Market Information: Offshore Wind in Ireland
Irish overarching policy and targets
Ireland’s Climate Action Plan commits Ireland to reducing GHG emissions by 51% by 2030 and to achieve 80% of electricity demand from renewable sources by 2030. Ireland’s Climate Action Bill underpins these ambitions and further commits Ireland, in law, to achieve a carbon neutral economy by 2050.
Offshore wind has been earmarked as the flagship technology for delivering upon our ambition, with a recognition that we cannot achieve our targets and our goals without the contribution of offshore wind.
To support delivery of these ambitious targets for 2030, Ireland has set a target for at least 5 GW of installed offshore wind capacity within these timeframes and has committed to delivering 20 GW by 2040 and 37 GW by 2050.
ORESS 1 auction success
Ireland held its first offshore auction in 2022 through the Renewable Electricity Support Scheme, a CfD style auction process which was open to Ireland’s Phase 1 projects. The Phase 1 projects are Ireland’s most advanced offshore wind developer-led projects, which have been in development over a number of years. 6 projects totalling c4.4 GW entered the auction, with 4 projects successful, totalling just over 3 GW of capacity and awarded at an average strike price of €86/MWh. These projects include 3 on the east coast - Codling Wind Park, developed by EDF Renewables and Fred.Olsen; Dublin Array, developed by RWE; North Irish Sea Array (NISA), developed by Statkraft; and one on the west coast - Sceirde Rocks, developed by Corio Generation.
The average price secured through this first auction is well below the average price of the wholesale market for the past 12 months which was c.€200/MWh. This means far better value for end consumers. These projects, once delivered will deliver against Ireland’s 5 GW target for 2030, power the equivalent of over 2.5 million Irish homes per year, and save over 1 Mt of power systems emissions in 2030. The projects will also see a total investment of c.€9 billion over the next 7 years and €24 million in Community Benefit Fund payments to local marine and coastal communities per year. Over 2,200 local development and construction jobs will be realised by 2030 to support these projects, and over 600 local permanent O&M jobs once the projects become fully operational.
The 4 projects successful through ORESS 1 are progressing and expect to submit planning permission applications early in 2024, following engagement with National Parks and Wildlife Service (NPWS) and An Bord Pleanala (ABP) in the second half of 2023.
The 2 remaining Phase 1 projects, Arklow Bank Phase 2 (SSE) and Oriel Wind Park (Parkwind & ESB) remain committed to delivering these projects and are currently working to secure alternative routes to market.
Plans for ORESS 2
Following Phase 1 of offshore wind, Phase 2 introduces a shift to a plan or state led approach to offshore wind development and delivery, and which will be the approach taken for all future ORE development in the longer term.
Phase 2 of Ireland’s offshore wind will exclusively procure a set volume of offshore wind capacity for development within individual offshore renewable energy (ORE) designated areas. These areas are to be designated in accordance with legislative provisions for Designated Maritime Area Plans (DMAPs) in the Maritime Area Planning (MAP) Act. The first of these DMAPs has been proposed off the South Coast which the Department of Environment, Climate & Communications (DECC) have been consulting on over recent months, with the aim of seeking formal adoption of this site in Q1 2024.
Phase 2 will include at least 2 offshore auctions and this capacity is expected to make up the remainder of the 5 GW target. The second offshore auction (ORESS 2.1), expected to open in 2024, will take place off the South Coast and will procure a single 900 MW project. ORESS 2.2 will be procure additional capacity off the east coast.
Future Framework
Following Phase 2, and as we move beyond 2030, further ORE development will form part of Ireland’s Future Framework for ORE. This framework, which is currently in development and to be consulted upon in Q1 2024, will be an overarching economic strategy with a cohesive focus which will coordinate and align inter-related policies (which impact on ORE development) under its banner, including Ireland’s Spatial Strategy for ORE, the National Industrial Strategy for Offshore Wind, the Offshore Transmission Strategy. This framework will set the groundwork for longer-term ORE development, introducing opportunities for floating offshore wind and green hydrogen production and include a roadmap for future DMAPs.
In December 2023, the North Seas Energy Cooperation (NSEC) published indicative auction timelines and volumes out to 2030 from across the NSEC member countries, including Ireland. This also included the publication of anticipated construction timelines to 2040 associated with these auctions. For Ireland, this maps out the intention and commitment to delivering 20 GW of offshore wind by 2040.
National Industrial Strategy for Offshore Wind
It was announced in May 2023 that the Department of Enterprise, Trade and Employment (DETE) would lead on the development of an Industrial Strategy for offshore wind in Ireland, working closely with other Government departments, through the Offshore Wind Delivery Taskforce, and with industry and other key stakeholders. The strategy will set out a roadmap to ensure that Ireland captures a significant proportion of the value of the supply chain to deliver an offshore wind sector of scale and maximises the economic benefit associated with the various routes to market for this renewable energy.
In December 2023, Ireland was one of 26 EU Member States to sign up to the European Wind Charter as part of the European Wind Power Action Plan, published in October 2023. This Charter seeks to develop and improve the conditions necessary for the delivery of wind energy targets by supporting EU companies and improving their competitiveness.
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