OUR ENERGY SUPPLIES are entering a period of significant transition. They are moving from a situation where using cheap fossil fuels was acceptable and climate change and peak oil wasn’t a concern to a future that will include a large portion of renewable energy sources.
How long this transition will take and who the winners and losers will be is still up for debate. Historically, Ireland’s energy systems and suppliers were predominantly state or semi-state led. The “profits” were often recouped by the state in dividends or prior to this, relayed to consumers through lower prices. This is no longer the case with increasing multi-national and private capital led ownership of our strategic energy assets.
For many, community-owned renewable energy generation is a clear win on all fronts. The impact on the climate is lessened and the money associated with energy use stays local. Ireland imports €6bn annually of fossil fuels, often from geopolitically unstable nations. Engagement of citizens in energy use and supply where they are active producers and consumers “Prosumers” increases the positive impact of this transition. Ireland has one of the best climates for renewable energy. Trees grow quickly here and we have wind and wave resources that many countries are jealous of.
What has happened in other countries and benefits?
A very large portion of Germany’s fossil/nuclear power is owned by large companies. However, their increasing % of renewable energy is almost all citizen or pension fund owned. As a result when they buy and sell power, it is their own citizens that benefit rather than the often foreign owned multi-nationals. This is not by accident.
In Denmark a new wind farm is currently being constructed near Copenhagen. It has opened up applications to local shareholders from the locality. A person can purchase a share for €600 and this will return €70 per annum to them. (The sale of 1000 units of electricity). The share can be sold after a number of years. The dividend is near 11% ROI. With bank interest rates in Ireland of 1%, this is a significantly better investment.
In general, Irish wind energy projects have similar returns on investment. Wouldn’t it be better to adopt the Danish model and deliver the value back to the community surrounding the wind farm (or any renewable energy project) rather than just to external developers?
What does the Government need to do?
- Encourage ownership of wind energy through a local ownership requirement modelled on the Danish example.
- Give priority access to the electricity grid for small community owned projects, be it wind or anaerobic digestion for groups of farmers.
- Empower communities to develop community and local scale ownership. This can be achieved by providing feasibility and project development support. This is how North Tipperary Leader Partnership helped Ireland’s only community owned wind farm, Templederry Community Wind Farm in County Tipperary. The Scottish government has recently opened a £10m community energy support office, where they actively support communities. Energy communities in Ireland such as Tralee, Aran Islands and the many transition town movements would benefit from support like this.
- Encourage tax efficient structures for local ownership of wind energy – as per Danish model where income earned up to a point from community renewable energy is tax free. Currently, the Irish Revenue allows people to write off tax when investing in “business expansion”. This could be a significant additional incentive for community owned energy projects.
- In Ireland, most large wind projects support their local communities through community funds/grants. Why not encourage developers to share the equity of their wind farms locally through enforced co-ownership with local civic organisations (schools, sports clubs, etc). This arrangement would better benefit communities by allowing them a shareholding rather than a token grant for specific once-off projects. This would encourage communities to work with developers to share their natural resources.
The Government is asking for your opinion with regards to the Green Paper on Ireland’s energy future. We are at a crossroads in Ireland, with many choices, and although comments are always welcome on these pages, you should also consider making a submission via Greenpaper@dcenr.gov.ie
Paul Kenny is the Chief Executive of the Tipperary Energy Agency, a not-for-profit consultancy that has supported many community energy projects including Ireland’s only Community owned Wind farm. www.tea.ie