ESB and Orsted win contract for major wind farm off Waterford coast

Ireland has awarded rights to develop a 900 megawatt (MW) offshore wind farm off the coast of Waterford to a joint venture between the ESB and Denmark's Orsted.

Ireland has awarded rights to develop a 900 megawatt (MW) offshore wind farm off the coast of Waterford to a joint venture between the ESB and Denmark's Orsted.

The 900 MW Tonn Nua site would be expected to produce enough electricity to power the equivalent of around 800,000 Irish homes.

The Tonn Nua project was awarded with a 20-year contract-for-difference (CfD) secured at a strike price of €98.72 per megawatt hour. The scheme ensures developers a guaranteed electricity price, with costs or savings passed onto consumers based on wholesale price fluctuations.

Minister for Climate, Energy and the Environment Darragh O'Brien welcomed the provisional results of the State's second offshore wind auction under the Offshore Renewable Electricity Support Scheme (ORESS).

"The provisional results of the Tonn Nua auction mark an important milestone in the State's offshore renewable energy ambitions. The highly competitive price secured represents positive news for Irish energy consumers and our nation, bringing us closer to overcoming the challenges of energy security and affordability, and towards achieving energy independence," said Mr O'Brien. 

"It's also a positive reflection of Ireland that we, as a country, can develop and produce enormous quantities of clean energy. It's a clear sign that international companies are confident in Ireland's ambition and infrastructure." 

The offshore wind sector has faced significant financial headwinds, including rising costs, higher interest rates and supply chain disruptions, deterring bidders in auctions across Europe. Developers have cited insufficient subsidies and revenue guarantees as key barriers in markets such as Denmark, Germany, France, the Netherlands and Lithuania.

The Tonn Nua site is in an early phase of development and will need to seek several permits from authorities and also meet the joint venture's own value creation criteria, Orsted said. The wind farm is expected to reach its final investment decision around 2031, with the first power generation seen in the mid-2030s. 

The successful bid comes as Ireland, which currently has just 25 MW of installed offshore wind capacity, aims to diversify its energy mix and increase renewables' share in electricity generation.

Noel Cunniffe, CEO of Wind Energy Ireland, said Wednesday's auction is a vote of confidence in Ireland as a place to invest for offshore wind energy. 

"Tonn Nua will deliver enormous volumes of clean, affordable, electricity for Irish consumers and represents a huge economic opportunity for Waterford and the south-east of Ireland generally," said Mr Cunniffe.

“We look forward to working with our colleagues in ESB/Orsted to ensure Tonn Nua is delivered and for it to be the foundation of a thriving offshore wind industry on the country’s south coast.

“The department deserves credit for a very well-designed auction system which has delivered for Irish consumers at a strong price.”

Mr Cunniffe called for clarity on the timeline for future offshore projects. “There are three other sites off Ireland’s south coast which have been identified for offshore wind energy but there is no clarity on when, how or even if they will move forward.

“The Government plans to publish a national map of new sites by the end of 2027 but until that is produced the development of further projects is effectively stalled.

“That makes it all the more important that industry and the relevant State agencies work together to ensure we deliver Tonn Nua and the five other existing projects off Ireland’s east coast.” 

Additional reporting by Reuters