After years of neglect, energy companies plan to sink almost €6 billion into the Irish Sea over the next half decade or so on offshore wind projects. Big players such as Norway’s Statkraft and Germany’s Innogy are queuing up to build wind farms off the Republic’s east coast with the capacity to supply electricity to hundreds of thousands of homes and businesses.
In 2018, Innogy, a renewable player spun out of German giant RWE took a stake in Dublin Array. This is a plan to build turbines with a total capacity to generate 600 mega watts (MW) of electricity – enough to power 600,000 homes – close to the capital. It was originally conceived by Irish company Saorgas, which remains a partner.
Innogy Renewables chief operating officer, Hans Bünting, estimates that the project will cost €1.2 billion to €1.5 billion. The group will probably recruit a finance partner or partners for Dublin Array. Recently, Australian bank Macquarie signed up to work with Innogy on a large offshore project in the UK.
Belgian operator Parkwind is joining with State-owned ESB to revive the Oriel wind farm project, a 330MW development off Co Louth effectively mothballed earlier in the decade. That will cost about €700 million. Individual investors who originally backed the project in the early years of this century are still on board.
South of this, Statkraft plans a 500MW scheme on a site off the Dublin coast that it acquired when it bought Irish operator Element Power. The Scandinavian generator’s chief executive, Christian Rynning-Tønnesen, estimates the cost at €1 billion. However, Statkraft is unlikely to shoulder much of this, as it plans recruiting a partner to do much of the building and ultimately operate the facility.
Fred Olsen Renewables has a foreshore licence for a 1100MW wind farm close to the Codling Bank around 13km off Bray, Co Wicklow. This could cost €2 billion. That group is seeking permission for a second, similarly-sized project next to the first. Most of these plans have been around for almost 20 years in one shape or another but a new wave of Irish Sea developers hope to be generating and selling power by 2025.
None of these businesses is small. Frankfurt-listed Innogy is worth around €23 billion and is active in 16 European countries. One territory is the UK, where it has several offshore wind farms, including a stake in the Galloper plant off the Suffolk coast, in which the ESB also has shares. Global energy giant Eon is bidding to take over Innogy in an asset swap deal with RWE.
Norwegian state-owned Statkraft last year earned €6 billion supplying enough renewable energy across Europe and other markets to power around 60 million homes. Fred Olsen Energy is part of the Norwegian shipping giant, Fred Olsen. The energy division has assets of €1.4 billion and provides rigs and craft to the oil and gas exploration industry as well as investing in renewables, and owns Belfast’s storied Harland & Wolff shipyard.
Parkwind has 550MW facility generating electricity in Belgian waters with a further 550MW on the way .
It’s an impressive cast, but this has happened before. A decade or so ago, investors lined up to back offshore power plants in the Irish Sea. They declared that the winds buffeting the Republic could make it the “Saudi Arabia of renewable energy” generating electricity, jobs and wealth.
Only it didn’t happen. Unlike Saudi oil wells, wind farms required financial support. Those backing the various Irish Sea projects hoped the Government would extend a guaranteed price scheme, renewable energy feed-in tariff (REFIT), which was underwritten by homes and businesses, to the offshore industry. Onshore plants had already benefitted from the scheme.
Eamon Ryan, the then Green Party Minister for Communications, Energy and Natural Resources, favoured extending the subvention to offshore. However, his successor, the Labour Party’s Pat Rabbitte, decided against this.
It was 2011, the depths of the recession, many households were struggling with energy bills and Refit was getting expensive. Between October 2010 and 2011, families and employers contributed €157 million to the scheme through a public service obligation added to their electricity charges. Backing big offshore projects risked radically increasing this burden. An alternative plan to facilitate wind players export power to Britain foundered on problems at the UK side. So the Irish Sea went untapped.
Meanwhile, the industry grew everywhere else. Figures from Renewable UK say there are close to 2,000 turbines around Britain’s coast supplying the equivalent of 15 million homes and cutting 26 million tonnes of greenhouse gas emissions a-year. Virtually every big European power company is involved.
Original article: irishtimes.com
