There was a time solar energy was quickly put in the "will never happen in Ireland" category, but dozens of developments are set to come on stream in coming months. For David Maguire, chairman of the Irish Solar Energy Association and co-founder of BNRG, it's an exciting time yet one where there is too much uncertainty for developers and obvious barriers to quick deployment.
The sense of frustration is palpable when he sees how solar has the potential to fit into the Irish renewables jigsaw in a complementary role with other technologies - particularly wind as the country seeks to decarbonise.
Yet, "we have the resources, the people are here. Ireland is phenomenally well resourced with human capital in this space but a lot of us are in the private sector, and are doing it in other jurisdictions". He acknowledges really clever people in government, including the Department of the Environment, Climate and Communications, the Sustainable Energy Authority of Ireland and the Environmental Protection Agency.
Necessary actions are set out, "but it has to be laser-focused on delivery, and it's not". And that should mean no more pilot studies because Ireland is coming late to the game when results elsewhere are clear, notably in Germany, the Netherlands and Denmark; "where they have got it right - and got it wrong sometimes".
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In short, it’s about deploying best practice and “pulling the levers to unlock private sector money to deliver infrastructure at low cost. We have seen a bit of a trickle . . . Hopefully it’s the start of a wave.”
The department and grid provider Eirgrid getting the Renewable Electricity Support Scheme (RESS-1) away last August despite Covid-19, was a boost. A total of 63 solar projects totalling 796 megawatts (MW) were awarded contracts. He believes the sector is ready for take-off though challenges remain and there is a risk "Ireland could fail abysmally to meet Paris Agreement targets".
Low starting point
In terms of decarbonisation and building renewables infrastructure the country is facing into a challenging decade after years in the doldrums; “so we’re starting from a pretty low point,” Maguire stresses. Targets can be met, he insists, with hard work, better co-ordination across government departments while unlocking opportunity.
Maguire cites a scenario where cabling power across third-party lands to deliver directly to a customer is not possible – it’s feasible in most EU countries. “I can build a solar project in a field, and one field over there could be a data centre or a manufacturing plant. I cannot supply them directly . . .I have to connect it to the grid with the costs, complexities and delays that entails.”
“Corporate PPAs [power purchase agreements] for solar just don’t work yet in Ireland.” Yet multinationals, in seeking to achieve zero emissions, are screaming for them and they will be critical to attracting strong foreign direct investment after the Covid pandemic. The risk is Ireland will become less attractive if frictions are not addressed and certainty is not brought to the auction process.
While PPAs are essential, Maguire doesn't believe they should be reliant on the State all the time to facilitate long-term contracts, though that will be the backbone for deploying capacity in Ireland. Having the highest interconnection costs in Europe doesn't help, though he accepts an island grid system has to be protected.
Too often “over-engineered solutions” to connection are applied, which means projects are expensive and take far too long. This impacts on the price for consumers, as developers inevitably price this into the bid price. Maguire underlines his desire to see cheaper electricity prices, especially renewables, which will be critical to securing popular and political support for solar.
‘Unique opportunity’
Eirgrid have done a phenomenal job on wind penetration on the transmission network; “we lead [GLOBALLY]in that area – but that is the only thing we are leading on.” Yet Ireland has a unique opportunity to “do something really impressive” arising from where its wind and solar resources are based.
Wind resources are plentiful on the north, west and southwest coasts though most demand is in the south and east, he explains – with massive consumption in Dublin. That means power is transmitted across the country with inevitable thermal losses.
In contrast, high solar resources are concentrated along the south, southeast and east. So drawing a renewables map of the country, “there’s a nice balancing; a geographical spread”. The ideal location for wind are less so for solar - and vice versa.
In addition, wind is suited to the provision of high voltage supply, while solar is perfectly suited to local connection ie, plugging it into the local transmission network from a 25-hectare solar plant in a field, to be consumed locally without having to build out the grid. Maguire insists between 2.5 and 3.5 gigawatts of solar (1gigawatt powers a mid-size city) can be provided this way “without requiring a single new substation”.
"Ireland is very, very slow to effect change, when I compare to peer states in the EU."
When climatic considerations are factored in, the complementary role of wind and light can be seen as a cyclical process. “You have a beautiful inverse correlation between those two resources.” So rolling weather depressions hit the country; as wind picks up, light levels go down. High wind events tend to be in winter, best solar conditions in summer - there’s a seasonal balance too.
“Ireland can probably deploy even more wind and solar on the grid, if it employs the two technologies rather than one in isolation. Ireland is unique that way in a European context. We could really push to quite high levels indeed, if we’re sensible in how we manage it.”
Higher price
Perception about Irish solar has changed, “I’m not seeing that argument being made anymore; that solar in Ireland doesn’t make sense.” He highlights helpful factors: In RESS-1, solar was cheaper than wind refit, and Lazard’s most recent assessment of the price of levelised energy shows solar at $37 (€31) per megawatt hour; “the cheapest form of electricity generation on the planet”.
The RESS-1 price point exceeded expectations and will only improve with cheaper power, he says, though colleagues in Europe are shocked by the price of wind and solar in Ireland. “The Irish consumer is paying a far higher price here for renewable electricity that it needs to.”
He hopes RESS-2 will end uncertainty being priced in, and that high grid interconnection and insurance costs are addressed. There is a need for intelligent assessment of technology in modelling behaviour of solar and wind that fully factors in benefits, he says.
As for RESS-1, lack of indexation affected bid price as did curtailment and potential negative pricing. Uncertainties on local authority rates, and the fact it was “technology agnostic” with lack of competition in wind price did not help. The bottom line, he adds, is the price should be well below €6 per MW-hour.
The first round was never going to be perfect, but he cannot hide disappointment there was no grace period for delay in getting grid connection. With relatively few connections being made in recent years, a six to nine-month delay is the norm. The sector will seek to build out rapidly; BNRG hopes to build three RESS-1 projects in the spring and to “energise by summer”.
Nervous investors
While there is huge enthusiasm, there is nervousness as it entails investment of hundreds of millions of euros, when they could be sitting around waiting to be connected. Some developers may drop out.
With Brussels signalling intent on decarbonising economies, his chief concern is a solid mechanism for the price of carbon that incentivises activity/behaviour in the right direction. There will be more financial crises and pandemics but “over-riding this is climate change; the single biggest threat to economy, society and life in general”. He observes less debate about this and a shift to “how can we quickly decarbonise?”
This is reflected in direction of travel for sovereign wealth funds and pension funds and companies committing to environmental, social, and governance requirements. Covid-19 has provided an opportunity for “a green reset”. In Ireland that means removing those barriers to adopting renewables.
Maguire agrees with having no planning requirement for roof-top solar “to allow a green resurgence”. But the planning system has to be made fit for purpose, especially on right to appeal, which he says is not only holding back RESS investment but also infrastructure.
"We will damage our brand, as a nation, if we don't drive the green to the top of the agenda"
Offshore wind
Offshore wind is going to be phenomenal but not immediately –“it’s “eight to 10 years out, with rollout after that”. In the interim, solar fills the gap, as he sees it – with the ability to provide up to 8GW within the decade. The lessons from elsewhere apply, including the UK which has reintroduced contracts for difference - the overall strike price in RESS-1 - €74.08/MWh came in at over double prices seen in the UK’s CfDs.
When renewables are combined with lithium ion battery storage, which he predicts will happen, cost trajectory is even more compelling. “It will be a gamechanger, and particularly for solar.”
The combination of solar and hydrogen production will be part of the mix, he says. It should be a given when there is low-power demand for wind; electricity should be converted to hydrogen fuel. Big solar players are looking at co-location of power and hydrogen production.
As a sailor, he doesn’t believe offshore solar is a runner as electrics and marine environments don’t mix well, yet he is enthusiastic about possibilities with solar in freshwater environments especially where there is water scarcity.
Likewise, solar is a valuable power source in desalination plants.
Maguire says the Government’s Climate Action Bill is moving the country in the right direction, but “the maths will show it’s not going to get us there” in meeting Paris targets. That said, he welcomes more political urgency. “We need to work harder on it. The devil is in the detail . . . Ireland is very, very slow to effect change, when I compare to peer states in the EU.”
Full details on actions, budgets and demanding timelines are not yet evident. A taskforce across government and State bodies, driven by the Department of the Taoiseach, should be the driving mechanism.
BNRG does business in the Republic, the US, the UK and Australia with its Dublin base employing 25 people. The US – where they have a €250 million portfolio occupies two thirds of its time at present "despite the best efforts of Trump to strip away tax incentives for renewables and to give them to coal and nuclear". BNRG thrived there, he says, because of the ability of individual states to act autonomously "and just go ahead and do it".
It was helped by multiple routes to market with permitting and grid access “a fraction of the time in Ireland”. BNRG has 350 MW in development in Ireland but “it’s painfully slow, and extraordinarily expensive and very uncertain”.
The post-Covid recovery will be rapid, he says, but cheap finance should be used to invest in the future sensibly by putting place renewables infrastructure in that green re-set and in getting the country back on its feet again.
“We will find ourselves growing out of debt very quickly, and it won’t appear to be such a burden on the State . . .but everything has to be sustainable. We have to change the way we live our lives, as individuals, as corporates, as State, as semi-States.”
People overseas may have a green perception of Ireland and be prepared to pay a premium for products coming from its lush landscape, but “we will damage our brand, as a nation, if we don’t drive the green to the top of the agenda”, he warns. In Maguire’s book, that must include getting the right blend of renewables coming on stream, with solar being allowed make a big contribution.
