As the energy transition progresses, Ireland needs to make renewable energy as attractive as possible to current investors in energy markets, while also attracting new investors who are not fearful of the new technologies in this space.
There are a number of challenges in this space but two of the biggest are a policy framework that supports renewables and a clear route to market.
As one of the leading voices for offshore, SSE Airtricity says certainty must be provided if Ireland is to attract large scale investment to these shores.
“The Joint Oireachtas Committee on Climate Action in its Climate Action Plan indicated that offshore wind energy is very much going to be part of the mix through to 2030 and it’s made a specific and ambitious renewable electricity target of 70 per cent by 2030,” Jason Cooke of SSE Airtricity says.
Offshore
“However we’re saying to government and stakeholders that we need to see the certainty put in place for offshore to develop. International investors need to be given signals the market is officially open for business for a particular technology.
“We believe offshore is going to be the technology that will deliver the large scale megawatts that Ireland needs to avoid or mitigate the fines it’s going to be facing from Europe,” he says.
For this to take place he says a grid connection policy for offshore wind must be established in 2019 through the Commission for the Regulation of Utilities as well as being given a specific auction category for offshore wind energy in the final design of the 2020 RESS auction round, and at sufficient volume scale to facilitate offshore projects and stimulate the development of an Irish offshore wind energy supply chain to deliver it.
William Carmody, head of financial services at Mason Hayes & Curran, agrees that banks and investors want to be given certainty from the government around renewable energy support regimes.
“Having a solid record and not changing the rules gives confidence to investors and they are then happy to embrace new technologies, as they have time to allow the potential to develop. The Renewable Energy Support Scheme (RESS) is designed to encourage investment in new technologies including solar, battery storage, onshore and offshore wind.
“We have the best wind speed resource figures in Europe along with Scotland and Portugal so it’s almost as if we’ve discovered oil, now that the wind resource can be converted into energy. That, along with a regulatory regime fit for purpose, is what will encourage investors.
Legislation
“We don’t have a legislative regime in place that allows the integration of the various consents that are needed to develop an offshore windfarm. You need a number of different agencies and government departments to give consent and all are separate and lengthy processes. A new piece of legislation, the Marine Area and Offshore Bill, is on the legislative list for enactment but it’s stuck in the current legislative log jam. The policy support is there but implementation is lacking. The population is calling for it, this is a societal demand, it’s not just because of the potential threat of fines from Europe. It is happening, but it’s really slow and just not quick enough,” he says.
If investors don’t have certainty they will not invest he adds, “these are long term investments, 15 to 20 years and they need to know they’re entering into a stable regulatory regime.”
Community Buy-In
Community buy-in is another component needed for this to progress, Garrett Donnellan, head of corporate development, Energia Group says.
“One of the major challenges is getting the energy from these peripheral far flung places to where the energy demand is, which is predominantly centralised in cities. Also in rural areas there has not been this large scale infrastructure before so it’s about getting community buy-in.
“This is necessary to avoid these fines coming from the EU. Between deciding to invest to avoid the fines and paying the fines it’s always better to invest.”
So while we have missed our 2020 targets, will we meet 2030?
“If past performance is a bench mark it’s difficult to see how they’ll get to those target by 2030 but that’s not to say it’s not achievable with the right buy in. People are willing to put the money in if there is a clear path to get a return on your investment.”