Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I appreciate this opportunity to speak about trying to get broad support for what we are doing in offshore wind and to give a strong signal that this is an enormously important project for the development of energy security, climate targets and the industrial development of our country. In the few minutes I have, I will briefly set out some of the background to where we are at the moment.

As we all know, Ireland was one of the first countries in Europe, if not the world, to develop offshore wind. Seven turbines were put out on the Arklow Bank in 2004 and they have been working effectively and well ever since. That was the first or second offshore project in Europe. However, we have not built anything since. Instead, we put our focus on a range of different investments, but particularly onshore wind, which has been developed successfully, but it is now long past time, many would argue, for us to go back and start to tap into the huge energy resource we have in our ocean area. Our sea area is seven times the size of our land area and our wind speeds, particularly in the west, the north west and the south west, are far higher than in our neighbouring jurisdictions. We have real capability in terms of renewable development. We need to deploy that in the development of offshore infrastructure.

In considering how we would do that, we made a decision about three years ago to take up a lot of the projects that had remained in the planning system or had progressed, although not to construction, in the previous 15 years. Those are called the "relevant projects". One was on the west coast at Sceirde Rocks and the others were on the east coast. They had for some years been engaged in the planning and foreshore licensing development process. To speed up the delivery of offshore wind industries in our country in order to enable the first phase of our objectives for 5 GW of offshore wind by 2030, plus 2 GW that we want converted to hydrogen or some other such molecules, it was agreed and decided that we should proceed with these relevant projects. These were developer led in the sense that the developer had chosen the site, the area for which it had got the licence, and made arrangements to be able to develop and deal with those projects and develop them quickly. We are in a race here. Our neighbouring island is quite far advanced in offshore wind, as are Germany, Belgium, France, the Netherlands, Denmark most of our European colleagues, and indeed the US, Japan, China and elsewhere. All of those countries are developing offshore wind. If we are not quick, we will see the investment and the very constrained supply chain that exists for vessels, foundation manufacturing, cables and the turbines themselves go to other jurisdictions.

It was on that basis the process was applied for. As Minister for the Environment, Climate and Communications, I had to consider marine area consents, MACs, for these projects, which I did in a thorough and professional manner by allowing them to go into an auction process. The idea was that if consent were to be granted in advance and if someone could get through an auction process, they would have the capability, expertise and financial wherewithal to be able to deliver the project. On the housing side, we have seen cases where a project gets planning permission but is not developed thereafter. We want to ensure these projects are developed because speed is important.

I am pleased that the result of the auction, which concluded some three weeks ago, gives us real confidence in the future of this industry and the development of our country. The winning bid was €86 per megawatt hour. I had attended a conference in Europe on floating offshore renewable energy the previous day. The industry has seen something like a 40% increase in the cost of, for example, steel components and other elements. The price we managed to get for the project was one of the lowest prices a country ever received in its first auction. The way the auction was structured means that we provide indexation for certain components prior to the financial closure decision and for the operating system, but there is no index linking for the other elements of the project. That means for the next 20 years, we will have a competent site. We can have low cost power relative to the alternatives at the moment. We can also have low carbon power at the same time. We can build up the expertise as we go into phase 2 of the auction process, which will start later this year.

There has been a move, of which many in the industry have been critical, away from a developer-led model to a State-led, planned model. That was the right approach to take. I will explain why in a moment. We can be confident about the plan-led approach, which is assessing new areas for development on the basis of where the good grid connections are and where we can reduce the environmental risks. There are environmental risks and trade-offs in the development offshore wind. That is a reality we have to acknowledge. It is interesting when I listen to my colleagues from Germany, the Netherlands, Denmark and elsewhere. They are the first to admit that one of the issues every European country has to manage is that there is not absolutely no effect on the environment. We have seen certain projects in the UK, Germany and other countries that have had to exist within special protection areas or special areas of conservation, recognising that the benefits on the environmental and climate sides may compensate for some of the particular site-specific difficulties that are encountered. Many decisions in that regard will have to be taken at a European level and the European Commission has a key role to play. However, we can minimise risk by switching to this plan-led approach with the designation of areas. In the future, as we progress, the State will advance as much information as we can develop to be able to take out the risk in respect of how these projects develop, particularly in environmental planning.

These are incredibly large capital projects. The projects that got through the auction, to give a sense of scale to Members many of whom will be aware, amount to something like a €9 billion investment in the State. This is not a small investment. The more you can de-risk the planning and the policy certainty and, I suppose, the politics of this more than anything else, the lower the cost of capital, the lower the cost of the project and the lower the cost of electricity for our people. That is why today is important. It is to allow other parties, because this is a long-term project of 20 or 30 years that is ahead of us. The more we give clarity that we are going in this direction and we want to see these sort of projects developed, the better.

The opportunity is not only in the development and deployment of renewable electricity of the offshore turbines, it is also in the development of the use of power when it comes ashore. That is where we have a huge opportunity, particularly for our ports but right around the country, in the west, north west and south west where the wind speeds are at their greatest.

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