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Offshore Wind Journal

Policy vacuum still hindering investment in Ireland

Mon 04 Feb 2019 by David Foxwell

Policy vacuum still hindering investment in Ireland

David Foxwell reflects on the prospects for offshore wind in Ireland and the continuing lack of policy from the Irish Government

In January 2019 Parkwind, which has been developing the Oriel offshore windfarm off the coast of Louth, and Irish energy company ESB announced they had entered into partnership for the project, as well as ESB’s Clogherhead project. It was also confirmed that plans are afoot to significantly expand the seven-turbine Arklow Bank offshore windfarm, Ireland’s first. So much for the good news.

Unfortunately, as Cornwall Insight’s senior consultant Ireland Dr Evie Doherty highlighted recently, despite these welcome announcements, very little has changed in recent months in Ireland in terms of policy clarity on offshore wind from the government and potential offshore wind projects continue to be disadvantaged compared to other forms of renewables. This is despite widespread recognition in other countries of offshore wind’s many advantages.

As Dr Doherty noted, what has changed in Ireland is increased pressure on the government to prioritise renewable energy in order to meet 2030 commitments, especially considering the country’s lacklustre performance at meeting the 2020 targets.

As highlighted numerous times by OWJ, offshore wind offers Ireland a route to increasing renewable generation in line with the climate ambitions, but for the sector to thrive and take hold, as in every market, policy mechanisms need to be aligned and send the right signals to the market.

The Oriel project along with SSE’s plan to expand Arklow Bank means that at least 1.3 GW of offshore wind could enter into operation in Ireland in the early 2020s. That is significant, because it  represents around 30% of Ireland’s Project 2040 ambitions to support up to 4.5 GW of new renewables by 2030, but without the right signals more offshore wind capacity is being held up. As Cornwall Insight points out, since the publication of its policy paper in September 2018, little has changed.

“In order to attract investors, good policymaking and transparent requirements are needed to allow them to assess the viability of offshore wind projects,” says the company’s senior consultant. “Visibility on clear routes to market is required for assessment of potential revenue sources and opportunities when creating long-term financial models. Clarity on timelines and rules are also important for assessing risks, costs and contingencies, as well as the ability to win subsidies and gain grid connections.”

There have been some changes in government policy, including awarding grid connections and subsidies based on certain deliverables on the part of projects, including a focus on ensuring that priority was given to projects that were ‘shovel ready’, and had planning permission. But offshore wind projects were not shovel ready and were not successful in the first Enduring Connections Policy (ECP-1) round, and little information has been released on the requirements and timing of ECP-2 or 3.

What’s more, the high level design paper for the new Renewable Energy Support Scheme (RESS) – which is due to be rolled out this year – specifically mentions using targeted delivery dates by which projects must be connected and energised in order to apply for support. The first auction has a proposed due date of 2020, which would not be feasible for offshore wind either. Cornwall Insight’s consultant says there is also a lack of clarity on the subsequent RESS auctions including timelines, eligibility criteria and using technology caps.

“If the licensing and consenting procedures for offshore wind were efficient and straightforward, perhaps these policy changes would not be an issue, but as anyone in the industry can tell you, they are not,” Dr Doherty says. Then there is the need for an offshore wind project to obtain a foreshore lease from the government. Legislation has been proposed that will streamline this process but has yet to be passed by government and it does not seem to be a priority. That’s not all. Once a lease has been obtained a developer must enter the consenting application process in order to commence surveys. Then there is the uncertainly around timing and potential cost of grid connections to factor in.

All in all, despite offshore wind’s ability to help Ireland meet climate targets, transition to clean energy and create jobs, developers still have little visibility of when a project could begin to generate revenue. This makes it difficult to plan projects and advance discussion on key issues such as costs that inform a bid into an auction. As Dr Doherty concludes, “without clarity on timelines, eligibility and support, making investment decisions on offshore wind projects in Ireland is challenging.”

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