€1bn Airtricity projects may lose out in licensing round

CLOSE TO €1 billion worth of green energy projects proposed by Scottish and Southern Energy-backed (SSE) Airtricity could lose out in the State's next power generation licensing round, writes Barry O'Halloran.

The Commission for Energy Regulation (CER) is planning to begin licensing renewable energy projects with the capacity to generate up to 3,000 megawatts (MW) of electricity over the coming months.

The regulator's documents show that a number of high-profile projects planned by Airtricity are not included in those that it is proposing to licence. The company applied to the agency after the October 2007 cut-off point.

The CER is seeking an industry response to the plan, but its chairman Tom Reeves has said that it is limiting new renewable licences to 3,000MW, although it has received applications from projects totalling 7,200MW.

Airtricity's general manager for Ireland Stephen Wheeler confirmed yesterday that it is seeking licences for wind farms with a total capacity of 800MW, equivalent to two conventional electricity plants. However, less than 100MW of its projects have been included in the list of those that the regulator is proposing to green light. Wind farms cost between €1 million and €1.5 million per MW to build. On this basis, Airtricity and its parent, SSE, would have had to invest around €1 billion to get the farms up and running.

The Arklow bank wind farm proposal and a major development for Co Mayo, are amongst the Airtricity projects that have lost out.

SSE paid €1 billion for Irish-based Airtricity last January. The pair recently announced plans to begin supplying natural gas in Ireland and to offer electricity to domestic users. Currently, Airtricity only supplies commercial customers.

Mr Reeves and his colleague Michael Tutty last week said that just 3,000MW of wind power is needed to meet the Republic's renewable energy target, to generate 33 per cent of the State's electricity needs by 2020.

The commission also pointed out that the Irish network needs new conventional electricity plants to guarantee the security of energy supplies. The CER intends issuing licences on a first-come, first-served basis. Consequently, it has excluded any applications received after October 4th.

Mr Wheeler argued yesterday that the CER's approach would prevent the Republic from meeting its renewable energy targets.

He also claimed that it was anti-competitive, as State energy companies, the ESB and Bord na Móna, are to get licences for a total of 900MW. However, applications from State enterprise, Coillte, also missed the cut-off point.

"This is a major issue for us and the industry as a whole," he said. He added that Airtricity, whose existing Irish wind farms produce 300MW of electricity, has an established track record in planning and building these facilities.

Mr Wheeler pointed out that the regulator should take factors such as this into account.