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Who gains when there is money blowing in wind?
Credit: Caelainn Barr | The Irish Times | April 8, 2013 | www.irishtimes.com ~~
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Translate: FROM English | TO English
Creating a wind farm development in the midlands would be like “selling the family silver” according to University of Sussex professor of economics Richard Tol, though developers insist the deal could boost the economy. So what is the economic benefit and who makes money when it comes to wind farms?
Private enterprise has built most of the wind farms in Ireland. The developments demand millions in upfront capital investment and take many years to become profitable.
The sector benefits from market support from the taxpayer, worth about €386 million each year in Ireland for the 5.5 million megawatt hours of renewable energy produced. These subsidies come from renewable energy feed in tarrifs (REFIT), which currently stand at between €69 and €72 per megawatt hour. Renewable power also has a guaranteed market, as it is given preference in terms of energy purchase.
Wind conditions
However energy production is not constant and varies on wind conditions. The small Bellacorick wind farm, the oldest commercial site in the State, which was set up in 1992 in Co Mayo, made a profit after tax of €555,073 in 2012, up from €303,095 the previous year.
The State is in discussions with the UK to work out the details of how an energy export arrangement would work between the two countries following the signing of a memorandum of understanding last January. It’s expected that no REFIT will be paid by the Irish State as the energy is being exported to the UK.
Royalty payment
Although the midlands developments have a projected export value running into the billions, revenue would be collected only on the basis of profits, which would be considerably less. The State may also negotiate a royalty payment as consumers in the UK could be set to save £7 billion from the deal. Thousands of short- and long-term jobs are expected to be created from the project.
Representatives from the Department of Communications, Energy and Natural Resources say the project will not go ahead if there is no positive economic benefit for Ireland from the development.
State and private landowners could be set for small windfall in the midlands if the wind farms go ahead. Landowners have been offered €18,000 per wind turbine placed on their land. It’s estimated that each turbine will require from 30 to 50 acres. However neighbouring landowners who can see or hear the turbines do not usually receive compensation, despite some landowners reporting a reduction in the value of their property of up to 80 per cent. The Irish Wind Energy Association also says €11.5 million was given to Irish county councils through rates last year.
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