Irish windpower will be cheaper for Britain, despite price spread - minister
The British power market will import major electricity volumes from proposed onshore wind farms in Ireland because it will be cheaper than building new generation assets in Britain for domestic consumption, Irish Energy Minister Pat Rabbitte told ICIS on Monday.
The governments of the UK and Ireland signed a memorandum of understanding (MoU) last month with the intention of building up to 5GW of Irish onshore wind farms specifically for export to the British market. The Energy Bridge project had been in the pipeline for some months beforehand, with merchant operators pushing the initiative (see EDEM 13 September 2012).
"The MoU is a result of no more than a pragmatic assessment by Britain of its obligation to meet mandatory targets and the fact that it can source renewable energy more cheaply in Ireland than by the alternatives available," Rabbitte said, adding that these alternatives included building new plants in Britain.
Speaking on the sidelines of a wind energy conference in Vienna, Rabbitte said that planning issues were continuing to hamper the development of British projects to the extent that importing clean power from overseas was a more economical alternative than pursuing home-grown schemes.
Costs
The arrangement highlights the growing costs and planning problems on the British side of the Irish sea, particularly when the spread between the two regional electricity markets is taken into account.
Last month, the trade-weighted average of February '13 Peaks at Ireland's all-island Single Electricity Market was €122.59/MWh, a €51.23/MWh premium to the UK power equivalent (see EDEM 17 January 2013). Under normal circumstances, it is not economical for the UK to source electricity from the more expensive Irish market.
The UK carbon floor, which takes effect from April 1, will go some way to narrowing the large spread. But Rabbitte denied that the policy had influenced the decision to proceed with the Energy Bridge.
"[The carbon floor] is only one limb of UK policy," Rabbitte said. "The UK is engaged in a very substantial policy revamp. The arrangement with Ireland is only one limb of that, and as long as it makes economic sense it will stand alone irrespective of the carbon floor."
45% in 2030?
Ireland holds the rotating EU presidency until June of this year, and Rabbitte said that he would be pushing for open debate on the issue of 2030 renewable energy targets - one of the major issues facing the bloc.
Anni Podimata, one of 14 vice presidents of the European Parliament, said that an ambitious 2030 target of 45% was "absolutely realistic and feasible". By comparison, the EU 2020 target is just 20%. It is one of the first times that a senior EU official has made mention of a specific 2030 target.
European Wind Energy Association (EWEA) president and chief executive of the Greece Public Power Corporation Arthouros Zervos said that a 2030 target would not emerge during the Irish EU presidency, but it would likely do so before the end of the year.
"We have to put the basis of the fundamentals in place, and then it will happen in the next presidency," he said. Jamie Stewart
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