This is an extract from a recent report “Ireland 2024: Energy policy Review’ by IEA.

Ireland has an enormous, largely untapped, renewable energy potential and has to date built almost 6 GW of capacity of mostly onshore wind and solar PV. It has ambitious goals for offshore wind, which offers the opportunity to enable the decarbonisation of the power sector but also turn the country into a net exporter of electricity and eventually hydrogen. This would allow meeting current and future electricity demand, including for new data centres, and for heating and transport. Offshore renewables in Ireland have the potential to also support the energy transition in other areas of the economy. This, in turn, offers substantial economic and social benefits and contributes to a just transition. In 2022, Ireland’s total electricity generation was 34 TWh, with 13 TWh from renewable energy sources. Fossil fuels generation was made up of natural gas (49%), coal (7%), oil (3%) and peat (1%). In CAP23 and the draft CAP24, Ireland committed to reach a target of 50% renewables in electricity demand by 2025 and 80% by 2030. The 2022 share of renewables according to EU regulation (RES-E) was 36.8%.

In line with commitments in the CAP, electricity production from peat ceased in 2023; coal is expected to follow in 2025. ESB’s Moneypoint power station has submitted a planning application to convert from using coal to heavy fuel oil by the end of 2025. The retention of Moneypoint on heavy fuel oil post-2025 will only be to ensure security of supply as a backup unit. Ireland is targeting the delivery of at least 2 GW of new gas-fired power by 2030 to replace the need to retain older power plants such as Moneypoint. Coupled with the integration of larger volumes of variable renewable resources, Ireland could face a temporary heightened reliance on natural gas-fired generation to maintain security of supply during periods of low wind activity. It could address this risk with the timely completion of additional interconnector projects.

To reach the 80% renewable generation target by 2030, Ireland plans to have 22 GW of renewable electricity capacity installed, up from 6 GW at the end of 2023. Specifically, Ireland has set targets to achieve the deployment of 9 GW of onshore wind, 8 GW of solar PV and at least 5 GW of offshore wind capacity by 2030. Beyond 2030, Ireland expects offshore wind to account for the dominant share of new renewable capacity additions; however, further deployment of new and repowered onshore wind and solar is expected throughout the 2030s. The accompanying challenges of this accelerated delivery of renewable capacity, however, need to be carefully managed to ensure a sustainable and affordable energy transition is delivered within the projected time frame.

Since 2020, Ireland’s main instrument to reach its 2030 targets is the RESS that auctions grid-scale capacity additions across eligible technologies. The RESS-1 auction awarded 479 MW of onshore wind capacity and 796 MW of solar capacity. The country’s first grid-scale solar project of 8 MW was connected in April 2022. However, the strike prices for solar were notably higher than in auctions in other European countries and the industry expressed concerns about high grid connection costs in addition to the difficulty in obtaining connections and lack of indexation to inflation. The RESS-2 auction in 2022 awarded over 1.9 GW of renewable generation capacity, of which solar accounted for almost 80%.

Eligible technologies included onshore wind, solar and, for the first time, so-called hybrids, the co-location of storage coupled with renewable generation to better utilise renewable energy sources and support security of supply. One hybrid solar and battery farm project and ten community projects were among the successful bids. The RESS-3 auction was held in 2023 and awarded 646 MW, of which solar accounted for 77% of the awarded capacity or around 50% of the anticipated delivered electricity. The auction outcome in terms of total MW awarded, however, was well below the government’s expectations, despite offering an inflation-indexed offer price in the first auction alongside the removal of curtailment risk for bidders. Nonetheless, the RESS-3 auction targeted mature projects capable of early delivery and reinforced the government’s commitment to annual auctions. Ireland anticipates a larger RESS-4 auction in 2024.

The ambitious renewable targets require a stronger focus on spatial planning. Spatial planning needs to take a comprehensive approach, as it is relevant to several areas such as developing grids, including for offshore wind; identifying the best locations for renewables considering existing and planned infrastructure, using energy clusters; and reducing curtailment. Spatial planning also informs infrastructure requirements and the supply chains for offshore developments and heat recovery from data centres. Digitalisation can play a vital role in, for example, accelerating permitting processes; sharing spatial planning information with eligible stakeholders, such as potential project developers and relevant hosting communities; and fostering demand-side measures and strengthening connections between distributed renewables and smart end-use devices. The ambitious targets for solar and onshore wind farms will impact land use planned on existing brownfield sites or greenfield sites such as agricultural land. Spatial planning should effectively and efficiently engage the public through the early involvement of the hosting communities.

Planning exercises should also carefully assess and consider environmental protection and biodiversity, ensuring environmental sustainability is taken into account upfront by design, thus lowering the risks of local and legal challenges at a later stage of project design or licensing. The process implemented by EirGrid for the Celtic Interconnector is an example of best practice from Ireland. Ireland could refine this process further and apply it to upcoming infrastructure investments. Auctions under the RESS use a developer-led approach, which has been successful in obtaining new capacity. Conversely, the absence of resources to manage the foreseen volumes of new capacity has, along with other factors such as challenges in the planning and construction of network upgrades and increased load, contributed to enhanced congestion on the electricity network. Greater alignment between regional and local renewable energy planning and the development of the electricity network, including through the identification of renewable energy acceleration areas and the development of renewable energy hubs, will be important in this regard.

Framework to develop Ireland’s vast offshore renewable energy

Ireland is conscious that its ambitious renewable targets require close engagement by the government and other state actors during the transition from the current decentralised developer-led to a plan-led and eventually the so-called enduring regime for the period beyond 2030. Key to this transition is the Offshore Renewable Energy Future Framework Policy Statement, which signposts the plan-led approach for offshore renewable energy (ORE) development from 2030 to 2050. A key action is an ORE Roadmap for Designated Maritime Area Plans, which is informed by the country’s first National Marine Planning Framework, its first national marine spatial plan and the Maritime Area Planning Act, both of 2021. The Act requires each project developer to obtain maritime area consents as a pre-condition to apply for planning permission. For this, the Act foresaw the creation of a new and independent state agency, the Maritime Area Regulatory Authority (MARA), which was established in July 2023.

MARA is tasked with, among other functions, assessing and granting maritime area consent applications, monitoring compliance with legislation, an enforcement role relating to consents and, to a certain extent, planning. Lastly, Ireland should promote facilitating future developments in maritime spatial planning as needed, as well as consenting and permitting processes, including in environmental impact assessments considering innovative areas such as the analysis of cumulative impacts. The government should also promote the development of scientific and academic research on areas of benefit to Ireland and its offshore wind farm deployment, as well as improving instalment, operation and maintenance, including of offshore floating wind. Public access to data from offshore developers and wind farm operators can support the necessary research and improvement of state processes.

The ORE Future Framework policy addresses these suggestions by determining actions to enable the long-term, sustainable and planned development of Ireland’s offshore wind, tidal and wave resources. For this purpose, statutory designated maritime area plans, which are regional spatial plans, are required, as per the Maritime Area Planning Act. The upcoming Roadmap for Designated Maritime Area Plans will enable the proactive construction and upgrading of required complementary infrastructure. The National Policy Statement on Electricity Interconnection signalled an integrated approach to transmission grid development. The upcoming Offshore Transmission Strategy will build upon the Future Framework, seeking to align both forward planning and the delivery of infrastructure. While the new frameworks are being developed, Ireland held its first dedicated offshore wind auction (ORESS-1) in 2023 under the developer-led model.

ORESS-1 awarded over 3 GW capacity. Winning bids received a 20-year contract for difference. Ireland will host two more auctions before 2030 to meet the 5 GW of grid-connected and fixed-bottom wind power installation target. ORESS-2 is the first auction under this transition to the plan-led regime and will invite bids for 900 MW in the newly designated maritime areas. A policy statement for this was issued in March 2023 to set out the framework for the next auctions. Ireland is also preparing to invite bids for 2 GW of offshore wind power for non-grid limited use by 2030. Beyond 2030, Ireland targets the installation of 20 GW offshore wind by 2040 and at least 37 GW by 2050.

Scale up the grid to accommodate offshore renewables

Ireland’s transmission network requires substantial investments to cope with the expected development of onshore and offshore capacities, the need for new offshore grids, and onshore reinforcements to link such offshore production to demand centres. In addition, the network needs to connect the vast amount of new renewable capacities and account for new demand, including EVs, heat pumps and data centres. Currently, electricity grid development is at risk of becoming a bottleneck to achieving the 80% RES-E target. The transition to a plan-led offshore renewable energy system requires a corresponding transition for the offshore electricity transmission system. Ireland can make better use of existing renewable resources by increasing flexibility in licensing, repowering and hybridisation. This will also support the affordability objective, lower the impact on land use and reduce the need for flexible firm generation capacity. Ireland has a large potential to maximise the utilisation of existing assets and promote the co-existence of technologies in single connection points. Repowering of existing installations and hybridisation are ways of efficiently maximising the use of existing grid capacities and to limit grid expansion needs (though grids may need reinforcement) and the government should, therefore, support and facilitate this as much as possible.

If Ireland wants to remain on track for its expected delivery in 2030, it urgently needs to start investing in the supporting infrastructure needed for the development of offshore wind. Ports in particular require immediate investments to be ready to convey the equipment out to the wind farms. Presently, however, no Irish port possesses the required facilities or capabilities to support the delivery of Ireland’s renewable energy ambitions. Irish ports do not have the financial resources to deliver projects of the scale needed and access to private investment may be difficult. Some form of government support will be needed to enable the necessary investment and unlock the opportunity Ireland’s renewable resources offer. Many floating wind designs are competing for commercial deployment, which have different infrastructure requirements. Floating wind, as opposed to bottom-fixed wind, carries most of the assembly onshore.

Therefore, ports will need to expand their land area, quay reinforcement, storage for components, carrying capacity, cranes and other retrofits to host the mass production of floaters and other turbine components. Supply along the offshore wind energy chain is a big constraint. Ireland has a limited maritime sector in general, and no offshore wind-dedicated supply chain, with only pilot capacities installed in the past. While it is not realistic nor beneficial to try to localise all of the necessary supply chain in Ireland, small and mediumsized enterprises such as service providers or component developers could become locally placed soon. One example of a gap in the wind energy supply chain, for example, is the absence of indigenous cable manufacturing and laying supply chain, both to enable Ireland’s offshore ambitions and facilitate disaster recovery.

Recommendations

  • The government of Ireland should encourage corporate power purchase agreements to foster additional market-based financing and promote partnerships between renewable and energy-intensive industry projects, including electrolysers and data centres.  
  • Design a streamlined system for repowering renewables, upgrading grids and facilitating hybrid connections (i.e. solar PV/wind/batteries). 
  • Ensure that the recently established Maritime Area Regulatory Authority is sufficiently resourced in terms of staff numbers and skill set. 
  • Explore avenues for information sharing and collaboration with European countries of a similar size and high offshore renewable energy potential, with a view to developing strategic options for at-scale connection of this potential with future demand.  
  • In its review of the National Ports Policy, assess the opportunities to attract the necessary finance to the sector, increase marine planning capability and capacity, and introduce measures to upskill and diversify the maritime labour force, to support the development of offshore wind projects.

Access the report here