Ørsted, ESB win rights to develop Irish offshore windfarm

The Tonn Nua site, which is off the coast of County Waterford and spans an area of 306 km², was designated by the Irish government as the only site for bidders under Ireland’s second offshore wind auction.

The auction offers a partially indexed 20-year contract for difference (CfD), and the right to apply for a seabed lease and grid connection for the winning bidder. The contract for difference is to support the development of a 900-MW fixed-bottom offshore windfarm at the Tonn Nua site.

The Tonn Nua site is in an early phase of development. The project now needs to be assessed, matured and successfully pass all gates in the joint venture’s stage-gate process, including meeting the value creation criteria. Final investment decision is expected around 2031 and first power in the mid-2030s.

The next step for the project is to seek a Maritime Area Consent and Marine Usage Licence from the Irish Maritime Area Regulatory Authority to commence surveying and assessment ahead of submitting a planning application for the development.

The two-way CfD was awarded at a strike price of €98.72 per MWh. The partially indexed CfD will run for 20 years from windfarm commissioning expected in the mid-2030s.

Ireland’s transmission system operator (TSO) EirGrid will build the transmission assets (offshore and onshore substations and export cables). The windfarm must be operational by the longstop date of 1 January 2037 under the CfD terms and conditions.

Ørsted head of Europe Alana Kühne said, “We commend the Irish government for running a successful auction continuing the support for the development of offshore wind in Ireland. 

“Offshore wind will play an important part in the future Irish energy system ensuring green, affordable and secure energy. We will continue to work with our joint venture partner ESB to carefully assess and progress this early-stage development opportunity, including ensuring that the project lives up to our value creation criteria.”

ESB executive director for generation and trading Jim Dollard said the outcome of the auction “secures a clear pathway for the development of a significant project.” He said it was also “another important step toward Ireland’s renewable energy and Net Zero ambitions.”