RESS been approved by Government and I will now seek EU State Aid approval. This Scheme will mark a shift from guaranteed fixed prices for renewable generators to a more market-oriented mechanism (auctions) where the cost of support will be determined by competitive bidding between renewable generators. The RESS is a critical step in bringing Ireland to a leadership role in relation to renewable energy, climate action, and energy efficiency. Communities are central to the design of the new Scheme and this will have a transformative impact on renewable energy projects right across the country.
Theoretically, this should lead to lower electricity prices but let's wait to see the finer details of how it will work. The Press Release mentions the importance of not locking in higher costs for consumers - surely the first time an Irish minister has acknowledged that the existing REFIT scheme led to higher electricity prices.
RESS auctions will be held at frequent intervals throughout the lifetime of the scheme. This will allow Ireland to take advantage of falling technology costs and by not auctioning all the required capacity at once, we will not be 'locking in' higher costs for consumers for the entirety of the scheme.
In the submission made by Irish Energy Blog to the consultation on the scheme (which can be read here), I outlined a scheme that would allow a low cost alternative to the fixed price REFIT scheme, which of course wasn't adopted, but I did warn about locking society into high energy costs :
This would ensure that our society is not locked into high energy costs for many years to come.
The proposed auction scheme still requires EU State Aid approval.
What a beauty - one of the main elements of the scheme is that community-led category and community capacity building measures will provide opportunities for communities to play their part in Ireland's renewable energy transition. Projects looking for support under the new RESS will need to meet pre-qualification criteria including offering the community an opportunity to invest in and take ownership of a portion of renewable projects in their local area.
ReplyDeleteFirst you lose your state pension when the Strategic Investment Fund exposure to wind developments collapses, and then you find that your carefully invested nest egg in the community fund is worthless. You would just have to admire the ingenuity of the architect of this scheme. In engineering terms, this is referred to as a common mode of failure (where two or more structures, systems or components fail in the same manner or mode due to a single event or cause).
Is there scope here for a little re-education of our technical and economic representatives in first principles, one wonders? Readers would do well to exercise prudence in this regard.
Unless the community involvement is a limited liability company which limits liability for debts to the value of the shares held by individuals, there will be exposure to the accrued debts which renewable generation activities are certain to incur. The accounts of some Irish wind farms show some had enough income to pay their expenses, but not to make repayments on the capital loans in 2015 and 2016. Others could not pay their expenses or their loan. None paid a dividend.
ReplyDeleteWhat is happening is that the larger parent company is absorbing these debts which cannot go on forever. Without the parent company they would be going into liquidation. The tidal energy company Open Hydro was forced into liquidation last week when the French Parent company applied to the court to wind it up. If there is no parent company and it cannot pay its debts, creditors can apply for liquidation and distribute the residual assets. Shareholders loose all, but not their private assets.
If any of these ventures promoted by government tie members of the community into anything except a limited liability company and if the renewable venture fails with liabilities owed to creditors, banks, supplier etc, private individuals could be on the hook. They could loose everything they own. A small 10 MW wind farm costs a minimum of 17 million Euros. I cannot say yet if this legislation has any clauses to indemnify against this happening.
From the 25th May 2018, until the 28th July 2008 there was practically no wind generated electricity produced in Ireland. There was a little in recent days, but yesterday and today has been calm again. Living in Ireland I can verify that Eirgrid's dashboard appears to reflect observed wind conditions, so I have no issue with it.
ReplyDeleteRunning cost are accruing, which include administration, wages, repairs and maintenance. The high level of these shocked even me. With every day that passes, the likelihood of wind speeds picking up for the rest of the year decreases. They can't catch up now. If they can make it through it will have to be be virtue of debt forgiveness by larger parent companies or state intervention to rise electricity bills again.
Mean while the anchors bolting the bases of turbines to the concrete are failing in some places and a lot of money is being spent trying to reinforce the tower mountings. 16 years is the total life span of a modern wind farm with nothing left at the end of it. They don't own the land, its rented. Check out Eirgrid's Dashboard.
According to the British Met Ofiice the no wind weather will continue until October. Given that all wind farms are now loosing significant amounts of cash. Who is going to pay their bills. I suppose Leo will give them more of our pensioners money.
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