Yield hit for John Laing wind farm in Ireland as wind strength weakens

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Yield hit for John Laing wind farm in Ireland as wind strength weakens
Yield hit for John Laing wind farm in Ireland as wind strength weakens

John Laing, the giant infrastructure firm, said it is taking a multi-million writedowns on a windfarm it owns in Co Tipperary and in Germany because it estimates that the wind will blow less and generate less power over the next 10 to 15 years than it once anticipated.The company’s fully-owned wind farm at Glencarbry in Co Tipperary, which it has operated for a number of years, is expected to have an operating life of a further 23 years.
The writedowns come as it prepares to sell its Irish and German renewable energy assets. It has further decided to put on hold any new solar and wind investments in Europe and Australia.The “once-off” financial hits, including a serious network transmission disruptions in Australia, which were outside its control, helped send its shares sharply lower by over 5.5% in London, valuing the infrastructure firm at over €1.9bn.Chief executive Olivier Brousse told analysts that its pre-tax profit for the six months to the end of June of £35m (€38.3m), down from £175m a year earlier, reflected the network transmission problems hitting all suppliers for renewable power in Australia and from the problem of lower-than-expected wind yields in Europe.Mr Brousse told analysts that apart from Australia, it had “another challenge in the first half with some of our European assets — especially in two countries, Germany and Ireland, where the wind yield has been quite subdued in recent months”.He said John Laing, as part of its plans to sell the Irish and German renewable assets, had commissioned its own assessment of the long-term wind yields from the projects.
Again we are talking about future wind yield over the next 10-15 years”, which led to the company taking the negative financial write-down of the assets.Mr Brousse said the first-half earnings were “mixed” but that the “resilient” company would bounce back in the second part of the year.John Laing has numerous projects around the world, including helping to help provide new trains on Britain’s east coast rail line between London and Edinburgh; providing student accommodation in Brighton; a rail project linking Denver city centre in the US with its airport; and a Luas-style light rail project in Sydney.The implications of John Laing’s assessment of its wind yields in future years from its Irish and German assets on the rest of the industry here and on the Irish Government’s targets for renewable energy remains unclear. Its remarks on wind yields in Ireland have, however, perplexed other wind producers in Ireland.“Ireland is recognised as having some of the best wind resources in Europe. Last year we provided 29% of the country’s electricity and indications so far for 2019 are that the amount of wind energy being produced is rising rapidly,” said Justin Moran, head of public affairs at the Irish Wind Energy Association, an industry group.He said that the Government’s Climate Action Plan seeks to provide 70% of Ireland’s electricity from renewable sources by 2030. “Our members are already developing the on- and offshore wind farms to ensure we achieve that target. We are confident that in the next decade wind will replace gas as our chief source of electricity, providing cheap, clean power to homes, farms, and businesses across the island,” said Mr Moran.
Source: Business News