Offshore Renewable Energy Development in Ireland: DECC signals faster move to Plan-led Approach
In recent years, the Government signalled a phased transition to plan-led development of offshore renewable energy as outlined, for example, in the 2021 policy statement on the offshore transmission system, which we looked at here.
Phase 1 Projects, which are developer led, have received Maritime Area Consents and the first Offshore Renewable Electricity Support Scheme auction is underway.
Phase 2 Projects are intended to bridge the gap between the volume of capacity that can be delivered in Phase 1 and the 2030 offshore target (5GW). The Selection process for Phase 2 Projects was consulted on here and a policy statement is expected in Q1 of 2023.
It was recently indicated by DECC that, in light of the war in Ukraine, Phase 2 will be used to accelerate delivery which will mean using a plan-led approach, led by grid connection. DECC indicated that it intends shortly to designate two areas along the South coast and South-East coast, based on scarce grid connection. These would be subject to Designated Maritime Area Plans (“DMAPs”) to be made under the Maritime Area Planning Act 2021. The DMAPs would be progressed this year into January 2024. It has been indicated that EirGrid will consult on, and then specify, the location of two nodes into which projects will connect. Pending the outcome of the ORESS 1 auction in summer 2023, consideration may be given to designation of a third area.
Phase 3 was initially conceived as the enduring regime but is now being earmarked as an additional phase, separate from the Enduring Regime. The focus will be on achieving an additional 2GW capacity for hydrogen production from floating wind. DECC indicated that it intends to launch the policy for this phase in 2024.
Both Phase 3 and the Enduring Regime are to be informed by the Offshore Renewable Energy Development Plan II, currently being consulted on. We look further at the OREDP II here.
Offshore wind energy development carries very high levels of risk for developers, increased by current global market competitiveness in securing supply chains. A plan-led approach recognises the State’s role in creating a framework in which investment is possible, and risks within the State’s control – such as adequate and timely grid development – are critical to achieving a successful offshore energy industry.
However, the State can manage risk in a variety of ways and, notwithstanding the benefits of a plan-led approach as an enduring solution, given where we are today in the race to meet 2030 targets, it is questionable whether a plan-led approach this decade will in fact accelerate delivery and/or result in more operational projects by 2030.
Given the long lead in time and very significant levels of private capital investment required for delivery of offshore renewable energy capacity, it is crucial that developers have access to information that is both consistent and reliable over the long-term around spatial planning of Ireland’s maritime area. Ireland’s renewable potential will not be met without investment in adequate grid infrastructure and, without information at this stage on the further potential areas for Phase 2 development, meeting 2030 targets will be very challenging. Certainty is critical.
…it is questionable whether a plan-led approach this decade will in fact accelerate delivery and/or result in more operational projects by 2030.