Coherent energy policy needed

Last week we heard that the Government appears to have offered subsidies for yet another base load plant to be constructed, in Killala, Co Mayo. It will burn wood chips imported through Dublin port from the United States. The plant will add to Ireland’s existing over-capacity and at very high cost. The bill for the American owners will be €180m for just 42.5MW of capacity – very expensive since it will make idle some gas capacity with a capital cost of just €1m per MW.

The plant has been deemed by Government to qualify as a renewable generator and will attract subsidies of around €20m per annum, thus removing any meaningful risk from the promoters.

The customer will pay for the subsidies through higher electricity bills. If the project helped to cut carbon emissions at reasonable cost, it could be justified on environmental grounds, but no such assessment has been prepared. It will create just 30 permanent jobs, despite the huge subsidy.

Ireland’s weak political institutions, unassertive public administration and populist media expose taxpayers to regular raids from predators posing as creators of jobs or saviours of the planet. This is most vividly illustrated in the continuing windfarm bonanza. Ireland has an enormous surplus of electricity generation capacity but an entire pseudo-green industry of self-styled entrepreneurs continues to prosper through farming, not the wind, but the taxpayers’ pockets.

There is no reasonable basis for doubting that global warming is a threat. Ireland produces roughly one tonne of carbon emissions for every 500 produced elsewhere. To listen to the lobbying from Big Wind, you would imagine Ireland had its very own atmosphere and that the climate change threat could be addressed unilaterally. Ireland can be saved through its own actions, you are invited to believe, while less enlightened countries incinerate themselves. This is nonsense: the earth has one atmosphere and Ireland will suffer the same fate as China or the US, who are jointly responsible for half of global emissions.

Whatever is done in Ireland to curb emissions will make no measurable difference to the fate of the planet. National climate policies, particularly in small countries, are something of a conceit: they cannot make any material difference and it is delusional to think that the rest of the world is waiting for moral leadership from some tiny rock in the north Atlantic.

Opposition to further windfarm development is driven largely by objections to the visual intrusion of turbines and the associated pylons. These are legitimate concerns but the real objection to yet more windfarms is that further cost impositions make no sense in either economic or environmental terms. Ireland already has a very large, and very costly, surplus of generating capacity. Peak demand is under 5,000 megawatts (MW) and there is no need to have a large margin over this figure. Around 6,000MW would be plenty, according to power engineers. There is already about 7,400MW of capacity in round-the-clock plants and over 2,000 more in intermittent windfarms, available unpredictably for about one hour in three.

When the wind blows, Ireland has total capacity almost double peak demand. It also has electricity prices 30-40% above the European average. Believe it or not, the Government plans to subsidise a further 3,000MW of new windfarms, many of which will be unable to produce even if the wind blows.

The wind entrepreneurs have been offered an extraordinary deal. If you build a windfarm you will get paid a guaranteed price, comfortably ahead of the market, and enough to ensure a return on investment. Even if your unit is constrained off the grid, because demand is too low, you still get paid. The costs are loaded on to electricity bills.

Not surprisingly, there is a long queue of would-be windfarmers. The queue includes State-owned companies lining up for State subsidies. If the wind blows, the capacity of windfarms exceeds the level of demand in the least busy hours of the year. When this happens, they must be “constrained off”, but are guaranteed payments.

On current plans, the number of windfarms will more than double, many of which are destined to collect subsidies while unable to generate power. Should the subsidy policies be curtailed, there would be no more windfarms. Ireland does not need additional electricity generating capacity. It needs a coherent energy policy.