Minister: 'Many companies' eager to enter Irish offshore wind market, as Norway's Equinor axes €2bn plans
The planned ESB/Equinor wind farm off the coast of Moneypoint, Co Clare, was a key component of Ireland's Programme for Government pledge to deliver 5GW of power from offshore wind by 2030. Stock picture
The Government wants to make the planning system "fit for offshore wind energy", but is "not too perturbed" at a major blow to the industry, the Public Expenditure Minister says.
Michael McGrath was speaking after the revealed that leading developer Equinor has decided to pull out of the Irish market.
The has learned that one of the main reasons for the company’s decision was dissatisfaction with the regulatory and planning regime.
Ahead of the publication of the Climate Action Plan, Mr McGrath told Newstalk that changes in the planning regime were coming to ensure that a renewable energy auction could take place next year.
"We are determined to make our planning and regulatory system fit for purpose for offshore renewable wind energy. We see enormous potential in this area and it will make a very important contribution to reaching the overall level of 80% of our electricity needs be met by renewable sources," he said.
"There is a need to change the regulatory and the planning system. We are doing that. We have legislation going through the Oireachtas at the moment - The Maritime Area Planning Bill, which for the first time will have a dedicated system in place to address planning issues in respect of all maritime matters, including offshore renewable energy.
"We will be backing that up with investment. We will have a renewable energy auction next year in this area and we do expect by 2025 we will see actual offshore renewable developments in place."
He said Equinor is only one company "and there are many, many companies who are very eager to get into the Irish market because they recognise the competitive advantage we have and the natural assets we have in relation to offshore renewable energy".
"So I wouldn't be too perturbed by that particular development."
Mr McGrath said that today's climate plan will mark an important moment in Ireland's plans to tackle climate change and said that while it will be difficult, it can be a net positive in terms of jobs and the quality of life in Ireland.
"We will invest across all modes of transport in the next decade - €35 billion. We just came out a few weeks ago with the National Development Plan, which is the greenest, most sustainable national development plan that our country has ever seen. So we need to use all of the policy levers at our disposal as a government to bring about this change. We will see a significant shift towards electric vehicles in the next number of years. We do need to see the price of them come down."
Mr McGrath said it is vital to "bring people with us" on climate transition, as they cannot be 'bludgeoned' into change.
The future for offshore wind energy production has been dealt a major blow with the decision of leading developer Equinor to pull out of the Irish market.
The Norwegian company was in a partnership with the Electricity Supply Board (ESB) since 2019, with the aim of delivering a large portion of the 80% of electricity which the country aspires to generate from renewable sources by 2030.
The has learned that one of the main reasons for the company’s decision was dissatisfaction with the regulatory and planning regime that currently exists for offshore energy development.
A spokesperson for Equinor said the company had decided to discontinue its Irish operations as a result of an assessment conducted on its wind power assets.
He declined to answer whether the decision was based largely on frustration with the Irish regulatory system, saying “the decision is based on many things and obviously the regulatory process would be part of that but it is just a part of the totality.
"We won’t comment in detail on how much the regulatory process was involved in the company decision.”
The company, formerly Statoil, contacted the ESB in recent weeks to announce it was pulling out of the partnership.
In 2019, the ESB and Equinor, one of the world's leading onshore and offshore wind developers, signed a co-operation agreement.
Last April, the partnership announced it was set to develop a major 1.4GW offshore wind farm near Moneypoint in Co Clare using floating technology to be built at a cost of €2bn.
When up and running, the facility was expected to produce enough energy to power 1.5m households. An application for a foreshore licence was made at the time, and preparatory work was done for a planning application. It is unclear whether it was a lack of progress in this specific project that prompted Equinor to pull out.
Last night, the ESB confirmed the decision, but said that it remains fully committed to developing a major portfolio of offshore projects.
“Following a review by Equinor of its strategy to develop profitable growth in renewables they decided to stop their early phase offshore wind activities in Ireland, in part due to local regulatory uncertainty,” the ESB said in a statement:
"Equinor has conveyed that they were very impressed with ESB’s professionalism and capability and that they wish ESB every success as they continue to develop a portfolio of offshore wind projects in Irish waters."
According to the ESB, the companies had worked closely together to identify and develop a portfolio of offshore projects around the east, south, and west coasts of the country.
“Significant preparation work, including foreshore licence applications, has been completed and ESB believes that these projects will make an important contribution to the Programme for Government’s target of 5GW [gigawatts] of offshore wind by 2030,” the statement said.
In a statement to the last night, a spokesperson for Environment Minister Eamon Ryan said: “The Maritime Area Planning Bill is the foundation for offshore renewable energy in Ireland and is expected to be enacted by Christmas.
"There will be an offshore energy auction in 2022 and we expect to see projects built by 2025. We note the decision of this company to exit the market. However, there are dozens of others competing to develop Ireland's competitive advantage in offshore wind."
Sources in the wind energy development sector say there are major problems with the regulatory regime at the moment as the applications for development are mounting and the new Maritime Area Planning Bill is still going through the Oireachtas.
“The main regulatory framework is decades old with various amendments,” one source said.
"But the problem is that the new regulatory authority will not be up and running possibly for another couple of years even at this rate.
"In the meantime, enough resources are not being put in to operate the existing system. There are backlogs and it will get worse as the market for wind energy ramps up over the coming years.”
Wind Energy Ireland expressed regret at Equinor’s decision.
“We are sorry to see one of the world’s leading energy companies pulling out of Ireland, but it is important to remember we still have some of the best offshore wind energy resources in the world and a growing pipeline of projects,” said CEO Noel Cunniffe.
“We are confident we will deliver offshore wind energy in large volumes and get projects connected before the end of the decade.
“But this decision simply underlines what we have been saying for some time. We are not reforming Ireland’s planning and regulatory framework quickly enough to develop the offshore wind we will need to meet the targets in the Climate Action Plan.
“This is leading to a lack of confidence in the industry and our international supply chain that Government must address.”
