An over-complicated bureaucratic system is significantly hampering job creation and investment in the Irish renewable sector, according to the Irish Wind Energy Association.
IWEA chief executive Dr Michael Walsh says that excess bureaucracy and unnecessary risk is driving investors away from what should be a thriving market.
“The absence of a coordinated and cohesive system for facilitating the delivery of required installations to meet our 2020 targets is resulting in an unstable market for investment. Such is the instability that last year we saw a 58% drop (Eur265m) in the level of investment in the wind sector in Ireland,” he explains. “Investors are lined up and ready to go but the framework for investment is simply too volatile. Many rules and processes are under review and there is no overall co-ordination of the consents needed to make an investment in renewable energy in Ireland. Investors are being asked to make substantial financial commitments in advance of clarity on the regulations that will apply in the future. International financial providers are still interested in Ireland but they will no longer accept this level of uncertainty.”
Indeed, the IWEA has spoken with a number of local and international banks who said they would like to continue funding renewable projects in Ireland but are increasingly concerned about the ever changing policy framework. “We need to provide these investors with a clear set of rules that they can analyse to bring efficient investments to Ireland,” he says. “The absence of a joined up approach has resulted in wild swings in the volume of activity in the sector. For example, we installed 250MW of wind in ’06 and then just 50MW in ’07. In ’09 we had 230MW installed but last year that was down to 115MW. The real shame is that this volatility makes it more difficult for local companies to capitalise on what should be a thriving sector. They will not speculate or invest in a market that fluctuates like ours does.”
Ireland needs to install over 300MW per year for the next nine years to deliver on its 2020 targets of 40% of electricity from renewable energy sources. The IWEA’s Deloitte report of 18 months ago illustrated that this could create over 10,000 jobs in Ireland but it also warned that consistent delivery would be necessary to create a solid platform for enterprise and job creation.
Dr Walsh elaborates: “Based on current inconsistent trends we could end up trying to rush through 900MW per year in four or five years time. This instability means we will not develop an indigenous supply chain to service the market. As a result, we will have to bring in people from other countries such as Denmark and Germany that have developed their industries and skills to do this work and Ireland will have missed out on high value job creation opportunities as a result.”
However, the new Government, if it acts quickly, can eradicate these problems. “What we need is a robust management system for the industry, where official bodies communicate with each other and work to make the sector business friendly and effective. The appointment by Minister Rabbitte of an ‘Energy Tsar’ within his department to co-ordinate energy and enterprise policy would certainly be a crucial first step,” he adds. “We should also urgently commence negotiations with the UK to ensure that Irish projects can play a part in meeting the UK’s energy needs. We will have the resources to meet over 15% of the UK’s 2020 renewable requirements in a highly cost effective fashion for UK consumers. This would result in additional jobs and investment in Ireland and ongoing export revenues.”
The IWEA chief concludes: “We could be world leaders in smart energy technology and green finance but we need to stop putting barriers in the way of enterprises that want to help us meet our national targets and reduce our energy costs.”