Winds of change

Mon, Oct 7, 2013, 01:06

Sir, – I take issue with the contention that wind energy will mean more expensive electricity for business and householders (Cantillon, October 3rd).

If the wind generators were not there the electricity would have to be manufactured by fossil fuels. What price will gas, coal and oil be for the period up to 2020? At least the cost of wind is known. Demand for fossil fuels is growing, as is its price. Recently we saw the Commission for Energy Regulation grant a price increase for gas. The cost of wind remains constant.

For much of my life the world reference for oil was circa $2 per barrel. From 1985 to 2003 the world price was a reasonably steady $12 to 18 per barrel. Now it is $110, and all the big commodity houses such as Barclays don’t have it going down. Whatever is paid by way of public service obligation will be looked on by our multinational manufacturers as a price risk reduction premium.

But Cantillon omits to mention the main point of wind energy. The marginal cost of wind-powered electricity is precisely zero. It causes the wholesale cost of electricity to fall. During 2012 the Public Service Obligation for wind was €50 million. The actual reduction in the wholesale price of electricity directly attributable to wind was €75 million.

Looking forward to 2020: the installed wind capacity will contribute (at a conservative 35 per cent capacity factor) some 12.264 terawatt hours to our electricity supply.

According to the US Environment Protection Agency, the CO2 released from this equivalent in fossil fuels would be 8.65 million tonnes. At €20 per tonne this would mean a bill of €173 million per year, at €40 per tonne the annual bill would €340 million.

Besides all this, the support scheme lasts for 15 years and thereafter the price can fall dramatically. – Yours, etc,


Chief Executive,

Mainstream Renewable

Power, Arena Road,

Sandyford, Dublin 18.