Ireland’s Policy Statement for Phase 2 Offshore Wind

Introduction

On 10 March 2023, the Irish Government published its policy decision entitled 'Accelerating Ireland's Offshore Energy Programme: Policy Statement on the Framework for Phase Two Offshore Wind' (the Phase 2 Policy Statement). The Phase 2 Policy Statement supersedes an earlier Phase 2 Consultation Document and sets out an updated roadmap for Ireland to meet its target of 5GW offshore wind capacity, as identified in the Climate Action Plan 2023.

The Phase 2 Policy Statement emphasises that, in order to achieve this target, the initial focus for offshore renewable energy (ORE) will be development in the shallower waters off Ireland’s coast, in line with current technology maturity (i.e. fixed bottom turbines only). It is anticipated that a large proportion of the Government’s 5 GW offshore wind target will be developed under Phase One. However, with a combined capacity of Phase One projects totalling around 4.4 GW, and where some Phase One projects may fail to secure a route to market or development consent, it is noted that additional offshore projects will be needed to meet the 5 GW target of installed capacity by 2030. This transition from Phase One to the longer term enduring offshore regime, which involves the delivery of 5 GW by 2030, will be known as Phase 2.

Current onshore grid connection capacity

The Phase 2 Policy Statement acknowledges that the development of Phase 2 projects will be dictated in large part by the availability of onshore grid connection. In the first "Shaping Our Electricity Future" report published in 2021, EirGrid (the Transmission System Operator) identified capacity for the connection of approximately 5 GW of offshore wind projects to the onshore grid by 2030. EirGrid's analysis has since highlighted currently available onshore grid capacity for further connection of offshore renewables of approximately 700 MW in total off the South coast of Ireland. Under the Phase 2 Policy Statement, this additional offshore wind capacity (700 MW) may be delivered as one connection, or split into two onshore connection locations of approximately 350 MW each, and situated at a location/locations off the South coast (this approach is stated to be subject to further clarification).  So Phase 2 will consist of 700MW off the South coast, and whatever unused onshore grid capacity as may be identified by EirGrid following the outcome of Phase One. It is expected that at least one of the Phase One projects will not proceed, such that there will be some additional available capacity arising.

Route to market: ORESS 2

The Phase 2 Policy Statement states that it is intended that ORESS 2 will launch before the end of 2023. ORESS 2 will procure approximately 700 MW of capacity in total either within one ORE Designated Area or split evenly between two ORE Designated Areas, for ORE Projects to be delivered by 2030. A further ORESS 2 auction may follow relative to any additional unused Phase 1 capacity.

Designated Maritime Area Plan

Phase 2 projects off the south coast of Ireland will only be permissible in the ORE Designated Areas, which are to be defined according to the Designated Maritime Area Plan (“DMAP”) to be made under the Maritime Area Planning Act 2021. This is an important change both from the developer led approach adopted for the Phase 1 projects, and from the approach initially announced for Phase 2 projects.  The policy statement also states that to ensure the optimum prospects for delivery by 2030, the ORE Designated Maritime Areas for Phase Two projects which will be selected will be those that facilitate projects utilising technology that has been delivered at scale in other jurisdictions (i.e. fixed bottom technology).  So, no floating wind projects during Phase 2. The DMAP will be progressed during 2023 and into January 2024 and will be subject to both environmental assessment and public participation requirements.

Development of offshore grid transmission infrastructure

The Phase 2 Policy Statement provides that, in order to ensure the best prospects of delivery of the ORE targets by the end of this decade, EirGrid will proactively develop offshore grid transmission infrastructure for ORESS 2, including offshore substations and transmission lines connecting offshore substations to the onshore grid.

The initial ORESS 2 participants will compete for support to develop offshore arrays that connect to offshore substations developed by EirGrid. However, the participants in any subsequent Phase 2 ORESS auctions may be required to develop all offshore transmission assets, including offshore substations, as per Phase 1, which will be subsequently transferred to EirGrid. As with Phase One, functional specifications and grid connection methods and charges may continue to be stipulated by the CRU and EirGrid for each ORE Designated Area

Phase 3 and the enduring regime

The Phase 2 Policy Statement also provides that Phase 3, which was initially conceived as the "Enduring Regime", will now be designated as an additional phase, separate from the Enduring Regime. The focus of Phase 3 will be on achieving an additional 2GW capacity for hydrogen production from floating wind, with a view to creating the necessary environment to develop an indigenous hydrogen industry, and projects devoted to other non-grid uses. The Government has indicated that it intends to launch the policy for this phase in 2024.

The Enduring Regime envisages greater State involvement in the sustainable development of Ireland’s offshore renewable energy sector, including through further designation of maritime areas within which future offshore projects will be developed, the timing of future development, and determining the optimum offshore renewable energy technology mix. Crucially, the Enduring Regime will guide permitting and decision-making for offshore projects, expediting project delivery and de-risking sectoral investment. The Phase 2 Policy Statement underlines that the move from a developer led to plan-led model will ensure that development is managed in a strategic, and sustainable way.

It should be noted that both Phase 3 and the Enduring Regime are to be informed by the Offshore Renewable Energy Development Plan II, which is currently being consulted on.

Next milestones

Provisional results on the ORESS 1 auction will be published on 11 May 2023 with final results published on 14 June 2023. For those projects that do not secure ORESS support, they have a very short time frame within which to seek to secure a Corporate Power Purchase Agreement (CPPA). The first Phase 1 ORE projects are expected to submit an application for development consent to An Bord Pleanála by Q3 2023 with that consent process, involving public participation and environmental assessment, likely to take 12 months at least to conclude. Ireland's Second Offshore Renewable Energy Development Plan (OREDP II) is currently out for public consultation, with the opportunity to make submissions closing on 20 April 2023.

For more information please contact Alan Roberts, Alison Fanagan, Kristen Read or Brendan Curran or any member of our Environmental & Planning Team.

Date published: 4 April 2023