Bogtec

This post was written by Richard Tol

Yesterday, Pat Rabbitte and Ed Davey signed a Memorandum of Understanding. The MoU is crafted in terms of the Renewables Directive, which allows EU Member States to pool their targets. Essentially, the MoU gives the UK an exclusive claim on any excess (wrt target) renewables that Ireland may have. A monopsony is good for the buyer, but less attractive to the seller. Either the Irish government has little faith in the emergence of a market for renewable obligations, or perhaps Ireland felt it needed to do the UK a favour, for instance in return for the bailout.

The MoU does not specify any project, but there is an expectation (see here and here) of large wind farms in the Irish midlands, transmitted to England and Wales via a dedicated grid.

This is intriguing. Midland winds are not particularly favourable, and definitely cannot compete with the winds of England and Wales once the costs of long distance transmission, including an undersea cable, are accounted for. This project only makes sense when you consider the difficulties in building wind turbines in the England and Wales. Ireland’s comparative advantage is the weakness of its planning regulations.

There have been some exaggerated claims about the benefits for Ireland. Few jobs would be created here. There is no reason to assume that wind turbine manufacturers would set up shop in Ireland. Even the more lucrative parts of construction may well be done by specialist teams flown in from abroad.

Export earnings depend on the price. In England and Wales, feed-in tariffs are about 25 c/KWh for small, domestic suppliers. It is unlikely that large, foreign suppliers will be offered similarly generous conditions.

Profits are likely to be taxed in Ireland, but need not benefit Irish shareholders. There are no royalties on wind (and EU competition law prevents the introduction of royalties on wind-for-export only).

The wind power companies would need to lease land, but as the name of Bord na Mona is often dropped, this may be at a concessionary rate.

From an English perspective, this agreement makes sense in a narrow way. The choice is between yet another conflict with Brussels (if the renewables target would be ditched — the sensible thing to do), a reform of planning regulations, or a deal with the Irish.

From an Irish perspective, it is hard to find anything to commend this plan.

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57 Responses to “Bogtec”

  1. Kevin Lyda Says:

    Just curious, when comparing the costs of fossil fuel and alternative energy, what percentage of western defense budgets and healthcare budgets are factored into the costs of producing and using fossil fuels?

  2. Ossian Smyth Says:

    This is Ireland taking the first step toward realising the North Sea Offshore Grid, a project to balance renewable energy generation and storage between ten European countries. Done right, it could lead to the eventual energy independence of the UK and Ireland with far higher penetration of renewable energy from wind to tidal to wave to wood.

    The Offshore Grid was agreed at the council of ministers in 2010 led by Paul Magnette, Belgian energy minister and our own Eamon Ryan.

    The proposal to allow preferentially operated and unregulated international HVDC interconnects seems bad. Electricity transmission is a natural monopoly and would be better operated on a carrier neutral basis. A private operator may make a better operator but ownership and regulation of a strategic monopoly should remain with the state.

    the MoU gives the UK an exclusive claim on any excess (wrt target) renewables that Ireland may have

    No, it doesn’t. The MoU is a simple one-page statement of intent by the two governments to work together to reach an agreement on terms for how to trade renewable energy. There is no monopsony implied. Eirgrid intends to interconnect with France in the medium term. I have no idea how this was misinterpreted.

    In the BBC report linked to above, Tol is quoted as follows:

    “From an Irish perspective this is not selling the family silver; this is giving it away. There is no money staying in Ireland that I can see.

    How can this be when the specific terms of the agreement have not been decided or even posited? One would expect that an export business like this would benefit the state in a similar fashion to any other export: landowner rents, local authority rates, employment taxes, corporation taxes. Annual 9 figure sums for the state for a couple of GW of additional installed wind.

    Capture and export of a surplus non-depleting, low polluting resource is probably a good idea.

  3. Maggie Says:

    Cullenagh Mountain, height 1045 feet, in South Laois is one of the ancient Beacon Hills of Ireland. Towards the end of 2011, a tall thin test mast was installed on the south-east slope of this mountain on land used by Coilte. The three dark-blue vans involved in this work were UK registered (yellow number plates). Stretching from Dooary Lane, Ballyroan and east up Cullenagh Mountain and across to Clontico Wood (also Coilte), allegedly it is proposed to install forty nine wind turbines. There was no planning permission notices. Trees have been cut down in a willy-nilly way and carted away. Tracks on the side of Cullenagh and in Clontico wood have been reinforced and widened throughout 2011 and six foot deep holes dug to facilitate said proposed wind farm. Local people know nothing. Mr Rabbitte has signed some sort of MOU with some UK organisation without consulting the people of the Midlands. The midlands of Ireland is not a remote area. If windfarm is installed on the side of Cullenagh (a sacred mountain), it will be visible from the Devil’s Bit in Tipperary, Mount Leinster on the Carlow/Wicklow border and Sliabh na mBan in South Tipperary.

  4. Richard Tol Says:

    @Ossian
    The Renewables Directive has two options for selling excess renewables. First, sell them, on paper, to the highest bidder. Second, sell them, in kind, to an exclusive partner. The MOU language works towards the latter. It is not there yet, but the intentions are clear.

    The overly optimistic Mainstream promises only half a billion in annual revenue. Their assessment hangs on the assumptions that the E&W refit tariff will double and that Ireland will become a choice location for mechanical engineering. What do you assume to get from their 8 figure sums to your 9 figure sums for the state?

  5. DylansGoneElectric Says:

    Mainstream’s claim of 40,000 jobs is highly suspect. Germany added about 1.5GW of wind in 2011.

    However the entire wind industry in Germany accounts for 102,000 jobs which includes 40,000 in manufacturing (see Wind Industry in Germany Economic Report - from the German wind industry association). If Mainstream’s analysis was correct German would be adding 40k jobs to support domestic projects alone over the next few years, but their employment story is all around export.

    The 40k jobs is being used to sell the 5GW. 5GW is a enormous number in relation to the available sites in the midlands.

    Fully agree that it is a planning arbitrage as the difficulties of getting planning for wind projects, particularly in England, are enormous. However I would not underestimate the difficulties in getting community acceptance for these projects.

    I was struck by the emphasis Mainstream put on having a grid connection. A grid connection is not a distinguishing factor of any real generation project - it is simply a necessary requirement. If grid connection was not possible, there would be nothing here at all. It is relatively easy to make an application to National Grid and change it when required. The security required is not great. What Mainstream have is an idea, a connection agreement and now an MoU. I’m waiting for the offload.

    Overall I think this is quite a bad idea. Hopefully it wont attract any Irish subsidies.

  6. Sporthog Says:

    @ Richard Tol,

    “This is intriguing. Midland winds are not particularly favourable”

    I believe from reading in the papers that the wind generators will be very high. With bigger blades a higher output can be achieved and to achieve a certain capacity less units will be required. In addition it was mentioned that visually it was preferable to have a smaller number of bigger generators than a larger number of smaller generators.

    I understand your perspective that wind could be looked at as a resource like gas or oil and as such should incur royalties.

    I don’t believe idea that “Thousands of jobs” would be created in Ireland, in fact I think it is pure fantasy. None of the components will be fabricated here. There will only be initial civil installation works, which once completed will not require further maintenance. A few service technicians will be required to carry out visual inspections and perhaps annual oil changes on gearboxes etc.

    On another point…. did the teething problems of the HVDC unit in north Dublin get sorted out? I believe people living in the community were experiencing problems with interference with telecom communications.

  7. Richard Tol Says:

    @Sporthog
    According to the EirGrid website, the interconnector is being planned, being build, or in operation.

  8. DylansGoneElectric Says:

    @Sporthog
    I understand it is operating at 50% since late december

  9. joseph wheatley Says:

    A few comments:

    (1) the harvest wind power subsidises from the UK is a smart business model from the point of view of irish wind developers, given that the ability of Irish consumers to subsidise this technology is close to exhausted.
    (2) wind speeds are highly correlated between the UK and Ireland. Capacity factors in the midlands are 20-25%. Irish wind generation has no magical properties that command a premium from a UK perspective.
    (3) yet as Richard says, the business model assumes that the UK will be willing to guarantee more than onshore wind rates, in return for outsourcing political and environmental issues to Ireland.
    (4) it is a dubious assumption that the current infatuation with stochastic power sources will be sustained over the long-term. The mathematical fact is that wind power does not achieve anything like the CO2 savings that were originally claimed for it. It is slowly being understood, even by policy-makers, that ind is a costly and ineffective way of reducing emissions. Therefore, if this project is to be de-risked from an Irish perspective, the UK would need to be locked into very watertight, very long-term power purchase agreements backed by government guarantees. Otherwise we all know who will end up with the bill.
    (5) it is not plausible that a huge ~10,000MW interconnector capacity would be allowed to simply sit idle 75-80% of the time. Surely the very fact of the existence of such a huge import capacity would impact the domestic generation industry and investment? This may create or destroy jobs, but it is hard to believe the impact is neutral.

  10. DylansGoneElectric Says:

    @ joseph
    on the point about interconnection capacity - the EWIC is likely to be in export mode ~(ie Ireland to UK) within a few years as the UK is developing a shortage of conventional generation, and Ireland has a surplus. If this is the case, the beneficiaries will be Irish generators and British consumers. Bear in mind that the Irish consumer bears all of the risk in relation to it and would see prices rise in this scenario.

  11. Michael Hennigan - Finfacts Says:

    There are some interesting comments here.

    Job targets are pulled from the sky and late last year the government published a marketing brochure with a target of 10,000 green economy jobs. Minister Eamon Ryan had said a few years before that “a green IFSC” could create 20,000 jobs over the following 5 to 10 years.

    Renewable subsidies have been cut back in several countries and early entrants usually lose money. Solar companies in the US, China and Germany have had big losses in recent times.

    Vestas Wind Systems of Denmark, the world’s biggest wind turbine maker, is struggling.

    Maggie above says: “if windfarm is installed on the side of Cullenagh (a sacred mountain), it will be visible from the Devil’s Bit in Tipperary, Mount Leinster on the Carlow/Wicklow border and Sliabh na mBan in South Tipperary.”

    That is a legitimate concern but we all want to have our cake and eat it. Modern life would come to a standstill if the legions of Nimbies (NIMBY - not in my backyard) got their way - - and they wouldn’t be happy either.

    In Galway, a Radio na Gaeltachta mast evoked no attention for decades until mobile phone users began objecting to the placement by a mobile phone company of a transmitter on the mast.

    The problem in recent times is that the cocktail of interests that are usually present in NIMBY cases - self-interest, ignorance and stupidity combined with media interest - has resulted in a situation, where members of the public who are not from the area of focus at a particular time, have great difficulty in developing an informed opinion on a specific case.

    Rossport objectors to the gas terminal or any gas development did not object to fossil fuels being transported to West Mayo despite the risks that were elsewhere along the supply chain across the world. CAP cash from a remote place called Brussels to support their standard of living was also a given.

    In 2011 after the German government gave into demands to shut the nuclear industry in the aftermath of the Japanese earthquake, attention then turned to the challenges of meeting renewable targets.

    NIMBYs began protests against the massive new power lines from the north coast and wind turbines that are being built across the country as part of the green energy program. Der Spiegel magazine said the ”energy autobahns” are facing resistance from all sides.

    Der Spiegel said that even in Baden-Württemberg, which has the lowest percentage of wind power of any state — at just 0.9% of net electricity consumption — people seem to have protested against virtually every wind turbine installed there.

    The magazine reported that the German Energy Agency (DENA), said in 2005 that 850 kilometers of high-voltage transmission lines would have to be built by the year 2015. Only 100 kilometers of this extended grid had been built by 2011. In its latest study, DENA anticipates that an additional 3,600 kilometers will be required by 2020.

    Der Spiegel cited a case in late 2006, when the German government obliged grid operators to connect planned offshore wind parks in the North Sea to their networks.

    The experts examined an area roughly 100 kilometers wide and 170 kilometers long. On a “regional resistance map” they highlighted in pink all areas with a wide range of problems, in orange all areas with a marked tendency toward problems, in yellow all moderately problematic areas and in green all areas that present virtually no problems. When the map was finished, it glowed pink, orange and yellow nearly everywhere. The experts unfortunately found that there were “no contiguous low-conflict corridors available.”

  12. Aisling Says:

    Why would withholding tax be relevant?

    We already have a surcharge (profit resource rent tax can result in an up to 40% effective tax rate) on corporate profits from oil/ minerals in the State which could easily be extended to profits from wind power. Logic is the same, the business cannot move elsewhere to avail of a lower CT rate since it has to be here for other reasons. Like North Sea Oil in the UK we can change the capital allowance rules to ensure that the ETR is not too low in initial years because again the profits are linked to the physical State.

    Effective taxation is relevant, existence or absence of a withholding tax is not.

  13. OMF Says:

    I don’t believe that this project has any logic behind it other than the self-glorification of Ministers, department officials, developers and various other members of the palace court. The jobs claims are an absurdly exaggerated pack of lies, and we’re clearly not going to get paid much for whatever power can actually be generated.

    Basically the government is selling out the people of the Midlands in exchange for PR material. That’s how low a regard they have for Irish people. The state behaves just like the empire it’s descended from.

    As with the Promissory notes, I think Minister Rabbitte has gotten ahead of himself here as well.

  14. Eureka Says:

    This does make sense.
    Ireland and the UK need to jointly develop energy resources and all in all this is a neutral situation - if the British weren’t interested the wind energy would not be developed in the first place. This is actually ok.

    The bigger threats for us are Fracking and loss of Coillte.

    In fact there’s so much sh*t facing Ireland that a neutral non event should not be over analysed

  15. Eureka Says:

    Still nothing on the promissory note stuff.
    Labour grass roots will be very unhappy and govt will have no credibility for Croke park 2.
    We are witnessing the slide into continuing misery that will end with the break up of Europe (that day can’t come fast enough at this stage…)

  16. veronica Says:

    According to the Department of Energy statement on the MoU, the next step is for officials to meet and agree a regulatory framework by the end of this year which will provide the basis for an intergovernmental treaty. And according to Eddie O’Connor, founder of Mainstream Renewable Power, and along with Element Power currently one of the two big players in the game, the Intergovernmental Treaty can’t happen fast enough:

    In a statement on 10 January last announcing Mainstream’s finalisation of “negotiations with UK’s National Grid for 5,000MW of “firm” access to be delivered to the UK National Grid from 2017 to 2020”, Mr. O’Connor said:”… we’ve signed up half the land we need since the IFA endorsed our offering to farmers back in September. We’re working with National Grid’s unregulated business and REN on the transmission infrastructure side..”
    Welcoming this week’s announcement , Mr. O’Connor noted: “Today’s MoU needs to lead to a full agreement between the two governments as quickly as possible. Speed is of the essence. The lead-time for High Voltage Direct Current (HVDC) equipment is in excess of three years. To deliver our first electricity to the UK by 2017 will require a full agreement between the governments in the coming months.”

    On the Irish Government side, public statements are framed in general terms of potential export growth, this time in the energy sector, and, of course, with an obligatory nod in the direction of thousands of jobs that will be created. The British side stress the angle of energy supply with a subliminal message that those thousands of horrid onshore wind turbines that cause so much public disquiet among folk in the Cotswolds, and other areas of outstanding natural beauty in England, will not now proceed since they can all be built in Ireland.

    Of course we must take our Minister at his word. The process is still in its infancy and no decisions have been made as to how the energy for export will be generated, as he told the BBC on 24 January last. And whilst there is, in his view, a mutual interest for both countries in progressing future development, of course “Ireland doesn’t want a wind farm at every cross roads; we don’t want that.”

    Dail Reports for 17 July last confirm this intent. In response to questions from Independent TD Claire Daly on renewable energy, the following commitment was inserted as a postcript : “ The agreement with the UK will be developed in a way which ensures a mutually beneficial arrangement and to ensure tangible economic benefits for Ireland. If renewable energy power is being exported and consumed in the UK, then UK consumers will have to provide the necessary financial support to make the development commercially viable. These costs will not fall on Irish energy consumers.”

    Rabbitte’s enthusiasm for this new export sector has been growing exponentially since he first started answering PQs on it shortly after taking office. “…some projects of scale onshore is the desirable way to go,” he told the Dail in July; and in a sop to his left wing critics:. “ It may well be that the State companies, including Bord na Móna and Coillte, have a considerable role to play…”

    Mainstream’s enthusiasm knows no bounds. Describing the MoU as a ‘game changer’ for Ireland. Eddie O’Connor concluded: “We haven’t seen anything like the scale of this anywhere in the world.”

    But , ultimately, who’s likely to benefit from this so-called game-changer?

    RTE reported the signing of the MoU as a ‘personal triumph’ for the Minister; of equivalence to him, perhaps, of something on the scale of the IFSC - a moment that assures his political legacy? The commercial developers, whose plans to capitalise on the opportunity it opens up are already well-advanced, seem barely able to contain themselves. IDA, Enterprise Ireland and other agencies of the state are involved in assessing likely projects. In answer to one Dail PQ, the Minister suggested that interest in developing opportunities in this new energy export market included pumped storage – a reference, perhaps, to resurrection of the Spirit of Ireland project?

    What about the rest of us? There has to be a concern that there has been insufficient public debate at national about the implications of this new departure in energy policy, which need to be thoroughly addressed. The economics of it, too, appear questionable, with too many questions unanswered.

    Further, there is a lack of transparency about what may be going on behind closed doors, so to speak, between people of like mind, and, no doubt, with the utmost sincerity in doing their best in Ireland’s interests.

    The trouble is they are all of ‘like mind’ – and we all know what that may tow in its wake. It’s getting past time for some enterprising journalist or parliamentarians to ask hard questions, or post a couple of FOI requests about process, and lobbying, and networking at all levels in respect of this project. Otherwise, one fine morning we may wake up to the announcement of a ‘done deal’ to which it would be deemed unpatriotic or ‘anti-environment’ or ‘anti-jobs’ or , god help us, ‘anti- Ireland’s recovery’ to even raise a critical question.

    Mainstream has promised to begin a process of ‘public consultation’ with local communities in the Spring. The comment by Maggie, above, is far from an expression of nimbyism. It’s a legitimate concern by a member of a local community whose lives may be about to be affected by largescale industrial development which, to quote Eddie O’Connor (out of context) , is truly on a scale the likes of which has not been seen anywhere in Ireland. Mediation might be a more appropriate term for what Mainstream need to do, and in that context they might be better off not trying to lead it themselves.

  17. Eureka Says:

    Ah come on - this isn’t rocket science:
    John Bull: Eh Paddy - now that you got no money and we’re lending you the cash you need why don’t you let us have that big field in the middle of your country to put windmills on…
    Paddy: Oh now I’m not to sure about that….
    John Bull: Ok - tell you what - here’s some magic beans for them.
    Paddy: Ah - as long as I got some magic beans to show for it that’s grand. Alright so

  18. OMF Says:

    Eureka, read up on “The Boy Who Cried Wolf”. The government has failed and lied too many times to be given the benefit of the doubt on anything. Based on past outcomes, it overwhelmingly likely that this deal is another scam/farce/scandal/calamity in the making, and of no significant benefit to Ireland or probably the UK either.

    Saying this may make me a “negative nelly”, but that doesn’t change the fact that scepticism is the correct position to hold with this government.

  19. Maggie Says:

    Folks this is not a NIMBY issue. Its really a political matter. Yes, I have respect for beacon hills and how can a government minister say that proposed wind farms are in ‘remote’ areas, when the whole point of ancient beacon hills was to have the lit beacons seen from the seas around the Irish coast. The main point I was making about what was happening as regards Cullenagh Mountain and Clontico Wood in South Laois was that the work started in 2011 - almost two years ago. Thus Mr Rabbittes recent MOU is part of an ongoing agreement which started secretly some time ago. I also believe the reference to ‘bogs’ is a diversion!! Bogs are usually in flat low-lying areas - think about it.

  20. Robert Glynn Says:

    OMF + 1

    We need two or three large nuclear plants. 1.5+ GWt - 15 years development. We transform ourselves from a country living on a knife edge (a la 1845), where almost any significant choking-off of the oil and gas supply (war, financial collapse) puts us out of business and lights out, to one where we have secure cheap energy and a substantial export businesses in goods, services and electricity. Energy independence will secure our sovereignty.

    Wind power is bullshit. The cost in terms of oil of large scale wind systems is significant and ongoing. So why do it? Wind requires huge on-going costs in the maintenance cycle. Wind destroys the landscape and is ugly, noisy, intrusive and looms over us. A testament to our folly and vulnerability.

    A large nuclear plant will fit in a site not much bigger that your local Aldi car-park. We must drop the stupid prejudice against the atom when what awaits us is an extreme marginalization due to a new energy cost paradigm.

    I never thought I would agree with Richard Tol, but he points-up the prospect of our worthless politicos selling the country down the river once again for reasons of short term expediency.

    We need to adopt a pro-nuclear stance now. There is not one good reason to turn our noses up at cheap stable electricity. At a cost of 4 to 5 cent per kwh there is no cheaper and more stable source of energy in the post carbon era.

    The above figure includes costs of build and commissioning, on-going management and maintenance, fuel costs, all contingent costs and full de-commissioning over a sixty year lifespan of a big unit; say 1.5GWt. Not to mention no CO2 emissions or oil use. In fact nuclear will achieve most of the wish list of improvements the Eco-people think are essential for human survival, in one fell swoop.

    Nuclear will give us the opportunity to build big, clean industries here in Ireland. Our much vaunted electric car notions are predicated on a vastly expanded supply of cheap electricity. Yet no politicians talk about nuclear. Where do they think the energy will come from? Divine intervention?

  21. veronica Says:

    @ Maggie,

    There’s nothing ’secret’ about what’s been in process. Go to oireachtas.ie, click on ‘Search’, enter ‘renewable energy’, a date starting 1 March 2011, and ‘Rabbitte’ in the designated boxes and the search engine will throw up over 100 parliamentary questions, some of which are directly related to this ‘energy for export’ initiative and others in which it is referenced in some way. Mainstream Renewable Energy’s site, in between all the PR fluff and extravagant claims about jobs and benefits to Ireland etc., is quite explicit on what they’ve been doing to advance their development plans. The Department of Energy website has a number of press releases which track progress on the intergovernmental level. On a superficial level, there’s plenty of information available. But the process is not transparent - who’s been lobbying, what their personal connections are, activity and meetings that have taken place, who’s been leading this concept from the outset, and so on. And to date no ‘hard’ questions have been asked about it in the mainstream media or by public representatives in the Dail, as to what it represents in terms of energy policy or its economic viability.

    What’s going on at a beacon hill near you may have absolutely nothing to do with any of this. Your best bet might be to make enquiries at local level - local council, TDs etc.

  22. Eureka Says:

    Jeez. This is getting more input than the poor CF kids.
    Wtf is wrong with people?

  23. Fungus the photo Says:

    Shill quality is really low now….

    This is a terrible deal, as the rest of the world realizes wind power of this kind makes no economic sense, it will interfere with genuine green projects. The idea is to cripple Ireland, using whatever is in fashion, to do so.

    When will Ireland get a dedicated anti-corruption agency?

  24. Richard Tol Says:

    @Eureka (12:08)
    2+2=4, innit

    @Veronica
    Thanks. This is indeed an open secret. But people will not get excited until there are facts on the ground, by which time it is too late to change anything meaningful.

  25. veronica Says:

    @Richard,

    Sadly, you are right. Worse, this is about a renewable energy export opportunity for mainly homegrown Irish-owned entities, not large global oil corporations whose product pollutes the atmosphere, so challenges risk being dismissed as ‘anti-patriotic’ and worse. Highlighting the fact that there are issues that merit robust public discussion, as you have done in this blog, might start to get a few people thinking though.

  26. Brian Woods Snr Says:

    @RG: “The cost in terms of oil of large scale wind systems is significant and ongoing. So why do it? Wind requires huge on-going costs in the maintenance cycle.”

    Costs? If you mean energy costs, you’re correct. These costs are’invisible’ - its not money!

    “We must drop the stupid prejudice against the atom when what awaits us is an extreme marginalization due to a new energy cost paradigm. ”

    I fancy our ‘prejudices’ are hardly stupid given our experiences with the Nuclear Industry. However, small Thorium reactors would suffice. You just need a sustained PR campaign, and, wean folk away from the stupid notion that electrical energy is ‘green’. Its no such thing.

    “Nuclear will give us the opportunity to build big, clean industries here in Ireland.”

    Wishful thinking Robert. Very wishful! Ireland’s ‘industrial’ future is down on the farm. Unless those fracking freaks are stopped. And folk are worried about a trace of Shergar in their burgers! What about mutagenic toxins in their freshwater aquifers? We’ll see.

    “Where do they think the energy will come from? Divine intervention?”

    Probably! Its hard to get folk to think constructively about a complex problem. However … … Hot lunches! Cui bono?

  27. Eureka Says:

    Has anyone ever totted them up:
    Wind + biofuel + tidal + wave + new hydro?

    Re the hydro - we could be doing more here couldn’t we?

  28. veronica Says:

    @Eureka,

    SEAI reports tot them up regularly. As do government reports to EU on policy compliance with climate change targets, various environmental directives, renewables penetration targets etc. You’ll be knee deep in information in seconds; cogent analysis is sparse however.

    As for hydro - we exhausted our potential for large scale hydro projects a long time ago. Most of what we did then would not be allowed to go forward today - for reasons of environment and ecological protection.

  29. Sporthog Says:

    The problems as I see it are..

    1… Visual pollution of the countryside.
    2… Road / track pollution of the countryside / bog, as each wind generator will have to have a dirt track going to it… 750 windmills will require 750 little dirt tracks. see here… http://www.masterresource.org/wp-content/uploads/2010/04/Part-IV-Wind-Turbines-1024×732.jpg

    3… Little or no jobs to speak off, lets face it…does Ireland make any of the components at the present time?
    4…Noise pollution.. swishing sound of the blades must produce some noise.

    On the other hand……….

    1… Global warming / climate change is definitely occurring.. the only surprise is that it is occurring at a much faster rate than anybody has previously recognized. This is a extremely urgent problem, which is going to bury civilization if we don’t act soon.

    2… If Ireland has resources which are bountiful.. then I agree we can export this energy.

    3… But trust is not going to develop around this project if the mantra of thousands of jobs will be created when NONE of the components are made in Ireland.

    4… Even if power from wind is more expensive than other conventional fuels then I think there is a premium to be paid to protect the environment. But how much of a premium? Otherwise we could end up killing off industry in Ireland.

  30. dylansgoneelectric Says:

    I’m not surprised by the government’s enthusiasm for the project as there is so much lobbying around the fact that we have this great resource from SEAI (who should know better), WEAI,Mainstream, Greenwire, Spirit of Ireland etc.

    @Richard
    I’m a bit surprised by this:
    “There are no royalties on wind (and EU competition law prevents the introduction of royalties on wind-for-export only)”
    isnt this a little like asking Saudi’s to sell oil for the cost of production, or Norway to sell its hydro resource at marginal cost?

    Even if we wanted to swallow the environmental cost, why would if we cannot profit from it? Logically export price is set by the subsidy in the receiving country, but if we have such a large resource this subsidy would revert to a lower cost based on our marginal cost, rather than the cost to the importing country (which is running out of options for renewables).

  31. Richard Tol Says:

    @DGE
    Ireland can levy royalties on wind, of course, but then it would have to levy royalties on all wind, domestic and exported.

  32. Niall Says:

    @ Richard T

    Surely the best way is to wrap them into one of the Government’s new fangled REITs to ensure no tax is paid!

  33. EWI Says:

    The trouble is they are all of ‘like mind’ – and we all know what that may tow in its wake. It’s getting past time for some enterprising journalist or parliamentarians to ask hard questions, or post a couple of FOI requests about process, and lobbying, and networking at all levels in respect of this project. Otherwise, one fine morning we may wake up to the announcement of a ‘done deal’ to which it would be deemed unpatriotic or ‘anti-environment’ or ‘anti-jobs’ or , god help us, ‘anti- Ireland’s recovery’ to even raise a critical question.

    Dear oh dear. If this were a nuke plant the same suspects would be praising it to the hilt.

    Curious about how Mr. Tol and Mr. McCarthy are dead set against any indigenous renewable power generation in this country. Unsurprising to see everything including the kitchen sink getting thrown in - even down to generous use of the adjectives “English” and “British” to describe such enterprises. I wonder what on earth they may be getting at here….?

  34. Richard Tol Says:

    @EWI
    Nuclear is not an option for Ireland, as I’ve argued at a number of occasions, including ones trolled by you.

  35. JeromeK Says:

    Maggie makes an important point that is beyond NIMBYism.
    Ireland is a small country, so any major development has a significant visible impact on the skyline. Just how many turbines are required to provide the UK with energy?

    Tourism is identified as a key sector to bring foreign revenue and support employment especially in rural areas. If every landowner gets a chance to lease their hilly bogland for wind turbines, you can say good bye to my Euro and many foreign Euros/pounds/dollars as well.

    Are we prioritizing the Renewable Energy sector over tourism, the way we prioritized farming over fishing 40 years ago when joining the EU?

  36. veronica Says:

    @Richard
    +1

    @Jerome
    The Minister is on record in the Dail and in the media that there will be no “windmills a every crossroads” involved. Further, that no wind-for-export projects will be developed at a cost to the Irish taxpayer. To what extent the state agencies and public servants involved in developing this initiative have taken sectoral impact/trade-offs into account is unknown. Transparency is thus a major issue. If we had transparency, it would also throw some much-needed light on the question of viability of this proposed scheme. As Richard has noted above, the risk is that by the time all is revealed it will be too late to change anything meaningful.

  37. Maestonom0 Says:

    “From an Irish perspective this is not selling the family silver; this is giving it away. There is no money staying in Ireland that I can see. ”

    As incompetently implemented as this eventual energy exchange might be, it’s ultimately not about money. It’s about giving our little backwater island some reason to perpetuate. In all honesty, there’s nothing wrong with nuclear, if it’s done right. The problem is it’s been historically done wrong by the likes of GE.
    Politically, the oil companies still have all the power so a diesel plant that recycles emissions might make more sense. Wind or hydro are acceptable too though.

    We don’t really sustain any home-grown industry in Ireland. They all sold out or sold us out a long time ago before that could ever get started.

    The vision I have of the future is the scene of a farm of rusty multi-tonne blades, sitting below uranium enriched clouds in a post-apocalyptic world.

  38. Ossian Smyth Says:

    In short, this could be a great project if done well and a bad project if done badly, an objective analyst would examine both scenarios and recommend policy actions to follow the better course.

    And Richard, half a billion is a 9 figure sum last time I checked.

  39. Richard Tol Says:

    @Ossian
    I stand corrected.

  40. Sporthog Says:

    @ Veronica, Jerome K.

    Windmills at every cross road.. beyond NIMBYism..

    It would appear that these wind generators are so big that it will be possible to see the wind generator from 10 cross roads away perhaps more!!

    I’m not against wind power… however being told lies about the project insults me.

    Minister Rabbitte mentions jobs to be created. Yet he has no understanding of electricity or wind power, not even it’s component parts. Yet he pontificates about thousands of jobs being created.

    I am asking……. Where will the jobs be created?

    Has there been an announcement of a new factory which will be opened in the midlands to make the blades? No. What about the gearboxes, generators, control systems, the steel columns?

    So in short……… no factory announcements, no assembly lines no fabrication of parts…………. yet Thousands of New Jobs????????

    It does not add up.

    Why can’t we have a break down of jobs to be created by the persons involved in these schemes?

  41. Ossian Smyth Says:

    re: jobs. I think everyone expects promoters to overstate their job creation prospects.

    The UK government produced a report last year, estimating the direct employment and revenue benefits of onshore wind. As with Ireland, in the UK nearly all wind turbines are expected to be imported from continental Europe.

    Summary is they found 864 UK jobs per GW of onshore wind and €33m annual benefit to the exchequer. Ireland has approx 2GW installed already, another 2GW in the pipeline to meet 2020 targets and this MoU envisages a further 3-5GW for export.

  42. veronica Says:

    @ Sprtshog

    Tall as Liberty Hall, by all accounts, these things are. Or three times the height of the conventional windmill.

    Check out http://www.mainstreamrp.com, site of one of the main developers, for job creation ‘figures’. According to Eddie O’Connor, his company is in discussions with industrialists re possibility of locating an assembly or some other sort of manufacturing unit here…

    While you’re on the site, it may be worth having a look at the company’s board members, several of whom have well-established entrepreneurial credentials and networking track records that enhance their credibility at elite levels of our system.

    It goes without saying that anyone who wants to get the ear of this government on any project idea needs to centre their proposal on jobs’ potential. Companies are entitled to make claims based on their vision and assessment of a project’s potential; it’s a matter for government and its agencies to make a judgement call on the substance of such claims. Your point is well taken.

  43. Sporthog Says:

    @ Ossian, Veronica,

    Thanks for the info…. however…

    864 jobs / GW installed capacity is not a lot of jobs when compared to our unemployment numbers.

    33m / GW installed capacity is again (unfortunately) not a lot of money when compared to our debt, or even just paying OA pensioners.

    Whilst we are constrained in making electricity TOO expensive… it is becoming obvious that this idea of pumping electrons to the UK is not going to reduce our unemployment numbers significantly nor is it going to prove a windfall and help reduce our debt by any significant amount.

    Veronica, I agree about “getting the ear of the Govt”, but I wish the people involved in this would be more honest about job creation numbers.

    I’m tired of being lied to…………. it’s nothing but forked tongue and false promises.

    It will be interesting to see if any journalists start to pin down definitive answers when interviewing the promoters of this project.

  44. Richard Tol Says:

    @Ossian
    Thanks for that link.

    864 jobs/GW is more credible than Mainstream’s 8,000 jobs/GW.

    However, that report does not count the job losses in the non-wind part of the power sector, and it does not count the job losses due to dearer electricity.

  45. Ossian Smyth Says:

    Increased trade lowers prices (see “The Wealth of Nations” by A Smith)
    Increased supply of a good lowers prices. (see John Locke, 1691)

    Future high oil and gas prices pose an economic threat which is mitigated by increased supply of domestically produced renewable energy.

  46. Robert Glynn Says:

    @veronica

    Where are you going with ‘tall as Liberty Hall, by all accounts,”?

    These things are three and a half times as tall as Liberty Hall. The big 7M/W units are 655 feet high including arm span.

  47. Brian Woods Snr Says:

    @ OS: “Increased trade lowers prices (see “The Wealth of Nations” by A Smith)”

    Yes, and, no Ossian. Smith does qualify this by alluding to the likely asymmetrical aspect of all types of trades. Locke was an unashamed apologist for the British colonists in the Americas. He provided the philosophical and legal justification for the confiscation of land that had been ‘worked’ for millenia by the natives.

    Check out Erasumus Peshine Smith* for a better explanation of trade (internal and external). He praises Smith to some extent, but shreds Ricardo. And if you have the stomach for it: Robert Mundell: 1961. A Theory of Optimum Currency Areas. Am. Econ. Rev. 51: (4), 657-666.

    * details are on Dr Michael Hudson’s website: http://www.michael-hudson.com/

  48. Ossian Smyth Says:

    Thanks, Brian.

  49. veronica Says:

    @Robert Glynn

    Crikey! That big?

    @Sportshog,

    If the corporates are exaggerating the jobs figures to the extent implied by that UK study, then they must be very confident that they won’t be publicly challenged on them. Also, as Richard points out, the report takes no account of any displacement impact within the energy sector.

    Exaggerating job creation potential is called ’spin’ by the way, since no-one can predict the future development of this initiative. There may turn out to be no net jobs gain over the long term. Then again, there may. But surely, agencies and officials, and Ministers, would have the ‘real’ figures nailed down?

  50. dylansgoneelectric Says:

    @Ossian
    The comments about trade relate to free-trade. The UK job figures relate to an heavily subsidised national industry and are subject general equilibrium effects as noted by Richard. To the extent we are replacing production in the UK, these effects continue to apply (ie job losses due in other power generation, job losses due to higher prices). Of course these losses are in the UK. However, if we really have a comparative advantage in wind electricity production, then it would be reasonable to assume we have a lower job intensity per gW here.

    On the subject of interconnection to France, I hope Eirgrid produce a better cost/benefit analysis than the EWIC one on the CER website. Furthermore I hope they try and assign the costs/risk to parties other than the Irish customer.

    They got a very easy ride on the EWIC.

  51. Sporthog Says:

    @ Veronica,

    Thanks for the reply.

    “But surely, agencies and officials, and Ministers, would have the ‘real’ figures nailed down?”

    I would not bet on it, there is no chance that the Chimpanzee’s who walked Ireland into a mess on almost every front (health, economy, financial) will find a way out of it. The enemy is among us.

    It does not say much for the maturity or intelligence of a nation if “Spin” is allowed to trump basic logical common sense.

  52. veronica Says:

    @Sportshog,

    The art of ’spin’ is hardly unique to Irish political culture. In fact, it could be argued that in its current manifestation on the Irish political scene it’s largely based on templates borrowed from US and UK political marketing practices. The importance of painting the best gloss possible on a political message, and ensuring its effective dissemination, though, is as old as politics itself. It could hardly be otherwise. Mechanisms to that end evolve and change in line with expansion of media opportunities and availability of media technologies. Corporate ’spin’ has also been around forever, as an offshoot of marketing or branding, whether directed at shareholders and investors, political elite groupings, or the consumer base. The problem is that political communication has adopted the corporate/commercial format and, in the process, shed any vestiges of authenticity in favour of the tactics of ’spin’.

    Does it work? Has it damaged public confidence in politics within democratic societies? Answers appear to be ‘No’ and ‘Yes’ respectively. Certainly, national and international polls would tend to support the latter content although spin overload is just one factor in public loss of faith in politics and its institutions. The current political elite appear to forgotten Lincoln’s observation a century and a half ago: ‘You can fool all of the people some of the time and some of the people all of the time but you can’t fool all of the people all of the time’.

  53. Eoghan Says:

    For info.

    Prior information notice from BNM that looks related: http://www.mytenders.ie/search/show/Search_View.aspx?id=JAN404829

  54. Polly Says:

    Planning permission pending for 22 turbines in North Tipp.
    Height 126.6 metres

  55. mary Says:

    I find it crazy that wind farms are proposed for land held by Bord na Mona, that possibly still contain areas of deep peat. How can the Irish government and for that matter the British government call energy development on bogs as renewable and as a means of off-setting carbon. Damage to the peatlands carbon store during wind-farm development and subsequently surely renders it a non-renewable enterprise. We have so little respect for the midlands of Ireland with vast areas of open cast mining in the form of peat extraction we now want to add massive wind farm development. Can we not look towards developing other sectors that are sustainable, such as eco-tourism, that actually give something positive to rural areas. This is a well documented untapped area, that various conservation organisations and academic have been telling us about.

  56. isMise Says:

    Apart from the effects of wind turbines effects on people and property account needs to be taken of the effect on horses, particularly race horses.

    Some of these wind farms are planned for Kildare, an area where horse racing establishments are very common. These horses are very highly strung and take flight at the least disturbance. If a shadow from a wind turbine crosses the horses line of sight this is likely to make the horse take off at a rate of knots injuring himself and possibly the jockey.

    Tony McCoy in the UK put plans on hold for a racing stables in Baydon Meadows until planning permission was refused. There is also a study linking the presences of wind turbines to foot deformities in new-born foals in Portugal.

    Any guidelines that are drawn up with regard to wind farms also need to take account of minimum set back distances from training and racing yards and indeed paddocks.

    Given the significant amount of employment that the horse racing industry provides it would be absolute madness to put those very real jobs at risk.

    When you start adding up fictitious figures for jobs in the wind farm industry you should also include a figure for actual job losses in the horse racing industry should one or more of these establishments relocate.

  57. Maggie Says:

    I am just a simple rural dweller who loves mountains. I response to Is Mise (last post), fair play to AP for achieving planning-permissionl refusal around Baydon in West Berkshire. There is a direct historical connection between Lambourn: the home of British flat racing and Ballyroan, County Laois: in 1599 The Earl of Essex was routed by Rory O’Moore at the Pass of the Plumes, Ballyroan. An archway still exists behind St Michael and All Angels Church in Lambourn, which was original entrance to said Earl’s property. The spirit of the O’Moore victory still exists in this rural area and Mainstream/Gaeltech also Mr Pat Rabbitte will be fought tooth and nail in their major-industrial plans for this area of the south Midlands of Ireland. There is no polarisation in the community - theres a great deal of sympathy for individual landowners who now know they have been conned. €1000 paid out to each individual landowner to sign a secrecy clause is not enriching.
    As late as 06 September 2013, the IFA (who have allegedly been compromised) issued “Harnessing Ireland’s Wind Resource for Renewable Wind Energy Equipment”. Section 2.1.9 states ‘Classification of agricultural land with wind-energy equipment’: when large scale wind turbines are built on agricultural land, then the area of the land on which the turbines are built s no longer classified as agricultural. Therefore the land may not be subject to agricultural relief’.
    Thus ‘large scale industrial turbines’ are proposed to be sited in industrial complexes of circa a hectare of land for each or around fifty hectares in the small Ballyroan/Timahoe area of south Laois, with associated wide-road infrastructure.
    This proposed development is causing major local trauma. Is it planned to depopulate the whole area? Nobody knows. Mainstream were to hold an information day last week on 02 October 2013 in Timahoe, Laois. They did not cancel. They did not turn up.
    As this is an economic blog, will somebody please explain why? There will be few jobs. Have national politicians once again been compromised, or are they idiots? What are the economic benefits for Ireland?

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