One of the key goals of the government’s 2019 Climate Action Plan (CAP) is for at least 70 per cent of Ireland’s electricity to come from renewable sources by 2030. This is one of a number of targets aimed at lowering Ireland’s carbon emissions to zero by 2050.
"The goal for 2030 is clear, as is what is needed to achieve it, but there are challenges," says Oisín McLoughlin, corporate senior associate specialising in energy mergers and acquisitions with Pinsent Masons.
Explaining the scale of the challenge, McLoughlin says achieving the target will require a doubling of onshore wind capacity, currently at over 4,000MW, and that this will have to be done in far less time than it took to put in place the existing plant. “In addition, to help with the energy mix, solar PV farms will have to come into play, and to advance things in a really transformative way, at least 3,500MW of offshore wind energy will be needed,” he points out.
McLoughlin believes the interest exists in the market to deliver this capacity. "Ireland needs developers, generators, investors and finance providers with the experience, interest and desire to play a part in helping Ireland to reach its 2030 target and there are quite a number of these market players who have been circling for some time," he says.
"According to John O'Connor of PwC, who advises on energy deals in Ireland, these stakeholders are existing players in the Irish market or other markets such as the UK, and Ireland has an existing supply chain for onshore projects which can be leveraged as well as having the benefit of being next to the supply chain in the UK which has been so successful at deploying offshore wind energy at scale."
Financial viability is being addressed. “There is pent-up demand to get projects developed and operational and the Irish government has put in place a plan for at least four auctions to take place this decade under a renewable energy support scheme which helps make renewable projects financially viable. The first of these auctions is scheduled to take place in June this year but there is concern that EU state aid approval for the scheme has not yet been granted.”
Ambitious target
Demand is not a problem either, but grid capacity may be. According to McLoughlin, demand for power in Dublin alone will double by 2028, due to an expanding population, the electrification of the economy and the increasing number of data centres being located in the region.
“This will put pressure on the existing grid infrastructure on the east coast of Ireland,” he adds. “EirGrid’s 2019 East Coast Generation Opportunity Assessment sets out a clear picture of estimated generation capacity in connection points along the east coast, but capacity will have to grow to keep pace with the 70 per cent CAP target. Between offshore wind and more traditional forms of power generation there is going to be competition for precious grid capacity.”
The planning system presents another challenge. In a recent article in the Law Society Gazette, Ronan O'Grady, head of legal at renewable energy developer Solar 21, stated: "One of the key challenges facing developers is the lack of consistency and transparency around the current timelines for planning decisions [on average, appeals between 2017-19 were under consideration for 66 weeks] which greatly diminishes the ability of developers to provide certainty to stakeholders and funders on delivery target dates for projects."
O’Grady further highlighted the importance of providing certainty around project delivery in order to expand the emergent corporate power purchase agreement (CPPA) market, which is a key component of the CAP.
The CPPA will require corporate off-takers of green power such as data centres to meet 15 per cent of Ireland’s electricity demand by 2030.
“Past methods of delivering projects will not give Ireland enough time to deploy renewable energy projects at the scale and in the time needed to meet the 2030 target, and something needs to change,” McLoughlin concludes.
“Ireland has a big opportunity to do the right things and to achieve an ambitious but attainable target. That ambition needs to be met with deployment at pace and development challenges need to be overcome quickly.”