Policy actions by the new government could nearly halve the price of renewable electricity in Ireland or increase it by as much as a third, according to a report commissioned by the Irish Wind Energy Association (IWEA).
It has called for an industry taskforce to enable renewable electricity to be offered to consumers at the lowest possible price in tandem with the outgoing Government’s commitment to have 70 per cent renewables used in power generation by 2030.
Over the past 20 years the price of onshore wind energy has been falling steadily with wind farms in Nordic countries selling power at prices as low as €30 per megawatt-hour (MWh). The average annual price on Ireland’s wholesale electricity market over the past decade has, however, ranged from €45-€65 per MWh.
The next government will face a number of policy choices that can cut – or drive up – the price of wind-generated electricity, according to the association.
It identifies 10 policy choices critical to setting a low price for renewable electricity. They include allowing taller turbines which are more efficient and could cut the cost of wind energy by 27 per cent.
They also include changing proposed noise limits that have been heavily criticised by independent experts as “among the harshest in Europe” and “could increase the cost of electricity produced by wind farms by 11 per cent”.
In addition, wind farms normally get planning permission for 20 years even though turbines have proven far more robust than expected. Ireland’s first wind farm is still operational after 28 years – “increasing the duration of planning permission from 20 years to 30 years could cut costs by 10 per cent”.
Grid issues
The report also cites grid issues, with substantial amounts of power being lost because the transmission system struggles to cope with available volumes of renewable electricity. As more wind farms (onshore and offshore) and solar farms are built “there is a risk that ever larger amounts of power will be lost” while a stronger transmission grid could cut costs by 18 per cent.
Commenting on the report's finding, IWEA chief executive David Connolly said: "We are calling on the incoming government to immediately set up a taskforce with the sole remit of identifying ways to reduce the price of renewable electricity in Ireland, and require it to report within nine months."
Certain policy changes now could have a significant impact on short-term onshore renewables costs to consumers and over the next 30 years, according to Simon Bryars of Everoze. "The ability to utilise the latest technology combined with a strong transmission network with export capability are key to further large reductions in costs."
Key to pushing down prices will be renewable electricity auctions, the first of which is due to take place next month under the new Renewable Electricity Support Scheme.
In an auction, each wind or solar farm bids a price and only the projects that offer the best value make it into the support scheme. Auctions have put price front and centre for renewable electricity in Ireland, but they are only part of the picture, Mr Connolly said.
“Prices will only fall if projects can provide power at the best possible price but in recent years Government policy has been pushing prices up, not down. Commercial rates for onshore wind farms have more than doubled. The proposed new WEGs [wind energy guidelines] would add billions on to consumer bills over the next 25 years.”
