New research has warned that international investment in Ireland’s offshore wind sector is in jeopardy without clarity on the necessary market rules and lower levels of risk.
The findings were revealed in analysis commissioned by Cornwall Insight Ireland in partnership with the Offshore Renewable Energy (ORE) Catapult and leading international law firm Pinsent Masons.
In the report, A Great Leap Forward? Offshore Wind in Ireland, it is outlined how Ireland has some of Europe’s best wind resource. However, large-scale offshore wind deployment has fallen behind other markets because of a lack of strong policy support.
The analysis finds that current policy developments will deliver support for a maximum offshore wind deployment of 2.4 GW by 2030.
As the Irish energy industry faces fundamental changes, the paper finds an evolving landscape for the offshore wind sector. The new Integrated Single Electricity Market (I-SEM) is set to go live on 1 October 2018, altering the risk and reward dynamic for generators and suppliers, particularly for variable generation such as wind.
In addition, the Renewable Electricity Support Scheme (RESS) should allow offshore wind to access stable revenues via a contract for difference mechanism, but detail is still lacking on key elements including auction design.
Both of these market changes have been designed to promote more effective competition and encourage investment in renewable generation. However, the paper proposes several potential barriers to this. It finds that to attract competitive tension from investors, Ireland must be viewed as an enduring market with a stable, coherent and long-term framework to establish a viable offshore wind sector.
A range of recommendations are put forward for policy makers and industry to unlock Ireland’s offshore wind potential.
These include: resolving the longer-term outlook for managing offshore wind under the Enduring Connection Policy (ECP-1) and enacting the Maritime Area and Foreshore Bill as rapidly as possible.
Further detail is also called for on technology caps available for offshore wind in RESS auctions, and the mechanics of those auctions.
Cornwall Insight head of Ireland Conall Bolger said, “With a relatively unexploited resource, the experience of other markets from which to learn, and a willingness to support offshore wind projects under the new proposed support scheme for renewable energy, Ireland is poised to move forward. This paper marks the start of Cornwall Insight Ireland’s contribution to the debate on how best to develop policy and regulatory frameworks to encourage investment in offshore wind.”
Irish Wind Energy Agency Association chief executive Dr David Connolly added, “We really need to see a sense of urgency from the government in eliminating the planning and technical obstructions that have prevented us from exploiting our enormous offshore wind potential.”
ORE Catapult operational performance director, Chris Hill said, “The untapped potential for offshore wind in Ireland is enormous, and with it the opportunity to generate significant employment and economic value. Proximity to the UK can take advantage of existing innovation networks, but positive policy support is required to catalyse these benefits.”
Pinsent Masons head of energy (Ireland) Richard Murphy said, “This report is important to informing the debate, but we now need those with their hands on policy levers to shift from learning to doing.
“Our work shows Ireland needs a better alignment across policy and regulatory frameworks to allow projects to come forward to market. With the rich resources we have, and strong fundamental structure underpinning our market it is inconceivable we would neglect such an opportunity.”
In recent months other parties have also argued that a clear signal from the Irish government is needed supporting potential Irish offshore wind energy projects if the country is to meet renewable energy targets.
A strategic environmental assessment, undertaken as part of the process to develop the Offshore Renewable Energy Development Plan, identified a potential of 4.5 GW of offshore wind that could be developed without significant impact on the environment.