What will we do when the oil has gone?

An Phoblacht's ROISIN DE ROSA examines the benefits of investing in wind power in a world of falling oil and gas reserves and rising prices for these fuels.

Scientists and economists debate whether oil is running out. There is certainly a growing demnand for a finite resource. They point to China, where the number of cars increased by 70% in just one year. It is thought that, whereas in 2002 China was consuming around two billion barrels annually, by 2025 they might be looking for ten billion barrels a day. China intends to triple car production in the next six years. America's annual consumption is over six billion barrels and rising.

But reliance on fossil fuels has other serious disadvantages, especially in the by-product of CO2 gases. We have given a commitment to the EU, under the Kyoto Protocol, to produce 13.2% of our electricity from renewable sources by 2010. At 3% coming from renewable sources, we are miles away from that target. We rely 39% on coal and worse still, peat, which are worse in terms of CO2 emissions.

If by 2008 our emissions are greater than 23% above our 1990 figure, we will be fined €100 for every tonne of CO2 excess. Each gallon of petrol used generates roughly a 5lb bag of carbon dioxide. On calculation, it means that not using peat to generate 1% of Ireland's current electricity would represent a saving of €50 million.

As Environment Minister Martin Cullen said in Leinster House last year: "Ireland has the highest levels of emissions growth within the EU, reaching 32% over our 1990 levels. The European Environment Agency has identified us an amongst nine of the (then) 15 member states significantly challenged in achieving Kyoto targets."

Other EU states

It is accepted that Ireland has enormous potential for energy production from renewable sources, especially wind. We have the possibility to become a net exporter of energy. The importance of this from an economic, environmental, security and social point of view is immeasurable.

Denmark has become a world leader in wind power generation. Since 1981, the government has given grants to cover one third of the cost of installing a turbine. The grants were later replaced by a government subsidy on the price paid for energy generated from renewables. This subsidy was enough to offer a 15% return on capital invested.

Denmark is also the leading centre for turbine research, engineering and sales. It is the world's largest turbine manufacturer, which has generated some 22,000 jobs. There are 100,000 Danish families who are members of wind power guilds, set up all over the country, where Denmark was able to draw on a rural co-operative tradition similar to that existing in Ireland.

Wind power now accounts for some 22% of Danish energy needs, and over the next 20 to 30 years, it is intended to generate half of its energy, 5,500 Mw, from wind power.

Similar developments have occurred in Spain, where the government has provided assistance to small communities to invest in small wind power developments. For example, in 2002, Spain installed 1,493 Mw, almost ten times the total installed in Ireland by the end of 2003. Moreover, 85% of the equipment used was made in Spain by some 350 different companies, which now supply 12% of all wind turbines produced worldwide, creating 26,000 jobs.

Subsidisation

Key to a vibrant growth sector in renewable energy generation has been the attitude of governments. All European states where wind power generation has grown substantively, have given financial support in the form of subsidies, low interest loans, capital grants, and sometimes tax allowances.

More significantly in relation to the Dublin Government's approach, all these states (with the exception of France prior to 2001) have had a purchase obligation in relation to energy from renewable resources and this obligation has been at a secure and guaranteed premium price.

Ireland has had neither. Not only has the 26-County Government failed to provide any support mechanism, but it has insisted on maintaining a crazy scheme of competitive tendering for the supply of power to the ESB, which itself regulates the competition and controls the rules of access set by the Commission for Energy Regulation (CER).

The government has made numerous statements averring its support for renewable energy and outlining its determination to "bring the renewable sector into the mainstream of energy policy". But action is what counts. The real test is in the result.

Wind Farm co-operative

Meitheal na Gaoithe, the Irish Wind Farmers Co-operative society, in a submission to the Joint Oireachtas Committee on Communications, Marine and National resources, in mid July, gave its considered opinion that "the wider wind power industry is struggling, mainly due to obstructionism by officialdom, primarily ESB and CER.

"Well over 3,000 Megawatts are in development stage, having secured planning permission and local support. But only 200Mw has been allowed into the system. To date, approximately €4 million has been invested by MnaG members in the planning and preparation of wind power projects. The bulk of the tenders have been offered to large scale developers, including the ultimate monopoly, the ESB, to the exclusion of small scale development projects."

Prices at which wind power projects were expected to tender were ridiculously low, ruling out local community projects. Furthermore, the ESB has the capacity to mop up the majority of what is on offer by artificially quoting lower contract prices than anyone else, because of its monopoly position.

As the Irish Wind Energy Association pointed out in its submission to the Joint Oireachtas Committee, the AER (Alternative Energy Requirement) system of tendering for contracts to access the grid has delivered less than 130 Mw to the grid and "will best be remembered as to how not to get things done".

Moratorium

The latest blow to small-scale projects was the moratorium, declared before Christmas, on new tenders. The ESB announced that it did not have the capacity to absorb more wind power into the grid. The moratorium is now lifted, but only with the introduction of entirely prohibitive requirements on the monitoring of electricity supplied, every half an hour, to the grid.

The ESB claims it cannot cope with the variations in wind generation. Turbines often have to be shut off when the wind reaches very high levels. But coping with this is technologically feasible with the correct switching gear, and perhaps investment in greater storage capacity. It is, as Thomas Cooke, Director of MnaG, points out, another example of how the interests of the ESB have been prioritised over the national need to increase wind power generation, and the requirement that local community schemes be favoured.

Situation in the Six Counties

Almost all commentators appear to concur with the view that the potential for development in the Six Counties has been far more favourable. There is access to the grid without problem — there is no comparable bidding system as imposed on communities in the 26 Counties.

However, there is an important difference. Consumers of electricity buy at a price of some 6p a unit, but energy can only be supplied at approximately half that price. This system has favoured very small scale projects, like for example wind generated power to power a farm, or a school, which represents a substantial saving on costs, but does not represent a viable economic price at which locally owned turbines can profitably sell wind power to the grid and make a profit for their shareholders - and their community.

This is a particular source of dissatisfaction, given the high price of electricity in the Six Counties, a result of the extremely unfavourable terms on which the Electricity Board was privatised. This has imposed prices that allow large dividends to owners but serve as a major barrier to manufacturing investment.

Tremendous opportunity

The ability to exploit our all-Ireland resources of wind power, potentially puts us into the position of a major, cheap and secure supplier of power for the coming generations to a large fraction of the European market. It could bring an end to Irish reliance on oil.

Wind power offers us an alternative. The failure to grab it with both hands is a measure of the shortsighted conservatism of those who currently hold the reins of power, North and South.