Wed Sep 18 01:30:00 UTC 2024: ## ESB Takes €135 Million Hit on Scottish Wind Farm, but Claims Project Will Still Be Profitable

**Dublin, Ireland** – The ESB, Ireland’s state-owned energy company, has announced a further €135 million provision in relation to its Neart na Gaoithe offshore wind farm project in Scotland. This brings the total impairments and provisions for the project to nearly €400 million.

Despite the significant financial impact, ESB chief financial officer Paul Stapleton insists the project, due to be operational next year, will still be profitable.

“The difficulty in long-life, large-scale infrastructure projects like an offshore wind farm is that you’re trying to value it now by predicting energy prices over the next 30 years,” Stapleton explained. “The analysis today suggests it will be a profitable asset over its life, but won’t be as profitable as originally envisaged because of the delays and increased construction costs.”

The project, which is a 50/50 joint venture with EDF, has faced numerous challenges, including delays caused by the Covid-19 pandemic and construction issues. These issues have led to increased costs and impacted the project’s expected profitability.

However, Stapleton emphasized that the project is not a write-off, and the company is confident it will eventually recoup its investment. He added that the project is nearing completion, with two-thirds of the turbines already erected.

Despite the difficulties encountered with Neart na Gaoithe, the ESB remains committed to developing offshore wind energy projects. The company is currently involved in joint ventures for similar projects off the Irish coast.

“Developing offshore is a complex construction process,” Stapleton said. “There’s always going to be challenges in offshore wind. That’s generally priced into the investment case. There were particular challenges in Neart na Gaoithe, some aspects are unique to that project.”

In addition to the provision for Neart na Gaoithe, the ESB also recently completed the acquisition of the Pallas Windfarm in Co Kerry, which generates nearly 52 MW of power.

The ESB’s operating profit declined by 34% in the first six months of the year to €446 million, attributed to lower energy margins as the wholesale price of gas continued to fall.

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