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ESB: Scrap subsidies for wind farms from 2020


Peter O’Shea, head of regulation and strategy at the ESB. Photo: Gerry Mooney Picture: Gerry Mooney

Peter O’Shea, head of regulation and strategy at the ESB. Photo: Gerry Mooney Picture: Gerry Mooney

Peter O’Shea, head of regulation and strategy at the ESB. Photo: Gerry Mooney Picture: Gerry Mooney

The State should scrap wind farm subsidies from 2020 and not introduce incentives to develop solar energy, the ESB has said.

Setting a guaranteed price for solar, as the Government plans next year, will not benefit consumers as the cost of developing the technology is falling, the company's head of regulation and strategy, Peter O'Shea, said.

Introducing a tariff will merely lock in customers to paying a higher subsidy, which will be reflected in more expensive electricity prices.

And he said that as Ireland was expected to meet its 2020 target to produce 40pc of electricity from renewable sources, subsidies for wind should be phased-out from that point.

"The price of solar is on a massive downwards trajectory. If you put in a support, you're locking in the price. We're not advocating price support for solar. For anything on a reducing cost trajectory, let it come to a level and when it's at that - and it's more expensive than a competing power - then you have to support it.

"The target that Ireland has (for electricity), 40pc, we think we're going to get there, and Ireland needs to do whatever it needs to do to get there. I don't think there's a case for financial supports beyond 2020."

Mr O'Shea's comments come after Climate Change Minister Denis Naughten said that two new incentives were being developed by his department - one for renewable heat, and a second for solar. The industry says that not until there is certainty around incentives, which involve the State guaranteeing a minimum price for the electricity generated, will solar farms be developed.

But Mr O'Shea said the conversation around tackling climate change needed to move beyond electricity generation.

He said just 19pc of the State's greenhouse gas emissions arose from production of electricity. This compared with 33pc from agriculture, 19pc from transport and 15pc for heat.

"If you look at climate change analysis in Ireland, 20pc (of emissions) come from electricity and the other 80pc comes from everything else. But 80pc of policy is about electricity, and 20pc is about everything else. We need to change that. We have kick-started a massive transformational change - in 1992, the system was based on coal, oil and gas with some hydro, to a situation that by 2020, 40pc of total generation will be from renewables.

"The lobby group behind renewables is big, and that's why the focus is there. But Ireland needs to deal with emissions in the round. Ireland could have a fully decarbonised electricity system, but still not meet its climate targets."

He said that while agriculture emissions were difficult to deal with, there were technological solutions for transport and heating. Targeted incentives for electric vehicles including free parking, use of tolled roads and bus lanes, as the Government is considering, would see a "big uptake", he said.

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A typical battery operated for 200km, and an EV was an ideal solution for city driving or for a second car which only made shorter trips.

An incentive to use heat pumps - which suck in air from the outside and use it to heat a house - would also help reduce emissions from the building sector. A renewable heat incentive is expected early next year.

"It could be fiscal or policy incentives to shift the mindset that 80pc of emissions are from sectors which are not electricity. There's no one silver bullet for the future. We think a broad shift from a focus on electricity to other sectors is required."