Renewable energy goal to cost up to €5bn

MEETING IRISH renewable energy targets will require investment of up to €5 billion between now and 2020, according to a report from stockbrokers Davy.

The Government and the administration in Northern Ireland have both set targets to generate 40 per cent of electricity from renewable sources by 2020.

A report by Davy analysts Caren Crowley, Barry Dixon and David McNamara, published yesterday, estimates this will require the construction of wind farms capable of generating up to 3,500 megawatts of electricity, in addition to the existing renewable generators.

Davy’s researchers calculate that this will require a total investment of €5 billion across Ireland.

The report, Ireland’s Electricity Future: Policy and Players Shaping Investment, states that this is likely to favour the country’s existing utilities and established large-scale industry players. It points out that the challenges this will pose for operating the electricity supply system, and a tough environment for raising finance, are having an impact on project finance.

“Accordingly, scarce capital is more likely to be channelled into projects via the utilities and larger, more experienced project developers,” the firm’s analysts say.

They add that the four existing utilities – ESB, Bord Gáis Energy, SSE Ireland and Viridian – which have both wind and conventional-power generators, are best placed to support the large-scale roll-out of wind power. Their conventional generators can be used when wind generators cannot – about 65 per cent of the time.

Davy suggests that other players, including Element Power, Mainstream Renewable Energy and State-owned Bord na Móna and Coillte, could also feature.

The researchers based their calculations on the likelihood that the Republic and Northern Ireland, which have a single electricity market, will focus on onshore wind to deliver renewable targets.