Ireland is still 'strategically' important for wind developer Ørsted despite hurdles

'I sincerely hope that whatever shape the new government we get is not a dramatic change, because where you get change, you create uncertainty', said senior vice president of Europe Ørsted onshore Kieran White

Ørsted Europe CEO Rasmus Errboe with senior vice president of Europe Ørsted onshore Kieran White. Picture: John Kelly

Nestled among country roads on the Tipperary-Kilkenny county boarder are luscious green fields where calves roam and huge wind turbines twirl in the Irish wind.

The scene of agriculture and renewable energy co-existing together prompted Rasmus Errboe, Ørsted Europe CEO, to say “it reminds me of Denmark”.

Mr Errboe made this comment while visiting the Danish multinational’s largest wind farm in Ireland Lisheen III, with senior vice president of Europe Ørsted onshore Kieran White.

The glistening white turbines are located next to Ørsted’s existing developments at Lisheen I and II. The combined three phases of Lisheen have the capacity to generate 89MW of green energy.

The sight is a positive one for the renewable industry in Ireland which has consistently faced hurdles. However, Mr Errboe and Mr White expressed concern about future developments if infrastructure and the level of red-tape in the way of getting projects off the ground isn’t addressed.

Mr White said he has heard of developers with other companies pulling out of projects elsewhere due to challenges and suggested that this may happen in Ireland as well.

“We're seeing evidence that companies are walking away from projects in the UK in the US, and I suspect we'll see more of that,” said Mr White.

To speed up projects in the renewable energy sector, the men at the centre of Ørsted’s plans in Ireland said a number of improvements have to be made. At the top of the list is updating the grid infrastructure to increase connectivity and capacity on the system. Mr white added:

It's not too late, but it's long overdue.

Mr White said the grid issue is not unique to Ireland and indicated that developers are getting frustrated in other regions as well, including in the UK.

Meanwhile, there are growing concerns in the industry about the upcoming onshore RESS 3 auction and rumours have circulated in the industry that it will not be as successful as past auctions due to a laborious planning process in getting the projects operational, high input costs, and a chronic lack of infrastructure particularly with the grid.

The focus is now on Government to include attractive terms and conditions and a reasonable ceiling cap in the upcoming auction to keep developers interested in basing projects in Ireland.

“That is a very, very important line in the sand for all of us developers in this country. We don't know what exactly the Government wants to procure through that round,” said Mr White.

Mr White said he is confident though about the more advanced projects that will be included in RESS 3.

Through the auction, Ørsted is aiming to deliver projects, including solar developments, that will generate 200 additional megawatts. To date, the company has installed projects that can generate nearly 400 megawatts of renewable energy capacity on the island of Ireland.

European volatility 

Apart from issues on the island, developers are also navigating a volatile economic environment across Europe.

Prices for building renewable projects have soared in recent years and Mr Errboe said he is increasingly being asked if wind companies like Ørsted will veer away from purchasing turbines from European manufacturing firms including Simens and Vestas for cheaper Chinese alternatives.

“What I can say is we don't have any such plans right now. We will always we will always procure turbines in a way where we get what we believe fits our strategic aspirations and is also what is the better business case and also what is the risk profile of what we are buying,” he said.

For others in the industry though Mr Errboe said “I don't think that can be ruled out”.

Ørsted entered into a contract with Vestas to build the Lisheen III wind farm. Overall though the two men remain optimistic about the industry’s future in Ireland.

“It's windy, and it is relatively mature from an onshore wind perspective, in Ireland. And that maturity is something that means something to us as the predictability means we know that what you see you're going get,” said Mr Errboe.

Earlier this year, the country’s largest electricity provider ESB signed an agreement with Ørsted to develop an Irish offshore wind portfolio in a landmark deal.

Ørsted is now a 50% partner in a pipeline of offshore wind development projects off the Irish coast, which were until now held exclusively by ESB, under the agreement. Mr Errboe said:

There is no doubt that Ireland is day by day becoming strategically more and more important for us as a group.

Offhsore wind projects and solar still face unpredictability though which has enforced a need for certainty going into the future. Mr White said this is even more important going into an election next year.

“I sincerely hope that whatever shape the new government we get is not a dramatic change, because where you get change, you create uncertainty,” he said.

In addition to the abundant wind, Ireland also provides a European headquarters for Big Tech firms which are increasingly investing more in renewable projects while also being huge consumers of energy through data centres.

“Working with what we call strategic corporate partners within global tech is core for us. Because we do fundamentally believe that from a global and also European perspective, we will see more and more demand for green electrons coming from global tech, as well as chemicals, but also very much global tech.

Ørsted have previously benefitted from deals with large tech companies. For example, the Lisheen III wind farm was part of a corporate power purchase agreement with Facebook-owner Meta.