Michael Moynihan (Cork North West, Fianna Fail)
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683. To ask the Minister for Communications, Energy and Natural Resources the cost of setting up an independent body to conduct a full economic review of wind energy; its impact on energy prices; and its long-term sustainability in supplying the national grid. [46319/15]

Alex White (Dublin South, Labour)
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My Department has been working with the Sustainable Energy Authority of Ireland, EirGrid and the Commission for Energy Regulation, to assess the costs and value of choosing the path towards 40% renewable electricity generation in 2020. It is expected that the majority of this 40% target will be met by wind energy. Quantifying the costs and benefits of meeting our renewable energy obligations is a complex task involving the examination of many interrelated variables. This work and the related findings will form the basis of a report that will be published shortly.

In addition, a range of other studies have been undertaken in the last number of years to assess the economic cost of integrating increasing amounts of renewable energy into the energy mix. The All-Island Grid Study, published in 2008, assessed the technical feasibility and the relative costs and benefits associated with various scenarios for increased shares of electricity sourced from renewable energy in the all island power system. The scenarios were informed by the resource available, technological readiness of the various generation technologies (including wind) and cost required per generated unit. This study informed the decision to move towards achieving 40% renewable electricity generation in Ireland by 2020. It concluded that - based on assumptions set out in the report - wind energy represented a cost effective source for electricity generation.

It is well known that Ireland is an ideal location for wind energy investment. The abundant wind resource in Ireland means that each unit of installed wind generation capacity generates more units of electricity when compared with other countries and hence needs a lower rate per generated unit of electricity in order to recover the overall costs of the project. The existing feed-in tariff, REFIT, which is funded from the Public Service Obligation levy on consumer bills, is a very cost effective support for onshore wind development. This was the finding of a report published by the Council of European Energy Regulators earlier this year.

This finding has been underpinned by other published reports and analyses which have examined the effect of renewables on electricity prices. Two major studies have been published on the impact of increased wind generation on the Single Electricity Market in Ireland. One was carried out by the Commission for Energy Regulation’s (CER) and the Northern Ireland Authority for Energy Regulation (NIAER) in January 2009 and the other by the Sustainable Energy Authority of Ireland (SEAI) and EirGrid in 2011. Both studies found that the market is capable of operating successfully with increasing amounts of wind and that the cost to consumers in Public Service Obligation (PSO) terms tends to be offset by the downward pressure wind puts on energy prices in the wholesale market.

On the question of sustainability; there is little doubt that the use of indigenous renewable generation is a more sustainable long-term approach for energy security and economic competitiveness than importing fossil fuel energy. In 2014, renewable electricity generation in Ireland is estimated by the SEAI to have avoided €250 million worth of fossil fuels imports.

In the circumstances, there are no plans to set up and independent body to commission further economic review of wind energy.