Irish wind generation costs analysed

Wind generation in Ireland does not increase wholesale electricity prices and in fact, the trend is that it lowers them.

This is according to a study by Eirgird, the Irish grid operator and the Sustainable Energy Authority of Ireland (SEAI).

Eirgrid used detailed modelling tools to look in detail at the wholesale prices in the Irish electricity system in 2011.

The analysis showed that wind generation lowers wholesale prices by over Euro 70 million.

This almost exactly offsets the costs of the Public Service Obligation (PSO) levy and other costs associated with the generation of wind energy.

SEAI, chief operations officer, Dr Brian Motherway, said: “It is important that our energy debates are based on solid facts and clear evidence.

“This detailed analysis answers an important question – that exploiting our strong wind energy resource comes at no additional cost.

“It is right that we keep a focus on energy costs, and it is very good news to see that we can capture the benefits of wind energy without having to pay extra for them. And as fossil fuel prices increase the economic benefits become more significant.”

The report found that although wind generators have high capital costs, they have no short-term costs as they do not consume fuel.

By displacing higher cost fossil fuel generation, wind energy tends to reduce the wholesale cost of producing electricity.

When balanced against other costs, the overall cost impact of wind is less than half of one percent, which is within the study’s margin of error.

It concludes that the increased use of wind energy on the Irish electricity system increases Ireland’s security of supply and ensures a more diverse fuel supply in the long-term.

EirGrid chief executive, Dermot Byrne, said: “Reliable, economic and sustainable power is crucial to Ireland’s future.

“Renewable energy can play an important part in the energy mix but it is important to continuously look at the effect on prices of all sources of energy, in the interest of consumers. This report is a significant contribution to that.”

Alison Brown

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