The Commission for Energy believes it will have to pay 63% less for land for wind farms than previously estimated after the collapse of land values in Ireland.
"Due to the significant movements in the economy over the last year, the value of land has reduced. An independent assessment was carried out on current land values, and the (Regulatory Authorities) are satisfied that the estimate for 2010 is a reasonable reflection of the current costs," it wrote in a consultation paper on the single electricity market.
John Fitzgerald of the ESRI, posting on the Irish economy website, said that it showed that "answers may turn up in unexpected places" in considering how to value land under current economic circumstances. Pointing to the report, he said that "the fall in land prices should reduce the long-term cost of producing wind energy, with beneficial effects for consumers".
Nama, the state agency that will take over soured development loans, will have to value tracts of development land and decide on the haircut the banks will have to take on those loans. In a liquidation scenario, the High Court heard recently, the assets held by Liam Carroll's Zoe Group, which includes a large amount of land, would be valued at 75% below their bank borrowings. Carroll wants an examiner appointed to the group and has taken a Supreme Court appeal to try to achieve that but ACC Bank opposes this and wants a receiver appointed instead.