Thank You, Mr Chairman. Good Morning ladies and gentlemen. May I say at the outset that I was very pleased to accept the kind invitation extended to me by the Irish Wind Energy Association to address your Association’s annual conference. I must also congratulate your Association on its choice of venue here in my home County, Donegal.
This is the first occasion for me to attend what is the most important annual gathering of the wind energy industry in this country. It gives me an opportunity to meet at first hand with the delegates here during the course of the proceedings.
I trust that this year’s conference will be a fruitful event with ample opportunity for all delegates to reflect on the progress to date and to chart a course for the coming decade and beyond.
I have no doubt that the current issues affecting the wind energy industry will be debated extensively today. I am sure that the conclusions reached here, will form the basis of a future informed submission to my Department on the way forward, to further increase the amount of indigenous wind-powered generation available to Irish electricity consumers.
The key constant concerns which must be addressed in any such submission are–
- Affordability, for consumers, of the retail product and,
- Continuity of electricity supply to the customer.
Here in Donegal we have made significant investments in wind-powered infrastructure. There are fourteen operational wind energy projects at present, with a total capacity of over 140 Megawatts. These projects include a recently developed Airtricity project at Meentycat of more than 70 Megawatts, which is Ireland’s largest wind farm and there are a further 6 wind energy projects currently under construction. In addition there are a total of 7 hydro powered plants in the region with a total capacity of 70 Megawatts. Donegal is in fact an example to other regions of what can be done to help reduce our reliance of fossil and carbon based fuel generation.
As we all know, wind energy is renewable, safe, and environmentally friendly. Electricity generated from the wind replaces generation from conventional power stations, thus preventing the emissions of several greenhouse gases, including carbon and sulphur dioxides. It has a vital role in building a secure and sustainable energy future.
Wind energy can also bring many benefits locally. Local power-plants also create local jobs, both in the construction and ongoing maintenance of wind energy projects, bringing direct economic benefits to communities through direct ownership, joint ventures or land rental and can contribute positively to community investments via rates payments to the Local Authority.
The progress here in Donegal is consistent with Government Policy. This Government fully recognises the importance of reducing our dependency on non-renewable fuels, whose prices are subject to the vagaries of the global markets and geopolitical uncertainty affecting energy markets generally.
In addition to these benefits locally, from a national economic perspective, not just the energy policy perspective, increasing the amount of renewable energy in the system will help in substituting costly fuel imports, and in dealing with levels of uncertainty in the future evolution of energy prices.
The factual position is that these macro issues and the direct environmental benefits justify the increasingly positive steps and increasingly challenging targets set by this Government.
In the last month, Government has agreed a target to increase overall renewable powered generating capacity in Ireland to 1450 Megawatts by 2010. Currently Ireland has 675MW of renewable capacity connected, with a further 175MW under active construction.
This consists of 400MW of wind, 240MW of hydro, with the balance made up of different biomass technologies. Further development will take place from the last two rounds of competitive tendering, the AER V and AER VI competitions. In order at a minimum to achieve our target, 400MW of new renewable capacity will be supported and will be increased to accommodate any slippage rates from previous competitions.
Wind-powered technology will be the dominant technology in delivering the additional capacity required. This target is challenging. It will more than double production from renewable sources from less than 5% to more than 13% in 5 years.
The challenge now is to put in place a regime which will give fair and reasonable returns to developers and incentivise “bankable” projects while also taking account of national competitiveness, environmental challenges and the interests of consumers.
However, the electricity market is now a fully liberalised market under EU rules and we must allow the market itself to determine who will prosper in that market. The requirements on Government are to ensure the administrative arrangements and fiscal incentives are sufficient to facilitate and adequately reward new project development.
These were compelling considerations in the Government Decision to move away from the competitive tendering model to a fixed price structure. The initial target or quantitative limit as I have said is 400 Megawatts, and this limit introduces a competitive element. The Government is aware the IWEA generally would prefer if there were no quantitative limit applied, however it should be recognised that the procedure adopted, allows us to proceed under existing legislation. The alternative would be to delay the launch of the programme until a time-consuming process of amending primary legislation is concluded.
I believe the approach we have adopted is, on balance, the most beneficial route for developers. We have used the existing legislation to bring a support mechanism to the market as quickly as possible.
I am conscious that the detailed terms and conditions of the new support programme are out to public consultation. However for those of you unfamiliar with the detail, the procedures proposed are, in summary-
- there is an initial support level of 400 MWs,
- projects must have full planning permission and a binding connection offer, and
- projects will then be allocated support on a first come first served or first past the post basis.
Thereafter, developers will have to comply with ex post conditions or the support will be transferred to other available projects. The priority required, if the target is to be delivered on time, is to assist those projects which can proceed soonest.
The reaction to our new proposals from both developers and suppliers has been reasonably positive although I do acknowledge there will be submissions within the consultation process as to means of improving the detail. Nevertheless the broad principles have been received positively.
We are conscious, ladies and gentlemen, that a fiscal support structure alone will not deliver projects. There are also significant technical challenges facing us all in this sector if the wind sector is to grow significantly, and the twin objectives of affordability and continuity of supply, remain as primary requirements.
I note from the conference brochure there are ample and substantial technical issues and personnel in attendance to address the technical challenges which must be resolved if windpower is to grow substantially and the continuity of supply remains as a dominant demand.
It only remains for me to launch this Conference and to wish you all well in your debates.
Ladies and gentlemen it is said in the English language that “a good start is half the work”. The Council of the IWEA by choosing the inspirational environment of Donegal has not delivered a good start, it has delivered a perfect start, and it is now a matter for you by your active participation to complete the programme.
Thank you for your attention.