SEM Chart of the Week
Sail away: Offshore wind vs. RESS
Last week the European Commission proposed a “Climate Law” enshrining in legislation the objective of achieving climate neutrality by 2050. In this week’s Chart, we consider the role of wind in achieving this goal, and Irelands role in the European Green Deal.
As we would expect, the green deal identifies renewable energy sources as playing an essential role in a carbon neutral Europe, specifically setting the ambition to develop the full potential of Europe’s offshore wind energy. Undoubtably, many more GW of renewable energy will be needed, in fact according to WindEurope’s CEO Giles Dickson “Climate neutrality and the Green Deal require Europe to install over twice as much new wind energy each year as it managed in 2019.”
Sail away with me honey
In 2019 Europe installed 15.4 GW of new wind energy. 3.6 GW was offshore and 80% of this was in just 2 countries; The UK and Germany. Most of the offshore capacity awarded was through government support schemes and it is evident that investment and growth in renewables across Europe is strongly linked to support schemes. This is certainly true in the UK where the CfD scheme has delivered the highest volume of offshore wind in the world.
Ireland has set a RES-E target of 70% for 2030 as part of the Climate Action Plan. Through this, Ireland will need to install around 9 GW of additional renewable electricity over the next ten years, stating a need for at least 3.5 GW of offshore wind.
Given that all offshore wind will most likely need to be delivered through government subsidy we can assume that the Renewable Energy Support (RESS) scheme will play a vital role in delivering the required installations.
The high-level design for the RESS targets delivery of 13,500 GWh of renewable generation. The first RESS auction aims to deliver 1000 GWh – 3000 GWh but excludes offshore participation. This leaves at most 12,500 GWh of available capacity in future RESS auctions. Therefore the remaining capacity available would only deliver 3.1 GW of offshore wind, 0.4 GW shy of the Climate Action Plan figure and leaving no support for any other renewable technology type.
To ensure the Climate Action Plan is realised, the Irish government need to ensure the future RESS auctions are fit for purpose, incentivising the timely delivery of a sizeable but varied renewable mix.