Danish multinational Ørsted plans to spend about €90 million on a new Irish onshore wind farm that it says will generate enough electricity to supply 25,000 homes.
Ørsted said on Thursday that the group had taken its “final investment decision” on its proposal to build Farranrory onshore wind farm in Co Tipperary, which will have the capacity to generate 43.2 megawatts (MW) of electricity.
The multinational did not say how much it planned to invest in the project, but the final bill is likely to be about €90 million.
Onshore wind farms cost about €2 million for each MW, edging the likely cost of the Co Tipperary energy plant past €86 million.
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Inflation and a worldwide rush to build green electricity plants, as countries scramble to meet climate targets, have driven up the cost of building these projects.
Ørsted itself calculated that by late last year onshore wind construction costs had risen by a third from €1.5 million a MW in 2020, when Farranrory would have cost closer to €60 million to build.
The nine-turbine power plant will generate enough electricity to supply about 25,000 average homes when it begins operating in the summer of 2026, the group said in a statement.
Last September, the project won a contract to supply electricity at €100.47 a megawatt hour – the unit in which electricity is sold on the wholesale market – under the Government’s Renewable Energy Support Scheme.
Ørsted was also awarded a contract for a Co Carlow solar farm on which it began work last month.
The renewable scheme fixes the price that companies are paid for electricity in return for guaranteeing that they will receive this amount irrespective of what the market pays.
Farranrory will be Ørsted’s 22nd Irish wind farm and bring the total capacity of its projects across Ireland, north and south, to 500MW.
Kieran White, Ørsted’s senior vice-president of onshore in region Europe, predicted wind would play a key role as the country shifts to renewable energy.
“Our final investment decision is testament to our commitment to providing green energy to the Irish grid,” he said, adding that this would help cut electricity bills.
Rising costs and planning bottlenecks continue to hamper green energy projects, industry figures say.
They are hopeful that Government pledges to boost staffing at An Bord Pleanála and reform the Republic’s planning laws will ease some of these problems this year.
Late in 2023 it emerged that rising costs had stalled wind and solar farms due to begin supplying electricity by this month.
As a consequence, renewable electricity projects capable of supplying more than 100,000 homes have not been built, even though they were awarded contracts under the renewable energy scheme.
