Having just officially opened its first developed wind farm, Bord Gais Energy (BGE) plans to bring a second facility on stream in 2012 as part of a €400 million investment programme to create a further 250MWs of wind energy over the next three years. Bord Gáis Energy’s first developed wind farm, Ballymartin Wind Farm, is located at Mullinavat, County Kilkenny. The second windfarm to become operational in 2012 will be Garracummer Wind Farm in County Tipperary, which will bring an additional 42MW of wind energy online.

Bord Gais Energy is a key player in the Irish wind energy market and has 15% of the installed wind capacity in Ireland at present. The company owns and operates 132 turbines on 13 wind farms in eight counties – Kerry, Cork, Limerick, Clare, Tipperary, Kilkenny, Donegal and Tyrone. The company’s long-term investment in renewable energy reflects and supports the Government’s target of having 40% of electricity produced by renewables by 2020. It is envisaged that wind energy will provide the largest source of renewable energy to achieve these targets.

John Mullins, chief executive of Bord Gais, comments: “The launch of Ballymartin Wind Farm is a significant milestone in Bord Gais’ renewable energy agenda. At present, our windfarms can provide energy to 150,000 homes across this country, and by the end of 2012, this will increase to 180,000 homes. We are committed to providing a sustainable energy product for our customers and we are actively pursuing a portfolio that reduces the carbon footprint associated with providing this energy. Long-term investment in the development of Irish wind is a cornerstone of our investment strategy and we will ensure Ireland maximises the benefit of one of its most precious indigenous resources – the wind.” In the past five years alone Bord Gais has invested Eur2 billion in the Irish economy.”

Bord Gais Energy has welcomed the announcement by the Commission for Energy Regulation (CER) that it will deregulate the small and medium business segments of the gas market on October 1st 2011. This announcement means that the small and medium business gas market will be fully liberalised from that date and that the CER will no longer set or approve tariffs for small business gas customers.

The ‘Roadmap for Deregulation in the Non-Daily Metered Retail Gas Market’ also states that, while the CER will carry out a further review of the roadmap for the residential sector later in the year, Bord Gais Energy will remain as a regulated supplier until its market share has fallen to at least 60%. No decision has been made at this stage concerning retention of the Bord Gais Energy brand.

“We welcome the CER’s decision to deregulate the small and medium business segments of the gas market. This is good news for small and medium business customers as it means that from the 1st October 2011, Bord Gais Energy will be able to compete on an equal basis for the first time and offer improved products and services to our business customers,” says John Mullins, chief executive of Bord Gais.

John Mullins, chief executive of Bord Gais.

Bord Gais also welcomes the Commission for Energy Regulation’s commitment to review the roadmap for deregulation of the residential sector later this year. The energy provider would like to see full deregulation take place as quickly as possible but is encouraging the CER to take account of progress in the dual fuel market such as the bundling of gas and electricity products.

John Mullins comments: “We are disappointed at the indication from the Commission that Bord Gais Energy’s market share threshold for deregulation of the residential sector will almost certainly be 60% or lower, before we are allowed compete on equal terms with other suppliers. We have pointed out on many occasions that the gas market is radically different to electricity, particularly in terms of ease of entry for competitors. We would like to see full deregulation take place as quickly as possible.”

He continues: “We also remain of the view that any requirement to rebrand Bord Gais Energy’s retail business is unnecessary. Rebranding is a costly exercise and in the current environment, with price rises looming on the back of significant increases in international wholesale prices, we believe this is an unnecessary expense which will ultimately be borne by the customer. The Bord Gais Energy brand is a valuable asset; it does not impede the proper functioning of the market and therefore it is not in the shareholder or consumer interest to replace it.”

Bord Gais Eireann is showing strong growth in its gas and electricity businesses, continued development of new assets and a significant increase in its energy customer numbers. Despite the challenging domestic environment, the company performed well in 2010. Turnover grew by 12% to Eur1.51 billion, while profit before tax remained relatively stable at Eur120 million. EBIDTA increased year on year by 8% to Eur354 million before exceptional items.

Concerns during the period included the increase in international wholesale energy prices and a significant uplift in customer bad debt. By the end of 2010, Bord Gais had approximately one million customers, including 460,000 electricity customers.

The development and acquisition of significant power generation assets is a strategic priority for Bord Gais, so the commissioning of the Whitegate Power Plant in County Cork was a major landmark for the company in 2010. Whitegate is one of the most efficient electricity generation facilities in the world today. It is the company’s first major gas-fired power station and cost Eur400 million to develop.

In 2010, the company invested Eur200 million in capital projects to support the delivery of a balanced portfolio of secure, competitive and efficient energy solutions, including renewables, to customers. This brings the company’s total capital expenditure in the last five years to Eur1.97 billion.

John Mullins, chief executive of Bord Gais.

“The 2010 performance sees the company on target to meet the objectives set in out in the five year strategic plan published in 2008,” says Rose Hynes, chairman of Bord Gais. “Bord Gais Eireann is continuing to make substantial progress with key milestones being realised such as the achievement of one million customers, continued investment in developing wind farms and alternative technologies and the commissioning of Whitegate.”

However, the issue of bad debt reached a critical level in 2010 and Bord Gais has made a provision of Eur26.4 million in its 2010 accounts.

John Mullins, chief executive of Bord Gais, comments: “Looking forward, international wholesale energy prices remain a concern and this will put increasing pressure on prices throughout 2011. Another key challenge facing the company this year is that Bord Gáis is the only regulated provider in the gas sector, and as such, faces considerable constraints in terms of its ability to compete on a level playing field. This needs to be addressed urgently.”

At a recent meeting of Irish and international ocean energy experts, John Mullins, chief executive of Bord Gais, spoke of his concern that not enough investment and planning is being put into developing Ireland’s ocean energy resources, an industry which could create up to 70,000 jobs and deliver a cumulative benefit of €120 billion to the Irish economy.

John Mullins points out that as Ireland searches for a more sustainable economic model, we must look at our natural resources, including the potential of wave and tidal energy. He welcomes the publication last November of the draft Offshore Renewable Energy Development Plan but says it needs to spell out clearly what Ireland is going to do and how, to develop offshore renewable energy with specific time-bound actions.

“Energy infrastructure in Ireland over the next 10-20 years has to be about developing and facilitating national energy security of supply and not just accessing the cheapest sources of energy in the short term. Ireland needs to be decoupled from the international price of oil or else many aspects of our economy will be seriously impacted by rising energy costs across electricity, heating and transport. We must invest now for this scenario and not when the peak oil shock comes,” he comments.

John Mullins, chief executive of Bord Gais.

According to John Mullins, ocean energy has the potential to become a strong export industry for Ireland. “A new Government must learn the lessons of previous years when our economic development was blinded by property. Ireland has some of the best wind and wave resources on the planet and our technology in this area is world-class. We cannot waste this intellectual capital, it must be nurtured and invested in now,” he adds.

Although projects such as the OpenHydro and Wavebob developments were being invested in by energy companies, as a whole, Ireland is currently sending a signal of having little ambition in the ocean energy industry. “I am calling on Government to set up a ‘one-stop’ shop to facilitate the development of this industry in Ireland, coordinated by the Department of Environment, Heritage and Local Government. We need a strong proactive policy and direct investment to ensure that our country maintains and develops our expertise in ocean energy, bringing jobs, investment and long-term security of energy supply to our island,” he says.

Bord Gais Energy is taking a shareholding in OpenHydro, the Irish tidal renewable energy company. OpenHydro and Bord Gais Energy have also formed a joint venture focused on the development of a utility scale tidal farm off the coast of Ireland.

Bord Gais Energy will initially invest Eur1million in OpenHydro, which specialises in the design and manufacture of marine turbines for generating renewable energy from tidal streams. Bord Gais has also agreed to invest a further Eur1million on achievement of certain milestones relating to the tidal farm development.

“We are delighted to have secured this investment from Bord Gais Energy and to have established this exciting new joint venture focused on the development of Ireland’s first utility scale tidal farm,” comments James Ives, chief executive at OpenHydro. “The additional funds will be used to support OpenHydro’s continued expansion in turbine production and deployment capability.”

John Mullins, chief executive of Bord Gais, says: “This investment – and the formation of the joint venture to develop utility scale tidal generating capacity off the coast of Ireland – will support our ambition to achieve early mover advantage in tidal energy development in this country. We are delighted at the opportunity to work with OpenHydro, which is an industry leader in this technology, and to be at the fore front of the development of marine renewables.”

OpenHydro has now raised Eur15.4million over the past twelve months from existing shareholders and new investors.

Currently employing over 50 people, OpenHydro has a project portfolio spanning the US, Canada, France, Scotland and the UK’s Channel Islands with utility partners including EDF, Nova Scotia Power and SSE Renewables. Last year, OpenHydro, in conjunction with SSE Renewables, was awarded licence rights by The Crown Estate in the UK to develop a major 200MW tidal farm in the Pentland Firth, off the northern coast of Scotland.

Bord Gais has officially opened its first major electricity generating station at Whitegate in Cork. The 445 megawatts gas-fired Whitegate Power Plant is one of the most efficient electricity generation facilities in the world today and is a key strategic development for Bord Gais. It is also a key development for the State as it enhances the country’s security of supply and energy mix.

The €400m investment provides power for 445,000 homes and at the peak of its construction 800 people were employed on site. Construction started at Whitegate in March 2008 and it was one of the safest construction sites in Ireland with over 1.8 million man-hours and 19 months accident free.

“The opening of Whitegate is a significant milestone for both Ireland and Bord Gais. Whitegate is a very tangible symbol of how Bord Gais has transformed from a gas supply utility to a dual fuel provider to over one million customers,” says Rose Hynes, chairman of Bord Gais. “The Whitegate power plant will add significantly to Ireland’s security of energy supply while contributing to a cleaner environment.”

Bord Gais now has over 420,000 electricity customers following the launch of its Big Switch campaign in February 2009.

Whitegate Power station is a Combined Cycle Gas Turbine (CCGT) and with an efficiency of 58.5% is the most efficient power station in Ireland. The principal contractors were Gama and General Electric and the project was completed on budget. After extensive testing the power plant was officially commissioned on 8th November and has been tendering to provide electricity within the Single Electricity Market (SEM) since then.

“The completion of the Whitegate power plant is hugely important to us in strategic terms. It provides the backing for our retail electricity business, which continues to grow,” points out John Mullins, chief executive of Bord Gais.

A group of Irish business leaders has written to the Taoiseach asking him to bring the proposed legislation on climate change to the Oireachtas before the end of the year. ‘Irish Corporate Leaders on Climate Change’ say the legislation is urgent for a number of reasons. It will bring the clarity and certainty to government policy that business needs to make long-term investment decisions, according to the group, and moreover, the cost of inaction far outweighs the cost of action.

The letter to the Taoiseach on the climate law was signed by Corporate Leaders for eight companies: Arup, Bord Gais, Bord na Móna, Diageo, Intel, KPMG, NTR and Vodafone.

“In light of the current economic situation, there is a risk that we will delay or not take the bold and ambitious steps needed. We believe that robust action on climate change will in fact help create a smarter, more competitive, more creative economy, deliver new high quality jobs, and set us on a path to a low-carbon, sustainable recovery,” says Gabriel D’Arcy, managing director of Bord na Mona.

John Mullins, chief executive of Bord Gais.

John Mullins, chief executive of Bord Gais, comments: “For business, the value of putting our emissions targets into law is in creating a predictable planning framework. The investment needed to move to a low-carbon economy is significant and the payback period long. To achieve the desired predictability, the targets set by the law need to be clear and credible.”

Corporate Leaders on Climate Change also welcomed the publication of draft climate legislation by the Oireachtas Committee on Climate Change and Energy Security recently. Like the cross-party Bill produced by the Committee, the Corporate Leaders have called for the Department of the Taoiseach to be given overall responsibility for climate policy in the final bill passed by the Oireachtas.

Tina Roche of Irish Corporate Leaders on Climate Change explains: “We believe that the Department of the Taoiseach should assume overall responsibility for climate change policy under this new legislation. Only the Taoiseach has the necessary authority to broker a deal among cabinet colleagues, as departments and their ministers seek the largest possible share of the national carbon budget.”

Irish Corporate Leaders on Climate Change are also calling on Irish businesses to sign the global Cancun Communique, which sets out the case for action on climate change with renewed urgency. Nearly 1000 businesses signed the Copenhagen Communiqué last year making it the definitive progressive business statement on climate change.

These businesses realise that a strong and effective international climate framework is essential to allow the global private sector to respond to the threat of climate change and make the most of its opportunities. Irish companies have until Friday 12th November to join this growing movement of international businesses in support of ambitious international action on climate change.

Wavebob, the Irish technology company specialising in ocean wave energy conversion, has secured a grant of $2.4 million (€1.83 million) from the US Department of Energy to prepare for a commercial-scale wave energy demonstration project planned for US waters in 2013. Bord Gais will also invest €1.8 million in Wavebob, bringing the total investments to €3.6 million.

The grant forms part of $37 million in marine and hydrokinetic energy grants announced by the US Department. It will be used to further develop Wavebob’s wave energy converter (WEC), which is currently in pre-commercial development. At full scale, the device is capable of producing in excess of one megawatt of energy with average output of over 500kW at sites in the North Atlantic and Pacific oceans.

The ‘Wavebob’ was one of the first WEC’s in the world to successfully produce electricity from ocean swell in 2007. The US Department of Energy grant will be used specifically to develop and test the company’s advanced power take-off device. The project benefits from support and collaboration with Vattenfall, one of Europe’s largest utility companies, and Chevron and Lockheed Martin in the US.

“The Department of Energy’s funding program for marine hydrokinetic technologies is vital to the development of both products and markets, at home and abroad. We are honoured to be selected for this award through a highly competitive process, and to be working with a distinguished team of leaders in maritime technology”, says Derek Robertson, president of Wavebob’s US operations based in Annapolis, Maryland.

Scarce Funding

Andrew Parish, chief executive. of Wavebob.

Traditional sources of finance for technology development have become increasingly scarce as a result of the global economic crisis, with the result that many Irish companies are struggling to survive. On the bright side however, Andrew Parish, chief executive. of Wavebob, believes that the Irish energy utilities are making particularly good use of state assets in recognising the world-class potential of a small Irish indigenous company such as Wavebob. “This investment from Bord Gais builds on a previous technical agreement with ESBI and clearly demonstrates that Irish utilities recognise the ocean energy opportunity and are key agents of Government policy in maximizing the potential to Ireland of this immense natural resource,” he says.

John Mullins, chief executive of Bord Gais.

According to John Mullins, chief executive of Bord Gais, Ireland has one of the best wave resources off its west coast, “It is important that utilities such as Bord Gais foster the development of companies like Wavebob, to enable them to advance their technology. Bord Gais will be actively involved in this development and we will commit our own resources to its advancement,” he adds.

Bord Gais has launched a report on ‘The Future of Renewable Gas in Ireland’. Produced in association with UCC and Ernst & Young, the report outlines how grass and waste can be converted into natural gas that can then be used locally or piped into the national grid for distribution around Ireland. The report estimates that 7.5% of Ireland’s natural gas demand could be met by renewable gas, the equivalent of heating 300,000 homes each year.

John Mullins, chief executive of Bord Gais.

“Capturing this renewable gas resource would be a considerable step in addressing Ireland’s challenging renewable energy and waste management objectives,” comments John Mullins, chief executive of Bord Gais. “It would also help reduce our dependence on energy imports, provide jobs in the construction and operation of biomethane plants, and create new business opportunities among the farming community in rural Ireland.”

The technology is already in use in other countries: for example, farmers in Denmark and Germany have formed co-operatives to finance, build and run such renewable gas facilities. In Stockholm, the city treats municipal waste to create natural gas for use as a transport fuel. This would be an option in Ireland also, as Bord Gais is currently trialling a production-line natural gas vehicle (NGV) in its fleet. Cities such as Madrid are strong advocates of NGVs for public transport and fleet operators, to reduce both carbon and other emissions.

Dr Jerry Murphy, principle investigator in Bioenergy and Biofuels, Environmental Research Institute, UCC, explains: “Biogas is produced when feedstocks, such as organic wastes, and energy crops, such as grass silage, are converted using anaerobic digestion technology. The ‘raw’ biogas can then be cleaned and upgraded to biomethane – renewable gas – and injected into the national gas grid. Distribution of this renewable gas is optimised due to the existing, modern, extensive natural gas grid. A biomethane industry could make a significant contribution to the ‘green tech’ sector in line with Ireland’s strategy to create sustainable knowledge-driven industries.”

John Mullins adds: “What this study has found is that biomethane represents a significant and under-utilised source of renewable energy in Ireland. Undoubtedly, there are obstacles to making renewable gas a viable energy source in Ireland. However, we believe that, if the necessary parties work together, these barriers can be overcome in a relatively short timeframe. We welcome the support of industry, the SEAI, the EPA and other relevant parties in the publication of this report and look forward to working with all policy makers in the development of a renewable gas industry in Ireland.”