There was much gnashing of teeth when analysis towards the end of last year showed an overwhelmed planning system, inefficient grid capacity and inconsistent policy are likely to scuttle chances of having renewables powering 80 per cent of the electricity system in Ireland by 2030.
Far from becoming a leader in Europe’s energy revolution, the KPMG report highlighted a shortfall in onshore wind and solar, the sectors that were supposed to provide most emissions savings this decade. The knock-on consequences for plans to massively scale up offshore wind were clear.
For multiple reasons, 2024 is a critical year for pushing through current projects and enabling the first tranche of offshore wind farms to go live within a reasonable time frame. Leading players in the renewables ecosystem have strong views on what can be achieved.
Ireland has the technologies to achieve the 80 per cent target and deliver large reductions in emissions while helping to electrify heat and transport, says Kevin O’Donovan, senior vice-president and managing director of UK and Ireland with Statkraft. The key requirement for 2024, he says, “is to put more resources into the State — so it can deliver what’s there”.
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The Government is getting macro policy right, he believes, with clear targets and specificity on what each technology can achieve. “The problem is implementation,” he adds.
The Department of Environment is working hard “to lead the country through a step change in how we live and operate as a country”, yet it isn’t much larger than it was 10 years ago.
O’Donovan hopes the overhaul of planning legislation will provide clarity on judicial reviews and ensure fixed timelines but he notes it could be the middle of the year before it is enacted. And a fully resourced, renamed An Bord Pleanála is needed, he says.
Looking at Europe, O’Donovan adds: “Incredibly, we all have the same bottlenecks and the same resource issues.” Supply chain problems, exacerbated by inflation and higher costs, are equally evident, but that applies to gas and nuclear too. The bottom line is “wind and solar are far cheaper to build new ... it’s still the far better solution”.
On supporting infrastructure, he says the first offshore projects need a decision on which ports need to be developed to accommodate them, while the State has yet to fully embrace the grid requirements (power lines, underground cables and substations). That requires a political conversation at national and local level to secure understanding of what’s necessary to decarbonise the grid.
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Priority should be to get phase one offshore wind projects “into and through planning”, says Barry Kilcline, SSE Renewables Ireland head of offshore. That accounts for about 4 gigawatts (GW) of the 5GW national 2030 target. The year “2024 is going to be a big year for those six projects. We need every single one of those projects to get anywhere near 5GW,” he said.
There was hope an additional 1GW could be filled from additional projects but it will be 2034 before the next tranche could potentially deliver. “We need to be looking 10 years down the road. If we want delivery sometime in the mid-2030s, we need to start to put in place building blocks now.”
Equally, these projects are not guaranteed. “They all have their own foibles and challenges. Four of them have a route to market by way of Oress (offshore renewable electricity support scheme) ... In reality, one or two of them are going to fail.”
This may be due to not getting planning approval, judicial review or failure to meet the agreed price. Since the Oress auction in April, SSE has seen a 10 per cent rise in capital costs, significantly higher than the inflation mechanism in contracts.
So Ireland next year could be like the US, he says, where developers cannot afford to deliver within the agreed “strike price” and projects are abandoned. The lesson is to give those six projects a chance to deliver “because there will be attrition”.
While Ireland is showing commendable ambition, Kilcline says that “needs to be taken down to [a] granular level to indicate what exactly is going to be auctioned — seabed or a support mechanism. Will grid be part of it and where are sites going to be?” That is essential for confidence and investment.
The UK has an offshore wind industry council, where industry and civil servants sit around the table, agree on auction strategy and identify infrastructure and supply chain needs, which sends strong investment signals.
Industry in Ireland is kept at a distance, he says. “There is an offshore wind task force set up by the Government but, with the best will in the world, it does not have the delivery experience that industry does ... We’re missing a trick there as Ireland Inc.”
There is a problem with small auction volumes too. The UK might auction 6GW in one go whereas, in Ireland, the next auction is 1GW. Big supply chain players are going to go where there is a one-in-three chance of success rather than one in 10 in the less ambitious marketplace.
That weakens Ireland’s ability to compete. Not helping is an extremely limited local supply chain, a litigious planning system and a grid operator that has never delivered offshore to the level now required, he says.
International supply chain challenges are going to continue between now and 2030, he says. The big offshore wind turbine manufacturers are building capacity but not fast enough. There are only a handful of vessels in the world that can install 15MW machines on location, and even fewer vessels big enough to install offshore platforms and power substations. Not many more are being constructed in the short term.
Two vital steps must be taken by the Government, according to Val Cummins, chief impact officer and Ireland portfolio director with Simply Blue Group. The first is to prepare a “future framework for offshore wind” reinforced with timelines. This is planning for the future, separate from short-term targets.
Complementing this is an industrial strategy for offshore energy from the Department of Enterprise. This, she says, is a huge opportunity to put the issue at the heart of regional economic development, address climate and enhance energy security, and above all to reposition Ireland with a sense of ambition in the international marketplace.
It is an opportunity “to deal with the elephant in the room — the route to market” while taking on board stakeholder views. “It’s about ‘what is the market?’,” Cummins says, backed by clarity on policy if Ireland is truly up for becoming a renewables exporter armed with a robust hydrogen strategy.
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The next requirement is to provide designated maritime area plans to facilitate development. The regulatory authority, Mara, is in place but the process is far too slow, she adds.
The Government’s unflagged shift from a developer-led system to a plan-led regime was not without risk but developers have accepted it is a reality they must deal with — ie, projects in designated areas. There is only one designated maritime area plan, off the south coast. They are needed for the southwest, west and off the Shannon estuary.
The Cop28 decision to triple renewables by 2030 is welcome but the climate issue and problems in scaling up can be an emotional rollercoaster, swinging from outrage to cautious optimism, she says. “If you’re a developer you have to believe the problems will and can be overcome.”
Governance issues
Dr Mark White, whose background is in marine development, including energy, and was laterally director of enterprise with Údarás na Gaeltachta, believes structural weaknesses in “permanent government” are hampering progress. Key departments are inadequately resourced, he says, while there is an absence of a one-stop-shop for offshore wind projects.
There needs to be an offshore wind tzar sitting in the Taoiseach’s department with executive responsibility to deliver policy. This driver must be “of the system” to be effective. White adds: “Government departments are happy to say, ‘not my bag’ — someone else’s problem.”
“The Department of Environment and Climate has overseen onshore wind development, in effect to supply domestic needs on a utility basis, but with floating wind likely to be a tradable commodity internationally — and therefore something for Enterprise Ireland, IDA Ireland and Údarás na Gaeltachta to support — it is still a big driver of energy independence, and of opportunities to facilitate growth in traditional sectors like agriculture and IT. And [it] should remain under the department’s remit,” he adds.
Meanwhile, Mara should not be in the Department of Housing. “For all sorts of reasons, not least the conflicts with the National Parks & Wildlife Service and county councils, its natural home is in the Department of Environment and Climate.”
The Department of Transport has a policy of not grant-aiding ports so there is slow progress on their development for offshore renewables when a highly ambitious, speedy path is needed, he added.
All told, White says the Government and public servants need to make clear priority decisions — what’s important in the context of the big picture of accelerating climate change and of our energy independence versus “what are very minor [in many cases non-existent] local negatives”.
Not doing that is tinkering at edges and killing progress, he says. “They need to be empowered to make decisions for ‘the greater good’. They should have an evidence base to stand over such decisions but be enabled to get on with it.”
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