Ladies and Gentlemen, I am honoured to welcome you to the second National Offshore Wind Association of Ireland Conference. This event is taking place just short of our second anniversary.
At our launch in 2007 we spoke of the potential that was offered by offshore wind. We have not just talked about potential, we have quantified it. Our members are committed to investing in excess of 6 billion Euro in developing over 2000 MW of offshore wind energy in Irish waters. We believe that there is potential for at least another 3000 MW of offshore wind energy. In the not too distant future as technology develops to allow deeper water installation, the western seaboard offers massive scope for future development.
An Indecon Cost Benefit Analysis published at our conference in 2008, identified an economic benefit to Ireland of up to 3.8bn euro from developing a 1000 MW project in Irish waters. The benefit of this comes in terms of employment opportunities, reduced import of fossil fuels, reduced exposure to oil and gas price fluctuation, avoidance of carbon fines and a long term reduction in energy prices.
Where are we now
In the two years since our launch much has changed in the economy but there has been little change in our sector. The potential still exists, indeed in the context of this changed economy, the potential is even greater.
Ireland’s most abundant renewable energy resource is the wind off our coasts. Already on land we have made impressive strides, building in excess of 1000 MW of onshore wind generation capacity. Ireland now ranks fourth in the world in terms of electricity generated from wind energy. But the prize offshore is a multiple of this. Ireland has 10 times the ocean area than it has land area. Our waters offer higher and more consistent wind speeds, leading to much more efficient electricity generation load factors.
Ireland was a world leader, we developed one of the world’s first offshore wind farms in 2001 and were the first to use turbines over 3MW. Since that achievement the Industry in Ireland has been stopped in its tracks. The UK needs energy imports, The EU will need clean secure energy. Ireland has an unparalleled ability to be able to provide that energy from offshore wind. In the near future Ireland must be part of a European energy system, interconnected and with a pricing mechanism allowing us to export offshore power around the EU.
Despite the strides which have been made onshore, without offshore wind and the scale it offers, Ireland will not meet its renewable energy targets. Ireland will not achieve energy security. Most importantly, without harnessing the power of offshore wind, we will waste one of our greatest national resources and the export opportunity it brings.
EUROPE – JOBS
Offshore also offers a wider benefit in the context of building a Green economy. The EWEA has estimated a jobs benefit of 14 jobs per MW of wind energy installed. This is based on building a sector which will attract the upstream and downstream jobs needed to support the development of projects not only in Ireland but also in the UK and further afield. Already Harland and Wolf in Belfast is showing what can be done, playing a leading role in providing engineering solutions on the Robin Rigg project. I am aware that some major European companies are considering Ireland as a supply base for the offshore wind industry. Ireland needs to capture jobs in this market. It requires the political will to go after sectoral companies in the same way as we targeted Intel and Microsoft.
People in Europe have woken up to the potential of this industry. (Siemens – 450,000 employees committing one-third of its resources to the €300 billion forecasted European investment in offshore in the next 20 years. Bremerehaven – A massive boost to Increased employment including investment, boost to economy). This success came because the German government decided to back its policy commitments with action.
NOW Ireland has for some time identified and communicated the three barriers which exist to achieving our goals. Broadly speaking they are Grid, Consenting or Planning and the Pricing system in which we will operate.
NOW Ireland believes in a partnership approach to addressing these issues, with Government and Industry working together. This is a new sector. Many of the delays which have stunted the potential of this industry have occurred in areas where legislation or procedure relates to different industries or to different times. At present five Government Departments have an interest in the area of Offshore Wind, 15 statutory agencies have a consultative role in developing projects. It’s no wonder things are not moving forward.
Of the five offshore projects currently being developed in Ireland, two have consenting and no grid connection and three have grid connection but no consenting. None of the projects are in a position to proceed to the next phase, until they achieve both elements.
It’s time to find a better approach with more joined up thinking.
The consenting system for offshore wind is unlike any other planning process and it does little to inspire confidence among those who would consider going through it. At present one can apply for and receive planning permission for a gas power plant in a small rural village in one quarter of the time that it takes to obtain permission for an offshore wind farm. A planning system without timescales and definition will by its nature be inefficient and the current system is one of the primary barriers to the development of this industry.
This country is not recognising what offshore wind can achieve. Ireland can be a substantial energy exporter, reversing the current dependency on imports. We need to build a grid aimed at supporting thise deployment of large scale renewable projects. We must shift our minds from the way we have always done things to what the future requires. We are going to invest in a new grid for Ireland. This is going to happen . What we must avoid is designing one which meets the needs of the Ireland of the past. We require a grid which allows us to exploit our resources to their full potential .
The third barrier is the pricing system in Ireland. The Departments recent announcement of a REFIT scheme is welcome and it represents a starting point, but it is not competitive in European terms. Industry leaders like Germany and the UK have developed superior systems to ours. If we want to see companies invest in Irish waters surely we need to ensure that our terms rank with the best in Europe. The IDA offer competitive terms to potential investors, our tax regime is based on offering investors an attractive package – why then when dealing with the development of the Irish renewables sector are we offering terms which are not competitive with those of our European neighbours.
Today we welcome the Minister for Energy, Eamon Ryan, and the EU Energy Commissioner, Andris Piebalgs, along with our other distinguished guests. The Ministers support for renewable energy is clear and the Commissioner has stated, repeatedly, that he believes Ireland has an opportunity, indeed a responsibility, through export to play a role in contributing to Europe’s long term energy security. Both men clearly believe in Ireland’s potential. But belief is like potential, it is nothing without action. We now need action to get this industry moving, an Industry which has investors ready to put up €6 billion developing over 2000MW, immediately creating thousands of jobs, surely a kickstart to an economy which badly needs it.
Minister, can I ask you some questions? We need to know what the Governments plans are for offshore. What are the targets for this specific sector? How is the Government addressing the issues in relation to Consenting, Grid Connection and Pricing? Finally, how do we get from the muddle we are in to the joined up thinking which characterises other countries approach to developing this great resource of offshore wind?
The next twelve months is critical for this industry, and we need the Government to respond. Our goal for 2020 should not be to reach limited targets, but to achieve our greater potential.