State electricity company ESB and Danish energy group Ørsted have won a State contract to build an offshore wind farm capable of supplying electricity to around one million homes.
Four groups last week bid for a deal to build the wind farm close to Dunmore East in Co Waterford in the latest offshore Renewable Energy Support Scheme auction.
A partnership of the ESB and Ørsted emerged with the winning, €98.72 a mega watt hour (MW/h), the unit in which electricity is sold, the Department of Climate, Energy and the Environment confirmed on Wednesday.
The price is higher than the €86.05MW/h awarded to winning bids to build power plants in the Irish Sea two years ago.
READ MORE
However, the Department and industry groups noted that it compared favourably with similar auctions run in other European countries that have succeeded in attracting bids from power companies.
The price is indexed, so could potentially increase by the time the wind farm begins generating electricity, which department officials believe will be around 2032 or 2033.
The wind farm, dubbed Tonn Nua – Irish for new wave – will generate up to 900MW of electricity, enough to supply almost one million average homes, the department said.
Neither company confirmed how the likely cost of building the offshore power plant, but some industry figures suggest that it could be around €4 billion.
Daragh O’Brien, Minister for Climate, Energy and the Environment dubbed the news an “important milestone” in the State’s efforts to develop offshore energy.
“The highly competitive price secured represents positive news for Irish energy consumers and our nation, bringing us closer to overcoming the challenges of energy security and affordability,” he said.
Timmy Dooley, Minister of State with Responsibility for the Marine, predicted the project would contribute to delivering “a clear and sustainable framework for developing offshore renewable energy”.
Renewable Energy Support Scheme auctions favour the lowest bid. Companies must supply power at the agreed price, with any changes tied to indexation.
The auction was the first over an offshore area designated by the Government.
