"We accept that there will be greater uncertainty because the overall market is changing but it is the same for all new plants, not just wind farms, " said a senior official at the department.

Under the SEM, which is due to come into effect on 1 November, the old system under which wind generators sold their power under contract to a larger energy provider such as the ESB or Viridian will be replaced by a system involving agents who will sell power to various providers on their behalf.

The official admitted the department was unable to quantify the commercial risks involved in this arrangement until the market began and prices were set, which was creating uncertainty among wind farm developers.

"You can estimate all you want but estimates are not good enough for banks, which are those funding the wind farms, " said the official.

"By introducing the SEM, we want to transfer risk away from developers and it should lead to greater economies of scale over time and greater opportunities for renewables, especially as interconnection between the North and South is improved."

The chairman of the Irish Wind Energy Association (IWEA), Tim Cowhig, who also heads SWS Natural Resources, said that while he appreciated the SEM would have long-term benefits, both the department and the Commission for Energy Regulation (CER) had failed to consider its implications for his members.

Cowhig said that, because it was unclear what commercial risks agents and wind farms would have to take on, it was proving impossible for wind farms to sign contracts with agents.

"Although we have spoken to the regulator on this, they keep on oversimplifying things. They just think you can go off and find an agent and sign up with them and that's that. But we can't find an intermediary because of the risk involved, " Cowhig said.

He claimed that, despite government targets for renewable energy production, the SEM had been designed around fossil fuels and that the confusion over commercial risks was evidence of this.

A spokesman for CER, however, said that it did not accept that the prospect of the SEM was creating uncertainty.

"The SEM has been in the planning for a number of years now and every aspect of its design and implementation has been developed through exhaustive consultations which SWS were involved in."

He added that it had been clear to wind producers that, under the SEM, the full commercial risk of transactions would be carried by their agents.

"In fact, new wholesale trading arrangements are something which all generators and suppliers have asked for. Wind generators stand to benefit from the SEM in terms of market opportunities, " he said.