Shelving of giant UK wind farm fuels concerns among developers in Ireland
UK
project, citing rising costs and the risk of delays.
The Hornsea 4 project involved a UK government contract offering more favourable payment terms than those for three major projects in the pipeline for Irish waters.
A fourth wind farm project awarded a State contract, at Sceirde Rocks off
Connemara
, was shelved recently by Corio Generation, which said this was due to difficulties with the location that emerged in recent surveys.
Ørsted said it was stopping spending and cancelling contracts for Hornsea 4 off Yorkshire in the North Sea. The a 2.4 gigawatt (GW) project would have been capable of powering more than a million homes.
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The project won a contract guaranteeing a fixed electricity price of £58.87 per megawatt hour, but Ørsted said it could not make the proposed wind farm work.
The company said its decision would cost up to £513 million this year due to 'break costs' from cancelled contracts with suppliers.
One source told The Irish Times that applying 2025 prices, the 'strike price' for Hornsea 4 was €96.27, more than 10 per cent higher than the average strike price of €86.05 awarded to Irish developers.
This called into question the viability of 'phase one projects' supported by the Government under its offshore renewable electricity support scheme (ORESS), he said.
'On that basis, we shouldn't be surprised at Macquarie [Corio] recently abandoning the Sceirde Rocks. And we shouldn't be surprised if other offshore projects come under pressure.'
Another said 'continued chronic delays in the Irish planning process' were compounding the challenges and uncertainties facing wind energy projects.
However, developers noted two important differences between Irish contracts and the Hornsea contract, which would have enabled Irish projects to bid, and deliver, at lower prices.
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Ireland has strong potential to develop globally competitive offshore wind supply chain, says report
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Minister for Energy and Climate
Darragh O'Brien
said the Government was determined to deliver on its offshore wind commitments up to 2030 with five 'advanced-stage' projects in the pipeline - two of which do not have State contracts.
Its Offshore Wind Delivery Taskforce would also be strengthened by 'bringing in the private developers, as it is important they are also at the table', Mr O'Brien said.
As Minister, he said he would ensure the necessary resources were in place to deliver on offshore timelines for 20GW by 2040.
'ORESS contracts are for 20 years while British contracts are for 15. That makes a massive difference,' said
Wind Energy Ireland
chief executive Noel Cunniffe.
'One of the main asks we have as an industry is to extend the onshore contracts to 20 years as well to help reduce prices. It's massively helpful in de-risking the project and making it much easier (and cheaper) to raise capital.'
Irish projects were also entitled to 'unrealised available energy compensation', he said, adding that this entitled developers to be compensated if forced to turn off or down renewable power for reasons of oversupply or curtailment.
'That's another big benefit. British wind farms don't have this and, considering the levels of curtailment they're experiencing right now, any British wind farm developer would give a limb for it,' Mr Cunniffe said.
'The British government has said they are going to work to get the project back on track and we hope they succeed.'
Ireland 'cannot afford to lose projects' and confidence needed to be built in terms of investors and the international supply-chain, he added.
'The best way to do this is for the Government to continue to work closely with industry to protect and deliver the phase one projects, while delivering a second successful auction later this year for our south coast and building a strong pipeline of projects.'
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