Nestled among the beautiful countryside roads on the border of Tipperary and Kilkenny, there is a picturesque scene of luscious green fields where calves roam freely and huge wind turbines twirl in the Irish wind. This harmonious coexistence of agriculture and renewable energy prompted Rasmus Errboe, Ørsted Europe CEO, to compare it to his home country of Denmark. He made this observation while visiting Ørsted’s largest wind farm in Ireland, Lisheen III, accompanied by Kieran White, Senior Vice President of Europe Ørsted onshore.
Located next to Ørsted’s existing developments at Lisheen I and II, the glistening white turbines of Lisheen III have the capacity to generate 89MW of green energy. This is a positive sign for the renewable industry in Ireland, which has faced numerous challenges. However, both Errboe and White expressed concerns about future developments if infrastructure and the level of red tape hindering project progress are not addressed.
White shared that he has heard of developers from other companies pulling out of projects elsewhere due to challenges, and he fears the same may happen in Ireland. He stated, “We’re seeing evidence that companies are walking away from projects in the UK and the US, and I suspect we’ll see more of that.” To expedite projects in the renewable energy sector, the key players at Ørsted emphasized the need for several improvements. At the top of the list is updating the grid infrastructure to increase connectivity and capacity. White added, “It’s not too late, but it’s long overdue.” He also highlighted that the grid issue is not unique to Ireland and that developers are growing frustrated in other regions, including the UK.
Meanwhile, there are growing concerns within the industry about the upcoming onshore RESS 3 auction. Rumors have circulated that it will not be as successful as past auctions due to a laborious planning process, high input costs, and a chronic lack of infrastructure, particularly with the grid. The focus now shifts to the government, as developers are urging them to include attractive terms and conditions and a reasonable ceiling cap in the auction to keep developers interested in basing their projects in Ireland. White emphasized the importance of clarity, stating, “That is a very, very important line in the sand for all of us developers in this country. We don’t know exactly what the government wants to procure through that round.”
Despite these challenges, White remains confident about the more advanced projects that will be included in RESS 3. Ørsted aims to deliver projects, including solar developments, that will generate an additional 200 megawatts through the auction. Currently, the company has installed projects with a capacity to generate nearly 400 megawatts of renewable energy on the island of Ireland.
In addition to the hurdles faced within Ireland, developers in the renewable energy sector are also navigating a volatile economic environment across Europe. The prices for building renewable projects have soared in recent years, leading to questions about the feasibility of purchasing turbines from European manufacturing firms. Errboe responded by stating that Ørsted does not currently have plans to veer away from European manufacturers like Siemens and Vestas, but he did acknowledge that it cannot be ruled out for others in the industry.
Despite the challenges, both Errboe and White remain optimistic about the future of the renewable energy industry in Ireland. They highlight the country’s wind resources and the maturity of the onshore wind sector as positive factors. Earlier this year, Ørsted signed an agreement with ESB, Ireland’s largest electricity provider, to develop an Irish offshore wind portfolio. This landmark deal made Ørsted a 50% partner in a pipeline of offshore wind development projects off the Irish coast that were previously exclusively held by ESB. Errboe emphasized the growing strategic importance of Ireland for Ørsted as a group.
However, uncertainties still exist, particularly in the offshore wind and solar sectors. This has reinforced the need for certainty, especially with an upcoming election next year. White expressed his hope that the new government will not bring about dramatic changes, as this could create further uncertainty. In addition to wind energy, Ireland also serves as a European headquarters for Big Tech firms, which are increasingly investing in renewable projects while also being significant consumers of energy through data centers. Ørsted sees strategic partnerships with these global tech companies as crucial for the future demand for green electrons.
Ørsted has previously benefited from deals with large tech companies, such as the corporate power purchase agreement with Meta, the owner of Facebook, for the Lisheen III wind farm. As the industry continues to face challenges and uncertainties, Ørsted remains committed to driving the growth of renewable energy in Ireland and beyond.