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Saving Ireland with offshore wind

Dec 10, 2018
By Michael Hayes

Ireland is expected to experience strong, sustained growth in electricity demand between now and 2030. In an analysis of various future energy scenarios, EirGrid estimates that Ireland’s total electricity requirement will increase by between 22% and 53% by 2030. This increased demand must come from renewable sources in order to satisfy both national and EU targets, as well as CSR agendas of large corporations and FDI.

Ireland has set a target that 40% of all electricity comes from renewable sources by 2020, rising to at least 55% by 2030, with many industry participants encouraging 75% by 2030. The EU has also set a separate target of 16% where all energy is to come from renewable energy sources by 2020, rising to 32% by 2030.

Analysis by the Sustainable Energy Authority of Ireland (SEAI) suggests Ireland will miss this 16% target, with the current trajectory suggesting it will only achieve 13% by 2020, and likely result in EU fines.

The essential role of offshore wind

Meeting the future renewable electricity demand while also meeting EU renewable targets will require Ireland to deploy between 400MW to 700MW of new renewable generation capacity per year against a historic onshore wind deployment rate of c.200MW per year. While solar and onshore wind can and will play a role, offshore wind is the only technology with the scale and deployment capacity to meet this demand in full.

Dramatic reductions in technology prices and improved performance now mean that offshore wind costs a fraction of its historic pricing, with a trajectory to hit parity with other technologies in the short to medium term.

Economic and social benefits

Ireland is the only European Union country with an Atlantic coastline which is not developing its offshore resource. Not only is this placing Ireland at an economic and competitive disadvantage, Ireland is missing out on a large number of associated economic and social benefits, including a significant economic boost; 20,000 new jobs by 2040; revitalisation to coastal areas; security over Ireland’s energy supply; and additional volumes of renewable power necessary to attract new foreign direct investment, to name a few. 

There is a strong pipeline of offshore wind projects in the Irish Sea. With clear Government support, these projects could deliver c.1,000MW of capacity in the immediate future that could help mitigate the 2020 fines. There is an additional c.3,000MW that could be delivered between 2020 – 2030.

Long-term impact

With appropriate policy support, Ireland can become an industry leader in the emerging area of floating wind, which is a particular technology where the western seaboard can experience significant benefit due to the nature of the sea basin and the large scale of the natural resource.

In addition, once Ireland has achieved its targets for domestic renewable energy supply, there are significant opportunities in relation to interconnection and export. Such interconnection will support a higher penetration of renewable power onto the Irish grid and enable future exports.

Policy recommendations

In order to facilitate development of the Irish offshore wind industry and stimulate the required private sector investment, specific Government policy support is required.

To ensure joined up work and action, it is proposed that the Government forms an Offshore Wind Development Committee on the model of the IFSC, where the Department of the Taoiseach plays a lead role, to bring together representatives of the relevant Government Departments and State Agencies and industry representatives, with a remit to oversee the work necessary to develop the offshore wind industry.

Based on consultation with key industry participants, I recommend the following policy initiatives:

  • the Government should develop a targeted policy for the development of the Irish offshore wind industry;
  • inclusion of technology-specific support for offshore wind within the proposed renewable electricity support scheme (“RESS”);
  • issue foreshore leases under the current Foreshore Act to enable Irish Sea projects to commence development in the immediate term, and introduce a Foreshore Amendment Act dealing with offshore wind; and
  • implement a specific offshore wind grid connection round for Irish Sea projects.
These policies would facilitate existing projects and provide a stimulus to the industry for future projects, enabling immediate investment and activity in the sector. All of the suggested policies can be implemented in the short term.

You can read the full report here.

Michael Hayes is the Global Head of Renewables in KPMG.