National Offshore Wind Association of Ireland, of which Oriel's Britton is secretary-general, estimates there is 2,680 megawatts of capacity in development in the Irish Sea.
"We've got this tremendous renewable resource and it's one of the main items on our agenda to reinvigorate our economy" Britton says, recognising that the authorities in London have other priorities.
Britton believes that British consumers might get cheaper power from offshore wind farms in Ireland because they're located in shallower waters.
Oriel has planning permission and has completed its environmental assessments, making it a potential first-mover should the two governments reach an accord.
"The one thing we need is the route to market, which is the United Kingdom," he says. "We couldn't finance the project unless we had the support mechanisms which the importing countries would pay us." ©Bloomberg
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