Government Policy on Phase 2 of Offshore Wind Development in Ireland
We looked here at recent indications from DECC that there will be a faster move to a plan-led approach to developing offshore renewable energy. This has been followed by publication of the Policy Statement on the Framework for Phase 2 Offshore Wind.
While the Government wishes to see 7GW of new offshore generation capacity, the line of sight for Phase 2 development is now limited in this Policy Statement to less than 1GW. This raises concerns around whether Ireland will be able to meet its ambitious targets. It also highlights the importance of getting to grips with the need to adequately invest in the grid.
Some of the key points in the Plan are set out below.
Unsuccessful ORESS 1 projects will be afforded a “strictly limited period” by the CRU within which to secure a CPPA, beyond which they will have to give up their Grid Connection Assessments.
Two areas geographically aligned with existing onshore grid capacity on the South coast are to be formally designated by the end of 2023, following which the ORESS 2 auction will launch, also intended to be done by the end of 2023.
The two proposed Designated Areas that have been identified will be for two grid connections of approximately 350MW, each at different locations. The precise location of the onshore connection nodes is to be identified by EirGrid over the coming months. ORESS 2 participants will compete for supports to develop 350MW of offshore wind projects utilising proven technology that has been delivered at scale in other jurisdictions within each of these areas, or a 700MW project within a single area. Innovative ways to maximise the energy output from these maritime areas beyond the level of available grid capacity will be considered: the auction winner selection process may include weighting towards projects that can deliver additional non-grid connected capacity. Further ORESS 2 design considerations may include weighting for co-location of flexible demand, overbuild, storage or other innovation that would maximise GHG reductions in the State.
It is not yet known whether a MAC will be required to compete in ORESS 2, but this is expected to be outlined in the coming weeks, to coincide with the publication of proposed Designated Areas, and following further discussion between DECC, MARA and relevant stakeholders. If MACs are not required in order to compete in ORESS 2, projects will still have to show the same financial and technical competency requirements sought by MARA in respect of MAC applications and, potentially, further declarations relating to project delivery and supply chain access.
Subsequent Phase 2 auctions will only take place following identification by EirGrid of additional available grid connection capacity. Participation in Phase 2 auctions will exclusively relate to offshore wind projects for delivery by 2030 to meet the 5GW target.
The location of further Phase 2 Designated Areas, and holding further auctions after ORESS 2, will be determined by the availability of additional onshore grid capacity that may arise should Phase One projects fail to achieve a route to market or planning consent.
Phase 3 projects, expected to be in development by 2030, will pursue the additional 2030 target of 2GW of floating wind for hydrogen generation. Phase 3 will be informed by the Offshore Renewable Energy Development Plan to be published in Q2 2023 and the Hydrogen Strategy to be published by Q3 2023. The Government states it will endeavour to initiate a dedicated floating wind route to market in 2024 but that further consideration and consultation is needed.
Floating Offshore Wind
Floating wind is to be pursued, on completion of the policies identified below, in an Enduring Regime off the South and West Coasts.
- Anticipated over the next 12 months: An Offshore Renewable Energy Development Plan; an updated National Policy Statement on Electricity Interconnection; a Net Zero Electricity System Pathway; and a Green Hydrogen Strategy.
- Anticipated in Q1 2024: An Enduring Regime for Offshore Wind Policy; and a Phase 3 policy.
- Anticipated in 2024: On completion of the above policies, the Government intends to open a specific route to market for floating wind projects within the Designated Areas.
The Government states that, to expedite delivery, EirGrid “will proactively develop offshore grid transmission infrastructure for ORESS 2” including offshore substations and submarine cable connecting offshore substations to the onshore grid. ORESS 2 participants will compete for supports to develop offshore arrays that connect to offshore substations developed by EirGrid.
For auctions after ORESS 2, successful bidders may be required to develop all offshore transmission assets, including offshore substations, as per Phase 1, which will be subsequently transferred to EirGrid. Such projects would include the costs of developing this infrastructure in their ORESS bids, informed by EirGrid grid connection charges for each Designated Area. All offshore transmission assets will ultimately be transferred to EirGrid ownership.
The Government is to develop a policy on hybrid grid connections and to support the potential creation of industrial clusters. In this context it is worth noting that the Climate Action Plan 2023 commits to ensuring by Q4 2023 that hybrid technology grid connections are facilitated and remaining barriers removed.
Route to Market
The Government states it will provide at least four ORESS auctions this decade and support alternative routes to market.
MARA is to give priority to energy and energy-related developments for the first year of its existence. The policy states that this prioritisation will follow through to other key decision-makers such as An Bord Pleanála.
A new National Ports Policy is anticipated.