Wind Energy Curtailment Rules Inhibit Windfarm Development in Ireland

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Researched by Industrial Info Resources Europe (Galway, Ireland)--The Single Electricity Market (SEM) Committee, which is responsible for overseeing the electricity market in both Northern Ireland and the Republic of Ireland, has announced new curtailment rules limiting the amount of wind-generated electricity allowed on the grid and prompting windfarm developers to rethink windfarm proposals.

Curtailment arises when there is high wind at times of low demand, and wind projects must be curtailed because the system cannot handle the amount of electricity generation. Under the new rules, existing windfarms are given preference over new developments during periods when electricity supply exceeds demand, so that instead of all wind generators being asked to reduce their electricity production, newer windfarms will have to bear the burden of curtailment, which in turn will affect their ability to generate revenues.

Modelling indicates that planned windfarms could be affected by having their output to the grid reduced to a significant degree, threatening the financial viability of the projects, as they would not be paid when power is reduced. Until the committee's decision was taken, wind generators were paid the relevant wholesale price for the time they were offline.

The SEM decision to grandfather curtailment levels applied to windfarms took the government and most industry stakeholders by surprise, as it reversed what was indicated in the SEM Committee's consultation paper of August 2011. Industry experts have warned that it could slow development to the point where the Republic could fail to reach an agreed target to generate 20% of its electricity from renewable sources by 2020.

The SEM Committee has invited industry representative associations to its next scheduled meeting at the end of this month, during which they will have an opportunity to present fresh information with regard to the impact of the new rules on windfarm development.

As part of our International Power Industry Database, Industrial Info is tracking approximately 50 windfarm projects in Ireland.

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