Irish Coalition Makes €2.7bn Forecast Uncertain

Politics has a habit of raining on a good parade, and even the most optimistic amongst us can’t ignore the clouds of political uncertainty in Ireland.


March 24, 2016

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Politics has a habit of raining on a good parade, and even the most optimistic amongst us can’t ignore the clouds of political uncertainty in Ireland.

The Irish Wind Energy Association released research at its annual conference this week that forecast developers would invest more than €2.7bn in onshore wind in the Republic of Ireland by 2020. However, political uncertainty is putting that in question.

You see, that €2.7bn is what is required for Ireland to meet 2020 renewable energy targets. The IWEA research forecasts that wind developers would install 300MW of new onshore wind farms every year until 2020. Sounds encouraging.

But these predictions will also be affected by Ireland’s shifting political landscape following the general election last month, where a government is yet to be formed.

The Fine Gael-Labour coalition government that was in charge from 2011 had already voiced concerns before February’s election over onshore wind’s impact on landscapes and communities. The government produced a white paper in December outlining the possibility of making planning restrictions around wind farms stricter; and energy minister Alex White sparked a conflict at the heart of government by protesting that the plans could put a stop to onshore wind development in Ireland.

The wind industry will be hoping that the incoming government after the election has fewer reservations about onshore wind than the Fine Gael-Labour coalition, but the problem is that no-one yet knows who this incoming government is going to be. The election results left no clear winner and negotiations are yet to result in a coalition.

Even worse, all of the three best-represented parties —Fine Gael, Fianna Fail and Sinn Fein— have promised either reviews of onshore wind’s role in the energy sector, or new restrictions for the industry. None of this looks positive for developers.

Whatever government emerges, it looks certain to be an unstable coalition of parties apathetic to wind. This is likely to place onshore wind in the sights of politicians looking to win support from the rural community. We expect a coalition built on shaky foundations to give more relative weight to a loud and disengaged constituency than to their 2020 renewable energy commitments. Such political uncertainty calls into question IWEA’s positive 2020 forecasts. After all, investors like predictability.

For now, who will end up governing Ireland remains an open question whilst coalition negotiations continue — and uncertainty in the Irish onshore wind industry looks to continue long after this is resolved.

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