The Minister for Communications, Mr Dempsey, has indicated he is unlikely to cut future supports for wind energy projects, despite a recent plea from the energy regulator, Mr Tom Reeves. Emmet Oliver reports

In a letter sent to Mr Dempsey just before Christmas, Mr Reeves said he believed the wind energy industry could survive without subvention in the years ahead. He pointed out that subvention, via the public service obligation levy, had a direct impact on customers' bills.

In answer to a parliamentary question from Labour's Mr Tommy Broughan TD, Mr Dempsey acknowleged there needed to be a balance between supporting the renewable sector and keeping electricity prices down.

In reply to Mr Broughan, Mr Dempsey stated: "The regulator took the view that wind energy projects could be developed without special support. The regulators are entitled to their view. It is not a policy decision by me. The current policy is that, by 2010, we will provide 13.2 per cent of our energy from alternative sources."

In comments which proved controversial with the wind energy lobby, Mr Reeves wrote that there was no need to further "stimulate the sector".

In his letter, Mr Reeves said that alternative energy competitions were impinging on competition generally in the sector.

He cited the case of one supplier. "This supplier had reached agreement with a number of developers and their bankers on long-term contracts only for the developers to avail of an opt-out clause in the contracts when it became clear last week that they would be offered AER contracts with preferential terms," he said.

Mr Dempsey said that he needed to balance a number of conflicting issues when making decisions on wind energy.

"There must be fair and reasonable returns for the people who initiate these projects, but one must also take into account national competitiveness and the interests of consumers. The more grants that are made available, if one decides to go that route, the greater the cost to consumers."

Asked by Mr Broughan whether he wanted to go beyond the 13.2 per cent target, Mr Dempsey said that it was the "minimum" target at this stage.

"My objective in regard to renewable energy is to put in place regimes that will give fair and reasonable returns and incentivise bankable projects while taking into account national competitiveness and the interests of consumers. I want to see our target for 2010 being met in full, as a minimum," he said.