1. Barriers and issues facing offshore wind Garrett Connell - NOW Ireland Economics of Ocean and Marine Renewable Energy HMRC 2012 1

2. Ireland’s Offshore Opportunity Ireland has a number of opportunities from Offshore Wind –To export high value green electricity to Europe. –To create jobs building and operating Irish Offshore wind farms. –To stimulate the €60bn Supply Chain Opportunity afforded by the development programmes for offshore wind in the Irish Sea and over €300bn in the rest of Europe. –To create Jobs. The European Commission expects the creation of 2.8m jobs by 2020 from the renewable energy industry in Europe. 2

3. 3 Source: EWEA 2011. Cumulative and annual offshore wind installations in Europe

4. 4 Projects online, under construction and consented.Location of consented capacity. Source: EWEA 2011.

5. Offshore Projects Under Development in Irish Waters 5  SSE Renewables Lease for 200 turbines on the Arklow Bank  Codling Wind Park Lease for 220 turbines on the Codling Bank plus application for a further 200 turbines  Oriel Windfarm Consent for 55 turbines East of Dundalk Bay  FST Application for 20 turbines on Skerd Rocks  Dublin Array Application for 145 turbines on the Bray and Kish Banks Crown Estate Leasing Round Under way for a 600 MW zone off the coast of Northern Ireland

6. 6 Getting to Financial Close – A Due Diligence Checklist Ticking all of the above boxes would result in minimised risk to an investor/bank maximised risk-adjusted return and value for the offshore wind farm.

7. 7 Inherent Resistance to change and risk from stakeholders: Government, industry incumbents, etc. Complexity of aligning support mechanisms, planning, market mechanisms, regulation, targets and statutory bodies Regulatory and policy inconsistency and/or vacuum Irrational Exuberance and Economic Collapse! Clear and Stable Government Policies are Required as a foundation to promote the development of an industry. Government Policy and Regulatory Barriers to Offshore Development

8. 8 Consents, Licences, Authorisations Foreshore Acts drafted 1933, amended 1992, 1998, 2002, 2005, 2007, 2009, 2011 Transfer of Foreshore Responsibility from DCMNR to DAFF to DOE SEA and OREDP draft published 2010, yet to be finalised. New Consenting Legislation drafted 2010, yet to be published. Grid Connection Connection Process Constraint and Curtailment (5% to 30% of revenue or more?) Uncertainty and Firm Access date delays too great a risk for some investors Acknowledge limited requirement for wind energy in small Irish market

9. 9 REFIT Policy Offshore REFIT announced February 2008 Terms and Conditions for offshore REFIT published 2009 Commitment to bring Offshore REFIT forward for state aid clearance 2010 into 2011 Assurances on offshore REFIT throughout 2011 “Offshore REFIT not being submitted to Brussels for State Aid Clearance at this time”, Pat Rabbitte February 2012.

10. 10 Getting to Financial Close – A Due Diligence Checklist A clear Government Commitment and set of Policies is needed to kick start the sector. Up to now this has been hampered by limited demand in Ireland and concerns over the cost of Electricity, particularly the cost to industry.

11. Light at the end of the Tunnel - Energy Export Opportunity The EU Renewables Directive issued June 2009 encourages interstate trading of renewable power and renewable credits between member states. A joint British Irish Council announcement, June 2011, agreed an All Island Approach to renewable energy development. Acknowledges Ireland’s substantial renewable energy resources, particularly offshore, providing an opportunity for export. Indicates that import of Irish renewable energy is a policy which the UK sees as beneficial. An Intergovernmental Agreement between Ireland and the UK is expected this year to facilitate the export of renewables. Policy Commitments from the UK have already increased investor certainty in Irish renewable energy. 11

12. How would renewables export work? - Statistical transfer / market mechanism - Interconnection - Direct connection of wind farms Statistical transfer can be undertaken using a bilateral agreement between two member states. This would require a similar statutory instrument as used for the REFIT schemes.  A number of recent Government backed studies have all concluded that an integrated and incremental approach to developing an offshore grid network in the Irish Sea is the most appropriate method to facilitate exports, increase the penetration of Renewable Energy and improve the existing onshore grid. These include:  The Isles Study  Eirgrid’s Offshore Grid Study  North Sea’s Offshore Grid Initiative Eirgrid offshore grid study base case scenario Export Mechanisms 12 Southern Isles Concept

13. Delivering on our Opportunity 13 Develop a positive mindset – our resources are unparalleled. Look beyond our shores for the opportunity which exists. Ensure our national policies support our industry objectives. Create the necessary market mechanism –Ireland / UK / Europe. Be the leaders of the change Ireland wants and needs.

14. The National Offshore Wind Association of Ireland (NOW Ireland) is the representative organisation for offshore wind farm developers in Ireland Contact Details for NOW Ireland: Address:NOW Ireland, 2 Marine Court Blackrock, Co. Louth Ireland Tel: +353 42 9322952 Fax: +353 42 9322995 Email:info@nowireland.ie Web:www.nowireland.ie 14