At a conference in Cork in October 2014, I expressed the view that Ireland had been investing too enthusiastically in windfarms and that project promoters were overly focused on the generous subsidies on offer. Many projects were heavily geared and there was a danger that we could end up with “a NAMA for windmills”.

Many windfarm projects were financed with up to 80% in debt, mostly bank loans. There is not much scope for things to go wrong on the operational side with such heavy gearing.

My comments were roundly dismissed by the Irish Wind Energy Association and by various spokespersons for the owners and promoters of windfarms, including the chief executive of a company called Gaelectric, one of the largest of the Irish operators.

The Gaelectric company has struggled with its debt burden, the assets are for sale and there has been speculation in the press that the shareholders could get nothing.

Several other windfarm companies may be in the same boat. The website irishenergyblog has been providing an analysis of financial accounts for a number of windfarms and for some it is not a pretty picture.

Some windfarms have not been making money and several may fail to meet obligations to their bankers, despite the priority dispatch they enjoy whenever they produce and the State guarantee of a minimum price (paid for by consumers).

Reaching targets

It appears that some of the older windfarms have suffered from a disappointing operational performance. They have failed to reach their targeted availability and have simply not produced enough electricity to sell. They may also have been incurring higher maintenance costs than expected. Irish banks may have located another lending bubble. Newer windfarms benefit from improved designs and have better operational prospects. It seems that viable projects can still attract finance notwithstanding the troubled loans beginning to hit the balance sheets of the lenders.

But every new windfarm expands the excess supply of generating capacity and may create more legacy losses for shareholders and lenders. Owners of conventional gas plants displaced at random when the wind blows have also taken losses, including the ESB, and the generator Viridian has just announced the closure of two modern gas units in Dublin.

It is taking an unconscionable length of time for the Government to stop digging this ever-expanding hole. The supply of generating capacity has been detached from demand as a deliberate act of policy, mainly through the distortion of the market through wind subsidies. This saves little by way of emissions, threatens the stability of the system, is costing consumers a fortune and, for some early investors, may not even be making money.

The international debate about climate change and energy policy, a global rather than a national problem, has become remarkably polarised. Despite an accumulation of scientific evidence there are those who deny flatly that there is a problem to be addressed at all, while others resort to apocalyptic rhetoric and demand instant resort to enormous and costly policy adventures.

There has in reality been a steady research effort, drowned out by protagonists of extreme complacency or extreme activism, which supports a middle-of-the-road policy response.

Thirty years of work by the UN-sponsored Intergovernmental Panel on Climate Change has established beyond reasonable doubt that human activity, in particular the combustion of fossil fuels and changes to land-use patterns, are altering the earth’s atmosphere and contributing to global warming.

There is a more tentative consensus on the speed with which these processes are taking place and on the likely severity of the consequences.

Most scientific experts agree that the negative consequences are mainly in the future and can be averted if prudent action is taken in good time. They also agree that there is time enough to act and no need to panic.

Since the planet has just one atmosphere, whatever policies are pursued need to be global rather than national – even the largest countries, the USA and China, are each responsible for less than a quarter of controllable greenhouse gas emissions. For small countries like Ireland, what they choose to do at national level is essentially irrelevant. If Ireland never produced a single extra tonne of carbon dioxide the fate of the planet would be unaffected.

Wind subsidy

The smart policy for small countries is to contribute effectively to the development of sensible international responses, conscious that their influence is limited and that unilateral efforts are pointless. Instead, Ireland has tagged along with European Union policy, not all of it coherent, while pursuing what at times has been a hyperactive domestic policy to limit emissions in Ireland, responsible for roughly one-fifth of 1% of worldwide emissions. This policy consists of the subsidisation of more and more wind, is extremely costly, has achieved little and contributes nothing in global terms.