ESB firm in €48m deal to buy wind farm energy

An ESB subsidiary has entered a €48 million deal to buy electricity from a wind farm operated by green energy group SWS.

ESB Independent Energy (ESBIE) said yesterday that it had agreed to buy all the electricity generated by the SWS wind farm at Knockawarriga in Co Limerick over the next 15 years.

The deal is worth €48 million over the lifetime of the contract. The news comes after the sale earlier this year of SWS to venture capital firm Ion Equity for €110 million.

Knockawarriga will begin generating power towards the end of this year.

It has a capacity of 22.5 megawatts (mw), which ESBIE said yesterday would be enough electricity to supply over 13,000 homes.

The company also claimed that the deal would cut carbon dioxide emissions by 50,000 tonnes.

The SWS deal follows a similar agreement struck by ESBIE late last year to buy electricity generated by a 7.8mw wind farm built by multinational Renewable Energy Systems (RES) at Lough Hill in Co Tyrone. That contract was valued at €36.7 million.

SWS is building Knockawarriga, near Newcastle West in Co Limerick, at a cost of €20 million. The company has, or is building, wind farms with a total capacity of 200mw.

Commenting on the deal yesterday, ESBIE business development manager Colm de Búrca said that it would enable the company to double its supply of renewable energy to its customers by the end of next year.

"This is set against a backdrop of increasing demand for green energy," he said.

SWS said that the deal would allow the company to proceed with the financing and construction of the plant this year.

ESBIE is an independent subsidiary of the State-owned power company ESB. It supplies electricity to businesses and large-scale users across Ireland. This element of the market is deregulated.

Its clients include Dublin Port Tunnel, Croke Park, Tesco and the Department of Finance.

Cork-based SWS's activities include alternative energy, waste-management, forestry and business services. It has built four wind farms and a number of biomass plants.

Late last year its shareholders - Cork co-ops Lisavaird, Drinagh, Bandon and Barryroe, and Dairygold spin-off Reox - agreed to sell the business to Ion Equity for €110 million.