Tuesday, 14 February 2012
Alternative Energy Projects
Michelle Mulherin (Mayo, Fine Gael)
Just before Christmas, the Single Electricity Market Committee, SEM Committee, made a whammy of a decision that has left those trying to develop our wind industry reeling and that will affect adversely the achievement of the Government's 2020 renewables targets for wind energy. The committee decided to grandfather curtailment levels when there is too much electricity being produced for the grid from wind energy rather than to curtail the output of every wind farm proportionately. Grandfathering is the allocation of curtailment based on new wind farms, with non-firm access being curtailed first. This means that instead of every wind farm being curtailed or asked to reduce its output, because there is too much energy entering the grid, some will bear all the burden and some will bear none at all. This decision will have a devastating effect on the development of new wind farms and the achievement by the Government of our 2020 renewables target of having wind capacity of 4,000 MW. Some 1,500 MW are currently installed.
If we look to those parts of the country with the best wind resource in Europe, such as the west, and decide to build the wind farms there, we will realise there is no grid or superhighway to take the energy therefrom. It is like seeing no roads in vast sectors on a road map. We have a massive deficit in our grid infrastructure. Under the new decision, the areas in question will carry the burden of curtailment. The wind farms in these areas would be asked to cut back their electricity output at their own expense whereas those in areas where there is firm access to proper grid infrastructure could operate at a capacity of 100% and be guaranteed payment for their energy. I have already been contacted by wind farm developers in Mayo who have planning permission and grid offers but who will get no finance from a bank or investor on account of the grandfathering of curtailment.
In effect, people are being punished because they are trying to develop in areas in which the last Government and EirGrid failed to develop infrastructure. In my county there is a community wind farm project, rather than one associated with big industry, yet the developers are being told they will not receive finance. We need to remember that if we are to develop our wind energy potential, we will require significant interest and investment from the private sector. They have a real appetite to develop wind farms. Therefore, we should not support the decision of the SEM Committee, which would choke the financial viability of new wind farm projects.
There over 500 MW of investor-ready wind farm projects in counties Mayo, Galway, Leitrim, Donegal, Clare, Kerry, Cork, Waterford, Tipperary and Cavan that will be affected negatively by the decision. In my county alone, developing the 600 MW offered through Gate 3 would see an investment of €250 million. Analysis has shown there is not enough firm access for the capacity of wind generation required to meet the 2020 targets. On this basis the committee's decision will stop the wind industry building sufficient capacity to meet our targets.
The SEM Committee is not a body with a mandate from the people to make Government policy on renewables, to amend such policy or interfere therewith. The decision was sprung on the industry without consultation. The committee previously indicated curtailment would be applied proportionately and shared equally by every wind farm in the country. There was no consultation or regulatory impact assessment taking cognisance of our targets. Therefore, it is imperative that the Minister impart Government policy in the strongest terms to the SEM Committee and leave it in no doubt that its action is contrary to Government policy, and that he requires the SEM Committee to engage in a proper consultative process so the grandfathering decision will be knocked on its head.