Economics

Turbines being assembled for deployment

Ireland can become a hub for wind farm development in the north west of Europe. This new green opportunity will not only benefit the environment, it will help kick-start our economy.

Export and Job Creation

In the short term Ireland’s first goal is to meet our climate change targets in 2020, in the longer term we have an opportunity to be a significant exporter of both energy and the supply chain components which will build green energy power plants.

Taking the totality of Ireland’s renewable energy resources, we can generate far more energy than we will use. This energy is green and renewable and is exportable, given interconnection, to countries in the EU which will struggle to meet their EU 2020 targets. Ireland will be in a position to generate and export the energy to power much the EU’s energy needs. The process of developing an EU energy system has already begun and Ireland can take full advantage of this.

In addition to becoming an energy exporter Ireland can become a centre for the development of green technology. The development of projects such as Oriel will be central to this. Leading companies such as ABB, Siemens and Strabag Wind have all highlighted the opportunity to develop jobs in Ireland on the back of Irish and UK offshore wind energy projects. For further information on this €60bn opportunity visit the National Offshore Wind Industry Association (NOW Ireland) website here. (link www.nowireland.ie)

The Indecon Study of Offshore Wind

Indecon International Economic consultants carried out an “Economic Appraisal of the Potential for Offshore Wind Generation in Ireland” which was published as a report in September 2008. The objective of the analysis was to estimate the net cost/benefit for enhanced offshore wind development in Ireland and to estimate other benefits including non-GHG emissions abatement, Kyoto compliance, tax and employment, fuel-price risk reduction, etc.

A Financial model based on a 1000MW wind farm for a 15 year period starting in 2012 was used with a conservative cost base of €3.5 million per megawatt capital cost and conservative fuel price forecasts.

The analysis shows primary net direct benefit for Ireland Inc. of up to €1.7 billion 2012-2027. Extra quantifiable indirect benefits €2.1 billion including Merit Order Effect, employment, carbon fines saved, reduced emissions, etc. In virtually all scenarios there is a direct net benefit, in all scenarios there is an economic benefit when indirect benefits are included. There is going to be a cost to Government of carbon fines 2008 – 2012 of €1.17 billion if Ireland fails to meet its obligations.

The other quantifiable benefits include the merit order effect, savings associated with reduced NOx & SOx Emissions, an estimate of Carbon Fines Avoided (2008-2012), the macroeconomic benefit and an estimate of fuel risk reduction.

Cost Benefit Analysis Conclusions

Shows primary net direct benefit for Ireland Inc. of up to €1.7 billion 2012-2027

Extra quantifiable indirect benefits €2.1 billion including Merit Order Effect, employment, carbon fines saved, reduced emissions, etc.

In virtually all scenarios there is a direct net benefit, in all scenarios there is an economic benefit when indirect benefits are included

Cost to Government of carbon fines 2008 – 2012 €1.17 billion