The ESB has been in a boghole with its Derrybrien wind farm for nearly 20-years. But it took until last week for it to finally stop digging.
The scale of the cock-up at the Co Galway development is hard to fathom. After long years of controversy, the 70-turbine project will now be dismantled. As Tánaiste Leo Varadkar said, the ESB had not covered itself in glory on the issue.
No environmental impact assessment (EIA) was done on the project in the early Noughties when it was built. EIAs didn’t have to be done back then, but that’s the difference between technical compliance and best practice.
We should have expected best practice from a firm like the ESB. Leaving aside the environmental damage done in 2003 when there was a landslide – 450,000 tonnes of peat disturbed over 25 hectares and about 50,000 fish killed – the financial cost has been astronomical.
This thing cost €72m to build. Failure to secure proper retrospective planning has contributed to EU fines of €17m – so far. The fines began in 2019 after the European Commission ordered the State to pay until compliance was achieved, through the submission of a retrospective environmental impact assessment. An Bord Pleanála last month refused substitute or retrospective consent.
Now will come the cost of taking the whole thing down.
At a time when people are struggling to pay electricity bills, it’s galling to see this appalling waste of money.
Not only has it cost €90m before the price of demolition, accounts for the wind farm show it lost money in four of the 10 years between 2010 and 2019.
Accounts for Gort Windfarms Ltd – which operates the farm – show it made a profit of €15.8m in 2013. But apart from that year, its bottom line profitability has been either unimpressive or non-existent.
It lost €1.2m in 2010; €2.2m in 2016; €11.5m in 2017 (following a €10.5m write down of the facility); and it lost €1.3m in 2019.
You can’t have green credentials if you don’t do an environmental impact assessment.
Corporate dilemmas and the high cost of peace
Everyone will welcome the tentative steps being taken towards a peace agreement between Russia and Ukraine. Agreeing a settlement would end the war and take away a level of the international economic uncertainty caused by the invasion.
But things might not be all that straightforward for corporations that have decided to cease doing business in or with Russia. It might remain very complicated for Western governments to decide what to do about sanctions in the aftermath of an agreement.
Will the EU, the UK, the US and others keep all of their sanctions in place if an agreement is reached? After all, a deal that Ukrainian president Volodymyr Zelensky might sign with Moscow does not change the war crimes committed by the Putin regime.
Neither would it change the fact that the Ukrainian people would have been forced to reach some kind of compromise while staring down the barrel of a Russian gun.
Yet everything from stock markets to oil prices reacted positively to news that talks were progressing.
Ironically, the situation for business with Russia may become even more complicated after an agreement.
For example, retailers and consumer brands that have pulled out of Russia – not because of sanctions, but because of a combination of ethics, reputational damage and not being able to get paid through the banking system – will have to decide whether it is reputationally safe for them to return.
Energy supermajors like BP and ExxonMobil have pledged to exit Russia because of its war in Ukraine. Will they stick to that plan if there is a deal?
Equally, lower profile companies that serve the country’s oil industry have not followed.
Schlumberger, Baker Hughes and Halliburton are three of the biggest western oilfield services companies, hired to do drilling and oil production in Russia. The US has ordered sanctions on buying Russian oil and on investing in new oil projects there.
But these companies are under no legal obligation to cease providing their services to the likes of Gazprom or Rosneft. In fact, Schlumberger has invested over $10bn in Russia in the last decade.
Oil prices continued their recent downward push again last week, with Brent crude dipping below $98 a barrel on Wednesday, off more than $40 a barrel from its high a little more than a week ago.
Is there an assumption that, if there is a peace deal, things might move back towards business as usual with the Putin regime?
This seems very unlikely especially for the likes of the oligarchs in the UK. That romance is over. But if the killing ends, will the West maintain the pressure on the Putin regime by retaining sanctions on banking and international payments?
Austria’s Raiffeisen Bank International said it is considering exiting Russia, just weeks after its chief executive said that the lender – which generates a third of its profits in the country – would stay.
Several big-name banks have said they are planning on leaving Russia, including JPMorgan, Goldman Sachs and Deutsche Bank.
One has to assume that sanctions will only be dismantled slowly in the event of a peace deal – perhaps even over time when nobody is watching anymore.
Peace deal or not, some things will not be the same. Several European countries will be determined to reduce their dependency on Russian oil and gas. This will have an impact on production and price in the coming years.
US president Joe Biden has described Vladimir Putin as a “war criminal”. That assessment cannot change in the event that the carnage stops. American economic policy on Russia must remain even if there is a Russian peace agreement with Ukraine.
Western governments will want to retain the moral high ground, even if a deal is reached. Reality doesn’t always play that way. Sanctions put in place after Putin took Crimea in 2014 technically remained – yet everybody seemed to do more business with Russia after 2014 than before.
Sanctions and slippage go hand in hand.
Shannon Foynes has the right idea for the future
Regardless of the outcome of Russia’s attack on Ukraine, Europe has to wean itself off Putin’s fossil fuels. This imperative has already had some Germans knocking on Irish doors, as they want to harness Ireland’s offshore wind energy potential.
There is a opportunity to develop this industry and export energy to Europe, so long as we can ensure the best economic return from it. The other thing is that it has to happen quickly.
Ireland is already late to the offshore wind party and its ambitions look modest with a target of 5GWs of offshore wind by 2030.
Shannon Foynes Port has been quick to register the potential of this future industry and isn’t wasting any time about positioning itself as a major hub for such activity. During the week the port announced details of a €25m investment – but, more importantly, it has encouraged policy makers and the Government to move more speedily and with more ambition.
Port CEO Pat Keating has been quick to recognise the potential for Ireland, especially given the imperative in places such as Germany for finding non-Russian energy sources.
Offshore wind is Ireland’s opportunity to help with energy security, improve on climate targets and create a brand new industry. We shouldn’t delay any longer.