Wind farm developers have been granted improved access to the electricity transmission grid following a change to the rules that removes a significant market risk for them. After representations from EirGrid, the Commission for Energy Regulation has changed market access rules giving 1621 megawatts of wind power, representing 131 wind farms, the prospect of improved access to the electricity market.

Previously developers who had been offered connections to the grid before 2007 had to wait for associated reinforcement works to be completed before being allowed full market access rights. Now they will be able to avail of incremental levels of market access in line with the completion of network reinforcements. Studies completed to date by EirGrid indicate that 36 wind farms, totalling 529 MW, will get improved access to the grid following the rules change. The remaining studies will be completed by the end of the year.

Dermot Byrne, chief executive of EirGrid, says: “Ireland has some of the most ambitious renewable energy targets in Europe – 40% by 2020. While this undoubtedly presents challenges, EirGrid is committed to ensuring a secure, efficient, reliable power system which is capable of meeting these targets. We will continue to work closely with generators to find solutions to these challenges.”

He adds: “Measures such as this one are very positive and will allow generators to benefit from the incremental increases in network capacity resulting from work carried out under our Grid25 Grid Development Strategy. It also provides a stronger foundation for those who have not yet completed development to advance their projects.”

Over 141 gigawatts (GW) of offshore wind energy capacity is built, under construction, consented, or planned in Europe – enough to power 130 million average EU households. These wind farms – representing 35 times more capacity than the just under 4 GW installed today – would provide 13.1% of Europe’s total electricity production.

The European Wind Energy Association (EWEA) has published its latest report analysing all existing offshore wind power projects in 17 EU member states, mostly in north-western Europe. New offshore wind farms with a capacity of 5.6 GW are currently under construction in the UK, Germany and Belgium.

“There is huge developer interest in offshore wind energy across Europe,” comments Arthouros Zervos, President of EWEA. “Developers, governments and investors realise that offshore wind energy offers the growth and jobs that Europe desperately needs.”

169,000 jobs in the EU offshore wind energy sector are expected to be created by 2020, going up to 300,000 by 2030, according to the EWEA report. European companies are currently global leaders, with over 99% of the world’s installed offshore capacity in European waters.

Areas for growth in offshore wind energy include turbine and turbine component manufacturing as well as substructures, vessels, electrical infrastructure including high voltage subsea cables, and ports. However, the new report warns that if the offshore wind energy sector’s potential is to be fulfilled in Europe, it is imperative that sufficient levels of financing are brought in by investors. Also crucial are the financing and building of offshore power grids in the northern and Baltic seas, which would enable huge amounts of electricity to be transported to consumers.

For the industry itself, there is a risk of a high-voltage subsea cable shortage in the next few years which has to be addressed urgently, says the report, as well as a possible shortage of trained workers.”The offshore wind energy sector can replicate the success of the onshore wind technology development, which is now a mainstream source of power competitive with new coal and gas plants, and a major European industry,” says Arthouros Zervos. “However, to ensure this happens, EU decision-makers need to set ambitious renewable energy targets beyond 2020, invest more in research and develop offshore grids.”

Dublin-based renewable energy and energy storage group Gaelectric and XEMC VWEC, part of the Chinese XEMC Group, are co-developing three Irish wind farms. The venture will see the first commercial deployment of XEMC VWEC wind turbines in Europe with the deployment of the new XV90 turbines at three Gaelectric on-shore sites – Roosky in County. Roscommon, Leabeg in County Offaly and Crowinstown in Westmeath – totalling 13.6 MW of wind power. The value of the initial co-development projects amounts to Eur18 million.

XEMC is one of the larger industrial groups in China. Through its acquisition of Dutch renewable energy technology firm, Darwind in 2009, XEMC has consolidated its position as leaders in the development of Direct Drive Permanent Magnet Generator technologies which have distinct technical and commercial advantages in a wide range of applications. Direct Drive PMG turbine technology avoids the requirement for generator gearboxes, thereby reducing weight and improving reliability. XEMC is supporting the further development of this PMG technology with its development of a 5 MW turbine for deployment in off-shore settings. A prototype of this offshore dedicated 5MW turbine has recently been installed at a turbine test centre in the Netherlands.

XEMC group chairman, Zhou Jianxiong, comments: “Gaelectric’s pipeline of wind farm projects in key locations, combined with our shared focus on innovation in renewable energy technologies, makes us ideal allies in co-developing Gaelectric’s portfolio of renewable power projects. We are particularly pleased that the sites that we intend to co-develop with Gaelectric are very suited to establishing our Direct Drive Permanent Magnet Generator (PMG) turbine technology as the leading global wind generation technology delivering low service and maintenance costs, competitive pricing, and high availability and annual yield.”

“Our alliance with XEMC is a significant strategic step for Gaelectric. With the backing of XEMC’s industrial strength and technological capacity, and their track record and commitment to long term relationships, we are confident that Gaelectric’s portfolio of wind farm sites will be realised to the highest commercial and technical standards,” comments Brendan McGrath, chief executive of Gaelectric.

Bord na Mona has increased EBITDA by 12.6% to €72.7 million and profits after tax by 23% to €12.9 million for last year ending March 2011. Turnover was €382.1 million, marginally down 0.6% on the previous year.

“We are on course to meet our growth strategy through diversification. We want to strengthen and streamline our existing businesses and grow further by investing in new long-term sustainable opportunities such as renewable energy and water. We have made significant progress towards achieving these goals during the year,” comments Gabriel D’Arcy, chief executive of Bord na Mona. “The company is in a new phase of diversification with a very clear focus on sustainability and innovation. Significant progress was made on our ‘Strategy for Growth’ for our combined Horticulture and Green Fuels businesses, presenting us with real opportunities to build on our current businesses in Ireland, UK, and mainland Europe.”

During the financial year, Bord na Mona took a number of significant steps in progressing its development strategy including obtaining planning permission for the construction of two major wind farms; 80 MW at Mount Lucas, Co Offaly, and 40 MW at Bruckana on the borders of Laois, Tipperary and Kilkenny, and concluding a joint venture agreement with ESB for the development of the initial phase of a wind farm at Oweninny, Co Mayo, providing a further 172 MW. The company has now received grid connection offers for all three wind projects amounting to some 490MW.

Bord ne Mona also brought into commercial operation its 116 MW peaking plant installation at Edenderry and expanded its programme to use biomass to generate electricity using 130,000 tonnes of mixed biomass in the year.

Another highlight of the year was the publication of Bord na Mona’s Biodiversity Action Plan 2010-2015, setting out projects and activities designed to enhance biodiversity on the company’s lands.

The progress made on both co-firing and wind farm developments is part of Bord na Mona’s journey toward being a leading renewable energy provider, providing up to 800 MW of capacity by 2020. By 2015 the target is to have over 50% of our portfolio from renewable sources which would provide power to over 90,000 homes annually.

EirGrid has completed its work in offering transmission grid connections to wind farms as part of the Gate 3 programme. The Gate 3 grid connection offer programme is one which has the potential to result in a three-fold increase in the amount of renewable energy on the electricity network and EirGrid has been working with the Commission for Energy Regulation and ESB Networks on the programme.

The final offer of 94 offers to connect to the transmission grid was issued by EirGrid to Coillte for a 58 MW Windfarm in Sliabh Bawn, County Roscommon.

The 94 offers issued by EirGrid under the Gate 3 Programme represent a total of over 5,400 MW of electricity to renewable and conventional generators – this would be more than Ireland’s peak demand load.

At over 4,000 MW, renewable energy generators make up nearly three quarters of all offers under the programme. There is currently approximately 1,500 MW of renewable energy connected to the system.

Completion of the programme represents a significant step towards meeting Ireland’s renewable energy targets. The Government has mandated that 40% of all electricity consumption must be met from renewable sources by 2020, the highest such target in Europe.

Dermot Byrne, chief executive of EirGrid, says: “I am delighted that this process has been completed on time. The amount of renewable energy connected to the grid has increased steadily over the past decade. In 2003 it accounted for just 4.4% of electricity usage whereas there is enough renewable generation on the system today to supply 15% of customer demand.  Ireland is making good progress towards its targets.”

Stuart Young Consulting, with support from the John Muir Trust, has released a report studying the ability of wind power to make a significant contribution to the UK’s energy supply. It concludes that the average power output of wind turbines across Scotland is well below the rates often claimed by industry and government.

Indeed, says the report, for numerous extended periods of time all the wind turbines in Scotland linked to the National Grid muster less than 20MW of energy – that is enough power for a mere 6,667 households to boil their kettles for a cup of tea.

Helen McDade, head of policy at the John Muir Trust, the UK wild land conservation charity, says: “This report is a real eye opener for anyone who’s been wondering just how much power Scotland is getting from the fleet of wind turbines that have taken over many of our most beautiful mountains and hillsides. The answer appears to be not enough, and much less than is routinely claimed.”

Stuart Young, author of the report, comments: “Over the two-year period studied in this report, the metered wind farms in the UK consistently generated far less energy than wind proponents claim is typical. The intermittent nature of wind also gives rise to low wind coinciding with high energy demand. Sadly, wind power is not what it’s cracked up to be and cannot contribute greatly to energy security in the UK.”

He adds: “It was a surprise to find out just how disappointingly wind turbines perform in a supposedly wind-ridden country like Scotland. Based on the data, for one third of the time wind output is less than 10% of capacity, compared to the 30% that is commonly claimed.”

The director of one of Europe’s leading energy producers and owner of indigenous Irish energy supplier Airtricity has warned that Ireland is being left behind in the development of offshore wind and marine generation. Addressing over 400 delegates at the annual conference of the Irish Wind Energy Association, Scottish and Southern Energy Group finance director Gregor Alexander said that this is resulting in a significant lost opportunity for the Irish economy and job creation here.

“Returns on our Irish onshore wind farms are marginal. More attractive returns are available in the UK. Of even more concern is that Ireland is being left behind in the development of offshore wind and marine generation. These technologies offer considerable export and job opportunities but Ireland is not maximising them,” he said.

Mr Alexander pointed out that for the renewable sector here to reach its true potential it needs to forge ahead with market coupling with the UK and to broaden its interconnection plans from just linking with the UK to include an interconnection to France as well.

“As a very small market in European terms Ireland, at a minimum, needs profound interconnection and market coupling with the UK. Coupling would bring economies of scale, a more diverse generation portfolio, the opportunity to export renewable electricity and ensure customers benefit from increased competitive energy supply,” he elaborated. “We would also encourage Ireland to go further seeking interconnection further afield. In Scotland, for example, we are looking to Norway and Iceland to tap into hydro and geothermal resources respectfully.”

An interconnector from Ireland to France would not only access French power in winter but it would provide an export opportunity in summer for Ireland’s generation fleet to supply France’s air conditioning load.

The Scottish and Southern Energy finance director also said that a more pragmatic approach to planning issues is also required in Ireland to bring an end to the current conflict between Irish energy and planning.

For example, SSE Renewables was recently refused planning permission on the basis of ‘the negligible probability’ that the proposed wind farm could pollute a water body some 25KM away, despite having recently completed a wind farm adjacent to a water body.

Energia will be the biggest purchaser of the renewable energy produced by Ireland’s growing number of wind farms in 2011, according to new figures from the Irish Wind Energy Association. Responding to the massive increase in demand from Irish businesses for ‘green’ power, Energia is set to grow its renewable energy portfolio by over 268 megawatts (MWs) this year.

The vast majority of this, 243 MW, will come from 26 new Irish windfarms that will become operational during 2011. This equates to 68% of the total new electricity generated by Ireland’s wind farms this year, making Energia by far the largest purchaser of new Irish wind farm power.

Peter Baillie, managing director of Energia Renewables.

Last year 115 MWs of new generating capacity from Irish wind farms was connected to the national grid, over 40%of which is in Energia’s portfolio. In 2011 this figure is set to rise to around 400MWs.

Peter Baillie, managing director of Energia Renewables, comments: “In response to the growing number of Irish businesses asking for green power, Energia’s renewable power portofolio is set to grow by 268 megawatts (MW) this year. 25MWs will come from our Energia wind farms and 243 MWs will come from new wind farms all over Ireland. This makes us by far the biggest purchaser of new wind power capacity in Ireland.”

He continues: “We have signed a large number of power purchase agreements (PPAs) with new wind farm developments all over Ireland, including locations in counties Carlow, Cork, Donegal, Kerry, Leitrim, Limerick, Mayo, Roscommon, Tipperary and Wexford.”

In addition to these PPAs, Energia already runs a large number of its own wind farms throughout Ireland in locations such as Donegal, Roscommon and Sligo. The company is also in the final stages of developing new wind farms in Caherdowney, County Cork, Meenadreen. County Donegal, and Hollyford, County Tipperary.

“We also recently raised a Eur72 million in financing for our latest group of renewable projects, bringing our total wind farm financing to Eur115m in the last two years,” he point out. “At the moment we are very focused on expanding our renewables business.”

GE has signed a ten year contract with Spanish wind developer Cobra Energia to provide advanced services for 178 GE wind turbines installed at eight wind farms across Spain. The agreement is GE’s largest wind energy services contract in Europe, and reinforces the company’s position in Europe’s highly competitive wind turbine services sector.

The agreement provides the flexibility for Cobra Energia to complete routine maintenance with GE contributing advanced solutions for advanced unplanned maintenance, troubleshooting, upgrades and parts. The GE service agreement covers Cobra Energia’s entire fleet of GE 1.5-megawatt wind turbines coming off warranty between 2010 and 2012.

A subsidiary of Spanish building company ACS, Cobra Energia operates some of the largest wind farms in Spain. Spain ranks among the world leaders in the use of renewable energy, including wind and solar.

With 308 new offshore wind turbines installed in 2010 – an increase of 51% in installed wind power capacity on the previous year – offshore wind power experienced a new record growth in Europe. In total, 883 Megawatt (MW) of new capacity, worth some €2.6 billion, were installed in 2010 in nine wind farms in five countries, making a total of 2,964 MW.

The installed offshore wind power capacity now supplies the equivalent of 2.9 million average EU households with electricity – comparable with the amounts of power consumed by the cities of Berlin and Brussels together – from a total of 1,136 offshore wind turbines. In a normal wind year they would produce 11.5 Terawatt hours (TWh) of electricity.

These figures are published by the European Wind Energy Association (EWEA) in its European offshore wind industry – key trends and statistics 2010.

Leading Countries

They show the UK to be European (and world) leader, with a total installed offshore wind capacity of 1,341 Megawatt (MW). The UK is followed by Denmark (854 MW), the Netherlands (249 MW), Belgium (195 MW), Sweden (164 MW), Germany (92 MW), Ireland (25 MW), Finland (26 MW) and Norway with 2.3 MW.

EWEA’s chief executive, Christian Kjaer comments: “With over 50% market growth, 2010 sets a new record for European offshore wind energy. Meanwhile, the 29 new offshore turbine models announced during 2010 show a growing commitment to the offshore wind energy sector by large, global industrial players, offering a real boost for Europe’s economy, its efforts to tackle climate change, create green jobs and exports while reducing our dependence on imported fuel”.

During 2010, 29 new offshore turbine models were announced by 21 manufacturers: 44 new turbine models have been announced by 33 manufacturers over the last two years.

Financing Environment

2010 saw an improving financing environment with private banks, financial institutions like the European Investment Bank (EIB), utilities and pension funds backing the sector. Two major deals completed in 2010 highlighted the brighter financial outlook: Thornton Bank C-Power and Trianel Wind Farm Borkum West both came to financial close.

“Finance remains a big challenge but we are seeing improvements with more banks and other financing institutions ready to invest in large offshore wind projects,” says Christian Kjaer.

Outlook

EWEA forecasts continued strong growth next year. Between 1,000 and 1,500 MW of new offshore wind power capacity is expected to be fully grid connected in Europe during 2011, compared with 883 MW of new capacity in 2010.

Ten European wind farms are currently under construction with a total of 3,000 MW – these will more than double the installed capacity in the 45 already grid connected offshore wind farms.

EWEA research shows that a total of 19,000 MW of offshore wind capacity is already fully consented. If constructed, it would generate 66.6 Terawatt hours of electricity in a normal wind year – enough to supply 14 of the largest capitals in Europe with electricity, including Paris, London and Berlin. Not included in this figure is large additional offshore wind energy capacity planned but not yet fully consented in the UK.

According to data from EirGrid, Ireland’s wind farms hit a new record power output level of 1250 megawatts, enough to power over 800,000 homes around Ireland.

“We have seen records in 2010 broken where there were times when we delivered over half of the electricity in Ireland from wind generators,” comments Michael Walsh, chief executive of Irish Wind Energy Association (IWEA). “As we continue to grow this sector in 2011, we are developing knowledge and skills that the rest of the world will need in the coming decade. Ireland is leading the way and showing that high wind levels are achievable which brings with it opportunities to advance Ireland’s strategies for economic renewal.”

Ireland currently has 1425MW of installed wind energy across the Republic, with over 1100MW contracted and 3900MW receiving grid connections in the next phase of Grid Connections, Gate 3. Outside of this there is more than 11GW of wind energy projects awaiting Grid connection showing the significant pipeline and opportunity to be harnessed.

“In the simplest terms, such are the opportunities ahead for us that we can export as much renewable energy as we use by 2020. If generation capacity is met, we could export up to 5,000 MW of renewable energy generation in ten years, which will be more or less what we will require ourselves. These resources could generate an annual export value of over €2 billion for Ireland,” he says.

Energia, a member of the Viridian Group, has achieved financial close for its Eur72 million investment in 51 megawatts of electricity capacity in new wind farms at Crigshane and Church Hill in County Tyrone. The development forms part of Energia’s all-island renewable energy plans.

Energia has completed Eur65 million in non-recourse project financing with Nord/LB and Rabobank, for an 18 year term. Work will commence immediately on these wind farms.

Energia is one of the most significant contributors to the achievement of Ireland’s renewable targets on an all-island basis. The company has contracted for 22 state-of-the-art Enercon E70 2.3 MW wind turbines with substantial civil works contracts awarded to Adman Civil Projects and PT McWilliams.

The Eur65 million financing was structured by Nord/LB who was mandated as Debt Advisor in summer 2008. Based on the strong project fundamentals, Nord/LB underwrote 100% of the financing in spring 2010. Rabobank International joined the financing before financial close as Mandated Lead Arranger.

Energia has now secured Eur115 million in funding for over 100MW of renewable asset development across Ireland and the arrangements are in place for the remaining funding to come from its Irish portfolio financing with RBS, Bank of Ireland and National Australia Bank.

By 2012, Energia plans to be the largest independent renewable off-taker on the island of Ireland with 740MW, around 25% of the Irish renewable market. It currently has long term Power Procurement Agreements (PPAs) in place with 255MW of operating wind farms and other renewables, with a further 485MW scheduled to be operational by 2012.

Energia is Ireland’s leading independent energy supply company with a 25% market share of the business electricity market on an all–island basis with over 65,000 customers. The company also supplies 30% of all gas consumed in Ireland by the country’s business gas users.  In addition to renewable assets, the company operates a 750MW gas fired generating station in north Dublin.

Peter Baillie, managing director Renewables, Energia comments: “We are very pleased with the vote of confidence from leading renewable lenders Nord/LB and Rabobank. We have been working closely with Nord/LB as debt advisor for the last two years to achieve this financing and we strongly recommend their expertise in the renewable sector. The addition of Dutch renewable lender Rabobank is a further vote of confidence in Energia’s renewable expertise. We are delighted to make this step change in our wind farm investment programme.”