Developers need certainty over pipeline of offshore wind development in Ireland

Dublin-based Kevin Collins of Pinsent Masons said the Irish government’s new policy statement on the framework for ‘phase two’ offshore wind development in Ireland was “limited in terms of both capacity and geography”. There are many projects at various stages of development that will fall outside the scope of the development earmarked under either phase one or two of the government’s plans and Collins said that there is a risk to the long-term pipeline of offshore wind development in Ireland if the government does not clarify how it intends to support those projects.

The Irish government is seeking to scale-up offshore wind power generation as part of wider plans to decarbonise the power sector and deliver energy security for Ireland. It has set a target of increasing offshore wind capacity to 5GW by 2030. It intends to achieve this target through two distinct phases of development.

The first phase is ongoing. Seven projects have been granted maritime area consent for development and are currently participating in a state-run auction – the first in the Offshore Renewable Energy Support Scheme (ORESS 1) – where they are competing for government ‘contracts for difference’ that will govern the supply of offshore wind power from the successful developments to Ireland’s electricity grid. The government expects the first phase to deliver around 4.4 GW of additional offshore wind capacity.

Until recently, the government’s plans for phase two envisaged developer-led development – where developers have the scope to decide where to build their offshore wind farms and undertake the preparatory work necessary to deliver the project. Recently, however, the government said it was moving to a centralised ‘plan-led’ approach for phase two, where it designates the areas where there can be development and invites developers to apply to operate sites in those areas. The publication of its ‘phase two’ paper now confirms this change in policy.

The focus of phase two is on supporting offshore wind development off the south coast of Ireland only. The capacity of the projects to be supported via ORESS 2 is expected to be limited to approximately 700MW in total. This reflects constraints on onshore grid capacity – EirGrid, the state-owned company that operates the grid, has estimated that there is only about 700MW spare capacity for further connection of offshore renewables, and the government has indicated that this will be provided to offshore wind developers from two onshore connection locations – each providing around 350MW capacity – along the south coast.

Further capacity may become available for phase two development depending on the outcome of ORESS 1.

Collins said: “The shift to a plan-led model for phase two will have major resourcing implications for government. It has indicated that development will be within specially designated marine areas but it is not yet clear to industry where those areas will be. It is seeking to identify two offshore renewable energy (ORE) designated areas and have them approved before the end of 2023, but this is subject to strategic environmental assessment.”

“We know from our experience that undertaking environmental impact assessments is time-consuming and costly – it is a big task for a small team within the government and civil service and it seems likely that the human resource that the government is able to commit to these tasks will be a major determining factor in the pace at which phase two progresses,” he said.

According to the government, the ORE designated areas for phase two will be selected on the basis that they “facilitate offshore wind projects utilising technology that has been delivered at scale in other jurisdictions”. Collins said this is likely to be interpreted by industry as favouring fixed offshore wind projects for phase two development, where turbines are cemented to the seabed, rather than floating offshore wind projects, where the structures are supported to float on the surface of the water.

Specific provision for floating wind projects is to be made in phase three, the details of which are to be outlined next year, according to the government. The government has set an initial target of scaling up floating wind capacity to 2GW by 2030.

According to Collins, however, the phase two policy paper raises deeper questions for government over long-term support for the offshore wind industry in Ireland beyond the end of the decade.

Collins said: “The focus of the government’s phase one and phase two work is on delivering its target for 2030 of scaling offshore wind power generation capacity to 5GW. However, it is vital that the government shows a clear path for developers that will not fall within the scope of either phase – according to our estimations, there is more than 80GW of capacity in prospective offshore wind projects in Irish territorial waters at various stages of development. The government’s recent change of approach for phase two excludes projects planned off the east or west coast of Ireland as well as larger projects planned off the south coast of Ireland where project capacity exceeds 700MW.”

“The government has promised to publish a phase three policy in the first quarter of next year and said it has started developing its plans for an ‘enduring regime’ for offshore renewable energy, which will involve it designating further marine areas for offshore development. However, as industry waits for the detail to emerge there will be significant uncertainty that threatens the viability of supply chains and the offshore wind industry as a whole if a constant pipeline of projects cannot be guaranteed – the latest proposals suggest there will be peaks as phase one and two development matures, and potential troughs thereafter. This puts at risk long-term targets the government has to increase offshore wind capacity to 20 GW by 2040 and at least 37 GW by 2050, which are linked to the need to address the climate crisis,” he said.

Noel Cunniffe, chief executive of industry body Wind Energy Ireland, said: “This is a radical change in policy from government that has created massive levels of uncertainty among international investors and the global supply-chain. They are gambling that state agencies can identify designated marine areas quickly. Unfortunately, our experience is that those agencies are grossly under-resourced and will struggle to deliver in time unless the right people with the right skills are put to work on it as soon as possible.”

“Our members have been working for years to deliver the projects Ireland needs only for the rules to change, without warning, in the middle of the process. We are effectively being told to stop developing offshore wind energy and wait for further decisions at a point when we have no time to lose,” he said.

Kevin Collins will chair a panel of industry experts discussing the role of Phase II offshore wind projects in Ireland’s energy transition with speakers from Gavin & Doherty Geosolutions, Energia and Wind Energy Ireland in Dublin on 29 March. The event will also include panel discussions on local partnerships and platform opportunities, and corporate PPAs and alternative routes to market. Register for the event