Ten years ago wind energy was a fledgling industry, but now it’s big business and getting bigger every year.
AS a nation, we need to focus on being the best in certain energy areas and exploiting areas where we have a comparative advantage. In the 1950s it was agriculture and in 2011 it is wind and tidal energy.
Our wind blows stronger for longer than in most other countries. There is 3,500 megawatts (MW) of onshore wind energy either already developed or in planning. Offshore wind could provide a further 7,100MW. We have wave and tidal resources which will play an important role for us in the future. Between them, these resources could give us well over the government target of 40% of our energy coming from renewable resources. We are not used to the idea that this nation could be energy rich: gas is the main fuel used in our conventional power plants; wind can help provide us with more security of supply.
Whilst we have generally hit our wind targets, we can do better. As can be seen from the third round of applications by wind generators for connection to the electricity grid – a process known as ‘Gate 3’ – there are a large number of organisations that want to build wind farms, ranging from large-scale 30- 50MW wind farms to smaller 5MW wind farms. Almost all of this development has been onshore to date; some traditional wind farm developers feel there is no need to develop offshore wind farms with our relatively unpopulated western seaboard.
The government is well aware of the issues affecting the roll-out of wind farms, including planning delays and grid connection issues. Another problem is funding: banks simply are not funding enough unless there are wellestablished players with track records such as large-scale utilities or wind farm promoters who have a history of developing wind farms.
Small scale wind farms are having difficulties with funding and some of our clients in that space are banking with ethical banks such as Triodos to avail of funds. Some of those who applied under Gate 3 have recently received calls from the grid operator to pay grid connection deposits, and this will be the proof of whether they are going to proceed. Grid connections are still a major issue: we are conscious that Eirgrid and ESB networks are working on this, but the process is slow.
We believe the market will become increasingly homogenised, with a lot of developers not proceeding to development once they have got past the planning permission stage/grid connection stage and that they will flip on projects to large-scale utilities and other players who have the financial muscle and skill set to bring wind projects to completion. We recently acted in the sale of a developed 38MW wind farm to one of the larger utility companies, an example of such homogenisation.
Consolidation is ultimately the correct route, where the market favours large-scale wind farm operators. This is the future, but the future will also need to support micro-generation, which is a possible growth area linked to community-based energy systems.
We are also seeing quite a lot of strategic investment in wind farms abroad. Mainstream is investing in a 400MW wind farm pipeline in Chile. We have clients who have put together consortiums to invest in wind farms in the USA, Portugal, Scotland, Wales and Bulgaria. It appears easier to develop big wind farms of 100MW or more in some of these jurisdictions.
Wind energy technology
While wind turbine design and manufacturing is possibly going to remain the preserve of big global players such as Siemens, GE, Vestas and Nordex, opportunities for Ireland primarily arise from technology-driven companies that can provide more efficient and innovative mechanical and software-based components for wind turbine design and manufacture. Indeed, one of our clients is working on improved wind turbine efficiency, which, if successful, would be a patented technology that could be sold to these big players.
We do believe that there will be some solution to storing electricity in the future and we have clients who have invested in electricity storage technologies. There may well be in the future an ability to harness night-time wind energy to power electric cars during the day time.
This was a fledgling industry ten years ago and all the players in it deserve praise for getting us to where we are now. Given the importance of energy security for Ireland, there needs to be greater government effort and support for the roll-out of wind farms into the future.