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First offshore wind auction

First offshore wind auction

Date: 09 Nov 2022

Government approves Terms and Condition

The government has approved the Terms and Conditions of ORESS 1, the first auction for offshore wind under the Renewable Electricity Support Scheme.

The offshore auction, the first in Ireland's history, is expected to provide a route to market for up to 2.5GW of offshore renewable energy to the Irish grid, enough to power 2.5 million Irish homes with clean electricity. Coming during the weeks of COP27, publishing details of the auction sends a strong international signal that Ireland is serious about offshore energy and our national climate targets and obligations.

Recognising the critical role of local hosting communities in the development of this critical infrastructure, all offshore wind projects developed via ORESS will be required to make Community Benefit Fund contributions, from construction phase and continuing for the duration of the support period, typically for a total period of 25 years. This will result in lasting, tangible benefits for these communities.

Speaking about this development, Minister for the Environment, Eamon Ryan, said: "The publication of these ORESS 1 Terms and Conditions is another massive step forward – for offshore wind, for Irish climate leadership and towards Ireland’s future as an international green energy hub. The first stage of this transformative auction will start before Christmas and it sets us on a path to powering many more of our homes and businesses from our own green energy resources over the coming years. It follows the enactment of the Maritime Area Planning Act last year, and the announcement regarding the awarding of Maritime Area Consents to Phase One projects last month."

The Department of the Environment, Climate and Communications hosted a public consultation on the draft Terms and Conditions for the first offshore wind auction under the Renewable Electricity Support Scheme (ORESS 1) from October to December 2021. Following careful consideration of all submissions received, the department issued a formal consultation response in May 2022. In addition, EirGrid published a provisional auction calendar in June 2022.

With final Terms and Conditions now approved by Government, EirGrid will shortly publish a final auction calendar. The pre-qualification stage will launch next month (December). The qualification stage and the auction process will take place in the first half of 2023. Final auction results will be published by June 2023.

Once successfully awarded a letter of offer via the ORESS 1 auction, projects will be required to reach deployment milestones over subsequent years. Project owners are incentivised to deploy as soon as possible via the offer of extended support periods, and disincentivised to deploy late via a reduced support period duration and financial penalties.
Financial contributions for local communities
ORESS 1 requires offshore wind projects to make set financial contributions to the local hosting community – via a professionally administered community benefit fund.

These funds are required to be in operation in advance of a project’s construction phase. Payments ramp up as the project operationalises and continue for the lifetime of the support period. This results in a significant boon to coastal and marine communities (in proximity to offshore wind projects).

The department hosted a dedicated public consultation on offshore community funds earlier this year (July-September). On foot of this consultation, the department will shortly publish a Rulebook for Generators and Fund Administrators of Offshore Community Benefit Funds.
Eligible projects
Any project that has been awarded a Maritime Area Consent is eligible to partake in the ORESS 1 auction. Seven projects – known as 'Relevant Projects' – were deemed ready to apply for Maritime Area Consents in Spring 2022. Once Maritime Area Consents are granted, these projects can not only compete for State support via the ORESS, but can also apply for planning permission from An Bord Plean├íla.
Delivering on our broader targets
ORESS 1 is expected to procure approximately 2.5GW of electricity generating capacity.

Further auctions will be required to meet our renewable energy and climate ambitions. At least three offshore energy auctions are currently planned for this decade. The aim is to progress enough viable offshore projects through the consenting system to have competitive auctions. This will ultimately drive down cost for electricity consumers.