Last month, I launched a new Strategy for Renewable Energy 2012–20. Under this strategy the development of wind farms in Ireland will play a critical role in delivering on our renewable energy ambitions, both in terms of meeting our own national 2020 targets and in contributing to the development of a renewable electricity export market with the UK in the first instance.
There has been considerable growth in the deployment of wind farms in Ireland from around 300 MW of capacity in 2005, to over 1,600 MW of capacity operational in the market today. The latest forecasts from the Sustainable Energy Authority of Ireland as to the amount of renewable generation required to meet our 40% renewable electricity target is around 4,000 MW of operational capacity, subject to achieving our energy efficiency goals.
Currently, approximately 1,900 MW of renewable generation is connected to the grid, including over 1,600 MW of wind generation. A further 1,500 MW of renewable generation, almost all of which is new wind-generating capacity, has contracted with either EirGrid or ESB Networks.
The Commission for Energy Regulation, CER, operates a processing approach for wind projects looking to connect to the electricity grid. This allows for a strategic view to be taken of network requirements and serves to put in place efficient connection solutions to cater for a large number of applications and to ensure optimum network development, minimising network costs and, where possible, avoidance of network bottlenecks. The EirGrid GRID25 strategy was devised to put in place the necessary infrastructure needed to underpin this market growth.
To date there have been three gates and in the latest Gate 3 phase some 3,900 MW of offers have issued to renewable generators. The take-up of Gate 3 offers cannot be quantified as yet. Somewhere around 500 MW of Gate 3 have accepted their offers to date and have already contracted with EirGrid or ESB Networks. It is expected that between what is already built in Gate 1 and Gate 2, and what has already contracted to build along with the remainder of Gate 3, is largely sufficient for the achievement of our 40% target, even if some Gate 3 developers ultimately decide not to accept their offer.
Additional information not given on the floor of the House.
In December last, the EU published an Energy 2050 roadmap which sets out a number of different scenarios for developing a decarbonised energy sector over the coming decades. It is clear under all of these scenarios that there will be a significant increase required in renewable energy deployment in Europe, well over and above the 2020 target levels. Following on from the Energy 2050 roadmap, earlier this month the CER published a "Renewable Energy Communication", which again outlines their ambition to progress beyond the 2020 levels of renewable energy development.
Ireland has a relatively small electricity demand by international standards with a peak demand of around 7,000 MW on the entire island. It has renewable energy resources that are considerably above that level, consisting of onshore and offshore wind resources in the short term and wave and tidal resources in the medium to longer term, as those technologies develop and become commercially deployable.
As the European Union moves towards more integrated European-wide electricity and gas markets, it gives us a real opportunity to develop new markets for our renewable resources. Last week, I met with my counterpart in the UK, Minister Charles Hendry, to progress the development of renewable electricity trading between our two countries. We put in place a formal process that will develop the necessary market, regulatory and technical issues and which aims to have a finalised memorandum of understanding in place by the end of the year. This will create the access conditions that will allow our developers to access a significantly bigger electricity market.
To summarise, while there are certainly challenges in developing new wind farms, there is a lot of work being done to overcome these. As Europe moves towards decarbonising its energy systems over the coming years, newer and bigger market opportunities will open up for developers.