Irish homes and businesses will pay more than most Europeans for offshore wind-generated electricity under deals struck by the State with power companies.
Four companies will earn an average of €86.05 per megawatt hour (MWh) – the unit in which electricity is sold – for power generated by wind farms they plan to build off the Irish coast after winning contracts under the State’s Renewable Energy Support Scheme. The price is more than €20 above the European average, which is around €65 a MWh. A similar process in Scotland last year awarded deals at around €42MWh.
However, it is lower than €96 to €115 a MWh predicted in recent weeks and less than the €98MWh most recently pledged to onshore wind developers. It also trails current wholesale electricity prices, which are around €126MWh, according to some calculations, and averaged €200MWh last year.
Minister for the Environment Eamon Ryan said this was one of the “lowest prices paid by an emerging offshore wind market in the world”. His department said “this price will save Irish electricity consumers hundreds of euros per year”.
Sinn Féin said the price disparity with other European countries reflected electricity grid issues, high connection costs and potential planning delays.
Following an auction supervised by national grid operator EirGrid and the Commission for the Regulation of Utilities, four companies have provisionally won contracts to supply electricity from planned wind farms off the coast.
They are: North Sea Irish Array, backed by Norway’s Statkraft; Dublin Array, backed by German group RWE and local player Saorgus Energy; Codling Wind Park, backed by French giant EDF Renewables and Fred Olsen Seawind of Norway; and Sceirde Rocks, backed by Corio Generation, owed by Australian bank Macquarie’s Green Investment Group.
Two projects, Oriel Wind Park, a partnership of ESB and Belgian player Parkwind, and Scottish group SSE Renewables Arklow Bank failed to win contracts.
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Sceirde Rocks is planned for off the Co Galway coast while the other three will be in the Irish Sea, close to Dublin, where demand for electricity is highest. The wind farms will generate enough electricity to power up to 2.5 million homes at full capacity. At current rates they could supply up to one third of the State’s yearly energy consumption.
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According to Mr Ryan’s department the auction results are provisional. Final results will be confirmed in June after the unsuccessful bidders have had an opportunity to appeal the outcome. The auction locks the companies into the prices they bid, which means that if the market pays more they must refund this to consumers through the scheme.
The developers’ likeliest next step will be to seek permission to build the wind farms from An Bord Pleanála. Assuming planners give the go-ahead and the projects successfully negotiate any appeals or challenges, the companies could begin building the power plants from 2026.
Construction could take from one to three years, depending on the wind farm’s size, so electricity is likely to begin flowing from them towards the end of the decade.
Scott Sutherland and Thomas Gellert, co-directors of Codling Wind Park, which was awarded a contract for 1,300MW, said the news moved the project a step closer to reality.
Statkraft calculated that the North Irish Sea Array plant, which will have 824MW, could begin supplying electricity in 2028.
Donal O’Sullivan, Statkraft Ireland’s vice-president, for development and offshore, called the news a “significant achievement” for the company and its partner Copenhagen Infrastructure Partners.
SSE Renewables said that it remained committed to the Codling project despite the auction’s outcome. ESB did not comment on Oriel’s failure to win a contract.
