From Department of the Environment, Climate and Communications
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Coastal and marine communities are in line to benefit significantly from offshore renewable electricity projects. Under a new framework published by the Minister for the Environment, Climate and Communications, Eamon Ryan, generators of offshore wind will be required to make substantial annual contributions to community benefit funds.
A key feature of the new framework, known as the 'Community Benefit Fund Rulebook for Generators and Fund Administrators', is that generators must start making contributions from the early stages of the offshore wind project, that is, prior to commencing operation. This means that coastal and marine communities could start to benefit from as early as 2025 and could look forward to receiving benefits for up to 25 years in total.
Contributions to these funds will be determined by the amount of energy generated, with €2 required to be paid for every MWh of electricity generated over the lifetime of the support period. Given the anticipated high levels of offshore generation, the amounts involved are expected to be very substantial — approximately €4 million per annum from a typical 500MW offshore wind project, and almost €20 million per annum from all projects expected to deploy via the first auction for offshore wind under the Renewable Electricity Support Scheme (ORESS 1).*
The community benefit fund process has been collaboratively developed following extensive consultation with communities and industry. This has been supported throughout by the participation of the Sustainable Energy Authority of Ireland (SEAI), which will be providing a critical role in the monitoring and compliance of the funds.
This follows on from the November 2022 launch of the first offshore competition under the Renewable Electricity Support Scheme (ORESS 1). ORESS auctions in the coming years will procure further offshore wind capacity to reach our 2030 target of 7GW, while also maintaining community benefit provisions to ensure that hosting communities continue to benefit from the enormous potential of offshore renewable energy.
Minister Ryan said:
"Local coastal and marine communities will play a central role in facilitating and supporting the development of Ireland’s offshore renewable electricity ambitions as a vital component in meeting Ireland’s commitments under the 2023 Climate Action Plan. In addition to the jobs, opportunities and business off-shore wind will help generate on-shore, this community benefit fund, built into the off-shore programme, ensures that community life and fabric more broadly can also be enhanced and supported.
"Never has it been more vital that we use our vast offshore wind resource to create renewable energy and ensure the security of our own energy supply. The development of our offshore wind energy capacity will eventually eradicate our dependence on imported fossil fuels and bring an unprecedented reduction in CO2 emissions for a climate neutral future."
The rulebook sets out the basis of the working relationship between each generator and the professional fund administrator it must appoint to undertake the implementation of the fund for their respective projects. It provides details on how each fund must be established and conducted to be properly representative of the local community, including fishers, seafood culture, tourism, the wider blue economy, and maritime heritage. The fund administrator will undertake the day-to-day operation of the fund on behalf of the local community, while decision-making on the allocation of funds remains within the community itself.
Further information is available on the website of the Department of the Environment, Climate and Communications.
*ORESS 1 is expected to deliver up to 2,500MW of offshore wind capacity. Assuming an average capacity factor of 45%, these projects will generate 9,855,000MWh per annum and €19,710,000 in community benefit contributions per annum.
ENDS
Ireland’s maritime area is seven times the size of its landmass. That, along with our ideal wind conditions, and our location at the edge of the Atlantic Ocean, makes the potential for offshore wind energy enormous. Ireland can become one of the leading producers of offshore wind energy in Europe.
In December, Minister Ryan issued Maritime Area Consents (MACs) to the first phase of seven offshore renewable energy projects.
The award of MACs ensures that only projects with the greatest viability to deliver Ireland’s ambitious energy targets can progress into the planning system. The award of a MAC follows a comprehensive assessment, by the Department of the Environment, Climate and Communications, into each project’s financial and technical competency. This approach enables all Phase One projects to begin their pre-planning application engagement with An Bord Pleanála.
The Maritime Area Consent (MAC) regime is provided for under the Maritime Area Planning (MAP) Act 2021. The legislation provides for the establishment of the Maritime Area Regulatory Authority (MARA) — a dedicated maritime area agency which is a priority for the government. Work on the establishment of MARA is being led by the Department of Housing, Local Government and Heritage and will be in place in early 2023, as set out in the Climate Action Plan. In the interim, the legislation provides the Minister for the Environment, Climate and Communications with the powers to assess the first batch of MAC applications from a set of seven qualified Offshore Renewable Energy (ORE) projects, known as the 'phase one projects':
The provision in the legislation to allow the Minister to assess applications for a MAC ensures immediate progress can be made to harness the vast resources we have while MARA is being established. Following the initial batch of MACs, responsibility will be handed over to MARA in 2023. MARA will assume responsibility for any MACs granted by the Minister for the Environment, Climate and Communications and the journey of those projects through the consenting and planning process will not be affected.
The holding of a MAC is required to participate in ORESS 1 — the first auction for offshore wind under the Renewable Electricity Support Scheme — which will be operated by EirGrid. The government approved the terms and conditions of ORESS 1 on 9 November 2022.
EirGrid published a calendar for ORESS 1 in November. Qualification stage is due to open this week, with auction stage in April 2023, and final results in June 2023.