Successful auction signals bright future for Irish renewable energy
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, Minister for the Environment, Climate and Communications, outlines why confidence is at an all-time high in Ireland's offshore wind energy sector.
Ireland’s vast offshore wind resource means the potential of the renewable wind energy sector cannot be overlooked. The scale of this resource is huge. Our sea area is seven times that of our land area. Ireland's statutory climate objective is a 51% reduction in emissions by 2030 and net-zero emissions no later than 2050.
Increasing the share of renewable energy is a critical element of achieving this aim. Renewable energy use through offshore wind can eradicate our dependence on imported fossil fuels, and bring a vast reduction in CO2 emissions. At the same time, it will help us to create jobs, future-proof our businesses and sustain and develop local communities. We now have opportunity to become a world leader in renewable energy.
Maximising renewable wind energy is a significant priority for this Government. To increase the pace of delivery of our ocean energy potential in a responsible way, we are implementing a Government-wide delivery and acceleration plan via the Offshore Wind Delivery Taskforce. This whole-of-Government approach is mobilising all relevant Departments and State agencies ensuring we work together, so potential economic and societal benefits of offshore wind are maximised, through a number of simultaneous phases.
The first and second of our offshore wind phases focus on ensuring we meet the targets set out in our Climate Action Plan of producing at least 5 gigawatts (GW) of installed offshore wind capacity by 2030, with an additional 2GW earmarked to produce green hydrogen and other non-grid uses.
In addition, we are working on a post-2030 future framework for offshore wind which is expected to feature floating offshore wind. This plan-led approach means that we will achieve our renewable energy goals in a way that is both environmentally and economically sustainable.
The clearest signal yet that Ireland can become a renewables powerhouse arrived last month when the provisional results of our first offshore wind auction were announced. The auction invited renewable energy projects to compete against each other by bidding as low as possible to win contracts to provide electricity at the bid price for a 20-year period.
The auction results surpassed expectations, both in terms of the total volume of renewable energy procured and the low price at which it has been secured. The hugely-competitive price secured — at an average of €86.05/MWh (megawatt hour) — is one of the lowest prices paid by an emerging offshore wind market in the world. For comparison, the average wholesale electricity price in Ireland over the past 12 months was more than €200/MWh. This price will save Irish electricity consumers hundreds of millions of euros per year.
With a combined capacity of more than 3GW, this first auction has delivered sufficient offshore wind potential to power more than 2.5 million Irish homes. This is by far the largest volume of renewable energy Ireland has ever procured at auction and it shows that offshore wind will deliver a cheap, sustainable, and secure indigenous alternative to imported fossil fuels.
The development of these first offshore projects, three on the east coast and one on the west coast, will be overwhelmingly positive for rural, coastal and local communities. It will create sustainable local jobs, tens of billions of euros of inward investment and wholesale societal gains. What’s more, under the community benefit fund provisions of the auction, the successful projects will make payments to the local marine and coastal communities hosting offshore renewable energy projects. These communities will now benefit from over €24 million per year, beginning before construction and continuing for up to 20 years after a project begins to produce renewable energy.
We are also stepping up the delivery of the next phases of offshore renewables development in Ireland. As outlined in the Policy Statement on the Framework for Phase Two Offshore Wind, the Government is accelerating the establishment of Designated Maritime Area Plans (DMAPs), including an initial south coast plan which will enable the start of Ireland’s second offshore wind auction before the end of this year. This auction, and all subsequent phase two auctions, will result in the development of offshore wind capacity within 'Offshore Renewable Energy Designated Areas'.
These areas, which will be designated according to legislative provisions DMAPs in the Maritime Area Planning (MAP) Act, will guide investment and decision-making and will complement the forthcoming network of Marine Protected Areas. This plan-led approach will ensure that development is managed in a planned, strategic and sustainable way. Importantly, it will provide greater certainty for all maritime users as to where offshore wind projects will be situated.
The approach we have chosen streamlines the development process for offshore renewable energy by optimising the State’s consenting, planning and grid development resources. It represents the best opportunity to meet our ambitious 2030 climate and energy targets, while at the same time bolstering our security of supply. It will also provide additional certainty for investment in Ireland’s offshore renewables sector due to enhanced project delivery prospects.
To harness the renewable energy power of Ireland’s wind, waves and tides, we need to ensure we use the right offshore technologies in the right places. This will be guided by the Offshore Renewable Energy Development Plan (OREDP II) which is due to be published later this year. The plan sets out Ireland’s strategy for the future of offshore renewable energy in Ireland. It is one of the key building blocks being progressed now by Government to deliver on our ambition to develop 2GW of green hydrogen and at least 30GW of floating energy beyond 2030.
Momentum is building behind green hydrogen in Ireland, which produces energy through the electrolysis of water, while eliminating emissions by using renewable energy. Last week, my department signed a Joint Declaration of Intent on cooperation in the field of green hydrogen with the German Federal Research Ministry. This will formalise cooperation in respect of green hydrogen between Ireland and Germany and enable it to expand in the coming years.
We are prioritising the work of a new State agency, the Maritime Area Regulatory Authority, which will be formally established on 17th July. This prioritisation will follow through to An Bord Pleanála, where a dedicated marine section has been established to process applications from offshore wind projects. In addition, recognising the crucial future role that ports have in the delivery of offshore energy, the government is supporting the development of indigenous ports through a new National Ports Policy.
Offshore wind installation will ensure that Ireland is well positioned to seize new market opportunities. Just last week, an Irish-based offshore wind energy consultancy firm announced plans to create up to 500 jobs over the next five years. With our resources, it is of little surprise that this untapped opportunity is also attracting world-class companies looking to partner with local energy companies.
There is no doubt that we have made massive progress in realising Ireland’s offshore wind potential. When I started in Government in 2020, there were only a handful of people in the state working on offshore wind. There was no legislation governing the consenting of offshore wind, and only limited policy in place to guide either developers or planning authorities. Since then, we have vastly increased our human resources. Work is well underway to deliver significant benefits not only in the short-term, but also in securing our future for generations to come.
Department of the Environment, Climate and Communications