Cornwall Insight’s head of Ireland Conall Bolger argues that Ireland’s offshore wind market could take off if a number of key issues are addressed
Renewables growth in Ireland has been a story with one key protagonist – onshore wind. Its offshore cousin has not progressed beyond a single operational project – the 25 MW Arklow Bank installation. This development lacuna has occurred despite the significant resource available offshore in Irish waters.
The strategic environmental assessment, undertaken as part of the process to develop the Offshore Renewable Energy Development Plan (OREDP), identified a potential of 4.5 GW offshore wind and 1.5 GW wave and tidal sites that could be developed without significant impact on the environment.
Recently, Irish offshore wind has piqued interest as evidenced by the increased attention at industry events and a number of recent developments:
With all this activity, has the sector’s time come? Perhaps, but it will still have to come to grips with a number of issues if it is to have a chance to attain the scale seen in peer northern European markets us as the UK and Germany.
There is more than 4 GW of offshore wind projects in the Irish connection queue. The scale of the connections and the likely onshore network reinforcements need consideration.
Offshore windfarms require scale to be economic and need access to larger connections. A process in which capacity is rationed out in batches, such as an ECP-1 style process of 1 GW volumes being released, may not be consistent with a significant volume of offshore renewables being connected.
Given the need for integrated development with the offshore generating stations already under early stage development, the status quo approach to connections may not be appropriate. Perhaps an offshore transmission owner-style regime may need to be considered, whereby offshore wind developers build connections to the onshore grid and then the regulator auctions these under individual licences, supported by predictable revenue streams, to independent parties.
The marine environment is large – over 10 times the land area of Ireland according to the OREDP. It is also physically complex. Developing offshore wind in the marine environment entails managing a variety of ecosystem impacts (such as spawning seasons), physical issues (waves, scour, water depths), health and safety (vessel transfer), and archaeological considerations (there are sunken vessels from the Spanish Armada off the Irish coast).
There is also a multiplicity of stakeholder interests that need to be managed: examples include fishing, minerals, offshore oil and gas, naval interests, plus a multitude of responsible agencies (the Irish Sea Fisheries Board, Marine Institute to name a couple).
To manage these in a way that allocates risk and responsibilities clearly for the developer, a robust, efficient and fit-for-purpose leasing and consenting regime is necessary.
The Maritime Area and (Foreshore) Amendment Bill, seeking to address these concerns, was published in October 2013, but is yet to be made law.
Central to enabling offshore energy is an emphasis on research across the project lifecycle. The Sustainable Energy Authority of Ireland, the Marine Institute and the Centre for Marine and Renewable Energy are undertaking valuable significant research in the space.
In addition to taking the lessons from neighbours who have progressed multiple projects (UK, Denmark, the Netherlands and Germany), to access scale benefits and operationalise research there is probably scope for greater collaboration between government, industry and the research community. The experience of the Offshore Renewables Joint Industry Programme in the UK may be instructive.
Route to market
There have been significant cost reductions experienced in other European markets in offshore wind. The UK projects received Contracts for Difference in the September 2017 auction of £57.50/MWh, a reduction of 47% on the February 2015 round.
This number was quite an achievement considering the Crown Estate’s previous goal was to achieve a price of £100/MWh by 2020.
In the context of Ireland likely missing its 2020 targets, the scale afforded by offshore wind, and a likely pressure for even stronger 2030 emissions targets, the Department for Communications, Climate Action and the Environment (DCCAE) may need to consider whether it provides a similar route to market for offshore renewables.
DCCAE noted in its consultation that offshore wind may require its own auction category within future competitions under the forthcoming Renewable Energy Support Scheme.
It should be noted that the detailed economic analysis supporting the paper quotes a levelised cost of energy figure of €103-129/MWh (admittedly with wide uncertainty bands) by 2030 for offshore wind, which seems out of step with the figures materialising in auctions in other European markets.
Under them skies of blue…
There is clearly potential for large-scale offshore wind projects in Irish waters, if the necessary frameworks can be put in place around connections, consenting, research and route to market. Will Ireland Inc make the decision? The future is wide open.
Cornwall Insight has been involved in many of the issues that affect energy production, transportation and retail markets on the island of Ireland. Its work covers issues including network regulation and competition, market design, infrastructure pricing and the economic and policy basis for low-carbon energy, with our projects broadly spanning the sector.